UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, DC   20549
                                      FORM 10-K

(X)   ANNUAL  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
                          EXCHANGE ACT OF 1934

                     For the fiscal year ended December 31, 1996

(  )  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
                          EXCHANGE ACT OF 1934
                       
               For the transaction period from ________  to  __________

                           Commission File Number 1-12298

                             REGENCY REALTY CORPORATION
               (Exact name of registrant as specified in its charter)

              FLORIDA                                    59-3191743
       (State of other jurisdiction of                 (I.R.S. Employer
       incorporation or organization)                  identification No.)
                                                       

       121 West Forsyth Street, Suite 200              (904) 356-7000
       Jacksonville, Florida    32202                    (Registrant's
                                                         telephone No.)
       (Address of principal executive 
              offices)  (zip code)

            Securities registered pursuant to Section 12(b) of the Act:

                            Common Stock, $.01 par value
                                  (Title of Class)

                               New York Stock Exchange
                       (Name of exchange on which registered)

           Securities registered pursuant to Section(g) of the Act:  None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES (X) NO ( )

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant was approximately  $165,638,487 based on the closing price on the New
York Stock Exchange for such stock on March 20, 1997. The approximate  number of
shares of Registrant's  Common Stock  outstanding was 12,323,183 as of March 21,
1997.

                        Documents Incorporated by References

Portions of the Registrant's  Proxy Statement in connection with its 1997 Annual
Meeting of Shareholders are incorporated by reference in Part III.



<PAGE>


                                  TABLE OF CONTENTS

                                                                 Form 10-K
Item No.                                                         Report Page


                                       PART I

1.    Business..........................................................1

2.    Properties........................................................4

3.    Legal Proceedings.................................................10

4.    Submission of Matters to a Vote of Security Holders ..............10

                                       PART II

5.    Market for the Registrant's Common Equity and 
          Related Shareholder Matters  ............................     10

6.    Selected Consolidated Financial Data ............................12

7.    Management's  Discussion  and  Analysis of  Financial  
         Condition  and Results of Operations .........................14

8.    Consolidated Financial Statements and Supplementary Data ..... ..19

9.    Changes in and  Disagreements  with  Accountants  on 
         Accounting  and  Financial Disclosure ........................19

                                      PART III

10.   Directors and Executive Officers of the Registrant ..............19

11.   Executive Compensation ..........................................20

12.   Security Ownership of Certain Beneficial Owners and Management ..20

13.   Certain Relationships and Related Transactions ..................20

                                       PART IV

14.   Exhibits, Financial Statements, Schedules and Reports on
           Form 8-K                                                    20



<PAGE>


                                       PART I

Item 1.     Business

      General:  The  principal  business  of  Regency  Realty  Corporation  (the
"Company") is owning,  operating and developing  grocery  anchored  neighborhood
shopping  centers in targeted  infill markets in the Southeast.  The Company,  a
Florida  corporation  organized in 1993,  commenced  operations as a real estate
investment  trust in 1993 with the  completion  of its Initial  Public  Offering
("IPO"), and was the successor to the real estate business of The Regency Group,
Inc. which had operated since 1963. Unless the context requires  otherwise,  all
references to the "Company" include (1) its wholly owned real estate properties,
an operating  partnership  and two joint  ventures and (2) Regency Realty Group,
Inc. (the "Management Company").

      The Company owns and operates 50 commercial real estate properties,  40 of
which are  anchored by grocery  stores.  At December 31,  1996,  the  properties
contained 5.5 million square feet ("GLA") and were 95.4% leased.  The properties
are all located in the Southeast,  primarily in Florida (71% of GLA) and Georgia
(11% of GLA). At December 31, 1996,  approximately  10.2%, 4.6%, 3.3%, and 3% of
annualized total rent pertains to leases with Publix, Winn-Dixie,  Wal-Mart, and
Kroger,  respectively.   For  more  specific  data  and  information  about  the
properties  owned by the Company see Item 2. Properties,  included  elsewhere in
this Form 10-K.  In  addition,  through  the  Management  Company,  the  Company
performs property  management,  leasing and client services on a selective basis
that generate fees and have the potential for creating synergistic relationships
that  lead  to  additional  acquisition,  development,  management  and  leasing
opportunities.

      Operating  and  Investment  Philosophy:  The  Company's  key operating and
investment  objectives  are (1) to  generate  superior  shareholder  returns  by
sustaining above average annual increases in funds from operations and long term
growth in free and clear  cash  flow,  (2) to create  the  largest  real  estate
portfolio of quality grocery anchored  neighborhood shopping centers in targeted
infill markets in the  Southeast,  (3) to build the strongest  possible  capital
structure through  conservative  financial management that will cost effectively
provide the capital to fund the  Company's  growth  strategy,  and (4) to put in
place the people and processes  necessary to enable the Company to implement its
Retail Operating System, a system which  incorporates  research based investment
strategies and value added leasing and management systems.

      Management  believes  that  the key to  successful  implementation  of its
strategies is to continue to exploit the Company's  competitive  strengths which
include,   its  cohesive  and   experienced   management   team,   its  research
capabilities,  its strong capital structure,  its access to competitively priced
capital, its client relationships, its market expertise in targeted markets, its
growing  critical  mass of  quality  neighborhood  shopping  centers  focused on
convenience  and daily  necessities,  and the vibrant  targeted  submarkets that
enjoy a favorable environment for retail sales.

      Since its IPO in 1993, the Company has acquired 27 properties at a cost of
$224.7 million.  These acquisitions were financed with $114.4 of new equity, and
$110.3  million  of new debt.  The  Company's  total  market  capitalization  at
December 31, 1996 was $529.1 million vs. $172.9 million at the completion of its
IPO, an increase of 206%.  At December 31,  1996,  the  Company's  debt to total
market capitalization was 32.4%. The Company intends to continue its emphasis on
acquiring and developing grocery anchored neighborhood shopping centers that are
the most significant  shopping  centers serving a targeted  submarket that offer
daily necessities and convenience.
                                   1

<PAGE>

      Current  Developments:  During  1996,  the  Company  acquired  13  grocery
anchored  shopping centers for  approximately  $107.1 million,  representing 1.4
million square feet (the "1996 Acquisitions"). Total real estate investments, at
cost, increased 40.1% from December 31, 1995. The 1996 Acquisitions were located
in Florida,  Georgia, and North Carolina and included six Publix locations,  two
Winn-Dixie  locations,  and two Kroger  locations.  The Company also  acquired a
parcel of land for a new Winn-Dixie  development and an existing shopping center
for redevelopment.

      On June 11, 1996, the Company entered into a Stock Purchase Agreement (the
"Agreement")  with Security  Capital U.S. Realty and Security  Capital  Holdings
S.A. (collectively,  "US Realty"). As part of the Agreement,  the Company agreed
to sell 7,499,400 shares of common stock to U.S. Realty for $132,176,925. During
1996, the Company sold  3,651,800  shares to US Realty for  $64,362,975  and the
proceeds  were used to reduce the  outstanding  balance of its  acquisition  and
development   line  of  credit  with  Wells  Fargo  Realty   Advisors   Funding,
Incorporated  (the "Wells Fargo Line").  Not later than June,  1997, the Company
intends to sell the  remaining  shares  committed to US Realty,  the proceeds of
which  will be used to  further  reduce the  balance  of its Wells  Fargo  Line,
increasing the capacity for future acquisitions.

      During 1996, the Company entered into discussions with Branch  Properties,
L.P.  ("Branch"),  an Atlanta  based real estate  partnership  that operates and
develops  shopping  centers in the  Southeast,  for purposes of  evaluating  the
potential  acquisition  of the assets of Branch.  On March 7, 1997,  the Company
acquired the assets of Branch for approximately  $190 million.  At closing,  the
Company issued 3,529,598 redeemable  partnership units ("Redeemable Units") from
Regency  Retail  Partnership  L.P.  ("Partnership")  in exchange for 100% of the
existing partnership units of Branch, and assumed  approximately $112 million of
debt, net of minority  interests.  During the next three years, Branch will have
the right to earn an additional $23.3 million of Redeemable Units based upon the
achievement  of increased  income levels.  At closing the Company  acquired from
Branch 18 shopping  centers  comprising  1.9  million  square  feet;  8 shopping
centers  containing  700,000 square feet that are currently under development or
redevelopment,  and management  contracts on over 4 million square feet owned by
third parties.  Including the completion of the  development  and  redevelopment
properties,  the three largest  anchor  tenants in these  properties are Publix,
Kroger, and Harris Teeter. Also at closing, the Company reduced Branch's debt by
approximately $25.7 million from a $26 million sale of common stock to US Realty
which funded concurrent with the acquisition.

      In  December,1996  the Company  negotiated  an increase in the  commitment
amount of the Wells Fargo Line to $90 million.  The Company  increased the Wells
Fargo Line  commitment  amount to $150 million during the first quarter of 1997.
The unused  balance of the Wells  Fargo Line will be used to continue to acquire
and  develop  neighborhood  shopping  centers in the  Southeast.  In addition to
acquiring  single  neighborhood  shopping centers from individual  sellers,  the
Company  also  expects to  continue  to engage in  discussions  with  public and
private  real estate  entities  regarding  possible  portfolio  acquisitions  or
business combinations.

      Matters  Relating to the Real Estate  Business:  The Company is subject to
certain  business  risks  arising in  connection  with owning real estate  which
include, among others, (1) the bankruptcy or insolvency of, or a downturn in the
business of, any of its anchor tenants,  (2) the  possibility  that such tenants
will not renew their leases as they expire,  (3) vacated anchor space  affecting
the entire  shopping  center because of the loss of the departed anchor tenant's
customer  drawing power, (4) risks relating to leverage,  including  uncertainty
that the Company will be able to  refinance  its  indebtedness,  and the risk of
higher  interest  rates,  (5)  the  Company's  inability  to  satisfy  its  cash
requirements for operations and the possibility that the Company may be required
to borrow  funds to meet  distribution  requirements  in order to  maintain  its
qualification  as  a  REIT,  (6)  potential  liability  for  unknown  or  future
environmental   matters  and  costs  of  compliance   with  the  Americans  with
Disabilities  Act, and (7) the risk of uninsured  losses.  Unfavorable  economic
conditions  could also  result in the  inability  of  tenants in certain  retail
sectors to meet their lease obligations and otherwise could adversely affect the
Company's ability to attract and retain desirable tenants.  The Company believes
that the shopping  centers are relatively well  positioned to withstand  adverse
economic  conditions  since they typically are anchored by grocery stores,  drug
stores and discount  department stores that offer day-to-day  necessities rather
than luxury goods.
                                   2

<PAGE>

      Compliance with Governmental  Regulations:  The Company like others in the
commercial real estate industry,  is subject to numerous  environmental laws and
regulations  particularly  as they  pertain  to dry  cleaning  plants.  Although
potential liability could exist for unknown or future environmental matters, the
Company  believes that dry cleaning  tenants are  operating in  accordance  with
current laws and  regulations  and has  established  procedures to monitor these
operations. For additional information, see Management's Discussion and Analysis
included elsewhere in this Form 10-K.

      Competition:  There are numerous shopping center  developers,  real estate
companies  and other  owners of real estate that operate in the  Southeast  that
compete with the Company in seeking retail  tenants to occupy vacant space,  for
the  acquisition of shopping  centers,  and for the  development of new shopping
centers.

      Changes in  Policies:  The  Company's  Board of Directors  determines  the
Company's  policies  with  respect to  certain  activities,  including  its debt
capitalization, growth, distributions, REIT status, and investment and operating
policies.  The Board of  Directors  has no present  intention to amend or revise
these policies.  However, the Board of Directors may do so at any time without a
vote of the Company's stockholders.

      Employees:  The Company  presently has four management and leasing offices
in Florida and one office in Atlanta, Georgia. As of March 20, 1997, the Company
had  approximately  160 employees and believes that relations with its employees
are good.

                                   3

<PAGE>



I
tem 2. Properties

      The Company  owns and  operates  46  neighborhood  shopping  centers and 4
suburban  office  complexes  in  the  Southeast.   The  properties   consist  of
approximately  5.5 million  square feet of Company  owned  gross  leasable  area
(GLA). At December 31, 1996, the locations of properties by GLA were as follows:

                  Company   Percent     Anchor               Percent    Number
                   Owned      of        Owned       Total      of        of
                    GLA     Total        GLA         GLA     Total   Properties
                    

Florida         3,958,423     71.8%     297,481   4,255,904     72.0%       34
Georgia           592,351     10.7%           -     592,351     10.0%        6
Alabama           516,080      9.4%      42,848     558,928      9.5%        5
North             
 Carolina         260,094      4.7%           -     260,094      4.4%        3
Mississippi       185,061      3.4%      54,962     240,023      4.1%        2
                ---------    ------    --------   ---------    ------       --
     Total      5,512,009    100.0%     395,291   5,907,300    100.0%       50
                =========    ======    ========   =========    ======       ==
                                          

      The Company's  neighborhood  shopping  centers  generally have one or more
anchor  tenants,  the majority of which are anchored by Publix (17),  Winn-Dixie
(9),  Wal-Mart  (7) or Kroger (3),  with 37 of the  center's  having two or more
anchor  tenants.  The average size of the  properties  is 118,146 sf. Six of the
shopping  centers are anchored by four grocery  stores and two Wal-Mart  stores,
where the store operator owns its own building.  To the extent that the shopping
centers are  anchored by store space which the Company does not own, the Company
can capitalize on the customer  drawing power and other  advantages  provided by
these  anchor  tenants  while  not  bearing  the  leasing  and  operating  risks
associated with leasing space to such a tenant. In most instances,  these stores
reimburse the Company for their share of common area maintenance expenses.

           The following table sets forth, as of December 31, 1996,  information
as to retail tenants which individually account for 1.0% or more of total rent:



                                      Percent of
                            Company      Total                Percent of
                Leased        GLA       Company      Total       Total
Tenant          Stores     (Sq. Ft.)      GLA       Rent (1)    Rent (2)
- ------          ------     ---------      ---      --------    --------

Publix             17      723,636       13.1%   $ 5,372,770      10.2%         
Winn Dixie          9      364,393        6.6%     2,432,073       4.6%
Wal-Mart            5      393,487        7.1%     1,765,280       3.3%
Kroger              3      165,435        3.0%     1,566,150       3.0%
Walgreens           9      116,640        2.1%     1,469,878       2.8%
AMC Theater         1       72,616        1.3%     1,003,651       1.9%
K-Mart              2      168,306        3.1%       987,130       1.9%
Eckerd             10      101,095        1.8%       887,746       1.7%
Luria's             3       69,855        1.3%       592,686       1.1%
Waccamaw            1       87,752        1.6%       538,633       1.0%
Jo-Ann
 Fabrics            4       52,230         .9%       527,396       1.0%
                   --      -------        ----     ---------      -----
                                                      
    Total          64    2,315,445       41.9%   $17,143,393      32.5%
                   ==    =========       =====   ===========      =====
                             

     -----------------------
     1)  Total  rent  includes  annualized  base  rent,   percentage  rent,  and
reimbursements for common area maintenance, real estate taxes, and insurance.
     2)    Based on annualized total rent on all properties owned at
 December 31,1996.

                                   4              

<PAGE>



      The Company's leases have lease terms generally ranging from three to five
years for tenant  space under 5,000  square  feet.  Leases  greater  than 10,000
square feet generally have lease terms in excess of ten years,  mostly comprised
of anchor  tenants.  Many of the anchor leases contain  provisions  allowing the
tenant  the  option  of  extending  the  term of the  lease at  expiration.  The
Company's  leases  provide for the monthly  payment in advance of fixed  minimum
rentals,  additional rents calculated as a percentage of the tenant's sales, the
tenant's  pro rata  share of real  estate  taxes,  insurance,  and  common  area
maintenance  expenses,  and  reimbursement  for  utility  costs if not  directly
metered.  At December 31, 1996,  42% of the Company's  leases have terms of five
years or less,  which allows the Company the  opportunity to increase rents upon
lease  expiration.  Approximately  42% of the Company's leases expire beyond ten
years.

     The following table sets forth a schedule of lease expirations for the next
ten years, assuming that no tenants exercise renewal options:


                            Percent of    Future
                               Total     Minimum      Percent
   Lease                     Company   Rent Under       of  
 Expiration     Expiring      Square    Expiring       Total 
    Year          GLA        Footage      Leases     Rent (1)
 ----------     --------    ---------- ----------    --------                   

    1997         437,545        7.9%   4,966,284       10.7%
    1998         616,350       11.2%   6,435,218       13.8%
    1999         442,226        8.0%   5,379,912       11.6%
    2000         261,023        4.7%   3,334,962        7.2%
    2001         334,874        6.1%   3,877,709        8.3%
    2002         314,026        5.7%   2,303,083        5.0%
    2003         216,386        3.9%   1,565,877        3.4%
    2004         133,002        2.4%   1,242,960        2.7%
    2005         174,354        3.2%   1,705,906        3.7%
    2006         208,155        3.8%   1,562,226        3.4%
    2007          40,298        0.7%     512,591        1.1%
                                         


            ------------------
            (1)Total rent includes  current minimum rent and future  contractual
               rent steps for all properties,  but excludes additional rent such
               as percentage rent, common area maintenance, real estate taxes 
               and insurance reimbursements.

Corporate  Headquarters:  The Company  leases  24,263  square feet in a 10 story
office  building  located at 121 West Forsyth Street in  Jacksonville,  Florida,
which serves as the Company's headquarters.  The lease, which expires on October
31, 1999,  provides that the Company will pay annual base rent of  approximately
$286,000.  The Company provides property  management  services to the building's
owner, who is unaffi iated with the Company.

                                   5



<PAGE>


Item 2.


The following table  describes the Company's properties owned at
December 31, 1996:

<TABLE>
<CAPTION>
                                                                                                        Company
                                                                                                         Owned
                                                                                                         Gross
                                                      Year           Year                Land           Leasable         Percent
Property                                            Acquired      Constructed (r)        Area             Area           Leased     
========                                            ========      ===========            ====           ========         =======
<S>                                                  <C>               <C>            <C>              <C>               <C>    
                                                                                                                                    
Florida:
     Jacksonville / North Florida:
          Bolton Plaza                               1994              1995             15.1             172,938          98.4%     
          Courtyard                                  1987              1987             17.0              67,794          95.5%     
          Old St. Augustine Plaza                    1996              1990             23.9             170,220          97.5%     
          The Quadrant (o)                           1984              1985             17.8             188,502          96.5%     
          Westland One (o)                           1988              1988              3.6              36,304          89.9%     
          Palm Harbor                                1996              1991             24.0             168,448          99.6%     
          Anastasia Plaza                            1993              1988             11.4             102,342          95.5%     
          Millhopper                                 1993              1974             11.0              84,444          99.4%     
          Newberry Square                            1994              1986             16.0             181,006          98.0%     
          Carriage Gate                              1994              1978              8.7              76,833          93.2%     
          Village Commons (j)                        1988              1988             23.8             105,827          91.3%     
     Miami / Ft. Lauderdale:
          Aventura                                   1994              1974              8.6             102,876          81.1%     
          North Miami                                1993              1988              4.0              42,500         100.0%     
          Fairway Executive Center (o)               1985              1985              2.0              33,135          83.8%     
          University Market Place                    1990              1990             13.0             124,101          93.1%     
          Welleby                                    1996              1982             12.0             109,949          92.3%     
          Berkshire Commons                          1994              1992             12.5             106,434          98.8%     
     Palm Beach / Treasure Coast:
          Wellington Market Place                    1995              1990             18.7             178,555          94.4%     
          Wellington Town Square                     1996              1982             11.3             105,150          94.4%     
          Tequesta Shoppes                           1996              1986             12.5             109,766          97.0%     
          Chasewood Plaza                            1992              1986             17.3             183,844          95.0%     
          Martin Downs Shoppes                       1992              1988              6.4              48,932          67.4%     
          Martin Downs Town Center                   1996              1996              7.6              64,546         100.0%     
          Martin Downs Village Center                1992              1985             20.1             121,998          93.4%     
          Ocean Breeze                               1992              1985             11.7             111,551          94.6%     
          Ocean East (d)(j)                          1996              1996             11.3             104,772          93.3%     
     Tampa Bay Area:
          Peachland Promenade                        1995              1991             14.5              82,082          96.9%     
          Market Place                               1995              1983              9.3              90,296          98.1%     
          Paragon Cable Building (o)                 1993              1993              3.2              40,298         100.0%     
          Regency Square at Brandon                  1986              1986             52.6             341,751          93.8%     
                                                                                                                                    
          Seven Springs                              1994              1986             19.5             162,580          97.0%     
          Terrace Walk                               1990              1990              4.4              50,926          88.0%     
          University Collections                     1996              1984             11.3             106,627          97.6%     
          Village Center                             1995              1993             17.0             181,096          97.4%     
                                                                                       -----           ---------          -----
                                                                                       473.1           3,958,423          95.0%
                                                                                       =====           =========          =====
                                                                                       
<FN>

(a) Tenant owns its own pad and building                                        
(d) Development or redevelopment property            
(r) or last renovation or major addition
(o) suburban office building
(j) ownership is less than 100%
</FN>
</TABLE>

                                             6

<PAGE>

<TABLE>
<CAPTION>

Property                                               Major Tenants and Lease Expiration (Mo/Yr)                                   
========                                               ==========================================                                   
<S>                                                   <C>    

Florida:                                                                                                                           
     Jacksonville / North Florida:                                                                                                 
          Bolton Plaza                                Wal-Mart (6/08), Blockbuster (6/98)                                          
          Courtyard                                   Albertsons (a)                                                               
          Old St. Augustine Plaza                     Publix (10/10), Eckerd Drugs(10/10), Waccamaw (3/02)                         
          The Quadrant (o)                            RS&H (10/98), Total System Service (10/00), GTE (8/99), Xerox (10/97)        
          Westland One (o)                            Logistics Services (1/99)                                                    
          Palm Harbor                                 Publix (3/11), Eckerd Drugs (12/98), Bealls (4/07), Blockbuster (12/01)      
          Anastasia Plaza                             Publix (2/08)                                                                
          Millhopper                                  Publix (4/03), Eckerd Drugs (3/98), Clothworld (3/98)                        
          Newberry Square                             Publix (11/06), Kmart (10/11), Jo-Ann Fabrics (1/02)                         
          Carriage Gate                               TJ Maxx (11/98)                                                              
          Village Commons (j)                         Wal-Mart (a) , Stein Mart (8/98), Ben Franklin (5/06), Shoe Station (5/02) 
     Miami / Ft. Lauderdale:                                                                                                       
          Aventura                                    Publix (11/98), Eckerd Drugs (9/97)                                          
          North Miami                                 Publix (10/03), Eckerd Drugs (8/99)                                          
          Fairway Executive Center (o)                Tarmac of Florida (5/01)                                                     
          University Market Place                     Albertsons (a), PetsMart (1/4), Linen Supermarket (2/04)                     
          Welleby                                     Publix (4/15), Walgreens (8/02)                                              
          Berkshire Commons                           Publix (10/11), Walgreens (8/11)                                             
     Palm Beach / Treasure Coast:                                                                                                  
          Wellington Market Place                     Winn-Dixie (9/09), Walgreens (8/09), United Artists (3/10)                   
          Wellington Town Square                      Publix (9/02), Eckerd Drug (10/02)                                           
          Tequesta Shoppes                            Publix (9/06), Walgreens (10/01)                                             
          Chasewood Plaza                             Publix (2/06), Walgreen's (3/01), Ben Franklin (2/01)                        
          Martin Downs Shoppes                        1st Bank of Indiantown (1/97)                                                
          Martin Downs Town Center                    Publix (11/16)                                                               
          Martin Downs Village Center                 Coastal Care (9/12), Walgreens (7/00)                                        
          Ocean Breeze                                Publix (11/03), Walgreens (11/03), Coastal Care (6/06)                       
          Ocean East (d)(j)                           Stuart Fine Foods (12/10), Coastal Care (11/16)                              
     Tampa Bay Area:                                                                                                               
          Peachland Promenade                         Publix (1/12), Ace Hardware (2/99)                                           
          Market Place                                Publix (7/03), Eckerd Drugs (4/03)                                           
          Paragon Cable Building (o)                  Paragon Cable (8/07)                                                         
          Regency Square at Brandon                   Marshalls (1/02), Jo-Ann Fabrics (11/02), AMC Theaters (11/15)               
                                                      Staples (1/00), Michaels (11/03), TJ Maxx (9/99), S&K Menswear (1/01)        
          Seven Springs                               Winn-Dixie (5/07), Kmart (11/10)                                             
          Terrace Walk                                -                                                                            
          University Collections                      Kash N Karry (a), Eckerd Drug (9/04), Jo-Ann Fabrics (8/05)                  
          Village Center                              Publix (6/07), Walgreens (6/07), Stein Mart (7/08)                           

<FN>

(a) Tenant owns its own pad and building                                        
(d) Development or redevelopment property            
(r) or last renovation or major addition
(o) suburban office building
(j) ownership is less than 100%

</FN>
</TABLE>



                                            7      

<PAGE>
                                                                                

<TABLE>
<CAPTION>
                                                                                             
                                       
                                                                                                        Company
                                                                                                         Owned
                                                                                                          Gross
                                                      Year              Year             Land           Leasable         Percent
Property                                            Acquired        Constructed (r)      Area             Area           Leased     
========                                            ========        ===============      ====           ========         =======
<S>                                                  <C>               <C>             <C>             <C>               <C>    
  

Georgia:
     Atlanta:
          Orchard Square                             1995              1987             14.8              85,940          91.2%    
          Cambridge Square                           1996              1979              9.5              68,725          91.4%    
          Russell Ridge                              1994              1994             16.5              98,556         100.0%    
          Sandy Plains Village                       1996              1992             19.0             168,513          80.6%    
     Other Markets:
          LaGrange Marketplace                       1993              1989              8.2              76,327          93.7%    
          Parkway Station                            1996              1983             10.5              94,290          94.3%    
                                                                                        ----             -------          -----     
                                                                                        78.5             592,351          90.5%
                                                                                        ====             =======          =====
Alabama:
     Birmingham:
          Village In Trussville                      1993              1987              8.0              69,300          97.8%    
          West County Marketplace                    1993              1987             14.0             129,155         100.0%    
     Other Markets:
          Bonner's Point                             1993              1985             11.9              87,280         100.0%    
          Country Club                               1993              1991              5.5              67,622         100.0%    
          The Marketplace                            1993              1995             13.0             162,723         100.0%    
                                                                                        ----             -------         ------
                                                                                        52.4             516,080          99.7%
                                                                                        ====             =======         ====== 
North Carolina:
     Charlotte:
          City View                                  1996              1993             14.5              77,550          98.5%    
          Union Square                               1996              1989             18.8              97,191          98.8%    
                                                                                                                                    
     Raleigh / Durham:
          Woodcroft                                  1996              1984             11.8              85,353          98.6%    
                                                                                        ----             -------          -----  
                                                                                        45.1             260,094          98.6%
                                                                                        ====             =======          =====  
Mississippi:
          Columbia Marketplace                       1993              1988             21.7             136,002         100.0%    
          Lucedale Marketplace                       1993              1989              6.1              49,059         100.0%    
                                                                                        ----             -------         ------     
                                                                                        27.8             185,061         100.0%
                                                                                        ====             =======         ======  

Total Properties:                                                                      676.9           5,512,009          95.4%
                                                                                       =====           =========          =====   

<FN>

(a) Tenant owns its own pad and building                                        
(d) Development or redevelopment property            
(r) or last renovation or major addition
(o) suburban office building
(j) ownership is less than 100%

</FN>
</TABLE>

                                        8

<PAGE>


<TABLE>

<CAPTION>
   
Property                                              Major Tenants and Lease Expiration (Mo/Yr)                              
========                                              ==========================================
<S>                                                   <C>    

Georgia:                                                                                                                   
     Atlanta:                                                                                                              
          Orchard Square                              A&P (1/08), Big B Drugs (1/08)                                                
          Cambridge Square                            Winn-Dixie (5/01), Big B Drugs (9/01)                                       
          Russell Ridge                               Kroger (9/14), Blockbuster (7/00)       
          Sandy Plains Village                        Kroger (8/10), Revco (10/97), Blockbuster (2/01), Ace Hardware (1/98)
     Other Markets:                                                                                                        
          LaGrange Marketplace                        Winn-Dixie (6/09), Eckerd Drugs (1/10)                               
          Parkway Station                             Kroger (2/07)                                                        
                                                                                                                           
                                                                                                                           
Alabama:                                                                                                                   
     Birmingham:                                                                                                           
          Village In Trussville                       Bruno's (10/12), Big B Drugs (2/03), Movie Gallery (12/97)           
          West County Marketplace                     Food World (a), Wal-Mart (2/08), Eckerd Drugs (2/11)                 
     Other Markets:                                                                                                        
          Bonner's Point                              Winn-Dixie (1/06), Wal-Mart (10/05)                                  
          Country Club                                Winn-Dixie (5/11), Harco Drugs (4/06)                                
          The Marketplace                             Winn-Dixie (2/15), Beall's (1/04)                                    
                                                                                                                           
                                                                                                                           
North Carolina:                                                                                                            
     Charlotte:                                                                                                            
          City View                                   Winn-Dixie (6/13), Revco (5/08)                                      
          Union Square                                Harris Teeter (10/15), Revco (6/04)                                  
                                                      Consolidated Theatres (5/06), Blockbuster (9/99)                     
     Raleigh / Durham:                                                                                                     
          Woodcroft                                   Food Lion (11/04), Kerr Drugs (11/04)                                
                                                                                                                           
                                                                                                                           
Mississippi:                                                                                                               
          Columbia Marketplace                        Winn-Dixie (9/12), Wal-Mart (2/08)                                   
          Lucedale Marketplace                        Delchamps (8/09), Wal-Mart (a)                                       
                                                      
                                                      
Total Properties:                                                                                                          

<FN>
                                                                                
(a) Tenant owns its own pad and building                                        
(d) Development or redevelopment property            
(r) or last renovation or major addition
(o) suburban office building
(j) ownership is less than 100%
</FN>
</TABLE>

                                        9

<PAGE>



Item 3.    Legal Proceedings

      The  Company is not  presently  involved  in any  litigation  nor,  to its
knowledge,  is any litigation threatened against the Company, except for routine
litigation  arising in the ordinary  course of business  such as "slip and fall"
litigation  which is  expected  to be covered by  insurance.  In the  opinion of
management  of the Company,  such  litigation is not expected to have a material
adverse effect on the business,  financial condition or results of operations of
the Company.


Item 4.    Submission of Matters to a Vote of Security Holders

     None


                                       PART Il


Item 5.   Market for the Registrant's Common Equity and Related Shareholder
          Matters

    Prior to the  Company's  IPO there was no public  market  for the  Company's
common stock. In connection with its IPO, 5,620,779 shares were sold for cash at
the  initial  offering  price of $19.25 per share.  The common  stock  commenced
trading  on the New York  Stock  Exchange  ("NYSE")  under the  symbol  "REG" on
October 29, 1993. There have been no additional public stock offerings since the
IPO; however,  there have been several private equity  transactions  since 1994.
The high and low sales  prices  for the  common  stock on the NYSE  during  each
quarter for the period January 1, 1995 to December 31, 1996 were as follows:

                                  1996                         1995
                        ------------------------     -------------------------
                                           Cash                         Cash
                         High      Low   Dividends    High      Low   Dividends
                         Price    Price  Declared     Price    Price  Declared

      March 31       $  17.500   15.875     .405     17.125   15.250     .395
      June 30           21.125   16.500     .405     18.375   15.750     .395
      September 30      22.375   19.250     .405     18.125   16.375     .395
      December 31       26.250   21.125     .405     17.500   16.375     .395


      The approximate  number of holders of record of the common stock was 3,000
as of March 20, 1997.

       On  March  7,  1997,  the  Company  acquired  Branch   Properties,   L.P.
("Branch"),  an Atlanta based real estate partnership that owns,  operates,  and
develops shopping centers in the Southeast,  for approximately $190 million.  At
closing, the Company issued 3,373,801 redeemable  partnership units ("Redeemable
Units") from Regency Retail Partnership, L.P. ("Partnership") and 155,797 shares
of  common  stock in  exchange  for 100% of the  existing  partnership  units of
Branch,  and assumed  approximately  $112 million of debt excluding the minority
interest amount. During the next three years, Branch will have the right to earn
an additional  $23.3 million of Redeemable  Units based upon the  achievement of
increased  income  levels.  Subject to  shareholder  approval  to be held at the
Company's  1997 Annual  Meeting,  the  Redeemable  Units will be redeemable  for
Regency common stock.
                                   10

<PAGE>

      On June 11, 1996, the Company entered into a Stock Purchase Agreement (the
"Agreement") with US Realty. Under the Agreement, the Company has agreed to sell
7,499,400  shares of common  stock to US Realty at a price of $17.625  per share
representing  total maximum proceeds of  $132,176,925.  During 1996, the Company
sold 3,651,800 shares to US Realty for $64,362,975 and the proceeds were used to
pay down the Wells Fargo Line. The Company sold 1,475,178 shares to US Realty on
March 3, 1997 and the proceeds of $26 million were primarily used to reduce debt
assumed  as part of the Branch  transaction.  Not later  than  June,  1997,  the
Company  intends  to sell the  remaining  shares  committed  to US  Realty,  the
proceeds of which will be used to further reduce its  outstanding  debt. As part
of the  Agreement,  US Realty also has  participation  rights  entitling them to
purchase  additional  equity in the Company at the same price as that offered to
other  purchasers in order to preserve  their pro rata  ownership in the Company
including  common  stock  and  Redeemable  Units  issued  as part of the  Branch
transaction.
                                  
      In connection with the  acquisition of five shopping  centers during 1995,
the Company completed a $50 million private placement (the "Private  Placement")
with LaSalle Advisors Limited  Partnership (the "Investor") on December 20, 1995
by issuing 2,500,000 shares of non-voting Class B common stock at $20 per share.
The Company  initially  issued  $18,250,000  of Series B preferred  stock to the
Investor on October 26, 1995 to fund an October  purchase of one of the shopping
centers;  however, these shares were subsequently converted into Class B common.
The Class B common shares are convertible  into 2,975,468 shares of common stock
beginning on the third  anniversary  of the issuance date subject to limitations
that the  holder  may not  beneficially  own  more  than  4.9% of the  Company's
outstanding common stock except in certain circumstances.

     In connection  with the purchase of a shopping center on June 29, 1994, the
Company  issued  7,665  shares  of  Series  A  nonvoting  preferred  stock  at a
liquidation  value of $1,000 per share. In 1996, the holder converted all of the
remaining  preferred  stock  outstanding  into 94,282 shares of common stock. In
1995 and 1994, the preferred stock was converted into 222,465 and 111,411 shares
of common stock, respectively.

      Future  dividends  paid by the Company on common and Class B common  stock
will be at the  discretion  of the Board of  Directors  of the  Company and will
depend on the actual cash flow of the Company, its financial condition,  capital
requirements,  the annual distribution requirements under the REIT provisions of
the Code,  limitations  imposed  by the  financial  covenants  of the  Company's
outstanding  debt,  and  such  other  factors  as the  Board of  Directors  deem
relevant.

                                   11

<PAGE>


Item 6.       Selected  Consolidated  Financial  Data (in  thousands,  except
              per share data)

The  following  table sets forth  Selected  Financial  Data on a historical
basis for the five years  ended  December  31,  1996,  for the  Company  and the
commercial  real estate  business of The Regency Group,  Inc. ("TRG" or "Regency
Properties"), the predecessor of the Company. This information should be read in
conjunction with the financial  statements of the Company (including the related
notes  thereto)  and  Management's  Discussion  and  Analysis  of the  Financial
Condition and Results of Operations,  each included elsewhere in this Form 10-K.
The historical  Selected  Financial Data for Regency Realty  Corporation for the
three year period  ended  December 31, 1996 and for the period from July 9, 1993
to December 31, 1993, have been derived from the audited  financial  statements.
The historical Selected Financial Data for the Regency Properties as of November
5, 1993 and the year ended  December  31, 1992 have been  derived  from  audited
financial statements.


<TABLE>
<CAPTION>
                                                    Regency Realty Corporation            Regency Properties (1)
                                            ------------------------------------------  ----------------------------
                                                                          Period Ended   Period Ended   Year Ended
                                                Year Ended December 31,   December 31,    November 5,   December 31,
                                              ----------------------------------------
                                            1996       1995       1994      1993            1993          1992
                                            ---        ----       ----      ----            ----          ----
<S>                                     <C>         <C>        <C>         <C>          <C>           <C>
Operating Data:                        
Revenues:
  Rental revenues                        $43,433     $31,555    $25,673      $3,094        $7,375        $8,436
  Management,  leasing and
     brokerage fees                        3,444       2,426      2,332         572         2,247         2,589
  Equity in income of real estate
     partnership investments                  70           4         17           3            18            11
                                        ---------   --------   --------    --------     ---------     ---------
       Total revenues                     46,948      33,985     28,022       3,669         9,640        11,036
                                        ---------   --------   --------    --------     ---------     ---------
Operating expenses:
  Operating, maintenance and real
     estate taxes                         12,065       8,684      7,140         862         3,365         3,659
  General and administrative               6,048       4,894      4,531         736         2,835         3,633
  Depreciation and amortization            8,758       6,436      5,266         679         1,564         1,643
                                        ---------   --------   --------    --------     ---------     ---------
      Total operating expenses            26,872      20,014     16,937       2,277         7,764         8,935
                                        ---------   --------   --------    --------     ---------     ---------
Equity in loss of unconsolidated
  partnership                                  -           -          -           -          (111)            -
Minority interest in operating
  (income) loss                                -           -          -           -           126           (77)
Other non-recurring income, net                -           -          -           -         3,291             -
Interest expense, net of income           10,111       8,386      5,701         496         3,937         4,701
                                        ---------   --------   --------    --------     ---------     ---------
  Net income (loss)                       $9,965      $5,585     $5,384        $895        $1,245       ($2,677)
  Preferred stock dividends                   58         591        283           -             -             -
                                        ---------   --------   --------    --------     ---------     ---------
  Net income (loss) for common
    stockholders                          $9,907      $4,994     $5,101        $895        $1,245       ($2,677)
                                        =========   ========   ========    ========     =========      =========
  Net income per common share              $0.96       $0.75      $0.80       $0.14           n/a           n/a
                                        =========   ========   ========    ========     =========      =========

Other Data:
Weighted average common shares
  outstanding (2)                         10,341       6,630      6,339       6,333          n/a            n/a
Common shares outstanding (2)             13,619       9,704      6,455       6,333          n/a            n/a
Company owned gross leasable area
  (at end of period)                       5,512       3,981      3,182       2,337        1,145          1,145
Number of properties (at end of period)       50          36         30          23            8              8

Balance Sheet Data:
Real estate, net of accumulated
  depreciation                          $367,190    $260,415   $204,421    $145,123                     $55,921
Total assets                             386,524     271,005    214,082     153,653                      60,636
Total debt                               171,607     115,617    107,998      53,521                      61,049
Stockholders' equity                     206,726     147,007    101,760      97,416                     (11,143)

</TABLE>

                                             12

<PAGE>

Item 6.       Selected  Consolidated  Financial  Data (in  thousands,  except
              per share data)  -continued-

                                   

- -----------------
                 
(1)   Such  Combined  Financial  Statements  have been  prepared  to reflect the
      historical combined  operations of the Regency Properties  associated with
      the ownership of the properties and the management,  leasing, acquisition,
      development  and  brokerage  business  acquired by the Company from TRG on
      November 5, 1993 in connection with the Company's  Initial Public Offering
      ("IPO") completed November 5, 1993.

(2)  1996 includes  28,848  Partnership  Operating  Units issued on February 28,
     1996,  convertible on a one for one basis into shares of common stock after
     the first  anniversary  date of the  issuance  date.  1996 and 1995 include
     2,975,468 common shares,  or the weighted average impact thereof,  that the
     Class B common stock,  issued December 20, 1995,  will be convertible  into
     after three years from the issuance date, subject to certain limitations.
                                        13

<PAGE>



Item 7.Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following  discussion  should be read in conjunction  with the  accompanying
Consolidated   Financial   Statements   and  Notes  thereto  of  Regency  Realty
Corporation (the "Company") appearing elsewhere in this Form 10-K.

Business

       The  Company's  principal  business is operating and  developing  grocery
anchored  neighborhood  shopping  centers  in  targeted  infill  markets  in the
Southeast. At December 31, 1996 the Company owned 50 properties or approximately
5.5 million  square  feet(GLA);  71% of the GLA of the properties are located in
Florida,  and 40 are grocery  anchored.  The Company's  four largest  tenants in
order by  number  of  leased  store  locations  are  Publix  Supermarkets  (17),
Winn-Dixie Stores (9), Wal-Mart (5), and The Kroger Co. (3).

Acquisition and Development

       During  1996,  the  Company  acquired  13  shopping  centers  (the  "1996
Acquisitions") for $107 million (including certain budgeted capital improvements
designed to improve the  performance  of the acquired  property)  for a total of
1,417,259  square  feet.  The  Company  also  acquired a parcel of land to begin
development of a Winn-Dixie shopping center, and entered into a joint venture to
redevelop an existing  shopping  center.  Total  estimated cost at completion of
these  development  projects  is  $15.2  million  and both  are  expected  to be
completed during the first quarter of 1998.

       During 1995, the Company acquired five shopping centers and completed the
development  or  expansion  of four  shopping  centers  for a total  cost of $62
million (the "1995 Acquisitions").

       On  March  7,  1997,  the  Company  acquired  Branch   Properties,   L.P.
("Branch"),  an Atlanta based real estate partnership that owns,  operates,  and
develops shopping centers in the Southeast,  for approximately $190 million.  At
closing, the Company issued 3,373,801 redeemable  partnership units ("Redeemable
Units") from Regency Retail Partnership, L.P. ("Partnership") and 155,797 shares
of  common  stock in  exchange  for 100% of the  existing  partnership  units of
Branch,  and assumed  approximately  $112 million of debt excluding the minority
interest amount. During the next three years, Branch will have the right to earn
an additional  $23.3 million of Redeemable  Units based upon the  achievement of
increased income levels. At closing the Company acquired from Branch 18 shopping
centers  comprising  1.9 million  square  feet;  8 shopping  centers  containing
700,000 square feet that are currently under development or  redevelopment,  and
management  contracts  on over 4 million  square  feet  owned by third  parties.
Including the completion of the development and  redevelopment  properties,  the
three largest tenants in these properties are Publix, Kroger, and Harris Teeter.
After the closing,  the  Company's  five  largest  tenants in order by number of
leased store locations are Publix (24), Winn-Dixie (9), Kroger (5) Wal-Mart (5),
and Harris Teeter (3). Also at closing,  the Company reduced the assumed debt by
approximately  $25.7  million  funded from a $26 million sale of common stock to
Security Capital U.S. Realty ("US Realty") further discussed below.
                                   14

<PAGE>

Liquidity and Capital Resources

      The Company's  total  indebtedness  at December 31, 1996 and 1995 was $172
million and $116 million, respectively, of which $94 million and $91 million had
fixed interest rates averaging 7.6% and 7.5%, respectively. The weighted average
interest  rate on total debt at  December  31,  1996 and 1995 was 7.5% and 7.7%,
respectively.  Based upon the Company's total market  capitalization (total debt
and the market value of equity) at December  31, 1996 of $529  million  (closing
common stock price of $26.25 per share and total  common  stock and  equivalents
outstanding of  13,619,221),  the Company's debt to total market  capitalization
ratio was 32.4% vs. 40.6% at December 31, 1996 and 1995, respectively.

      During 1996,  the Company  negotiated an unsecured  $90 million  revolving
line of credit with Wells Fargo Realty Advisors  Funding,  Incorporated  ("Wells
Fargo Line") with an interest  rate equal to the London  Interbank  Offered Rate
("LIBOR")  plus  1.625%.  The  proceeds  were used to pay off the balance of the
secured line of credit and fund the 1996 Acquisitions.  The balance of the Wells
Fargo  Line  at  December  31,  1996,  was $74  million.  The  unused  available
commitment  on the Wells Fargo Line will be used to finance  future  acquisition
and development activity.  The Company increased the Wells Fargo Line commitment
amount to $150  million  during  the first  quarter  of 1997,  and  reduced  the
variable interest rate to LIBOR plus 1.50%.
                              
      On June 11, 1996, the Company entered into a Stock Purchase Agreement (the
"Agreement") with US Realty. Under the Agreement, the Company has agreed to sell
7,499,400  shares of common  stock to US Realty at a price of $17.625  per share
representing  total maximum proceeds of  $132,176,925.  During 1996, the Company
sold 3,651,800 shares to US Realty for $64,362,975 and the proceeds were used to
pay down the Wells Fargo Line. The Company sold 1,475,178 shares to US Realty on
March 3, 1997 and the proceeds of $26 million were primarily used to reduce debt
assumed  as part of the Branch  transaction.  Not later  than  June,  1997,  the
Company  intends  to sell the  remaining  shares  committed  to US  Realty,  the
proceeds of which will be used to further reduce its  outstanding  debt. As part
of the  Agreement,  US Realty also has  participation  rights  entitling them to
purchase  additional  equity in the Company at the same price as that offered to
other  purchasers in order to preserve  their pro rata  ownership in the Company
including  common  stock  and  Redeemable  Units  issued  as part of the  Branch
transaction.

      The Company funded the 1995  Acquisitions  from borrowings on the Line and
the proceeds from a $50 million private placement (the "Private Placement"). The
Private Placement was completed on December 20, 1995 by issuing 2,500,000 shares
of  non-voting  Class B common  stock to a single  investor.  The Class B common
shares are  convertible  into 2,975,468  shares of common stock beginning on the
third  anniversary of the issuance date subject to  limitations  that the holder
may not  beneficially  own more than 4.9% of the  Company's  outstanding  common
stock except in certain circumstances.

      The   Company's   principal   demands  for   liquidity  are  dividends  to
stockholders,  the operation,  maintenance and  improvement of real estate,  and
scheduled interest and principal payments. The Company paid common and preferred
dividends of $16.2 million and $10.8 million to its stockholders during 1996 and
1995,  respectively.  The percentage of funds from operations paid out in common
dividends,  or "dividend payout ratio", was 80.7% and 85.2% at December 31, 1996
and 1995,  respectively.  In January 1997,  the Company  increased its quarterly
common dividend to $.42 per share or $1.68 annually. Total dividends expected to
be paid by the Company during 1997 will increase  substantially over 1996 due to
the common stock dividend increase,  and the Agreement with US Realty;  however,
the Company expects the dividend payout ratio to remain below 85%.
                                   15

<PAGE>

      During 1996 and 1995, the Company's net cash used in investing  activities
was $109.8 million and $61.5 million,  respectively,  related  primarily to real
estate  acquisitions,   construction  and  building  improvements.  The  Company
invested  approximately  $2.9 million and $2.0 million for  improvements  to its
properties at December 31, 1996 and 1995, respectively.  The Company anticipates
that cash provided by operating activities, unused amounts under the Wells Fargo
Line, and cash reserves are adequate to meet liquidity requirements. At December
31,  1996,  the Company had cash  balances of $8.3 million of which $1.8 million
was restricted.

      The Company has made an election to be taxed,  and is  operating  so as to
qualify,  as a Real Estate  Investment  Trust  ("REIT")  for Federal  income tax
purposes,  and  accordingly  has paid no Federal  income tax  subsequent  to its
Initial Public  Offering in 1993.  While the Company  intends to continue to pay
dividends  to its  stockholders,  the Company  will reserve such amounts of cash
flow as it considers necessary for the proper maintenance and improvement of its
real estate, while still maintaining its qualification as a REIT.

      The Company's real estate  portfolio has grown  substantially  during 1996
and 1995 as a result of the acquisitions  and  developments  discussed above. In
addition to the Branch  acquisition,  during 1997, the Company expects to exceed
the 1996 level of growth and intends to meet the related  capital  requirements,
principally  for  the  acquisition  or  development  of  new  properties,   from
borrowings on the Wells Fargo Line, and from  additional  public equity and debt
offerings. Because such acquisition and development activities are discretionary
in nature,  they are not  expected  to burden the  Company's  capital  resources
currently available for liquidity requirements.

Results of Operations

      Comparison of 1996 to 1995

      Revenues  increased  $13.0  million or 38% to $46.9 million in 1996 due to
the 1996  Acquisitions  providing $3.7 million in revenues in 1996 (partial year
ownership),  and the 1995  Acquisitions  providing $9.5 million in 1996 vs. $2.3
million in 1995 (partial year ownership).  At December 31, 1996, the real estate
portfolio  contained  approximately  5.5  million  sf, was 95.4%  leased and had
average rents of $8.73 per sf.  Minimum rent  increased $9.7 million or 39%, and
recoveries from tenants  increased $1.9 million or 32%. On a same property basis
(excluding the 1996 and 1995  Acquisitions)  revenues  increased $2.0 million or
6.3%,  primarily  due to higher  occupancy  levels,  and an  increase in average
rents. At December 31, 1996, the real estate  portfolio on a same property basis
was 96.2% leased vs. 95.7% leased at December 31, 1995.  Same  property  average
rents grew to $8.13 at  December  31,  1996 from  $8.08 at  December  31,  1995.
Revenues from property management,  leasing, brokerage, and development services
provided  on  properties  not owned by the  Company  were $3.4  million  in 1996
compared to $2.4 million in 1995,  the increase due primarily to higher build to
suit development activity.

      Operating expenses increased $6.9 million or 34% to $26.9 million in 1996.
Combined operating and maintenance  expense and real estate taxes increased $3.4
million  or 39%  during  1996 to  $12.1  million  due to the  1996  Acquisitions
generating  $1.0 million in operating  expenses in 1996 (partial year ownership)
and the 1995 Acquisitions  producing $2.6 million in operating  expenses in 1996
vs. $.5 million in 1995 (partial  year  ownership).  General and  administrative
expense  increased  24% during 1996 to $6.0 million due to hiring new  employees
during 1996 as part of the development of a "retail  operating system" that will
ensure  that the  Company  has the  resources  necessary  to acquire  and manage
properties in the future. Depreciation and amortization was 36% higher than 1995
due to the 1996 and 1995 Acquisitions.

      Net interest expense  increased to $10.1 million in 1996 from $8.4 million
in 1995 or 21% due primarily to increased  average  outstanding  loan  balances.
Outstanding debt at December 31, 1996 was $172 million vs. $116 million in 1995.
Weighted  average  interest rates were 7.5% in 1996 vs. 7.7% in 1995.  Preferred
stock  dividends  declined as a result of the full  conversion  of the remaining
Series A preferred  stock into common stock  during 1996.  Net income for common
stockholders was $9.9 million or $.96 per share in 1996 vs. $5.0 million or $.75
per share in 1995.
                                   16

<PAGE>

      Comparison of 1995 to 1994

      Revenues increased $6.0 million or 21% to $34.0 million in 1995 due to the
1995  Acquisitions  providing  $2.3  million in revenues in 1995  (partial  year
ownership),  and the 1994  Acquisitions  providing $7.6 million in 1995 vs. $5.0
million in 1994 (partial year ownership).  At December 31, 1995, the real estate
portfolio contained approximately 4 million sf, was 96.2% leased and had average
rents  of  $8.54  per sf.  Minimum  rent  increased  $4.3  million  or 21%,  and
recoveries from tenants  increased $1.4 million or 33%. On a same property basis
(excluding the 1995 and 1994  Acquisitions)  revenues  increased $1.1 million or
4.8%,  primarily  due to higher  occupancy  levels,  and an  increase in average
rents. At December 31, 1995, the real estate  portfolio on a same property basis
was 95.3% leased vs. 93.7% leased at December 31, 1994.  Same  property  average
rents grew to $8.49 at  December  31,  1995 from  $8.34 at  December  31,  1994.
Revenues from property management,  leasing, brokerage, and development services
provided  on  properties  not owned by the  Company  were $2.4  million  in 1995
compared to $2.3 million in 1994.

      Operating expenses increased $3.1 million or 18% to $20.0 million in 1995.
Combined operating and maintenance  expense and real estate taxes increased $1.5
million  or 22%  during  1995  to  $8.7  million  due to the  1995  Acquisitions
generating  $.45 million in operating  expenses in 1995 (partial year ownership)
and the 1994 Acquisitions  producing $1.7 million in operating  expenses in 1995
vs. $1.0 million in 1994 (partial year  ownership).  General and  administrative
expense  increased  8% during  1995 to $4.9  million due to  increased  staffing
requirements  related to the  acquisitions,  and nominal  increases  in employee
compensation.  Depreciation and amortization was 22% higher than 1994 due to the
1995 and 1994 Acquisitions.

      Net interest  expense  increased to $8.4 million in 1995 from $5.7 million
in 1994 or 47% due primarily to increased average  outstanding loan balances and
higher interest rates. Outstanding debt at December 31,1995 was $116 million vs.
$108 million in 1994. Weighted average interest rates were 7.7% in 1995 vs. 7.2%
in 1994.  Preferred stock dividends  increased from $.28 million in 1994 to $.59
million in 1995 as a result of the Series B  preferred  stock  issued on October
26, 1995 and  outstanding  through  December 20, 1995,  partially  offset by the
conversion of Series A preferred stock into common stock.

      Net income for common  stockholders  was $5.0 million or $.75 per share in
1995 vs. $5.1 million or $.80 per share in 1994.  The reduction is primarily due
to the  increase in net  interest  expense and  depreciation  expense  discussed
above, and additionally,  as it pertains to per share amounts, the dilution from
the  conversion  of the Series A and B  preferred  stock into common and Class B
common stock, respectively.

Funds from Operations

      The Company  considers funds from operations  ("FFO") to be one measure of
REIT  performance  and defines it as net income  (computed  in  accordance  with
generally accepted accounting  principles) excluding gains (or losses) from debt
restructuring  and sales of  property,  adjusted  for certain  noncash  amounts,
primarily  depreciation and amortization,  and after adjustments for investments
in  real  estate  partnerships.  Adjustments  for  investments  in  real  estate
partnerships  are  calculated  to reflect FFO on the same basis.  FFO as defined
above has become a measure used by many industry analysts;  however,  FFO should
not be considered an alternative to net income as an indication of the Company's
performance  or to cash flow as a measure of liquidity  determined in accordance
with generally accepted accounting principles.

      FFO for the years ended  December 31, 1996,  1995 and 1994 are summarized
in the following table:
                                               1996        1995         1994
Net income for common stockholders        $   9,907       4,994        5,101
Add:  non-cash amounts:
  Real   estate   depreciation   and          
    amortization                              8,049       5,833        4,656
  Common stock compensation:
    Board of directors' fees and
      401 (k) contributions                     613         451          417
    Long-term compensation plans              2,173         815          621
  Straight-lining of rents charge                28         208          206
                                             ------      ------       ------   
          Funds from operations           $  20,770      12,301       11,001
                                             ======      ======       ======
Weighted average shares outstanding          10,341       6,630        6,339
                                             ======       =====        =====
Funds from operations per share           $    2.01        1.86         1.74
                                              =====        ====         ====   
                                   17

<PAGE>

      In May 1995 the  National  Association  of Real Estate  Investment  Trusts
(NAREIT) amended the definition of FFO and recommended the following  changes to
become effective for fiscal years ending in 1996: (1) amortization of loan costs
and  depreciation of office  furniture and equipment should not be added back to
net income,  (2)  non-recurring  gains (losses) should be excluded from FFO, and
(3) gains (losses) from the sale of undepreciated  real estate  considered to be
part of a company's  recurring  business  may be  included  in FFO.  The Company
modified its definition of FFO for these changes  effective  January 1, 1996 and
has also restated amounts reported for 1995 and 1994 for comparison purposes.

Environmental Matters

      The Company like others in the commercial real estate industry, is subject
to numerous environmental laws and regulations and the operation of dry cleaning
plants at the Company's shopping centers is the principal environmental concern.
The Company  believes  that the dry cleaners are  operating in  accordance  with
current laws and  regulations  and has  established  procedures to monitor their
operations.   Based  on   information   presently   available,   no   additional
environmental  accruals  were made and  management  believes  that the  ultimate
disposition  of currently  known matters will not have a material  effect on the
financial  position,  liquidity,  or  operations  of the Company.  Environmental
matters  are  discussed  further  in note  10,  Contingencies,  of the  notes to
Consolidated Financial Statements.

Economic Conditions

      A substantial number of the Company's  long-term leases contain provisions
designed to mitigate  the  adverse  impact of  inflation  on the  Company's  net
income.  Such provisions include percentage  rentals,  rental escalation clauses
and  reimbursements  for common  area  maintenance,  insurance,  and real estate
taxes.  In  addition,  42% of the  Company's  leases have terms of five years or
less,  which  allows the Company the  opportunity  to increase  rents upon lease
expiration. Approximately 42% of the Company's leases expire beyond 10 years and
are generally anchor tenants.  Unfavorable  economic  conditions could result in
the inability of certain  tenants to meet their lease  obligations and otherwise
could  adversely  affect the Company's  ability to attract and retain  desirable
tenants.  During  1996,  Discovery  Zone ("DZ") filed for  protection  under the
bankruptcy  laws.  DZ had two leases with the  Company,  both of which have been
terminated  and no longer pay rent.  DZ's  annualized  minimum rent  represented
approximately  .50%  of 1996  minimum  rent  reported  by the  Company.  Luria's
currently  has three  leases  with the  Company,  one store of which was  closed
during 1995, but continued to pay rent.  During 1996,  Luria's  defaulted on the
lease of the closed  store and informed the Company that it intends to close its
remaining  two stores during 1997.  Minimum rent from the three  Luria's  leases
represents  approximately  1.2% of  1996  total  minimum  rent  reported  by the
Company.  The three leases with  Luria's  expire  beyond  2007,  and the Company
considers Luria's to be bound by the lease terms.
                                   
     At December  31, 1996  approximately  11%,  5%, 3% and 3% of the  Company's
annualized  rent is  received  from  Publix,  Winn-Dixie,  Wal-Mart  and Kroger,
respectively  (the "Four  Major  Tenants").  During  1996 no tenant had rents in
excess of 10% of the Company's minimum rent. In February,  1996, Wal-Mart closed
its store  located at The  Marketplace  in Alexander  City,  Alabama in order to
relocate to a new larger store  nearby.  Wal-Mart  will continue to pay rent due
under  its  lease  at The  Marketplace  which  expires  in  October,  2007.  The
Marketplace is anchored by a Winn-Dixie  which opened during 1995.  Although the
Company  considers the financial  condition and its  relationship  with the Four
Major  Tenants to be very  solid,  a  significant  downturn  in  business or the
non-renewal of expiring leases of the Four Major Tenants could adversely  affect
the Company.  Management also believes that the shopping  centers are relatively
well  positioned  to  withstand  adverse  economic  conditions  since  they  are
typically anchored by supermarkets,  drug stores and discount  department stores
that offer day-to-day necessities rather than luxury goods.
                                   18

<PAGE>


I
tem 8.            Consolidated Financial Statements and Supplementary Data


      The Consolidated  Financial  Statements and supplementary data included in
this Report are listed in Part IV, Item 14(a).



Item 9.            Changes in and  Disagreements  with  Accountants  on
Accounting and Financial Disclosure


      None.


                                       PART III


Item 10.    Directors and Executive Officers of the Registrant


      Information concerning the directors of the Company is incorporated herein
by reference to the Company's  definitive  proxy  statement to be filed with the
Securities and Exchange  Commission  within 120 days after the end of the fiscal
year  covered  by this Form 10-K with  respect  to its 1997  Annual  Meeting  of
Shareholders.

      The following table provides information concerning the executive officers
of the Company, all of whom were officers of TRG for five years or more prior to
the Company's acquisition of TRG's real estate business in November, 1993.

- -------------------------------------------------------------------------------

                                             Positions with the Company;
            Name                            Principal Occupations During
            (Age)                                  Past Five Years
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Martin E. Stein, Jr. (44)      President,  Chief Executive Officer and Director
                               of the Company and  TRG.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Bruce M. Johnson (49)          Executive  Vice President and Chief  Financial 
                               Officer of  the  Company  and  previously
                               Vice  President  of Investment Management and
                               Acquisitions  for TRG.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Robert C. Gillander, Jr. (43)  Executive  Vice   President  of  Investments
                               for  the Company and  previously  Vice  President
                               of Development for TRG.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

James D. Thompson (41)         Executive Vice President of Operations for  the
                               Company and previously Vice President of Asset
                               Management in North and Central Florida regions
                               for TRG.
- -------------------------------------------------------------------------------
                                   19
                              

<PAGE>




Item 11.    Executive Compensation

      Incorporated  herein  by  reference  to  the  Company's  definitive  proxy
statement to be filed with the  Securities  and Exchange  Commission  within 120
days after the end of the fiscal year  covered by this Form 10-K with respect to
its 1997 Annual Meeting of Shareholders.



Item 12.    Security Ownership of Certain Beneficial Owner and Management

      Incorporated  herein  by  reference  to  the  Company's  definitive  proxy
statement to be filed with the  Securities  and Exchange  Commission  within 120
days after the end of the fiscal year  covered by this Form 10-K with respect to
its 1997 Annual Meeting of Shareholders.




Item 13.    Certain Relationships and Related Transactions

      Incorporated  herein  by  reference  to  the  Company's  definitive  proxy
statement to be filed with the  Securities  and Exchange  Commission  within 120
days after the end of the fiscal year  covered by this Form 10-K with respect to
its 1997 Annual Meeting of Shareholders.




                                       PART IV



Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

   (a)   Financial Statements and Financial Statement Schedules:


      The Company's 1996 financial  statements and financial statement schedule,
together with the report of KPMG Peat Marwick LLP dated January 27, 1997, except
for Note 11 as to  which  the date is March  7,  1997 are  listed  on the  index
immediately preceding the financial statements at the end of this report.

   (b)   Reports on Form 8-K:

      None
                                        20

<PAGE>


   (c)  Exhibits:

3.    Articles of Incorporation

          ***     (i)         Restated  Articles of  Incorporation  of Regency
                              Realty Corporation as amended to date.

         *(ii)          Bylaws of Regency Realty Corporation.

4.       See exhibits 3(i) and 3(ii) for  provisions of the Articles of
         Incorporation and Bylaws of Regency Realty Corporation defining rights
         of security holders.

10.   Material Contracts

          ~*(a)         Regency Realty Corporation 1993 Long Term Omnibus Plan

          ~*(b)         Form of Stock Purchase Award Agreement

         ~*(c)          Form of  Management  Stock Pledge  Agreement,  relating
                  to the Stock Purchase Award Agreement filed as Exhibit 10(b)

         ~*(d)          Form  of  Promissory  Note,  relating  to the  Stock
                  Purchase Award Agreement filed as Exhibit 10(b)

         ~*(e)          Form of Option Award Agreement for Key Employees

         ~*(f)         Form of Option Award Agreement for Non-Employee Directors

         ~*(g)          Annual Incentive for Management Plan

         ~*(h)          Form of Director/Officer Indemnification Agreement

     ~*(i) Form of Non-Competition  Agreement between Regency Realty Corporation
and Joan W.  Stein,  Robert L.  Stein,  Richard  W.  Stein,  the Martin E. Stein
Testamentary Trust A and the Martin E. Stein Testamentary Trust B. ~*** 

(j) Form of Employment Agreements entered into with the
following:

                  (i)   Bruce M. Johnson
                  (ii)  Robert C. Gillander, Jr.
                  (iii) James D. Thompson
                  (iv)  Richard E. Cook
                  (v)   A. Chester Skinner, III
                  (vi)  J. Christian Leavitt
                  (vii) Robert L. Miller



~        Management  contract or  compensatory  plan or arrangement
filed pursuant to S-K 601(10)(iii)(A).

*        Included as an exhibit to the Pre-effective  Amendment No. 2 to the
Company's S-11 filed October 5,1993, and is incorporated herein by reference

**       Included as an exhibit to the  Company's  Form 10-Q filed 
December 13, 1993, and is incorporated herein by reference

***      Included as an exhibit to the  Company's  Form 10-Q filed 
November 14, 1996, and is incorporated herein by reference

****     Included as an exhibit to the Company's  Form 10-Q filed May 12, 1994,
and is incorporated herein by reference

*****    Filed as appendices to the  Registrant's  definitive  proxy  statement
dated August 2, 1996 and is incorporated herein by reference.

******      Filed as an exhibit to the  Registrant's  Form 8-K report
filed March 14, 1997 and is incorporated herein by reference.
                              21

<PAGE>


     *(k) Form of  Agreement  for Right of First  Refusal as to stock in Regency
Realty  Group,   Inc.  between  The  Regency  Group,  Inc.  and  Regency  Realty
Corporation.

     (l) The following documents,  all dated November 5, 1993, relating to a $51
million loan from Salomon Brothers Inc. to corporations and subsidiaries  wholly
owned by the Company.
         
   **          (i)  Loan  Agreement  between  RSP IV  Criterion,  Ltd.,
                        Regency  Rosewood Temple Terrace,  Ltd.,  Treasure Coast
                        Investors,  Ltd., Landcom Regency Mandarin, Ltd., RRC FL
                        SPC,  Inc.,  RRC AL SPC, Inc., RRC MS SPC, Inc., and RRC
                        GA SPC,  Inc. (as  borrowers)  and RRC Lender,  Inc. (as
                        lender)

            **    (ii)  Promissory  Note  in  the  original  principal  amount 
                        of $51 million

            **          (iii) Undertaking  executed by the Registrant and RRC FL
                        SPC,  Inc.,  RRC AL SPC, Inc., RRC MS SPC, Inc., and RRC
                        GA SPC, Inc.

            **    (iv)  Certificate  Purchase  Agreement between RRC Lender, 
                        Inc. (as seller) and Salomon Brothers, Inc.( as lender)

     (m) The following  documents  relating to the purchase by Security  Capital
U.S. Realty and Security Capital Holdings, S.A. of up to 45% of the Registrant's
outstanding common stock:
         
             ***** (i)   Stock Purchase Agreement dated June 11, 1996.

            ***** (ii)  Stockholders' Agreement dated July 10, 1996.

                  ******     (A)   First Amendment of  Stockholders'  Agreement
                                    dated February 10, 1997.

            ***** (iii) Registration Rights Agreement dated July 10, 1996.

      ****(n)           Stock  Grant Plan  adopted on January  31, 1994 to grant
                          stock to employees.

          (o)         Criteria  for  Restricted  Stock  Awards  under 1993
                        Long Term Omnibus Plan.

          (p)           Form of 1996 Stock Purchase Award Agreement.

          (q)           Form of 1996  Management  Stock Pledge  Agreement
                  relating to the Stock Purchase Award Agreement filed as 
                  Exhibit 10(p)..

          (r)     Form of Promissory  Note relating to 1996 Stock Purchase Award
                  Agreement filed as Exhibit 10 (p).

- ----------------------------

     ~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
     *  Included  as an  exhibit  to the  Pre-effective  Amendment  No. 2 to the
Company's S-11 filed October 5, 1993, and is incorporated herein by reference
  
   ** Included as an exhibit to the  Company's  Form 10-Q filed  December  13,
1993, and is incorporated  herein by reference 

*** Included as an exhibit to the Company's Form 10-Q filed November 14, 1996,
and is incorporated herein by reference

****     Included as an exhibit to the Company's  Form 10-Q filed May 12, 1994,
and is incorporated herein by reference

*****    Filed as appendices to the  Registrant's  definitive  proxy  statement
dated August 2, 1996 and is incorporated herein by reference.

******      Filed as an exhibit to the  Registrant's  Form 8-K report 
filed March 14, 1997 and is incorporated herein by reference.
                                   22

<PAGE>


          (s)     Purchase and Sale Agreement  dated July 11, 1996 between RREFF
                  MA-II  Cambridge  Square,  Inc.,  a  Delaware  Corporation  as
                  ("Seller") and RRC Acquisitions,  Inc., a Florida  Corporation
                  and  wholly-owned  subsidiary  of the  Company  as  ("Buyer"),
                  relating  to the  acquisition  of  Cambridge  Square  Shopping
                  Center.

          (t)     Purchase and Sale Agreement  dated  September 23, 1996 between
                  Real Estate Collateral  Management  Company,  Inc., a Delaware
                  Corporation  as  ("Seller")  and  RRC  Acquisitions,  Inc.,  a
                  Florida Corporation and wholly-owned subsidiary of the Company
                  as ('Buyer"), relating to the acquisition of Old St. Augustine
                  Plaza.

          (u)     Purchase  and Sale  Agreement  dated  November 7, 1996 between
                  Durham  Woodcroft  Associates.  L.P., a North Carolina limited
                  partnership  as  ('Seller")  and  RRC  Acquisitions,  Inc.,  a
                  Florida Corporation and wholly-owned subsidiary of the Company
                  as  ("Buyer"),   relating  to  the  acquisition  of  Woodcroft
                  Shopping Center.

          (v)     Purchase and Sale Agreement dated December 10, 1996 between C.
                  M.   Wellington  Town  Square,   L.P.,  an  Illinois   limited
                  partnership  as  ('Seller")  and  RRC  Acquisitions,  Inc.,  a
                  Florida Corporation and wholly-owned subsidiary of the Company
                  as ("Buyer"),  relating to the  acquisition of Wellington Town
                  Square.

          (w)     Agreement  to Purchase  Real Estate  dated  December  27, 1996
                  between Publix Super Markets,  Inc., a Florida  Corporation as
                  ('Seller") and RRC Acquisitions,  Inc., a Florida  Corporation
                  and  wholly-owned  subsidiary  of the  Company  as  ('Buyer"),
                  relating to the acquisition of Town Center at Martin Downs.

       ~*(x)      Form of Employment Agreement with Martin E. Stein, Jr.



21.   Subsidiaries of the Registrant

23.   Consent of KPMG Peat Marwick LLP

27.   Financial Data Table


- --------------------------

     ~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
 
   * Included as an exhibit to the Pre-effective Amendment No.2 to the Company's
S-11 filed October 5, 1993, and is incorporated herein by reference

     ** Included as an exhibit to the  Company's  Form 10-Q filed  December  13,
1993, and is incorporated herein by reference

     *** Included as an exhibit to the  Company's  Form 10-Q filed  November 14,
1996, and is incorporated herein by reference

     **** Included as an exhibit to the Company's  Form 10-Q filed May 12, 1994,
and is incorporated herein by reference

     ***** Filed as appendices to the  Registrant's  definitive  proxy statement
dated August 2, 1996 and is incorporated herein by reference.

     ****** Filed as an exhibit to the Registrant's  Form 8-K report filed March
14, 1997 and is incorporated herein by reference.

                                   23

<PAGE>


                                     SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          REGENCY REALTY CORPORATION



Date:        March 21, 1997                 By:  /s/  Martin  E.  Stein, Jr.
                                                 --------------------------- 
                                                 Martin E. Stein, Jr.
                                                 President  and   Chief
                                                 Executive Officer


Date:        March 21,1997                  By:  /s/  Bruce  M.   Johnson
                                                 -------------------------
                                                 Bruce M. Johnson
                                                 Executive Vice President and
                                                 Chief Financial Officer


Date:        March 21, 1997                 By:  /s/ J.  Christian  Leavitt
                                                 ---------------------------
                                                  J. Christian Leavitt
                                                  Secretary and Treasurer
                                                  Principal Accounting Officer


      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated:



Date:        March 21, 1997                    /s/   Joan W. Stein  
                                              -----------------------------
                                                 Joan W. Stein, Chairman
  
Date:        March 21, 1997                    /s/   Martin E. Stein, Jr.
                                              ------------------------------
                                               Martin E. Stein, Jr., Director

Date:        March 21, 1997                   /s/   Robert L. Stein
                                               -----------------------------
                                               Robert L. Stein, Director

Date:        March 21, 1997                   /s/  Edward L. Baker
                                               -----------------------------
                                                   Edward L. Baker, Director

Date:        March 21, 1997                   /s/   A. R.Carpenter
                                              ------------------------------
                                                    A. R. Carpenter, Director

Date:        March 21, 1997                   /s/ J. Dix Druce
                                              -------------------------------
                                                  J. Dix Druce, Jr., Director

Date:        March 21, 1997                 /s/   Albert  D.   Ernest, Jr.
                                                --------------------------
                                                Albert D. Ernest, Jr., Director

Date:        March 21, 1997                 /s/   Douglas   S.   Luke
                                               --------------------------
                                                  Douglas S. Luke, Director

Date:        March 21, 1997                 /s/    J. Marhsall Peck
                                             -----------------------------
                                                   J. Marshall Peck, Director

Date:        March 21, 1997                 /s/    Paul E. Szurek
                                                  -----------------------------
                                                   Paul E. Szurek, Director

                                   24

<PAGE>

                                     









                          REGENCY REALTY CORPORATION


                        INDEX TO FINANCIAL STATEMENTS




Regency Realty Corporation

   Independent Auditors' Report                                      F-2
   Consolidated Balance Sheets as of December 31, 1996 and 1995      F-3
   Consolidated Statements of Operations for the years ended
      December 31, 1996, 1995, and 1994                              F-4
   Consolidated Statements of Stockholders' Equity for
      the years ended December 31, 1996, 1995 and 1994               F-5
   Consolidated Statements of Cash Flows for the years ended
      December 31, 1996, 1995, and 1994                              F-7
   Notes to Consolidated Financial Statements                        F-9


Financial Statement Schedule

   Independent Auditors' Report on Financial Statement Schedule      S-1

   Schedule III - Regency Realty Corporation Combined 
      Real Estate and Accumulated Depreciation -
      December 31, 1996                                              S-2



     All other  schedules are omitted because they are
     not applicable or because information required
     therein is shown in the financial statements
     or notes thereto.
                                   F-1


<PAGE>


                         Independent Auditors' Report


The Shareholders and Board of Directors
Regency Realty Corporation:


We have audited the accompanying  consolidated  balance sheets of Regency Realty
Corporation  as of  December  31, 1996 and 1995,  and the  related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the three year period  ended  December  31,  1996.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of Regency  Realty
Corporation  as of  December  31,  1996  and  1995,  and the  results  of  their
operations  and their cash flows for each of the years in the three year  period
ended  December  31,  1996 in  conformity  with  generally  accepted  accounting
principles.



                                                /s/ KPMG Peat Marwick LLP  
                                                -----------------------------  
                                                KPMG Peat Marwick LLP
                                                Certified Public Accountants





Jacksonville, Florida January 27, 1997, except for Note 11, as to which the date
is March 7, 1997

                                   F-2

<PAGE>


                           REGENCY REALTY CORPORATION
                          Consolidated Balance Sheets
                           December 31, 1996 and 1995


                                                   1996             1995
                                                   ----             ----
Assets
Real estate rental property, at cost 
  (notes 2, 4, 5 and 8):
     Land                                     $  84,186,483      61,126,706
     Buildings and improvements                 304,820,998     217,604,461
     Construction in progress                     3,360,206               - 
                                                -----------     -----------     
                                                392,367,687     278,731,167
     Less:  accumulated depreciation             26,213,225      18,631,310     
                                                -----------     ----------- 
                                                366,154,462     260,099,857
     Investments in  real estate
       partnerships (note 3)                      1,035,107         315,389
                                                -----------     -----------
                  Real estate, net              367,189,569     260,415,246

Cash and cash equivalents (note 4)                8,293,229       3,401,701
Tenant receivables, net of allowance for
     uncollectible accounts of $832,091
     and $474,019 at December 31, 1996 and
     1995, respectively                           5,281,419       2,620,763
Deferred costs, less accumulated amortization
     of $2,519,019 and $2,547,765 at
     December 31, 1996 and 1995, respectively     3,961,439       3,598,011
Other assets                                      1,798,393         969,676
                                                -----------       ---------
                                              $ 386,524,049     271,005,397
                                                ===========     ===========
                                             
Liabilities and Stockholders' Equity
Liabilities:
     Mortgage loans payable (note 4)             97,906,288      93,277,273
     Acquisition and development line of         
       credit (note 5)                           73,701,185      22,339,803 
     Accounts payable and other liabilities       6,300,640       7,405,232
     Tenants' security and escrow deposits        1,381,673         976,515
                                                -----------     -----------  
                Total Liabilities               179,289,786     123,998,823
                                                -----------     -----------
Limited partner's interest in operating             
partnership (note 6)                                508,486               -

Stockholders' Equity (notes 6 and 7)
     Preferred stock - 1,000,000 shares
       authorized:Series A 8% cumulative
       convertible, 1,916 shares issued
       and outstanding at December 31, 1995               -       1,916,268
     Common stock $.01 par value per share:
       25,000,000 shares authorized;
       10,614,905 and 6,728,723 shares
       issued and outstanding  at 
       December 31, 1996 and 1995,                             
       respectively                                 106,149          67,287
    Special common stock - 10,000,000 shares
       authorized: Class B $.01 par
       value per share, 2,500,000
       shares issued and outstanding                 25,000          25,000
     Additional paid in capital                 223,080,831     155,221,241
     Distributions in excess of net income      (13,981,770)     (8,073,188) 
     Stock loans                                 (2,504,433)     (2,150,034) 
                                                ------------    ------------   
                Total stockholders' equity      206,725,777     147,006,574
                                                ===========     ===========
Commitments and contingencies
 (notes 8 and 10)

                                              $ 386,524,049     271,005,397
See accompanying notes to consolidated          ===========     ===========
financial statements.
                                   F-3                              

<PAGE>


                           REGENCY REALTY CORPORATION
                     Consolidated Statements of Operations
                  Years ended December 31, 1996, 1995 and 1994



                                           1996       1995       1994
                                           ----      -----       ----

Revenues:
  Minimum rent (note 8)                $ 34,705,905  25,044,201  20,716,870
  Percentage rent                           997,981     672,986     565,711
  Recoveries from tenants (note 9)        7,729,404   5,837,773   4,390,894
  Management, leasing and
    brokerage fees                        3,444,287   2,425,733   2,331,990
  Equity in income of real estate
     partnership investments (note 3)        69,990       4,226      16,943
                                         ----------  ----------  ----------
                                              
         Total revenues                  46,947,567  33,984,919  28,022,408
                                         ----------  ----------  ----------  
                                                      
  
Operating expenses:
  Depreciation and amortization            8,758,067   6,436,092  5,265,947
  Operating and maintenance                7,655,934   5,682,967  4,793,231
  General and administrative (note 9)      6,048,140   4,894,432  4,530,682
  Real estate taxes                        4,409,460   3,000,557  2,347,016
                                          ----------  ---------- ----------
                                           
         Total operating expenses         26,871,601  20,014,048 16,936,876
                                          ----------  ---------- ---------- 

Interest expense (income):
  Interest expense                         10,777,131  8,840,376  6,065,239
  Interest income                            (666,031)  (454,207)  (364,105)
                                           ----------- ---------- ----------
                                             
         Net interest expense              10,111,100  8,386,169  5,701,134
                                           ----------- ---------- ----------

         Net income                        9,964,866   5,584,702  5,384,398

Preferred stock dividends                     57,721     590,904    283,071
                                           ---------   ---------  --------- 
                                              
         Net income for common           
          stockholders                   $ 9,907,145   4,993,798  5,101,327
                                           =========   =========  =========

         Net income per common share     
          outstanding                    $       .96         .75        .80
                                                 ===         ===        ===

         Weighted average common 
          shares outstanding              10,341,239   6,630,385  6,338,648
                                          ==========   =========  =========


See accompanying notes to consolidated financial statements.

                                   F-4

<PAGE>

                           REGENCY REALTY CORPORATION  


                 Consolidated Statements of Stockholders' Equity

                  Years ended December 31, 1996, 1995 and 1994


<TABLE>
<CAPTION>
                                                                                            Additional   Distributions          
                                                  Preferred     Common        Class B        Paid In     in excess of   Stock
                                                   Stock        Stock       Common Stock      Capital     Net Income    Loans   
                                                   -----        -----       ------------     -------       ----------   -----   
<S>                                           <C>            <C>          <C>               <C>            <C>          <C>


Balance at December 31, 1993                            -       63,331                -      98,986,129        895,522  (2,529,450) 

Common stock issued as compensation                     -          101                -         173,771              -           -  
Series A Preferred stock issued (note 6)        7,665,132            -                -               -              -           -  
Series A Preferred stock converted
     to common stock                           (1,916,283)       1,114                -       1,915,169              -           -  
Series A Preferred stock converted -
     partial share payment                            (14)           -                -               -              -           -  
Partial forgiveness of stock loans (note 7)             -            -                -               -              -     126,472  
Cash dividends declared:
     Preferred stock                                    -            -                -               -       (283,071)          -  
     Common stock, $1.37 per share                      -            -                -               -     (8,716,587)          -  
Stock issuance costs                                    -            -                -          (5,775)             -           -  
Net income                                              -            -                -               -      5,384,398           -  
                                              -----------    ---------    -------------     -----------    -----------  ----------  

Balance at December 31, 1994                  $ 5,748,835       64,546                -     101,069,294     (2,719,738) (2,402,978) 


Common stock issued as compensation                     -          516                -         831,083              -           -  
Series B Preferred stock issued (note 6)       18,250,000            -                -               -              -           -  
Series B Preferred stock converted
     to Class B common stock                  (18,250,000)           -            9,125      18,240,875              -           -  
Class B common stock issued (note 6)                    -            -           15,875      31,734,125              -           -  
Series A  Preferred stock converted
     to common stock                           (3,832,567)       2,225                -       3,830,342              -           -  
Partial forgiveness of stock loans (note 7)             -            -                -               -              -     252,944  
Cash dividends declared:
     Preferred stock                                    -            -                -               -       (590,904)          -  
     Common stock, $1.58 per share                      -            -                -               -    (10,347,248)          -  
Stock issuance costs                                    -            -                -        (484,478)             -           -  
Net income                                              -            -                -               -      5,584,702           -  
                                              -----------    ---------    -------------     -----------      ---------  ----------  

Balance at December 31, 1995                  $ 1,916,268       67,287           25,000     155,221,241     (8,073,188) (2,150,034) 


Common stock issued (note 6)                            -       36,518                -      64,326,457              -           -  
Common stock purchased by executive
     officers (note 7)                                  -          800                -       1,339,200              -  (1,273,000) 
Common stock issued as compensation                     -          532                -       1,091,375              -           -  
Common stock purchased by directors                     -           69                -         139,931              -           -  
Series A Preferred stock converted
     to common stock                           (1,916,282)         943                -       1,915,339              -           -  
Series A Preferred stock converted -
     partial share payment                             14            -                -               -              -           -  
Partial forgiveness of stock loans (note 7)             -            -                -               -              -     918,601  
Cash dividends declared:
     Preferred stock                                    -            -                -               -         (57,721)         -  
     Common stock, $1.62 per share                      -            -                -               -     (15,815,727)         -  
Stock issuance costs                                    -            -                -        (952,712)             -           -  
Net income                                              -            -                -               -       9,964,866          -  
                                              -----------    ---------    -------------     -----------    ------------ ----------  

Balance at December 31, 1996                  $         -      106,149           25,000     223,080,831    (13,981,770) (2,504,433) 
                                              ===========    =========    =============     ===========    ============ =========== 

</TABLE>


See accompanying notes to consolidated financial statements.

                                   F-5

<PAGE>




                           REGENCY REALTY CORPORATION


                 Consolidated Statements of Stockholders' Equity

                  Years ended December 31, 1996, 1995 and 1994

                                 -continued-
                                                                Total        
                                                            Stockholders'       
                                                                Equity       
                                                            -------------     

Balance at December 31, 1993                                    97,415,532      
                                                                                
Common stock issued as compensation                                173,872      
Series A Preferred stock issued (note 6)                         7,665,132      
Series A Preferred stock converted                                           
     to common stock                                                     -   
Series A Preferred stock converted -                                         
     partial share payment                                             (14)  
Partial forgiveness of stock loans (note 7)                        126,472   
Cash dividends declared:                                                     
     Preferred stock                                              (283,071)  
     Common stock, $1.37 per share                              (8,716,587)  
Stock issuance costs                                                (5,775)  
Net income                                                       5,384,398   
                                                               -----------   
                                                                             
Balance at December 31, 1994                                   101,759,959   
                                                                             
Common stock issued as compensation                                831,599   
Series B Preferred stock issued (note 6)                        18,250,000   
Series B Preferred stock converted                                           
     to Class B common stock                                             -   
Class B common stock issued (note 6)                            31,750,000   
Series A  Preferred stock converted                                          
     to common stock                                                     -    
Partial forgiveness of stock loans (note 7)                        252,944   
Cash dividends declared:                                                     
     Preferred stock                                              (590,904)  
     Common stock, $1.58 per share                             (10,347,248)  
Stock issuance costs                                              (484,478)  
Net income                                                       5,584,702   
                                                              ------------   
                                                                             
Balance at December 31, 1995                                   147,006,574    
                                                                             
Common stock issued (note 6)                                    64,362,975   
Common stock purchased by executive                                          
     officers (note 7)                                              67,000   
Common stock issued as compensation                              1,091,907   
Common stock purchased by directors                                140,000   
Series A Preferred stock converted                                           
     to common stock                                                     -   
Series A Preferred stock converted -                                         
     partial share payment                                              14   
Partial forgiveness of stock loans (note 7)                        918,601   
Cash dividends declared:                                                     
     Preferred stock                                               (57,721)  
     Common stock, $1.62 per share                             (15,815,727)  
Stock issuance costs                                              (952,712)  
Net income                                                       9,964,866   
                                                              ------------   
                                                                             
Balance at December 31, 1996                                   206,725,777   
                                                               ===========   
                                                            
                                                          
See accompanying notes to consolidated financial statements.

                                   F-6

<PAGE>

                                REGENCY REALTY CORPORATION
                           Consolidated Statements of Cash Flows
                         Years ended December 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>

                                                                         1996                   1995              1994
                                                                         ----                   ----              ----
<S>                                                                    <C>                  <C>               <C>    

Cash flows from operating activities:
   Net income                                                          $  9,964,866           5,584,702          5,384,398
   Adjustments  to  reconcile  net  income 
   to net cash  provided  by  operating
      activities:
         Depreciation and amortization                                    8,758,067           6,436,092          5,265,947
         Equity in income of real estate
            partnership investments                                         (69,990)             (4,226)           (16,943)
          Changes in assets and liabilities:
              (Increase) decrease in tenant receivables                  (2,660,656)              9,879           (397,699)
              (Increase) in deferred leasing commissions                   (585,889)           (479,454)          (378,563)         
              (increase) in other assets                                 (1,019,637)           (619,800)          (130,012)     
              Increase in tenants' security                                                                                    
                 and escrow deposits                                        405,158             304,378            282,568     
              Increase in accounts payable                                                                                     
                 and other liabilities                                    1,212,000           4,660,370          1,496,384     
                                                                        -----------         -----------        -----------     
                                                                                                                                
                Net cash provided by operating activities                16,003,919          15,891,941         11,506,080     
                                                                        -----------         -----------        -----------     
Cash flows from investing activities:
   Investment in real estate                                           (102,933,980)        (59,537,217)      (43,518,218)
   Investment in real estate partnership                                   (881,309)                  -                 -
   Capital expenditures                                                  (2,898,250)         (1,978,643)       (1,875,963)
   Construction in progress                                              (3,360,206)                  -                 -
   Distributions received from real
     estate partnership investments                                         231,581              12,146            29,083
                                                                       ------------         -----------       -----------
                                                                                                             
                Net cash used in investing activities                  (109,842,164)        (61,503,714)      (45,365,098)
                                                                       ------------         -----------       ----------- 
Cash flows from financing activities:
   Proceeds from common stock issuance                                   64,569,975                   -                 -
   Limited partner distribution                                             (16,846)                  -                 -
   Series B preferred stock issued                                                -          18,250,000                 -
   Class B common stock issued                                                    -          31,750,000                 -
   Dividends paid in cash                                               (16,179,518)        (10,760,237)       (8,871,517)
   Stock issuance costs                                                    (952,712)           (484,478)           (5,775)
   Proceeds (repayments) from acquisition
      and development line of credit, net                                51,361,382         (18,736,629)       38,555,343
   Proceeds from construction and mortgage
      loans payable                                                       1,518,331          26,773,540         5,326,460
   Principal payments on mortgage loans payable                           (808,068)            (417,851)         (112,581)
   Payment of loan closing costs                                          (762,771)            (221,708)         (422,253) 
                                                                       ------------         -----------        -----------          
                                                                     
              Net cash provided by financing activities                 98,729,773           46,152,637        34,469,677
                                                                       ------------         -----------        -----------
                                                              
              Net increase in cash and cash equivalents                  4,891,528              540,864           610,659
                                                                       ------------         -----------        -----------
                                                              
Cash and cash equivalents at beginning of period                         3,401,701            2,860,837         2,250,178
                                                                       ------------         -----------        -----------
                                                                        
Cash and cash equivalents at end of period                      $        8,293,229            3,401,701         2,860,837
                                                                       ===========           ==========        ==========
</TABLE>

                                                                          
See accompanying notes to consolidated financial statements.

                                   F-7

<PAGE>



                         REGENCY REALTY CORPORATION
                      Consolidated Statements of Cash Flows
                  Years Ended December 31, 1996, 1995 and 1994
                                   -continued-



                                                                            
                                                                            
                                        1996            1995           1994
                                        ----            ----           ----
                                                                       

Supplemental  disclosure  of 
    cash  flow  information 
    cash  paid  for  interest
   (including  capitalized  interest
   of  approximately  $381,000,
   $285,000  and
   $216,000 in 1996, 1995
   and 1994, respectively)        $ 10,979,841       9,147,175        5,898,287
                                   ===========      ==========        =========

Supplemental disclosure of non
  cash transactions:
   Mortgage loans assumed 
   from sellers of real estate    $  3,918,752               -       10,707,705
                                   ===========      ==========       ==========
   Limited partner interest
    in operating partnership
    issued to seller of
    eal estate as partial payment $    525,332               -                -
                                    ===========      ==========       ==========
   Preferred stock issued to 
    seller of real estate         $          -               -        7,665,132
                                      =========      ==========       ==========


See accompanying notes to consolidated financial statements.


                                   F-8

<PAGE>



                          REGENCY REALTY CORPORATION


                  Notes to Consolidated Financial Statements

                          December 31, 1996 and 1995



1.   Summary of Significant Accounting Policies

     (a) General

         Regency Realty  Corporation (the Company) was formed for the purpose of
         managing,  leasing,  brokering,   acquiring,  and  developing  shopping
         centers. The Company also provides management,  leasing,  brokerage and
         development  services  for real estate not owned by the Company  (third
         parties).   The  Company  commenced   operations   effective  with  the
         completion of its initial public offering on November 5, 1993.

         The accompanying consolidated financial statements include the accounts
         of Regency Realty Group,  Inc. (the "Management  Company"),  its wholly
         owned  real  estate  properties,  an  operating  partnership,  and  the
         Company's two joint ventures. All significant intercompany balances and
         transactions have been eliminated.

     (b) Revenues

         The Company  leases  space to tenants  under  agreements  with  varying
         terms.  Leases are accounted for as operating  leases with minimum rent
         recognized  on a  straight-line  basis  over  the  term  of  the  lease
         regardless  of when  payments  are due.  Accrued  rents are included in
         tenant  receivables.  Minimum  rent has been  adjusted  to reflect  the
         effects of recognizing rent on a straight line basis. Substantially all
         of the lease agreements  contain  provisions  which provide  additional
         rents based on tenants' sales volume or  reimbursement  of the tenants'
         share of real estate taxes and certain  common area  maintenance  (CAM)
         costs. These additional rents are reflected on the accrual basis.

         Management,  leasing,  brokerage and development fees are recognized as
         revenue when earned.

     (c) Real Estate Rental Property

         Land,  buildings and  improvements are recorded at cost. All direct and
         indirect costs clearly associated with the acquisition, development and
         construction   of  real  estate  projects  owned  by  the  Company  are
         capitalized  as  buildings  and  improvements,  while  maintenance  and
         repairs  which  do not  improve  or  extend  the  useful  lives  of the
         respective  assets are reflected in operating and maintenance  expense.
         The property  cost  includes  the  capitalization  of interest  expense
         incurred  during  construction  in accordance  with generally  accepted
         accounting  principles.  Included  in  land  is 30  and  8.4  acres  of
         undeveloped  land with a cost  basis of  approximately  $2,600,000  and
         $1,700,000 at December 31, 1996 and 1995, respectively.

         Depreciation  is computed using the straight line method over estimated
         useful lives up to forty years for buildings and improvements,  term of
         lease for tenant  improvements,  and five to seven years for  furniture
         and equipment.

     (d) Income Taxes

         The Company has made an election to be taxed, and is operating so as to
         qualify,  as a Real Estate  Investment  Trust (REIT) for Federal income
         tax purposes.  Accordingly, the Company will not pay Federal income tax
         provided distributions to stockholders equal at least the amount of its
         REIT taxable income as defined under the Internal Revenue Code.

                                   F-9

<PAGE>




                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements

1.   Summary of Significant Accounting Policies, continued

     (d) Income Taxes, continued

         Regency  Realty Group,  Inc. files a separate tax return and is subject
         to Federal and State income taxes. This Management  Company had taxable
         income of $150,674 for the year ended  December 31, 1996 and incurred a
         taxable  loss for the years  ended  December  31,  1995 and  1994.  The
         Management Company had a net operating loss carryforward of $484,000 at
         December  31,  1995,  and  accordingly  paid no income tax in 1996.  No
         income  tax  benefit  has  been  recorded  for the net  operating  loss
         carryforwards.

         The tax  basis of real  estate  assets  exceeds  the net book  basis by
         approximately  $1.9 and $7.0  million at  December  31,  1996 and 1995,
         respectively,  primarily  due to higher  depreciation  expense for book
         purposes  and  differences  in  accounting  for real estate held in the
         operating partnership.

     (e) Deferred Costs

         Deferred costs consist of internal and external commissions  associated
         with leasing the rental  property and loan costs  incurred in obtaining
         financing  which are limited to initial direct and  incremental  costs.
         The net leasing  commission  balance  was  $1,108,374  and  $808,291 at
         December 31, 1996 and 1995, respectively. The net loan cost balance was
         $2,853,065 and $2,789,720 at December 31, 1996 and 1995,  respectively.
         Such costs are deferred and amortized  using the  straight-line  method
         over the terms of the  respective  leases  and loans.  Fully  amortized
         deferred  leasing  costs of $958,398  were removed  from the  financial
         statements during 1996.

     (f) Fair Value of Financial Instruments

         The fair value of the Company's  mortgage loans payable and acquisition
         and development line of credit are estimated based on the current rates
         available  to the  Company for debt of the same  remaining  maturities.
         Therefore,   the  Company  considers  their  carrying  value  to  be  a
         reasonable estimation of their fair value.

     (g) Per Share Data

         Net income per common  share  outstanding  is  computed  based upon the
         weighted average shares  outstanding  during the period.  The Company's
         Class B common  stock as well as the  redeemable  units of the  limited
         partner are convertible into shares of common stock and are included in
         the weighted  average shares  calculation as common stock  equivalents.
         The  dilutive  impact  of  common  stock  options  is  included  in the
         calculation of net income per share when the exercise price falls below
         the market price.  Net income per share on a fully diluted basis is not
         different from net income per common share  outstanding and thus is not
         disclosed separately.

     (h) Cash and Cash Equivalents

         Any instruments  which have an original maturity of ninety days or less
         when purchased are considered cash equivalents.

     (i) Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires the Company's  management to
         make  estimates  and  assumptions  that affect the reported  amounts of
         assets  and  liabilities,  and  disclosure  of  contingent  assets  and
         liabilities,  at the date of the financial  statements and the reported
         amounts of revenues and expenses  during the reporting  period.  Actual
         results could differ from those estimates.

                                   F-10

<PAGE>



                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements




1.   Summary of Significant Accounting Policies, continued

     (j) Impairment of Long-Lived Assets

         The Company adopted the provisions of SFAS No. 121, "Accounting for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to be
         Disposed  Of",  on  January  1,  1996.  This  Statement  requires  that
         long-lived assets and certain identifiable  intangibles be reviewed for
         impairment  whenever events or changes in  circumstances  indicate that
         the carrying amount of an asset may not be recoverable.  Recoverability
         of  assets  to be held  and used is  measured  by a  comparison  of the
         carrying  amount of an asset to future  net cash flows  expected  to be
         generated by the asset.  If such assets are  considered to be impaired,
         the  impairment to be recognized is measured by the amount by which the
         carrying  amount of the assets  exceed  the fair  value of the  assets.
         Adoption  of this  Statement  did not  have a  material  impact  on the
         Company's financial position, results of operations, or liquidity.

     (k) Stock Option Plan

         Prior to January 1, 1996,  the Company  accounted  for its stock option
         plan in accordance with the provisions of Accounting  Principles  Board
         ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", and
         related  interpretations.   As  such,  compensation  expense  would  be
         recorded on the date of grant only if the current  market  price of the
         underlying  stock exceeded the exercise  price. On January 1, 1996, the
         Company   adopted   SFAS   No.   123,   "Accounting   for   Stock-Based
         Compensation",  which permits entities to recognize as expense over the
         vesting period the fair value of all stock-based  awards on the date of
         grant. Alternatively,  SFAS No. 123 also allows entities to continue to
         apply the  provisions  of APB  Opinion No. 25 and provide pro forma net
         income and pro forma earnings per share  disclosures for employee stock
         option grants made in 1995 and future years as if the  fair-value-based
         method  defined  in SFAS No.  123 had been  applied.  The  Company  has
         elected to continue to apply the  provisions  of APB Opinion No. 25 and
         provide the pro forma disclosure provisions of SFAS No. 123.


     (l) Reclassifications

         Certain  reclassifications  have been made to the 1994 and 1995 amounts
         to conform to classifications adopted in 1996.


2.   Acquisitions of Real Estate Rental Property

     During  1996 and 1995,  the  Company  acquired  18  shopping  centers  (the
     "Acquisitions")  accounted  for as purchases  with  consideration  totaling
     approximately $160.4 million in cash and the assumption of a mortgage loan.
     The operating results are included in the Company's  consolidated financial
     statements  from  the  date  each  property  was  acquired.  The  following
     unaudited  pro forma  information  presents  the  consolidated  results  of
     operations as if the  Acquisitions  had occurred on January 1, 1995,  after
     giving  effect  to  certain  adjustments  including  depreciation  expense,
     additional general and administration  costs,  interest expense on new debt
     incurred, and an increase in the weighted average common shares outstanding
     for Common and Class B common stock issued to acquire  shopping  centers as
     if it had been  issued on January 1, 1995.  Pro forma  revenues  would have
     been $57.6  million and $53.5 million in 1996 and 1995,  respectively.  Pro
     forma net income for common  stockholders would have been $10.6 million and
     $8.0  million  in 1996 and 1995,  respectively.  Pro forma net  income  per
     common  share would have been $.98 per share and $.76 per share in 1996 and
     1995,  respectively.  This data does not purport to be  indicative  of what
     would have occurred had the  acquisitions  been made on January 1, 1995, or
     of results which may occur in the future.




                                   F-11

<PAGE>




                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements


3.   Investments In Real Estate Partnerships

     The Company has a 10%  investment in Village  Commons  Shopping  Center and
     during 1996 acquired a 25%  investment  in Ocean East Mall by  contributing
     $881,307 in cash.  These  investments  are recorded on the equity method of
     accounting  with  income  being  recognized  in the  year  reported  by the
     partnership.  The Company's  combined  investment in these two partnerships
     was  $1,035,107  and $315,389 at December 31, 1996 and 1995,  respectively.
     Net  income  is  allocated  in  accordance  with  each  of the  partnership
     agreements.  The Company's combined  proportionate  share of net income was
     $69,990, $4,226 and $16,943 for the years ended December 31, 1996, 1995 and
     1994, respectively.

     At  December  31,  1996  and  1995,   the  combined  total  assets  of  the
     partnerships  were  $13,147,083  and  $8,345,732,  respectively,  and total
     liabilities  were  $7,109,378 and  $5,192,241,  respectively.  Combined net
     income was $323,174,  $42,260 and $169,432 for the years ended December 31,
     1996, 1995 and 1994, respectively.

4.   Mortgage Loans Payable

     Mortgage  loans  payable  secured by real  estate  rental  property  are as
     follows:
                                                         1996         1995
      6.72% mortgage loan,  held by a trust
         created for the benefit of investors
         who purchased mortgage pass-through
         certificates,  non recourse to the
         Company, interest only paid monthly,
         due in full November 5, 2000                $ 51,000,000    51,000,000

      7.60% mortgage notes payable in monthly
         principal installments of $26,236
          maturing from June 28, 2001 
          to June 1, 2002                              15,932,745    16,238,314

      9.80% mortgage note, payable in monthly
         installments of $73,899, including
         principal and interest, maturing
         on February 1, 1999                            8,000,421     8,097,910
      
      9.50% mortgage note, payable in monthly
         installments of $78,633 including principal
         and interest, maturing on March 1, 2002        8,823,403     8,931,412

      8.01% mortgage note, payable in monthly
         principal installments of $10,411,
         maturing on August 17, 2002                    6,532,665     6,651,967

      8.28% mortgage note, payable in monthly
         installments of $37,598 including
         principal and interest, maturing
         on August 1, 1997                              3,801,821             -

      8.72%  mortgage   note,   rate  adjusts
         annually, payable  in  monthly
         installments of $23,105 including
         principal and interest, maturing
         on March 1, 1997                               2,296,902     2,357,670

      Construction note payable, interest only
         payable monthly at Prime + 1/4%
                                                        1,518,331             -
                                                       ----------   -----------

            Total mortgage loans payable             $ 97,906,288    93,277,273
                                                       ==========   ===========


                                   F-12

<PAGE>


                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements

4.   Mortgage Loans Payable (continued)

     Principal maturities on the mortgage loans are as follows:

                  Year                         Amount

                  1997                       6,774,592
                  1998                       2,253,663
                  1999                       8,443,866
                  2000                      51,726,556
                  2001                       8,869,856
                  Thereafter                19,837,755
                                            ----------
                                          $ 97,906,288
                                          ============    
     As part of  their  borrowing  arrangements,  the  Company  is  expected  to
     maintain  escrow  balances  for the  payment  of real  estate  taxes on the
     mortgaged  properties,  and in the case of the  $51,000,000  mortgage loan,
     also  maintain  interest,   insurance  and  specified  capital  improvement
     escrows.  Escrow  balances  recorded  as cash  and  cash  equivalents  were
     $1,069,337 and $1,255,421 at December 31, 1996 and 1995, respectively.

5.   Acquisition and Development Line of Credit

     The Company negotiated a $90 million unsecured  acquisition and development
     revolving line of credit,  the Wells Fargo Line, during 1996 which replaced
     the existing secured line of credit, the Line. The Wells Fargo Line will be
     used to finance  future  real estate  acquisitions  and  developments.  The
     interest rate is based on the LIBOR  plus1.625%  with interest only for two
     years,  and if then  terminated,  becomes a two year term loan  maturing in
     May,  2000  with  principal  due in  seven  equal  quarterly  installments.
     However, the borrower may request a one year extension of the interest only
     revolving period annually in May of each year beginning in 1997.

6.   Stockholders' Equity

     On June 11, 1996, the Company entered into a Stock Purchase  Agreement (the
     "Agreement")  with  Security  Capital  U.S.  Realty  and  Security  Capital
     Holdings  S.A. (  collectively,  "US  Realty").  Under the  Agreement,  the
     Company has agreed to sell 7,499,400 shares of Common Stock to US Realty at
     $17.625 per share  representing  total  maximum  proceeds of  $132,176,925.
     During  1996,  the  Company  sold   3,651,800   shares  to  US  Realty  for
     $64,362,975.  Not  later  than  June 1, 1997  ("Subsequent  Closing"),  the
     Company  may sell up to  3,847,600  shares for a total of  $67,813,950.  US
     Realty will have the right,  exercisable  on a one-time basis in June 1997,
     to acquire  additional shares of common stock to the extent that the shares
     to be acquired at the Subsequent Closing have not yet been purchased.

     In connection  with the purchase of a shopping center on February 28, 1996,
     the Company issued 28,848 Partnership  Operating Units to a limited partner
     convertible  on a one for one basis into  shares of common  stock after the
     first anniversary of the issuance date.

     The Company completed a $50,000,000  private placement by issuing 2,500,000
     shares of non-voting  Class B common stock to a single investor on December
     20, 1995 (the "Private Placement"). The proceeds from the Private Placement
     were used to acquire five shopping  centers.  The Company  initially issued
     $18,250,000  of Series B  preferred  stock on October  26, 1995 to fund the
     acquisition of a shopping center. These shares were subsequently  converted
     into Class B common  stock.  The Class B common stock is  convertible  into
     2,975,468 shares of common stock beginning on the third  anniversary of the
     issuance date, subject to certain limitations defined in the agreement. The
     dividend on each share of Class B common is payable when and if declared by
     the Board of Directors  pari passu with any dividend on the common stock of
     the Company.

     In connection  with the purchase of a shopping center on June 29, 1994, the
     Company  issued  7,665  shares of Series A nonvoting  preferred  stock at a
     liquidation value of $1,000 per share. In 1996, the holder converted all of
     the  remaining  preferred  stock  outstanding  into 94,282 shares of common
     stock. In 1995 and 1994, the preferred stock was converted into 222,465 and
     111,411 shares of common stock, respectively.

                                   F-13

<PAGE>


                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements

7.   Long-term Stock Incentive Plans

     In 1993, the Company adopted a Long Term Omnibus Plan (the "Plan") pursuant
     to which  the Board of  Directors  may grant  stock  and stock  options  to
     officers,  directors  and other key  employees.  The Plan  provides for the
     issuance of up to 12% of the  Company's  common shares  outstanding  not to
     exceed 3 million  shares of authorized  but unissued  common  stock.  Stock
     options are granted with an exercise price equal to the stock's fair market
     value at the date of grant.  All stock options granted have ten year terms,
     and with  respect  to  officers  and  other  key  employees,  become  fully
     exercisable  after five years from the date of grant,  and with  respect to
     directors, become fully exercisable after one year.

     At December 31, 1996, there were approximately 1.1 million shares available
     for grant  under the Plan.  The per share  weighted-average  fair  value of
     stock options  granted during 1996 and 1995 was $3.04 and $1.08 on the date
     of grant using the Black  Scholes  option-pricing  model with the following
     weighted-average   assumptions:   1996  -  expected  dividend  yield  6.6%,
     risk-free interest rate of 5.9%,  expected  volatility 21%, and an expected
     life of five years; 1995 - expected dividend yield 9.2%, risk-free interest
     rate of 5.4%, expected volatility 19%, and an expected life of five years.

     The Company  applies APB  Opinion  No. 25 in  accounting  for its Plan and,
     accordingly, no compensation cost has been recognized for its stock options
     in the  consolidated  financial  statements.  Had  the  Company  determined
     compensation  cost  based on the fair value at the grant date for its stock
     options   under  SFAS  No.  123,  the   Company's  net  income  for  common
     stockholders  would have been  reduced to the pro forma  amounts  indicated
     below:
    
                          Net income for             
                       common stockholders           1996             1995
                       -------------------           ----             ----      
                          As reported       $      9,907,145    $  4,993,798
                          Net income per
                           common share                 0.96            0.75
                                                        
                          Pro forma                9,896,934       4,993,798 (*)
                          Net income per
                           common share                 0.96            0.75
              
                           -------------------
                           * The options  granted  during 1995 were issued
                             on December 31, 1995 and accordingly had no
                             effect to income.

     Pro forma net income for common stockholders  reflects only options granted
     in 1996 and 1995.  Therefore,  the full impact of calculating  compensation
     cost for stock options under SFAS No. 123 is not reflected in the pro forma
     net  income  for  common  stockholders   amounts  presented  above  because
     compensation  cost is  reflected  over  the  options'  vesting  period  and
     compensation  cost for  options  granted  prior to  January  1, 1995 is not
     considered.

     Stock option activity during the periods indicated is as follows:
     
                                               Number of     Weighted-Average
                                                  Shares      Exercise Price
                                               ----------    ----------------

         Outstanding, December 31, 1993          187,000          $19.22
            Granted                                6,500          $17.33
            Forfeited                             (2,500)         $19.25
                                              ----------
         Outstanding, December 31, 1994          191,000          $19.16
            Granted                                6,000          $17.25
            Forfeited                            (11,000)         $19.25
                                               ----------              
         Outstanding, December 31, 1995          186,000          $19.09
            Granted                               12,000          $24.67
                                                ---------
         Outstanding, December 31, 1996          198,000          $19.43
                                                =========
                                   F-14

<PAGE>


                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements


7.   Long-term Stock Incentive Plans (continued)

     At December 31,  1996,  the range of exercise  prices and  weighted-average
     remaining  contractual life of the outstanding  options was $16.75 - $26.25
     and 7.5 years, respectively.

     At  December  31,  1996 and 1995,  the  number of options  exercisable  was
     186,000 and 31,500,  respectively,  and the weighted-average exercise price
     of those options was $19.09 and $19.16, respectively.

     Also as part of the Plan,  in 1993 and  1996,  certain  officers  purchased
     common stock at fair market value  directly from the Company,  of which 90%
     and 95%,  respectively,  was financed by a stock  purchase loan provided by
     the Plan. These recourse loans are fully secured by stock, bear interest at
     fixed  rates of 7.34% to 7.79% and  mature  after ten  years.  The Board of
     Directors  may  authorize  the  forgiveness  of  all  or a  portion  of the
     principal balance based on the Company's achievement of specified financial
     objectives,  and total stockholder return performance targets. During 1996,
     1995 and 1994,  $646,598 $379,418 and $252,944 was forgiven,  respectively,
     and is included  as a charge to income on the  consolidated  statements  of
     operations.  The Company also has a performance based restricted stock plan
     for officers whereby a portion of the shares  authorized under the Plan may
     be  granted  upon the  achievement  of  certain  total  stockholder  return
     performance  targets.  Shares granted under the plan become fully vested by
     December 31, 2000. During 1996, the initial measurement and grant date, the
     Company  charged  $809,400  to  income  on the  consolidated  statement  of
     operations.

8.   Operating Leases

     The Company's  properties are leased to tenants under operating leases with
     expiration  dates  extending  to the year 2041.  Future  minimum rent under
     noncancelable  operating  leases as of December  31,1996,  excluding tenant
     reimbursements of operating  expenses and excluding  additional  contingent
     rentals based on tenants' sales volume are as follows:

                 Year ending December 31,         Amount

                     1997                      41,544,074
                     1998                      36,779,305
                     1999                      31,659,814
                     2000                      27,375,272
                     2001                      22,728,344
                     Thereafter               146,240,248
                                              -----------
                           Total            $ 306,327,057
                                              ===========

     At  December  31,  1996,   the  real  estate   portfolio  as  a  whole  was
     approximately 95.4% leased.

     The shopping centers' tenant base includes  primarily national and regional
     supermarkets,  drug stores,  discount department stores and other retailers
     and, consequently,  the credit risk is concentrated in the retail industry.
     There were no tenants  which  individually  represented  10% or more of the
     Company's  combined  minimum rent.  The combined  annualized  rent from the
     Company's  four largest  retail tenants  represented  approximately  22% of
     annualized minimum rent at December 31, 1996.

9.   Related Party Transactions

     The Company  provides  management,  leasing,  and  brokerage  services  for
     certain  commercial real estate  properties of The Regency Group,  Inc. and
     its affiliates ("TRG"), a corporation  wholly-owned by certain officers and
     stockholders  of the  Company.  Fees for such  services  are charged to TRG
     based on current market rates.

     
                                   F-15

<PAGE>

                          REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements


9.   Related Party Transactions (continued)
     
     From  time  to  time,   certain   personnel  of  the  Company  may  provide
administrative  services  to TRG,  pursuant  to an  agreement.  The cost of such
services are  reimbursed  by TRG based on percentage  allocations  of management
time and general overhead made in compliance with applicable  regulations of the
Internal Revenue Service.  The Company received  $95,000,  $194,000 and $204,000
during the years ended December 31, 1996, 1995 and 1994, respectively, which has
been recorded as a reimbursement to general and administrative expenses.

     In connection with and as a condition to the Company's acquisition of
     University Marketplace, TRG entered into a cash flow support agreement with
     the Company.  The  agreement  provided that TRG guarantee the monthly gross
     rental revenue, for a period of three years following the Company's initial
     public  offering for a portion of the anchor  space  vacated by Phar-Mor in
     July 1993. The Company  received $58,034 and $88,882 during the years ended
     December  31,  1995 and  1994,  respectively,  which has been  recorded  as
     recoveries from tenants.

10.  Contingencies

     The Company like others in the commercial real estate industry,  is subject
     to numerous  environmental  laws and  regulations  and the operation of dry
     cleaning  plants  at  the  Company's  shopping  centers  is  the  principal
     environmental  concern.  The Company  believes  that the dry  cleaners  are
     operating  in  accordance   with  current  laws  and  regulations  and  has
     established  procedures to monitor their operations.  While the Company has
     registered  the  plants  located in Florida  under a state  funded  program
     designed  to  substantially  fund  the  clean  up,  if  necessary,  of  any
     environmental  issues,  the  owner or  operator  is not  relieved  from the
     ultimate  responsibility for clean up. The Company also has established due
     diligence  procedures  to identify  and  evaluate  potential  environmental
     issues on properties under  consideration  for  acquisition.  In connection
     with   acquisitions   during  1996  and  1995,   the  Company   established
     environmental reserves of $600,000 and $500,000,  respectively. While it is
     not  possible  to predict  with  certainty,  management  believes  that the
     reserves  are  adequate to cover  future  clean-up  costs  related to these
     sites. The Company's policy is to accrue environmental  clean-up costs when
     it is  probable  that a  liability  has been  incurred  and that  amount is
     reasonably  estimable.   Based  on  information  presently  available,   no
     additional  environmental  accruals were made and management  believes that
     the  ultimate  disposition  of  currently  known  matters  will  not have a
     material effect on the financial position,  liquidity, or operations of the
     Company.

11.  Subsequent Event

     On March 7, 1997, the Company acquired Branch Properties,  L.P. ("Branch"),
     an Atlanta based real estate  partnership that owns,  manages,  leases, and
     develops   shopping  centers  in  the  Southeastern   United  States,   for
     approximately  $190 million.  At the closing,  the Company issued 3,373,801
     redeemable  partnership  units  ("Redeemable  Units") from  Regency  Retail
     Partnership,  L.P.  ("Partnership")  and 155,797  shares of common stock in
     exchange for 100% of the existing  partnership units of Branch, and assumed
     approximately  $112 million of debt excluding the minority interest amount.
     During  the  next  three  years,  Branch  will  have  the  right to earn an
     additional  $23.3 million of Redeemable Units based upon the achievement of
     increased  income  levels.  At closing the Company  acquired from Branch 18
     shopping  centers  comprising 1.9 million  square feet; 8 shopping  centers
     containing  700,000  square feet that are currently  under  development  or
     redevelopment, and management contracts on over 4 million square feet owned
     by third parties.

                                   F-16


<PAGE>

                       REGENCY REALTY CORPORATION

                  Notes to Consolidated Financial Statements




12.  Market and Dividend Information (Unaudited)

     The Company  trades on the New York Stock  Exchange under the symbol "REG".
     The Company currently has approximately 3,000  shareholders.  The following
     table sets forth the high and low prices and the cash dividends declared on
     the Company's common stock by quarter for 1996 and 1995.

                                  1996                         1995
                        ------------------------     -------------------------
                                           Cash                         Cash
                         High      Low   Dividends    High      Low   Dividends
                         Price    Price  Declared     Price    Price  Declared

      March 31       $  17.500   15.875     .405     17.125   15.250     .395
      June 30           21.125   16.500     .405     18.375   15.750     .395
      September 30      22.375   19.250     .405     18.125   16.375     .395
      December 31       26.250   21.125     .405     17.500   16.375     .395

                            

13.  Summary of Quarterly Financial Data (Unaudited)

     Presented below is a summary of the consolidated  quarterly  financial data
     for the years ended December 31, 1996 and 1995.

                                        First    Second    Third    Fourth
                                       Quarter   Quarter  Quarter   Quarter
                                       -------   -------  -------   -------     
                                  (amounts in thousands, except per share data)
      1996:
      Revenues                       $ 10,501    10,952   12,030    13,464
      Net income for common
        stockholders                    2,576     2,597    3,025     1,709
      Net income per share                .26       .26      .28       .16

      1995:
      Revenues                        $ 7,863     8,102    8,569     9,451
      Net income for common
        stockholders                    1,341     1,313    1,213     1,127
      Net income per share               0.20      0.20     0.18      0.17


                                   F-17

<PAGE>



                         Independent Auditors' Report
                       On Financial Statement Schedule


The Shareholders and Board of Directors
Regency Realty Corporation


Under date of January 27, 1997, except for Note 11 as to which the date is March
7, 1997,  we  reported  on the  consolidated  balance  sheets of Regency  Realty
Corporation  as of  December  31, 1996 and 1995,  and the  related  consolidated
statements of operations,  stockholders'  equity, and cash flows for each of the
years in the three year period  ended  December  31,  1996,  as contained in the
annual report on Form 10-K for the year 1996.  In connection  with our audits of
the  aforementioned  consolidated  financial  statements,  we also  audited  the
related financial statement schedule as listed in the accompanying index on page
F-1 of the  annual  report  on Form  10-K  for the  year  1996.  This  financial
statement  schedule  is the  responsibility  of the  Company's  management.  Our
responsibility  is to express an opinion  on the  financial  statement  schedule
based on our audits.

In our opinion,  the related financial  statement  schedule,  when considered in
relation  to the  basic  consolidated  financial  statements  taken  as a whole,
presents fairly, in all material respects, the information set forth therein.







                                          KPMG Peat Marwick LLP
                                          Certified Public Accountants



Jacksonville, Florida
January 27, 1997


                              S-1

<PAGE>








                           REGENCY REALTY CORPORATION

               Combined Real Estate and Accumulated Depreciation                
                                December 31, 1996


<TABLE>
<CAPTION>
 
                                                                                                                  Schedule III
                                                                                                                                    
                                         Initial Cost                                     Total Cost                               
                                   -------------------------   Capitalized      --------------------------------                    
                                                Building &     Subsequent to               Building &                 Accumulated   
                                    Land        Improvements    Acquistion      Land     Improvements      Total      Depreciation  
                                    ----        ------------     ----------     ----     ------------      -----      ------------  
<S>                               <C>          <C>            <C>            <C>           <C>           <C>            <C>


University Marketplace             3,250,562     7,044,579     2,161,839      3,532,046      8,924,934    12,456,980     1,288,558  
Millhopper                         1,073,390     3,593,523        77,826      1,073,390      3,671,349     4,744,739       558,028  
Newberry Square                    2,341,460     8,466,651       606,591      2,341,460      9,073,242    11,414,702       783,531  
Bolton Plaza                       2,660,227     6,209,110     1,110,507      2,634,664      7,345,180     9,979,844       489,924  
Courtyard                          1,761,567     4,187,039       149,000      1,761,567      4,336,039     6,097,606       977,582  
Chasewood Plaza                    1,675,000    11,390,727     4,294,660      2,476,486     14,883,901    17,360,387     1,710,514  
Aventura                           2,751,094     9,317,790       110,043      2,751,094      9,427,833    12,178,927     1,165,150  
North Miami Shopping Center          603,750     2,021,250        85,432        603,750      2,106,682     2,710,432       372,351  
Berkshire Commons                  2,294,960     8,151,236        32,531      2,294,960      8,183,767    10,478,727       609,755  
Peachland Promenade                1,284,562     5,143,564        40,263      1,284,562      5,183,827     6,468,389       270,430  
Anastasia Shopping Plaza           1,072,451     3,617,493        87,595      1,072,451      3,705,088     4,777,539       341,374  
Market Place                       1,287,000     4,662,740        50,558      1,287,000      4,713,298     6,000,298       126,661  
Martin Downs Shoppes                 700,000     1,207,861       738,862        817,135      1,829,588     2,646,723       190,898  
Martin Downs Village Center        2,000,000     5,133,495     2,303,522      2,437,664      6,999,353     9,437,017       816,085  
Ocean Breeze                       1,250,000     3,341,199     2,294,970      1,527,400      5,358,769     6,886,169       562,251  
Carriage Gate                        740,960     2,494,750       503,911        740,960      2,998,661     3,739,621       382,906  
Regency Square at Brandon            577,975    18,156,719     7,228,382      4,491,461     21,471,615    25,963,076     4,798,799  
Seven Springs                      1,737,994     6,290,048     1,417,041      1,757,441      7,687,642     9,445,083       622,809  
Terrace Walk                       1,196,286     2,935,683        83,406      1,196,286      3,019,089     4,215,375       468,695  
Village Center                     3,885,444    10,799,316       (38,745)     3,885,443     10,760,572    14,646,015       291,457  
Wellington Market Place            5,070,384    13,308,972       197,109      5,070,384     13,506,081    18,576,465       406,180  
The Marketplace                    1,211,605     4,056,242     2,815,258      1,758,433      6,324,672     8,083,105       497,399  
West County Marketplace            1,491,462     4,993,155       120,670      1,491,462      5,113,825     6,605,287       521,915  
Villages in Trussville               973,954     3,260,627        50,689        973,954      3,311,316     4,285,270       324,518  
Bonner's Point                       859,854     2,878,641        87,477        859,854      2,966,118     3,825,972       327,501  
Country Club                       1,105,201     3,709,452        57,619      1,105,201      3,767,071     4,872,272       340,451  
Columbia Marketplace               1,280,158     4,285,745        76,840      1,280,158      4,362,585     5,642,743       408,610  
Lucedale Marketplace                 641,565     2,147,848        50,334        641,565      2,198,182     2,839,747       200,816  
Orchard Square                     1,155,000     4,135,353       222,881      1,155,000      4,358,234     5,513,234       107,386  
Russell Ridge                      2,153,214             -     6,287,829      2,215,341      6,225,702     8,441,043       264,111  
LaGrange Marketplace                 983,923     3,294,003        58,996        983,923      3,352,999     4,336,922       311,344  
Fairway Executive Center             512,169     2,282,314         8,827        512,169      2,291,141     2,803,310       651,916  
Quadrant                           2,342,823    15,541,967       859,758      2,343,698     16,400,850    18,744,548     3,853,078  
Westland One                         198,344     1,747,391        51,517        198,344      1,798,908     1,997,252       342,858  
Paragon Cable Building               570,000     2,472,537             -        570,000      2,472,537     3,042,537       180,307  
Parkway Station                    1,123,200     4,283,917        57,681      1,123,200      4,341,598     5,464,798        90,881  
Welleby Plaza                      1,496,000     5,371,636       175,213      1,496,000      5,546,849     7,042,849       121,615  
Union Square                       1,578,654     5,933,889         2,010      1,578,654      5,935,899     7,514,553        60,958  
City View                          1,207,204     4,341,304         3,610      1,207,204      4,344,914     5,552,118        48,763  
Palm Harbour                       2,899,928    10,998,230         5,968      2,899,928     11,004,198    13,904,126       110,179  
Sandy Plains Village               2,906,640    10,412,440             -      2,906,640     10,412,440    13,319,080       108,210  
Tequesta Shoppes                   1,782,000     6,426,042         9,290      1,782,000      6,435,332     8,217,332        28,363  
University Collection              2,530,000     8,971,597        31,000      2,530,000      9,002,597    11,532,597        37,403  
Old St. Augustine Plaza            2,047,151     7,355,162             -      2,047,151      7,355,162     9,402,313        15,323  
Wellington Town Square             1,914,000     7,197,934             -      1,914,000      7,197,934     9,111,934        14,996  
Woodcroft Shopping Center          1,419,000     5,211,981             -      1,419,000      5,211,981     6,630,981             -  
Cambridge Square                     792,000     2,916,034             -        792,000      2,916,034     3,708,034             -  
Town Center at Martin Downs        1,364,000     4,985,410             -      1,364,000      4,985,410     6,349,410        10,386  
                                  ----------   -----------    ----------     ----------    -----------   -----------    ----------- 
                                  77,754,115   276,684,596    34,568,770     84,186,483    304,820,998   389,007,481    26,213,225  
                                  ==========   ===========    ==========     ==========    ===========   ===========    =========== 

</TABLE>


                                   S-2

<PAGE>

                                                                                

                          REGENCY REALTY CORPORATION                            

               Combined Real Estate and Accumulated Depreciation                
                                December 31, 1996                               

                                   -continued-
                                                            Schedule III


                                 Total Cost,                                    
                                   Net of                          Date of      
                                Accumulated                     Construction (c)
                                Depreciation    Mortgages       Acquisition (a) 
                                ------------   ----------      ---------------  
                                                                                
                                                                                
University Marketplace            11,168,422             -       1990 (a)       
Millhopper                         4,186,711     2,401,000       1993 (a)       
Newberry Square                   10,631,171     6,801,694       1994 (a)       
Bolton Plaza                       9,489,920             -       1994 (a)       
Courtyard                          5,120,024     1,378,000       1987 (c)       
Chasewood Plaza                   15,649,873     8,000,000       1992 (a)       
Aventura                          11,013,777     8,823,403       1994 (a)       
North Miami Shopping Center        2,338,081     1,160,000       1993 (a)       
Berkshire Commons                  9,868,972     8,000,421       1994 (a)       
Peachland Promenade                6,197,959     4,370,784       1995 (a)       
Anastasia Shopping Plaza           4,436,165             -       1993 (a)       
Market Place                       5,873,637             -       1995 (a)       
Martin Downs Shoppes               2,455,825     1,313,000       1992 (a)       
Martin Downs Village Center        8,620,932     4,150,000       1992 (a)       
Ocean Breeze                       6,323,918     2,805,000       1992 (a)       
Carriage Gate                      3,356,715     2,429,176       1994 (a)       
Regency Square at Brandon         21,164,277    12,000,000       1986 (c)       
Seven Springs                      8,822,274             -       1994 (a)       
Terrace Walk                       3,746,680       683,000       1990 (c)       
Village Center                    14,354,558             -       1995 (a)       
Wellington Market Place           18,170,285             -       1995 (a)       
The Marketplace                    7,585,706     4,978,091       1993 (a),
                                                                 1995 (c)  
West County Marketplace            6,083,372     3,190,000       1993 (a)       
Villages in Trussville             3,960,752     1,775,000       1993 (a)       
Bonner's Point                     3,498,471     1,613,000       1993 (a)       
Country Club                       4,531,821     2,264,000       1993 (a)       
Columbia Marketplace               5,234,133     2,586,000       1993 (a)       
Lucedale Marketplace               2,638,931     1,390,000       1993 (a)       
Orchard Square                     5,405,848             -       1995 (a)       
Russell Ridge                      8,176,932     6,532,665       1993 (c)       
LaGrange Marketplace               4,025,578     1,645,000       1993 (a)       
Fairway Executive Center           2,151,394             -       1985 (a)       
Quadrant                          14,891,470             -       1985 (c)       
Westland One                       1,654,394             -       1988 (c)       
Paragon Cable Building             2,862,230     2,296,902       1994 (a)       
Parkway Station                    5,373,917     3,801,821       1996 (a)       
Welleby Plaza                      6,921,234             -       1996 (a)       
Union Square                       7,453,595             -       1996 (a)       
City View                          5,503,355             -       1996 (a)       
Palm Harbour                      13,793,947             -       1996 (a)       
Sandy Plains Village              13,210,870             -       1996 (a)       
Tequesta Shoppes                   8,188,969             -       1996 (a)       
University Collection             11,495,194             -       1996 (a)       
Old St. Augustine Plaza            9,386,990             -       1996 (a)       
Wellington Town Square             9,096,938             -       1996 (a)       
Woodcroft Shopping Center          6,630,981             -       1996 (a)       
Cambridge Square                   3,708,034             -       1996 (a)       
Town Center at Martin Downs        6,339,024             -       1996 (a)       
                                 -----------  ------------                      
                                 362,794,256    96,387,957                      
                                 ===========  ============                      

                                   S-3

<PAGE>
                                               


                          REGENCY REALTY CORPORATION

               Combined Real Estate and Accumulated Depreciation                
                                December 31, 1996

                                   -continued-
                                                            Schedule III


Depreciation  and  amortization  of the  Company's  investment  in buildings and
improvements  reflected in the statement of  operations  is calculated  over the
estimated useful lives of the assets as follows:

                 Buildings                                       40 years
                 Improvements                                    40 years

    The  aggregate   cost  for  Federal  income  tax  purposes  was
approximately $383,644,529 at December 31, 1996.


The changes in total real estate  assets for the period ended 
December 31, 1996 and 1995:

                                                1996            1995
                                                ----            ----
  Balance, beginning of period              278,731,167     217,215,307
  Developed or acquired properties          107,378,064      59,537,217
  Improvements                                2,898,250       1,978,643
                                          -------------    ------------
        Balance, end of period            $ 389,007,481     278,731,167
                                          =============    ============


The changes in accumulated  depreciation  for the period ended
December 31, 1996 and 1995:

                                                1996            1995
                                                ----            ----

 Balance, beginning of period               18,631,310       13,117,581
 Depreciation for period                     7,581,915        5,513,729
                                          ------------      -----------
  Balance, end of period                  $ 26,213,225       18,631,310
                                          ============      ===========

                                   S-4





                          REGENCY REALTY CORPORATION

    Criteria for Restricted Stock Awards Under 1993 Long Term Omnibus Plan


1.    RESERVATION OF SHARES FOR ISSUANCE:

      In order to further  align the  interests  of senior  management  with the
      interests of the Company's shareholders, the Compensation Committee hereby
      reserves for issuance pursuant to the Regency Realty Corporation 1993 Long
      Term Omnibus Plan (the "Plan") a total of 64,000  shares of Common  Stock,
      which may be issued in the form of shares of restricted stock ("Restricted
      Stock").  The  Restricted  Stock  will be issued  pursuant  to the form of
      Restricted  Stock Award Agreement for Key Employees  attached as Exhibit A
      (the  "Award  Agreement"),  subject  to  fulfillment  of  the  performance
      standards set forth below and to the other terms and  conditions set forth
      below.

2.    PERFORMANCE STANDARDS:

      The  Restricted  Stock will be awarded as  promptly as  practicable  after
      fiscal  1996  and/or  fiscal  1997 in the  proportions  set forth below if
      Cumulative Total Shareholder  Return reaches the levels set forth below as
      of the end of the fiscal year in question:

                                                              Cumulative
                                 Cumulative Total            Percentage of
        Fiscal Year             Shareholder Return     Restricted Stock Awarded


           1996                         30%                         40%

           1997                         45%                        100%


      Definitions:  "Cumulative
 Total  Shareholder  Return" means the sum of (1)
      the  Percentage  Stock Price Change from January 1, 1995 to the end of the
      fiscal year in question,  plus (2) the Dividend Yield from January 1, 1995
      to the end of the fiscal year in  question.  The  "Percentage  Stock Price
      Change,"  which shall be  expressed  to the nearest  tenth of a percentage
      point, means:

            the average  closing price of the Common Stock on the New York Stock
            Exchange  during the fourth  quarter of the fiscal  year in question
            (the  "Current  Price")  minus the average  closing price during the
            fourth quarter of 1994 (the "Initial Price")

                                  divided by

            the Initial Price.

                                   1


<PAGE>




      The  "Dividend  Yield," which shall be expressed to the nearest tenth of a
      percentage point, means:

            total cash  dividends paid each full fiscal year that has elapsed on
            the measurement date in question, beginning with fiscal 1995

                                  divided by

            the Initial Price.

      Example:  For  example,  if (a) the Initial  Price is $16, (b) the Current
      Price at the end of fiscal 1996 is $20,  and (c) cash  dividends  of $1.60
      and $1.76 are paid in 1995 and 1996, respectively, then :

            o     the Percentage Stock Price Change would be [$20 - $16
                  divided by $16 times 100], or 25%;

            o     the Dividend Yield would be [$1.60 plus $1.76 divided by $16 
                  times 100], or 21%; and

            o     the Cumulative Total Shareholder Return for the fiscal 1995
                  and 1996 would be [25% plus 21%], or 46%.

      The Cumulative Total Shareholder Return as of the end of fiscal 1996 would
      be 46%, in excess of the 30% required for 1996 awards, and accordingly, an
      aggregate  of 40% of the  Restricted  Stock,  or 25,600  shares,  would be
      awarded to recipients,  subject to the restrictions set forth in the Award
      Agreement.  If Cumulative Total Shareholder  Return reaches 45% or more as
      of the end of fiscal 1996, the remaining 60% of the Restricted  Stock,  or
      38,400 shares, would be awarded to recipients, subject to the restrictions
      set forth in the Award Agreement.  If Cumulative Total Shareholder  Return
      is less than 30% as of the end of fiscal  1996,  but is at least 45% as of
      the end of fiscal 1997,  100% of the Restricted  Stock would be awarded to
      recipients, subject to the restrictions set forth in the Award Agreement.

3.    RECIPIENTS OF RESTRICTED STOCK AWARDS

      Shares of  Restricted  Stock awarded  hereunder  will be divided among the
      executive  officers listed on Exhibit B, in the amounts set forth thereon,
      provided that they are full-time employees of the Company or any Affiliate
      (as defined in the Plan) on the date of award.  As set forth on Exhibit B,
      5,000  shares of  Restricted  Stock will be  available  for  discretionary
      awards to one or more of such  participants  and/or  any  other  executive
      officers  that the  Committee may  subsequently  designate.  The number of
      discretionary  shares,  if any,  allocated to participants  other than the
      President  will be determined by the Committee,  based on  recommendations
      from the President, and the number of

                                      2


<PAGE>



      discretionary shares, if any, awarded to the President will be determined
      by the Committee.

4.    VESTING; RESTRICTIONS DURING VESTING PERIOD

      Restricted Stock awarded hereunder will be subject to vesting requirements
      and to transfer  restrictions  during the vesting period, all as set forth
      in the Award Agreement. The holder of unvested shares will have voting and
      dividend  rights  with  respect to such  shares,  as provided in the Award
      Agreement.  Any shares  forfeited  because the  recipient's  employment is
      terminated  prior to vesting will be restored to the status of  authorized
      but unissued shares, available for reissuance under the Plan.

\LYK\REGENCY\OP\PLAN.3|2/01/96|JAXC18|LYK:kjr



                                      3


<PAGE>



                                   EXHIBIT A

                          REGENCY REALTY CORPORATION
                          1993 LONG TERM OMNIBUS PLAN

              RESTRICTED STOCK AWARD AGREEMENT FOR KEY EMPLOYEES

      THIS  AGREEMENT  is made and entered  into as of the date set forth on the
signature  page  hereof by and between  REGENCY  REALTY  CORPORATION,  a Florida
corporation ("Company"),  and the Key Employee of the Company whose signature is
set forth on the signature page hereof (the "Key Employee").

                              W I T N E S S E T H

      WHEREAS,  the Company has adopted the Regency Realty Corporation 1993 Long
Term Omnibus Plan ("Plan"), the terms of which, to the extent not stated herein,
are specifically incorporated by reference in this Agreement;

      WHEREAS,  the purpose of the Plan is to permit Awards under the Plan to be
granted to certain Key Employees of the Company and its Affiliates;

      WHEREAS,  the Key Employee is now employed or engaged by the Company or an
Affiliate  in a key  employee  capacity  and the  Company  desires him or her to
remain in such  capacity,  and to secure or  increase  his or her  ownership  of
Shares in order to increase his or her  incentive  and personal  interest in the
success and growth of the Company; and

      WHEREAS,  defined terms used herein and not otherwise defined herein shall
have the meanings set forth in the Plan.

      NOW, THEREFORE,  in consideration of the premises and of the covenants and
agreements  herein set forth, the parties hereby mutually  covenant and agree as
follows:

      1. Grant of  Restricted  Stock.  Subject to the terms and  conditions  set
forth herein, the Company hereby grants to the Key Employee as of the grant date
set forth below, in return for services  previously provided by the Key Employee
to  the  Company  and/or  its  Affiliates,   the  aggregate   number  of  Shares
(hereinafter  referred to as the "Restricted  Stock") set forth on the signature
page hereof.  Stock certificates  bearing  restrictive  legends referring to the
transfer restrictions set forth in this Agreement shall be held in escrow by the
Company pending the vesting of the Restricted Stock as hereinafter provided, or,
at the Company's election,  Shares constituting  unvested Restricted Stock shall
be issued in book entry form only, unless and until vested.


                                      1


<PAGE>



      2.    Vesting.

            (a) The Key  Employee  shall have all rights as a  shareholder  with
respect to the Restricted Stock,  including  dividend and voting rights,  except
that while Shares of Restricted Stock remain unvested,  they shall be subject to
the  transfer  restrictions  set forth in Section . Shares of  Restricted  Stock
shall vest on the applicable  anniversary date of the grant date set forth below
according to the  following  schedule  provided  that the Key Employee  remained
employed by the Company or an Affiliate on the date of vesting:

                                              Cumulative Fraction of Shares
            Date of Vesting                  of Restricted Stock Which Vest

         3rd Anniversary Date                              34%

         4th Anniversary Date                              33%

         5th Anniversary Date                              33%


            (b) Promptly upon the vesting of any Shares of Restricted Stock, the
Company shall deliver a stock  certificate to the Key Employee  representing the
vested Shares, bearing any restrictive legend deemed necessary by counsel to the
Company under the Securities Act of 1933 and counterpart state securities laws.

            (c) Except as provided  elsewhere  herein,  the Key  Employee  shall
forfeit any interest in any unvested Shares of Restricted  Stock as of the close
of  business  on the date that the Key  Employee  ceases to be  employed  by the
Company  or any of its  Affiliates.  In the event that the Key  Employee  who so
forfeits  unvested  Shares holds vested Shares that include a fractional  Share,
the Company shall  purchase such  fractional  Share  promptly  following the Key
Employee's  termination of employment,  at a cash price equal to the Fair Market
Value of the Company's Common Stock on such date of termination.

            (d) Absence of the Key Employee on leave  approved by a duly elected
officer of the Company,  other than the Key Employee,  shall not be considered a
termination of employment during the period of such leave.

            (e) If the  Key  Employee's  employment  with  the  Company  and all
Affiliates is terminated  because of death,  Retirement or Total  Disability (as
such terms are defined below) on or after the initial date of vesting,  the full
amount of  Restricted  Stock  granted  herein shall vest in the hands of the Key
Employer,  or in the case of his death,  his  Beneficiary  (as defined  herein),
without  regard to the vesting  schedule set forth above.  If a  termination  of
employment  occurs prior to the initial  date of vesting for reasons  other than
Cause,  Shares of Restricted  Stock shall vest in the hands of the Key Employee,
or in the case of his death,  his  Beneficiary,  to the  extent,  if any, as the
Committee may determine.


                                      2


<PAGE>



            (f) As used herein, (i) "Retirement" means termination of employment
with the Company and all  Affiliates  on or after age 65, except that if the Key
Employee's  employment  is  terminated  for Cause (as  hereinafter  defined)  or
because of death or Total Disability, such termination shall not be "Retirement"
for  purposes  hereof,   (ii)  "Total  Disability"  means  permanent  and  total
disability within the meaning of Code Section 22(e)(3), and (iii) "Cause" means,
as determined by the Committee, the Key Employee's failure to perform his duties
or intentional  dishonest or illegal  conduct in connection with his performance
of services for the Company or any Affiliate.

      3.    Transfer Restrictions.  Shares of Restricted Stock may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of while
they remain unvested.

      4.    Acceleration.

            (a) In the event of a Change  of  Control  (as  defined  below)  any
unvested Shares of Restricted  Stock shall vest  immediately  (without regard to
the vesting  schedule  set forth  above).  "Change of Control"  for this purpose
means a change of control of a nature  that would be  required to be reported in
response to Item 6(e) of Schedule 14A of Regulation  14A  promulgated  under the
Exchange  Act.  Without  limiting the  inclusiveness  of the  definition  in the
preceding sentence,  a Change of Control shall be deemed to have occurred if the
circumstances described in the following paragraphs shall occur:

                  (i) Any individual,  firm,  partnership,  corporation or other
entity,  including any  successor (by merger or otherwise) of such entity,  or a
group of any of the  foregoing  acting in concert (a  "Person")  (other than any
employee  benefit plan of the Company or any entity  holding  securities  of the
Company  for or  pursuant  to  the  terms  of  any  such  plan  or any  trustee,
administrator or fiduciary of such a plan) is or becomes the Beneficial Owner of
securities  of the  Company  representing  at least 30 percent  of the  combined
voting power of the Company's  then  outstanding  securities;  a Person shall be
deemed to be the  "Beneficial  Owner" of any securities (1) which such Person or
any of such Person's "Affiliates" and "Associates," as such terms are defined in
Rule 12b-2 of the General  Rules and  Regulations  of the Exchange  Act, has the
right to acquire  (whether such right is  exercisable  immediately or only after
the passage of time) pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion  rights,  exchange rights,  rights,  warrants or
options, or otherwise;  provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own,  securities  tendered pursuant to a
tender or  exchange  offer  made by or on  behalf of such  Person or any of such
Person's  Affiliates or Associates  until such tendered  securities are accepted
for  purchase;  or (2) which such Person or any of such  Person's  Affiliates or
Associates,  directly or indirectly,  has the right to vote or dispose of or has
"beneficial  ownership" of (as determined  pursuant to Rule 13d-3 of the General
Rules and  Regulations  under  the  Exchange  Act),  including  pursuant  to any
agreement, arrangement or understanding;  provided, however, that a Person shall
not be deemed the  Beneficial  Owner of, or to  beneficially  own,  any security
under  this  subsentence  (2)  as a  result  of  an  agreement,  arrangement  or
understanding   to  vote  such  security  if  the   agreement,   arrangement  or
understanding arises solely from a revocable proxy or consent

                                      3


<PAGE>



given to such Person in response to a public proxy or consent  solicitation made
pursuant to, and in accordance with, the applicable rules and regulations  under
the  Exchange  Act and is not also then  reportable  on a Schedule 13D under the
Exchange Act (or any comparable or successor report); (3) which are beneficially
owned, directly or indirectly, by any other Person with which such Person or any
of such Person's  Affiliates or Associates  has any  agreement,  arrangement  or
understanding for the purpose of acquiring,  holding, voting (except pursuant to
a revocable  proxy as  described in  subsentence  (2) above) or disposing of any
voting securities of the Company.

                  (ii)  One-third  or  more  of  the  members  of the  Board  of
Directors of the Company are not Continuing  Directors;  a "Continuing Director"
means any member of the Board of  Directors  of the  Company who was a member of
such Board on December 31, 1993, and any successor of a Continuing  Director who
is recommended to succeed a Continuing  Director by a majority of the Continuing
Directors then on such Board.

                  (iii)  There shall be  consummated  (1) any  consolidation  or
merger of the Company in which the Company is not the  continuing  or  surviving
corporation  or pursuant to which the Company's  Shares would be converted  into
cash, securities or other property,  other than a merger of the Company in which
the holders of the  Company's  Shares  immediately  prior to the merger have the
same  proportionate  ownership  of  common  stock of the  surviving  corporation
immediately after the merger, or (2) any sale, lease, exchange or other transfer
(in  one  transaction  or  a  series  of  related   transactions)   of  all,  or
substantially all, of the assets of the Company.

                  (iv)  The  shareholders  of the  Company  approve  any plan or
proposal for the liquidation or dissolution of the Company.

      5.    Beneficiary.

            (a) The person whose name appears on the signature page hereof after
the caption  "Beneficiary"  or any  successor  designated by the Key Employee in
accordance  herewith (the person who is the Key  Employee's  Beneficiary  at the
time of his death herein referred to as the "Beneficiary")  shall be entitled to
receive any Shares that vest as the result of the death of the Key Employee. The
Key Employee may from time to time revoke or change his Beneficiary  without the
consent of any prior Beneficiary by filing a new designation with the Committee.
The last  such  designation  received  by the  Committee  shall be  controlling;
provided,  however, that no designation,  or change or revocation thereof, shall
be effective unless received by the Committee prior to the Key Employee's death,
and in no event shall any  designation  be  effective as of a date prior to such
receipt.

            (b) If no such Beneficiary designation is in effect at the time of a
Key Employee's death, or if no designated  Beneficiary survives the Key Employee
or if such  designation  conflicts with law, the Key Employee's  estate shall be
the Beneficiary  hereunder.  If the Committee is in doubt as to the right of any
person to receive Shares that vest hereunder,

                                      4


<PAGE>



the Company may refuse to  recognize  such  person,  without  liability  for any
interest or dividends on the Restricted  Stock,  until the Committee  determines
the person  entitled  to such  Shares,  or the Company may apply to any court of
appropriate  jurisdiction and such application shall be a complete  discharge of
the liability of the Company therefor.

      6.    Tax Withholding.

            (a) It shall be a condition  to the vesting of Shares of  Restricted
Stock in the hands of the Key Employee or the Beneficiary,  and the Key Employee
agrees,  that the Key Employee  shall pay to the Company  upon its demand,  such
amount as may be  requested  by the Company for the  purpose of  satisfying  its
liability to withhold federal, state, or local income or other taxes incurred by
reason of such  vesting.  In the event that the Key  Employee  makes an election
under Section 83(b) of the Code (or any  successor  provision)  allowing the Key
Employee to accelerate the Tax Date (as defined below),  the Key Employee agrees
that payment of such amount to the Company for satisfying  such tax  obligations
shall be a condition to the making of the election.

            (b) The Key Employee may elect to deliver to the Company a number of
Shares,  in each case,  having a Fair Market  Value on the Tax Date equal to the
minimum  amount  required to be withheld by the Company in connection  with such
Tax Date.  The  election  must be made in writing and, if the Key Employee is an
Insider (as defined  below),  must be  delivered to the Company 6 months or more
prior to the Tax Date and shall not be  effective  until at least 6 months after
the Grant Date, provided,  however, that this restriction shall not apply in the
event death of the Key Employee  occurs prior to the  expiration of such 6 month
period. If the Key Employee is not an Insider, the election must be delivered to
the  Company  prior  to the Tax  Date.  All  elections  shall  be made in a form
approved by the  Committee and shall be subject to  disapproval,  in whole or in
part by the Committee.  Any election under this paragraph by an Insider shall be
irrevocable  and  may not be  changed  until  another  irrevocable  election  is
effective. As used herein, (i) Tax Date means the date on which the Key Employee
must include in his gross income for federal income tax purposes the fair market
value of the Restricted  Stock,  and (ii) "Insider" means an officer or director
of the Company or a beneficial owner of more than 10 percent of the Shares.

      7. Powers of Company Not Affected.  The existence of the Restricted  Stock
shall  not  affect  in  any  way  the  right  or  power  of the  Company  or its
stockholders   to  make   or   authorize   any   combination,   subdivision   or
reclassification  of the Shares or any  reorganization,  merger,  consolidation,
business  combination,  exchange  of Shares,  or other  change in the  Company's
capital  structure or its business,  or any issue of bonds,  debentures or stock
having rights or  preferences  equal,  superior to or affecting  the  Restricted
Stock or the rights thereof or dissolution or liquidation of the Company, or any
sale or  transfer  of all or any part of its  assets or  business,  or any other
corporate act or proceeding, whether of a similar character or

                                      5


<PAGE>



otherwise.  Nothing in this  Agreement  shall  confer upon the Key  Employee any
right  to  continue  in the  employment  of the  Company  or any  Affiliate,  or
interfere  with or limit in any way the right of the Company or any Affiliate to
terminate the Key Employee's employment at any time.

      8.  Interpretation by Committee.  The Key Employee agrees that any dispute
or  disagreement  which may arise in  connection  with this  Agreement  shall be
resolved by the Committee,  in its sole discretion,  and that any interpretation
by  the  Committee  of  the  terms  of  this  Agreement  or  the  Plan  and  any
determination made by the Committee under this Agreement or the Plan may be made
in the sole  discretion  of the  Committee  and  shall be  final,  binding,  and
conclusive.  Any  such  determination  need  not be  uniform  and  may  be  made
differently among Key Employees awarded Restricted Stock.

      9.    Miscellaneous.

            (a) This  Agreement  shall be governed and  construed in  accordance
with the laws of the State of Florida  applicable  to  contracts  made and to be
performed therein between residents thereof.

            (b)   This Agreement may not be amended or modified except by the
written consent of the parties hereto.

            (c) The captions of this  Agreement are inserted for  convenience of
reference only and shall not be taken into account in construing this Agreement.

            (d) Any notice,  filing or  delivery  hereunder  or with  respect to
Restricted  Stock  shall be given to the Key  Employee  at either his usual work
location or his home address as  indicated  in the records of the  Company,  and
shall be given to the Committee or the Company at 121 West Forsyth Street, Suite
200,  Jacksonville,  Florida  32202,  Attention  Corporate  Secretary.  All such
notices shall be given by first class mail, postage prepaid, or by personal
delivery.

            (e) This Agreement shall be binding upon and inure to the benefit of
the Company and its  successors  and assigns and shall be binding upon and inure
to the personal  benefit of the Key Employee,  the  Beneficiary and the personal
representative(s) and heirs of the Key Employee.


                                      6


<PAGE>


      IN WITNESS WHEREOF,  the Company has caused this instrument to be executed
by its duly authorized officer and its corporate seal hereunto affixed,  and the
Key Employee has hereunto affixed his hand and seal, all on the day and year set
forth below.

                                          REGENCY REALTY CORPORATION

[CORPORATE SEAL]              By:____________________________________
                                Its:_________________________________

                                          ________________________________(SEAL)
                                          Key Employee
                                          [Print Name]:________________________

No. of shares of Restricted Stock:__________

Grant Date:_______________________
Date of Agreement:________________


\LYK\REGENCY\OP\PLAN.3|2/01/96|JAXC18|LYK:kjr



                                      7





                      1996 STOCK PURCHASE AWARD AGREEMENT


      THIS STOCK PURCHASE AWARD AGREEMENT executed this ______ day of
_______________,  1996,  is  effective as of January 1, 1996 and  documents  the
grant of a stock purchase award pursuant to action of the compensation committee
(the  "Committee")  appointed by the board of directors (the "Board") of Regency
Realty Corporation (the "Company") to ___________ (the "Participant") subject to
the  terms and  conditions  of the  Regency  Realty  Corporation  1993 Long Term
Omnibus Plan (the "Plan") and the terms and conditions set forth herein.

                             W I T N E S S E T H:

      WHEREAS,  the purpose of the Plan is to permit Awards under the Plan to be
granted to certain  employees of the Company and its  Affiliates  and to further
specify the terms and conditions  under which such  individuals may receive such
Awards;

      WHEREAS,  the  Participant is now employed or engaged by the Company or an
Affiliate  in a key  employee  capacity  and the  Company  desires him or her to
remain in such  capacity,  and to secure or  increase  his or her  ownership  of
Shares in order to increase his or her  incentive  and personal  interest in the
success and growth of the Company;

      WHEREAS,  the Company  wishes to grant the  Participant  a stock  purchase
award for the purchase of shares of Company  stock under
 the Plan  financed by a
loan from the Company;

      WHEREAS,  defined terms used herein and not otherwise defined herein shall
have the meanings set forth in the Plan.

      NOW, THEREFORE,  in consideration of the premises and of the covenants and
agreements  herein set forth, the parties hereby mutually  covenant and agree as
follows:

      1. Grant of Stock Purchase Award.  The Company,  pursuant to action of the
Committee,  has offered to the Participant,  as of January 1, 1996, the right to
purchase up to _________  shares (the "Shares") of the Company's common stock at
$16.75 per share (the "Purchase Price").

      2. Exercise of Stock  Purchase  Award.  The  Participant  has accepted the
award and is delivering contemporaneously herewith to the Company the promissory
note described in Section , the stock pledge agreement  described in Section and
a check for five percent (5%) of the  Purchase  Price of the Shares.  The Shares
purchased pursuant to this Agreement were issued as of January 1, 1996

      3.    Stock Purchase Loan.

            (a)   Grant of Loan.  The Company has provided a loan to the 
Participant for ninety-five percent (95%) of the Purchase Price (the "Loan"),
and the Participant is executing



<PAGE>



and delivering to the Company  contemporaneously  herewith a Promissory  Note in
the form attached as Exhibit 1 (the "Note").

            (b) 1996  Management  Stock Pledge  Agreement.  The  Participant  is
executing  and  delivering  to the  Company  contemporaneously  herewith  a 1996
Management  Stock  Pledge  Agreement,   pledging  the  Participant's  Shares  as
collateral for the Note in the form attached as Exhibit 2.

            (c) Dividends. Any dividends paid by the Company with respect to the
Shares  subject  to  the  1996  Management   Stock  Pledge  Agreement  shall  be
automatically  credited  against  amounts  then  due  under  the  Note,  but any
dividends  in excess  of  amounts  then due under the Note  shall be paid to the
Participant  and shall not be applied to prepay the Note unless the  Participant
directs otherwise.

      4.    Loan Forgiveness.

    (a)   The following definitions shall apply for purposes of this Section 4:

      "Cumulative Dividend Yield" for a fiscal year, which shall be expressed to
the nearest tenth of a percentage  point,  means total cash dividends paid since
December 31, 1995  through the fiscal year in  question,  divided by the Initial
Price for fiscal 1996.

      "Cumulative  Percentage Stock Price Change" for a fiscal year, which shall
be expressed to the nearest tenth of a percentage point, means the Current Price
for the fiscal year divided by the Initial Price for fiscal 1996.

      "Cumulative Total Shareholder  Return" for a fiscal year means (i) the sum
of (x) the  Cumulative  Percentage  Stock Price Change,  plus (y) the Cumulative
Dividend  Yield,  divided  by (ii) the  number of full  fiscal  years  that have
elapsed since December 31, 1995.

      "Current  Price" for a fiscal year means the average  closing price of the
Common  Stock on the New York Stock  Exchange  during the fourth  quarter of the
fiscal year.

      "Dividend  Yield"  for a fiscal  year,  which  shall be  expressed  to the
nearest tenth of a percentage point,  means total cash dividends paid during the
fiscal year divided by the Initial Price for the fiscal year.

      "Funds  from  Operations"  shall  be as  reported  by the  Company  in its
periodic  reports filed with the  Securities and Exchange  Commission,  or if no
figures for Funds from Operations are so reported, "Funds from Operations" shall
be as computed by the Company  from time to time for internal  purposes.  In the
event of any change from one fiscal year to another in how the Company  computes
Funds from Operations, the Compensation Committee shall, in its sole discretion,
determine  the  method  for  taking  account  of the  change so that  Funds from
Operations for purposes of this Section 4 will be measured on an equitable basis
from year to year.


                                      2


<PAGE>



      "Initial  Price" for a fiscal year means the average  closing price of the
Common  Stock on the New York Stock  Exchange  during the fourth  quarter of the
immediately preceding fiscal year.

      "Percentage  Stock  Price  Change"  for a  fiscal  year,  which  shall  be
expressed to the nearest  tenth of a percentage  point,  means the Current Price
divided by the Initial Price.

      "Total  Shareholder  Return"  for a fiscal  year  means the sum of (1) the
Percentage  Stock Price change for the fiscal year,  plus (2) the Dividend Yield
for the fiscal year.

            (b) Promptly  following  the  completion  of the annual audit of the
Company's  financial  statements  each year,  five  percent (5%) of the original
principal amount of the Note shall be forgiven  retroactive to January 1 of such
year  beginning  January  1,  1997 if any of the  following  events  shall  have
occurred for the most recent  fiscal year (and if more than one such event shall
have occurred,  an additional  five percent (5%) shall be forgiven for each such
event that shall have occurred for such fiscal year):

      (i)   Funds from  Operations  for the fiscal  year  increased  by at least
            seven percent (7%) over Funds from  Operations  for the  immediately
            preceding fiscal year;

      (ii)  Total Shareholder Return for the fiscal year was at least fifteen
            percent (15%); or

      (iii)       Cumulative  Total  Shareholder  Return through the end of such
                  fiscal year was at least twenty percent (20%).

For  example,  if for fiscal 1996 (a) the Initial  Price is $17, (b) the Current
Price is $20, and (c) cash dividends of $1.76 are paid in 1996, then:

      o     the Percentage Stock Price Change would be [$20 minus $17 divided 
            by $17 times 100], or 17.6%;

      o  the Dividend Yield would be [$1.76 divided by $17 times 100], or 10.4%;

      o     Total Shareholder Return would be [17.6% plus 10.4%], or 28%; and

      o     Cumulative Total Shareholder Return would be [17.6% plus 10.4% /
            by 1], or 28%.

Assume  further that Funds from  Operations  increase by 10% in fiscal 1996 over
fiscal 1995. If the original principal amount of the Note were $100,000, a total
of $15,000  would be forgiven as of January 1, 1997:  (1) $5,000  because  Funds
from Operations  increased by more than 7%, (1) $5,000 because Total Shareholder
Return was more than 15%, and (3) $5,000 because  Cumulative  Total  Shareholder
Return was more than 20%.


                                      3


<PAGE>



            (c) In the  event  that no  forgiveness  occurs  for one (1) or more
fiscal  years (each a  "Non-Performance  Year")  because  Funds from  Operations
and/or Total  Shareholder  Return did not achieve the required level(s) but in a
subsequent  fiscal  year  ("Catch-Up  Year"),   regardless  of  whether  or  not
consecutive,  the increase in Funds from  Operations  and/or  Total  Shareholder
Return is such that Funds from Operations and/or Total  Shareholder  Return have
reached a level for the  Catch-Up  Year that would have been  attained had Funds
from  Operations  and/or Total  Shareholder  Return been sufficient to result in
forgiveness for the Non-Performance  Year(s) and the Catch-Up Year, then in such
event an  additional  five  percent  (5%) or ten percent  (10%) of the  original
principal amount of the Note for each applicable  Non-Performance  Year shall be
forgiven as of January 1 of the Catch-Up Year, depending on whether the increase
is in Funds from Operations and/or Total  Shareholder  Return.  For example,  if
Funds from  Operations  increases two percent (2%) in 1996 but increases  twelve
and  one-quarter  percent  (12.25%) in 1997,  Funds from Operations in 1997 will
have  attained  the same level it would have  attained  had it  increased  seven
percent (7%) in 1996 and seven  percent (7%) in 1997.  Accordingly,  ten percent
(10%) of the  original  principal  amount of the Note  would be  forgiven  as of
January 1, 1997 instead of five percent (5%).

            (d) In addition,  in the event that  forgiveness  does not occur for
one or more fiscal years because  Cumulative  Total  Shareholder  Return did not
reach  twenty  percent  (20%)  as of the end of such  fiscal  year(s),  but in a
subsequent  fiscal year  Cumulative  Total  Shareholder  Return  reaches  twenty
percent  (20%),  then in such event five percent (5%) of the original  principal
amount of the Note shall be forgiven,  plus an additional  five percent (5%) for
each such other fiscal year for which no forgiveness had previously  taken place
by reason of Cumulative  Shareholder Return being less than twenty percent (20%)
as of the end of such fiscal year.

            (e) The  remaining  amount  outstanding  under  the  Note  shall  be
forgiven in full upon the occurrence of any of the following events:

      (i)   The approval by the Company's shareholders of any plan or proposal
            for the
            liquidation or dissolution of the Company; or

      (ii)  Any merger,  consolidation  or share exchange  pursuant to which the
            holders of the  Company's  common  stock  receive  consideration  in
            exchange for such common  stock other than capital  stock listed for
            trading on a national  securities  exchange  or the Nasdaq  National
            Market.

            (f)   Forgiveness shall be limited to the aggregate amount 
outstanding under the Note.

      5. Change of  Control.  In the event of a Change of Control (as defined in
Section ) that does not result in  forgiveness in full pursuant to Section , the
Note shall become nonrecourse as to the Participant,  and the Company shall look
only to the collateral  securing the Note for the payment thereof.  In the event
that a Change of Control  takes  place by reason of a merger,  consolidation  or
share  exchange  (collectively,   a  "Transaction")  that  does  not  result  in
forgiveness  in full  pursuant  to Section , the  Current  Price for the year in
which the

                                      4


<PAGE>



Transaction  occurs shall be the valuation  placed by the  Company's  investment
bankers on the Company's Common Stock in the  transaction,  if such valuation is
higher  than what the Current  Price would  otherwise  be. For  example,  if the
Company's  investment  bankers valued the Company's  Common Stock exchanged in a
Transaction  for  other  publicly  traded  securities  at $25 per  share and the
average  closing  price of the Common  Stock  during the fourth  quarter of such
fiscal  year was  $22,  the  Current  Price  for the  fiscal  year in which  the
Transaction  took place  would be $25 rather than $22.  Appropriate  adjustments
shall be made for the fiscal year in the event of a Transaction that takes place
other  than on the last day of the  fiscal  year and  that  does not  result  in
forgiveness  in full pursuant to Section so as to achieve  comparability  in the
formula for forgiveness for the period before and after the Transaction.

      6.    Termination of Employment.

            (a)  Definitions.  For purposes of this Section , the terms "Cause,"
"Change of  Control,"  "Disability"  and "Good  Reason"  shall have the meanings
ascribed to them in the  Employment  Agreement  effective  as of January 1, 1996
between the Company and the Participant, as it may be amended from time to time.
Absence of the  Participant on leave  approved by a duly elected  officer of the
Company,  other than the  Participant,  shall not be considered a termination of
employment during the period of such leave.

            (b) Termination for Cause. In the event the Participant's employment
with the Company is terminated  for Cause,  whether  before or after a Change in
Control,  any outstanding  balance under the Note must be repaid  immediately on
the date of termination.

            (c)  Termination  Without Cause or by Reason of Death.  In the event
that the Participant's employment (i) is terminated by the Company without Cause
and no Change of Control  falling  within  Section shall have occurred  prior to
such  termination,  or (ii) is  terminated,  whether before or after a Change in
Control,  by reason of Employee's  death, the Participant shall have a period of
ninety (90) days following  termination  without Cause or one (1) year following
termination by reason of death to repay any outstanding  balance under the Note,
unless the repayment  period is extended as provided in this Section.  Repayment
shall be  effected  by  cancellation  by the  Company  of that  number of Shares
pledged as  collateral  for the Note the  closing  price of which on the date of
repayment equals the outstanding balance due under the Note (with a cash payment
made to the Participant for any fractional Share the value of which exceeds such
balance).  In the event that the value of the Shares  pledged as  collateral  is
less than the outstanding balance of the Note, the due date of the Note shall be
extended  until the  earlier  of (i) the date on which  the value of the  Shares
pledged as collateral is at least equal to the outstanding  balance of the Note,
or (ii) the tenth anniversary date of the Note.

            (d)  Termination  by Reason  of  Disability.  In the event  that the
Participant's employment is terminated by reason of the Participant's Disability
and no Change of Control  falling  within  Section shall have occurred  prior to
such  termination,  no  acceleration of any amounts  outstanding  under the Note
shall occur,  and the Participant  shall continue to be eligible for forgiveness
of the Note pursuant to Section .


                                      5


<PAGE>



            (e) Termination  Following Certain Changes of Control.  In the event
that, following a Change of Control, the Participant's  employment is terminated
by the Company  without Cause or by the Participant for Good Reason or by either
party by reason of the Participant's Disability and the Change of Control is not
an event described in Section , no acceleration of any amounts outstanding under
the Note shall  occur,  and the  Participant  shall  continue to be eligible for
forgiveness of the Note pursuant to Section .

      7. Securities Law  Restrictions.  The Participant  agrees and acknowledges
with respect to any Shares that have not been  registered  under the  Securities
Act of 1933,  as amended (the "Act") that (i) the  Participant  will not sell or
otherwise  dispose of such Shares except  pursuant to an effective  registration
statement  under  the Act and any  applicable  state  securities  laws,  or in a
transaction  which,  in the opinion of counsel for the  Company,  is exempt from
such registration,  and (ii) a legend will be placed on the certificates for the
Shares to such effect.

      8. Tax Withholding.  The Participant agrees that the Participant shall pay
to the Company  upon its demand,  such amount as may be requested by the Company
for the purpose of satisfying its liability to withhold federal, state, or local
income or other taxes  incurred by reason of any  forgiveness  of any portion of
the Note.

      9. Power of Company Not Affected.  Nothing in this Agreement  shall confer
upon the  Participant  any right to continue in the employment of the Company or
any Affiliate, or interfere with or limit in any way the right of the Company or
any Affiliate to terminate the Participant's employment at any time.

      10.   Miscellaneous.

            (a) This  Agreement  shall be governed and  construed in  accordance
with the laws of the State of Florida  applicable  to  contracts  made and to be
performed therein between residents thereof.

            (b)   This Agreement may not be amended or modified except by the
written consent of the parties hereto.

            (c) The captions of this  Agreement are inserted for  convenience of
reference only and shall not be taken into account in construing this Agreement.

            (d) Any notice,  filing or  delivery  hereunder  or with  respect to
Shares shall be given to the  Participant  at either his usual work  location or
his home address as indicated in the records of the Company,  and shall be given
to the  Committee  or the  Company  at  121  West  Forsyth  Street,  Suite  200,
Jacksonville,  Florida 32202,  Attention Corporate  Secretary.  All such notices
shall be given by first class mail, postage prepaid, or by personal delivery.

            (e) This Agreement shall be binding upon and inure to the benefit of
the Company and its  successors  and assigns and shall be binding upon and inure
to the personal  benefit of the Participant  and the personal  representative(s)
and heirs of the Participant.


                                      6


<PAGE>


      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                              REGENCY REALTY CORPORATION,
                              a Florida corporation


                                          By:
                                             Its ____________ President




                                          ---------------------
                                   Participant


Date of execution: _________________, 1996


FL3273.4



                                      7




                    1996 MANAGEMENT STOCK PLEDGE AGREEMENT

                                                  Date:  As of January 1, 1996

      _____________________,  whose address is _________________  (the "Debtor")
and REGENCY REALTY  CORPORATION,  a Florida  corporation (the "Secured  Party"),
agree as follows:

      1. Security  Interest.  In  consideration of a loan to the Debtor from the
Secured  Party to enable the Debtor to purchase  shares of the  Secured  Party's
Common Stock  pursuant to the Secured  Party's 1993 Long Term Omnibus Plan,  the
Debtor  hereby  pledges  to the  Secured  Party and gives  the  Secured  Party a
continuing and unconditional  security interest (the "Security Interest") in the
following described property and in all increases and profits therefrom,  in all
substitutions   therefor  and  in  all   proceeds   thereof  in  any  form  (the
"Collateral"):   _______________  shares  of  Common  Stock  of  Regency  Realty
Corporation  purchased  from the issuer in a private  offering  effective  as of
January 1, 1996.  The Debtor has  deposited  with,  and the Secured Party hereby
acknowledges  receipt of, stock  certificates for the Collateral,  together with
stock powers endorsed in blank by the Debtor.

      2. Indebtedness  Secured. This Agreement and the Security Interest created
by it secure  payment of all  obligations of any kind owing by the Debtor to the
Secured Party  pursuant
 to a 1996 Stock  Purchase  Award  Agreement of even date
herewith between the Debtor and the Secured Party and a Promissory Note executed
pursuant   thereto   by  the  Debtor  in  favor  of  the   Secured   Party  (the
"Indebtedness").  The 1996  Stock  Purchase  Award  Agreement,  the  Note,  this
Agreement and any other documents executed in connection  therewith are referred
to collectively as the "Transaction Documents."

      3.  Warranties of Debtor.  Debtor  represents and warrants and, so long as
the Indebtedness  remains unpaid,  shall be deemed continuously to represent and
warrant  that  (a) each  item  constituting  Collateral  is  genuine  and in all
respects what it purports to be; (b) Debtor is the owner of the Collateral  free
of all security  interests or other  encumbrances  except the Security Interest;
and (c) Debtor is authorized to enter into this Security Agreement.

      4. Irrevocable Proxy. The Debtor irrevocably  constitutes and appoints the
Secured Party,  as the Debtor's Proxy with full power to (a) attend all meetings
of  stockholders  of the issuer of the  Collateral  (the Company) held after the
date of this  Agreement  and to vote the  Collateral  at those  meetings in such
manner as the Secured Party shall in its sole discretion deem  appropriate;  (b)
to  consent  in the sole  discretion  of the  Secured  Party to any action by or
concerning the Company for which the consent of the  stockholders of the Company
is or may be  necessary or  appropriate;  and (c) without  limitation  to do all
things which the Debtor could do as a stockholder of the Company,  giving to the
Secured Party full power of  substitution  and revocation.  Notwithstanding  the
foregoing,  the Debtor alone shall have the rights under this  paragraph and the
Secured  Party may not exercise  those rights so long as no Event of Default has
occurred.  The proxy  contained  in this  paragraph  shall  terminate  when this
Security  Agreement  terminates  as provided in paragraph  10. The Debtor hereby
revokes all proxies



<PAGE>



heretofore  given to any  person or  persons  and  agrees  not to give any other
proxies in  derogation  of this proxy so long as this  Security  Agreement is in
force.

      5. Covenants of Debtor.  So long as this Agreement has not been terminated
as provided in paragraph 10, the Debtor (a) will defend the  Collateral  against
the claims of all persons;  (b) will keep the Collateral  free from all security
interests  or other  encumbrances  except the  Security  Interest;  (c) will not
assign,  sell,  transfer,  deliver or otherwise dispose of the Collateral or any
interest  therein or attempt to do the same without the prior written consent of
the Secured Party;  (d) will notify the Secured Party promptly in writing of any
change in the Debtor's address,  name or identity  specified above; and (e) will
pay taxes,  assessments and other charges of every nature which may be levied or
assessed against the Collateral.

      6. Income and  Collateral.  Any cash  dividends  paid by the Company  with
respect to the Collateral shall be  automatically  credited against amounts then
due under the  Indebtedness,  but any  dividends  in excess of amounts  then due
under the  Indebtedness  shall be paid to the Debtor and shall not be applied to
prepay the Indebtedness unless the Debtor directs otherwise.

      7.    Increases, Profits or Distributions.

            (a)  Whether or not an Event of  Default  has  occurred,  the Debtor
authorizes  the Secured Party (i) to receive any increase in or stock  dividends
on the  Collateral  (other than cash  dividends) and any  distribution  upon the
dissolution and  liquidation of the issuer of any Collateral;  (ii) to surrender
such Collateral or any part thereof in exchange therefor;  and (iii) to hold the
receipt from any such distribution or increase as part of the Collateral.

            (b)  If  the  Debtor   receives  any  such   increase,   profits  or
distribution,  the Debtor will  deliver  such  receipts  promptly to the Secured
Party to be held by the Secured Party as provided in this paragraph.

      8. Release of Collateral.  Promptly upon any reduction in the  outstanding
principal  amount of the Note,  provided that the Debtor is not in default under
any Transaction Document,  the Secured Party shall release whole Shares from the
Collateral in such number,  if any, that the fair market value of the Collateral
on the date of the release is as nearly  equal as possible  to, but in any event
not less than, 100% of the remaining principal balance of the Note.

      9.    Default.

            (a) Any of the following  events or conditions  shall  constitute an
"Event of Default"  hereunder:  (i) non-payment of any Indebtedness when due for
more than 15 days after  notice of default,  or failure by the Debtor to perform
any  obligations  under this Agreement or any other  Transaction  Document after
written notice of default and a reasonable  opportunity to cure;  (ii) filing by
the  Debtor  of a  petition  in  bankruptcy  or  for  reorganization  under  any
bankruptcy, reorganization,  compromise arrangement, insolvency, readjustment or
debt  dissolution,  liquidation  or similar law of any  jurisdiction;  (iii) the
making of a general assignment by the Debtor for the benefit of creditors;  (iv)
filing against the Debtor of any petition in bankruptcy or for reorganization or
for the appointment of a receiver, trustee,

                                      2


<PAGE>



custodian or similar  official for the Debtor or for any of the Debtor's  assets
as to which the Debtor by any act indicates its approval  therefor or consent or
acquiescence  therein,  or entry of an order  approving  such  petition  or such
appointment  which remains  unstayed and in effect for more than 30 days; or (v)
material  falsity in any  certificate,  statement,  representation,  warranty or
audit at any time furnished to the Secured Party by or on behalf of the Debtor.

            (b)  The  Secured   Party  may  declare  all  or  any  part  of  the
Indebtedness  to be  immediately  due without  notice upon the  happening of any
Event of Default.

            (c) Upon the happening of any Event of Default,  the Secured Party's
rights with respect to the  Collateral  shall be those of a secured  party under
the Uniform Commercial Code and under any other applicable law from time to time
in effect.  The Secured  Party  shall also have any  additional  rights  granted
herein and any other agreement now or hereafter in effect between the Debtor and
the Secured Party.  If requested by the Secured Party,  the Debtor will assemble
the  Collateral  and make it  available  to the  Secured  Party at a place to be
designated by the Secured Party.

            (d) The Debtor  agrees that any notice by the  Secured  Party of the
sale or disposition of Collateral or any other intended action hereunder whether
required  by  the  Uniform  Commercial  Code  or  otherwise,   shall  constitute
reasonable  notice to the  Debtor if the  notice  is mailed by  certified  mail,
postage prepaid, at least fifteen days before the action to the Debtor's address
as specified  in this  Agreement  or to any other  address  which the Debtor has
specified in writing to the Secured  Party as the address to which notices shall
be given to the Debtor.

            (e) The Debtor shall be liable for any  deficiency in the event that
disposition of the Collateral  does not satisfy the  Indebtedness in full except
in the event that the  Indebtedness  becomes  non-recourse  pursuant to the 1996
Stock Purchase Award Agreement.

      10.   Miscellaneous.

            (a) In the event of any  litigation  arising  out of or  relating to
this Agreement,  the prevailing party shall be entitled to reasonable attorney's
fees and expenses from the losing party, whether incurred before or at trial, on
appeal or in insolvency proceedings.

            (b)  The  Debtor   appoints  the  Secured   Party  as  the  Debtor's
attorney-in-fact  to perform all acts which the Secured Party deems  appropriate
to perfect and  continue  the  Security  Interest,  to protect and  preserve the
Collateral and to indorse and transfer all or any part of the Collateral.

            (c)  Upon  the  Debtor's  failure  to  perform  any  of  its  duties
hereunder,  the Secured Party may, but it shall not be obligated to, perform any
of such duties and the Debtor shall forthwith upon demand  reimburse the Secured
Party for any expense incurred by the Secured Party in so doing.

            (d) No delay or  omission  by the Secured  Party in  exercising  any
right hereunder or with respect to any Indebtedness shall operate as a waiver of
that or any other right

                                      3


<PAGE>


and no single  right,  and no  single or  partial  exercise  of any right  shall
preclude the Secured  Party from any other or further  exercise of that right or
the  exercise  of any other  right or  remedy.  The  Secured  Party may cure any
default by the Debtor in any reasonable  manner  without  waiving the default so
cured and without  waiving any other prior or subsequent  default by the Debtor.
All rights and remedies of the Secured Party under this  Agreement and under the
Uniform Commercial Code shall be deemed cumulative.

            (e) The terms "Secured Party" and "Debtor" as used in this Agreement
include the heirs,  personal  representatives and successors or assigns of those
parties.

            (f) This  Agreement  may not be  modified  or amended  nor shall any
provision  of it be waived  except by in writing  signed by the Debtor and by an
authorized officer of the Secured Party.

            (g) This Agreement shall be construed  under the Uniform  Commercial
Code of Florida  and any other  applicable  Florida  laws in effect from time to
time.

            (h) This Agreement is a continuing  agreement  which shall remain in
force until all the Indebtedness shall be paid in full.

      11.   Waiver.  The Debtor hereby waives any rights Debtor may have to
notice and a hearing before possession or sale of collateral is effected by 
Secured Party by self-help, replevin, attachment or otherwise.



                                          ---------------------

                                                            Debtor


                                          REGENCY REALTY CORPORATION


                                          By:
                                             Its:

                                                            Secured Party

Date of execution:                    , 1996

FL3275.3



                                      4




                                PROMISSORY NOTE


$_____________                                           As of January 1, 1996


      FOR VALUE  RECEIVED,  the  undersigned,  _____________  ("Maker"),  hereby
promises to pay to the order of REGENCY REALTY CORPORATION  ("Payee"), a Florida
corporation,  at the office of the Payee at 121 West Forsyth Street,  Suite 200,
Jacksonville,  Florida 32202, or such other place as the holder may designate in
writing,  the sum of  _________________  ($___________) or such lesser amount as
may be outstanding  from time to time, with interest  thereon at a rate equal to
Seven and 34/100ths  Percent  (7.34%) per annum.  Interest on this Note shall be
computed on the basis of a 360-day year and shall be due and payable on the last
day of March, June,  September and December each year, except as may be provided
otherwise pursuant to the Stock Purchase Award Agreement referred to below.

      Nothing  contained  herein shall entitle the holder of this Note to demand
or collect  interest  or charges  in the  nature of  interest  in excess of that
permitted by law and if any such excess is collected,  it shall be promptly paid
to the Maker together with interest thereon at the highest lawful rate in effect
at the time of such overcharge.

      The entire principal, together with all accrued but unpaid interest, shall
be due and  payable on the tenth  (10th)  year  anniversary  of the date
 of this
Note,  or  under  certain   circumstances   following   termination  of  Maker's
employment,  if sooner,  as provided in the 1996 Stock Purchase Award  Agreement
between the Maker and Payee executed contemporaneously herewith.

      This Note may be prepaid in whole or in part without  penalty at any time.
Any  partial  prepayment  shall be  applied  first  against  accrued  but unpaid
interest, and then against outstanding principal.

      After maturity,  whether normal maturity or upon acceleration,  the unpaid
principal  balance of this Note and, to the extent permitted by law, any accrued
but unpaid  interest  thereon,  shall accrue  interest until paid in full at the
lesser  of five  percent  (5%) per annum in  excess  of the  stated  rate or the
highest rate permitted by law.

      The Maker agrees to pay the holder on demand a late charge of five percent
(5%) of any amount payable  hereunder which is not paid within fifteen (15) days
after notice of default.  The parties  acknowledge that such charge is necessary
and reasonable to compensate the holder for additional  administrative  expenses
relating to the delinquent payment.

      This Note is given  subject to the terms and  conditions of the 1996 Stock
Purchase  Award  Agreement  between the Maker and Payee  referred to above.  The
obligations  of  Maker  hereunder  are  recourse  as to Maker  (but  may  become
non-recourse  under the  circumstances  described  in the Stock  Purchase  Award
Agreement) and are secured by the 1996 Management



<PAGE>


Stock Pledge Agreement (the "Stock Pledge")  encumbering  shares of common stock
of Regency  Realty  Corporation  purchased  by Maker  pursuant to the 1996 Stock
Purchase Award Agreement.

      If default be made in the payment of any amounts required to be paid under
this Note for more than  fifteen  (15) days after  notice of default or if there
exists any event of default under the Stock Pledge,  then the holder hereof may,
at its option,  declare the entire principal  balance and accrued interest to be
immediately due and payable without notice, time being of the essence.

      The Maker and all endorsers and  guarantors of this Note, now or hereafter
becoming liable hereon, waive demand, presentment, protest and notice of protest
and  dishonor and all other  notices or  requirements  which might  otherwise be
necessary to bind them.

      If the Maker  defaults  under this Note,  it shall be obligated to pay all
costs,  including reasonable attorneys' fees, incurred by the holder in pursuing
its remedies  hereunder and under any instrument  securing this Note,  including
costs and fees on appeal and in insolvency proceedings.

      This Note shall be governed by the laws of Florida.



                                          ------------------


STATE OF GEORGIA
COUNTY OF _____________

      The  foregoing  instrument  was  acknowledged  before  me this ____ day of
____________, 1996, by _____________________. Such person did not take an oath.

{Notary Seal must be affixed}


                                          Notary Public, State of

                                          My commission expires:

FL3274.3



                                      2




                        AGREEMENT OF PURCHASE AND SALE

      RRC ACQUISITIONS, INC., a Florida corporation,  hereinafter referred to as
"Purchaser,"  agrees to  purchase,  and RREEF MA-II  CAMBRIDGE  SQUARE,  INC., a
Delaware corporation,  hereinafter referred to as "Seller," agrees to sell, that
certain  improved  real  property,  hereinafter  referred to as the  "Property,"
legally described on Exhibit A attached hereto and made a part hereof,  commonly
known as  Cambridge  Square  Shopping  Center,  situated in the City of Atlanta,
DeKalb  County,  Georgia,  consisting  of an  approximately  68,500  square foot
shopping center on approximately  9.46 acres of land,  together with all rights,
privileges, easements and appurtenances thereto.

     1. Purchase Price. The purchase price for the Property is Three Million Six
Hundred Thousand Dollars ($3,600,000.00), payable in cash or by wire transfer of
funds at Closing.
      
     2. Deposit.  Within two (2) working days after the full execution  hereof,
Purchaser agrees to deposit the amount of Twenty Thousand  Dollars  ($20,000.00)
(the "Initial Deposit") with Slutzky,  Wolfe & Bailey,  2255 Cumberland Parkway,
Building 1300,  Atlanta,  Georgia 30339,  ("Escrow Holder") authorized agent for
Chicago Title Insurance Company ("CTIC"), as earnest money to secure Purchaser's

performance  hereunder.  If Purchaser  notifies  Seller  pursuant to Paragraph 3
hereof  that all  matters  are  acceptable  to it prior to the end of the Review
Period (as  hereinafter  defined),  then within two (2)  working  days after the
expiration of the Review  Period,  Purchaser  will deposit an additional  Eighty
Thousand  Dollars  ($80,000.00)  with the Escrow  Holder (the "Second  Deposit";
hereinafter,  the  Initial  Deposit  and the  Second  Deposit  are  collectively
referred to as the "Deposit"). If Purchaser fails to make the Initial Deposit by
the required date, this Agreement will terminate  without  liability on the part
of Seller or Purchaser.  If Purchaser  makes the Initial  Deposit,  but fails to
make the Second  Deposit by the required  date,  this  Agreement  will terminate
without  further  liability  on the part of Seller  or  Purchaser,  (except  for
Purchaser's  obligations  pursuant to Paragraph  8.17  hereof),  and the Initial
Deposit will be paid to Seller as liquidated  damages.  If Purchaser  makes both
the Initial Deposit and the Second Deposit,  but the transaction  fails to close
for any  reason  other  than a default  on the part of Seller or a failure  of a
condition  precedent to Purchaser's  obligations  to close,  this Agreement will
terminate  without  liability  on the part of Seller or  Purchaser,  (except for
Purchaser's obligations pursuant to Paragraph 8.17 hereof), and the Deposit will
be paid to Seller as liquidated  damages.  Escrow Holder will invest the Deposit
as the  installments  are  received in  federally  insured  accounts or paper as
directed by Purchaser.  All interest payable with respect to the Deposit will be
added to and  become a part of the  Deposit  and will be  payable  to the  party
entitled to the Deposit hereunder. Prior to the expiration of the Review Period,
Escrow  Holder will return the Deposit to Purchaser  at its sole  demand,  which
demand must  include a notice  that  Purchaser  is  terminating  this  Agreement
pursuant to the provisions of Paragraph 3 hereof.  Otherwise,  the Escrow Holder
will  return  the  Deposit  only upon a written  joint  order  from  Seller  and
Purchaser.  Escrow  Holder will not be liable for any action with respect to the
Deposit taken in good faith, any such liability hereby being waived by Purchaser
and Seller.  Without  limiting the  generality of the  foregoing,  Purchaser and
Seller authorize and direct Escrow Holder to accept, comply

79025/4
                                      1


<PAGE>



with, and obey any and all writs, orders, judgments or decrees entered or issued
by any court with or without  jurisdiction.  In the case Escrow  Holder obeys or
complies with any such writ, order, judgment or decree of any court, it will not
be liable  to any of the  parties  hereto or any other  person by reason of such
compliance.  In case  Escrow  Holder  is made a party  defendant  to any suit or
proceedings regarding the Deposit,  Purchaser and Seller, jointly and severally,
agree to pay to Escrow  Holder,  upon demand,  all costs,  attorneys'  fees, and
expenses incurred with respect thereto. Seller and Purchaser hereby grant Escrow
Holder a lien on the Deposit for any and all such costs,  fees and expenses.  If
said costs, fees and expenses are not paid, Escrow Holder will have the right to
reimburse itself out of the Deposit. The party at fault will reimburse the other
party for all of the fees and expenses of the Escrow  Holder  deducted  from the
Deposit upon demand of the other party.

      3.  Review of the Property.  Within ten (10) days after full execution 
hereof, Seller will:

            3.1 subject to the  provisions  of Paragraph  8.17  hereof,  provide
Purchaser and its agents or  consultants  with access to the Property to inspect
each and every part thereof to determine  its present  condition  and to conduct
such physical and environmental  studies (including a mechanical and roof study)
as it deems appropriate.

            3.2 deliver to  Purchaser,  all to the extent in the  possession  of
Seller, a copy of any existing leases,  service  contracts,  maintenance and all
other contracts  pertaining to the operation of the Property,  copies of surveys
and tax bills,  and any notice of any statute or code,  regulatory  or insurance
violation  pertaining  to the  Property  received by Seller or its agents  since
January 1, 1994 and any documents pertaining to the resolution thereof.

            3.3 to the extent in Seller's possession, provide Purchaser with any
recent reports prepared by third party consultants  regarding hazardous waste or
substances and the physical condition of the Property.

Purchaser  will have  forty-five  (45) days from the date that this Agreement is
fully executed ("Review Period") to determine in its sole discretion whether all
matters  relating to the  Property,  including,  without  limitation,  the title
thereto, the physical condition thereof, the terms of the leases thereon and the
fiscal  feasibility  of the  purchase  thereof,  are  acceptable  to  Purchaser.
Purchaser  will  notify  Seller  prior to the  expiration  of the Review  period
whether all matters are acceptable to it. If Purchaser  notifies Seller that all
matters  are  not  acceptable  to it,  this  Agreement  will  terminate  without
liability on the part of Seller or Purchaser,  other than Purchaser's  indemnity
contained  in  Paragraph  8.17  hereof,  and the  Deposit  will be  returned  to
Purchaser.  If Purchaser  notifies Seller that all matters are acceptable to it,
Purchaser  will make the Second Deposit as provided in Paragraph 2. In the event
that  Purchaser  does not timely so notify  Seller,  Purchaser will be deemed to
have  concluded that the condition of the Property is not acceptable and to have
elected  to  terminate  the  transaction,  in which  event the  Deposit  will be
returned to Purchaser  and this  Agreement  will be terminated  without  further
liability on the part of Seller or Purchaser,  other than Purchaser's  indemnity
contained in Paragraph 8.17 hereof.

79025/4
                                      2


<PAGE>



The Review Period will be extended one day for each day beyond  thirty-five (35)
days after full execution  hereof that Seller delays in delivering the materials
required by clauses (i), (ii) and (iii) of Paragraph 5 hereof. In the event this
Agreement is terminated or deemed terminated  pursuant to the provisions of this
Paragraph, Purchaser agrees (which agreement survives termination) to deliver to
Seller a copy of any third party reports prepared at Purchaser's  direction with
respect to the physical condition of the Property.

      4. Tenant Estoppels. It is a condition precedent to Purchaser's objections
hereunder that Seller obtain fully executed Tenant Estoppel  Certificates in the
form of Exhibit B attached  hereto and made a part hereof  from (i)  Winn-Dixie,
Inc., Big "B" Drug Stores, Los Bravos Mexican Restaurant, McDonalds Corporation,
SOM  Video  Wonderland  and  Cambridge  Cleaners  and (ii) 80% of all  remaining
tenants of the  Property  (computed  on the basis of net  rentable  square feet)
("Other Tenants") and (iii) Tenant Estoppel  Certificates  executed by Seller on
behalf of all Other  Tenants who do not  furnish  Tenant  Estoppel  Certificates
within  ten (10) days  prior to the  Closing  hereunder.  In the event  that (a)
Seller does not deliver to Purchaser fully executed Tenant Estoppel Certificates
as aforesaid  within the time period set forth herein,  (b) any Tenant  Estoppel
Certificate delivered to Purchaser indicates a default by the Landlord under the
Lease,  which  default  is not cured by Seller on or prior to Closing or (c) any
information  contained on any Tenant Estoppel Certificate delivered to Purchaser
materially  differs from the information set forth in the leases of the Property
previously delivered to Purchaser pursuant to the terms of Paragraph 3.2 hereof,
(A) Purchaser  will have the right to terminate  this  Agreement  upon notice to
Seller given at any time on or prior to Closing and, in such event,  the Deposit
will be returned to Purchaser and this Agreement will terminate  without further
liability on the part of Seller or Purchaser,  other than Purchaser's  indemnity
contained in Paragraph 8.17 hereof,  or (B) if Purchaser has not terminated this
Agreement as aforesaid,  the purchase and sale will close without  regard to the
provisions of this Paragraph 4.

      5. Title and Survey.  Upon its  execution of this  Agreement,  Seller will
order and  promptly  upon  receipt  thereof  deliver to  Purchaser,  (i) a title
commitment on the Property  issued by the Escrow Holder as agent for CTIC,  (ii)
copies of all documents  relating to title exceptions  referred to therein,  and
(iii) a current survey meeting the minimum 1992 standard detail requirements for
an Urban  ALTA/ASCM Land Title Survey,  including Items 1-11 of Table A thereof,
except  Item 5 and Item 6 (except to the extent  such  matters  are  customarily
shown in surveys in the Atlanta,  Georgia  metropolitan  area).  After receiving
said  preliminary  title  report,  documents,  and survey,  Purchaser  will have
fifteen (15) working days in which to notify  Seller in writing of any objection
Purchaser  may have to any  exceptions  reported  in the title  report or matter
shown on the survey.  Seller will use reasonable  efforts to cure any reasonable
title or survey  objections  either by removing  same or by insurance  over such
objected-to  exception or survey  matter,  subject to the  provisions  set forth
below.  The  commitment  will be for an ALTA  standard  form 1992  owners  title
insurance  policy,  subject to the  standard  and general  ALTA  exceptions  and
exclusions,  in an amount  equal to the  purchase  price.  If, prior to Closing,
Seller is unable to remove or provide  insurance over any exceptions to title or
survey  matters  objected to, and  Purchaser is unwilling to take title  subject
thereto, Purchaser may terminate this

79025/4
                                      3


<PAGE>



Agreement.  However,  if such objected-to  exceptions to title or survey matters
are not removed or insured over by the date of Closing,  Purchaser  may elect to
discharge any tax,  mortgage,  financing or mechanic's lien of any amount or any
other unpermitted liens,  encumbrances,  or restrictions which can be discharged
by the  payment  of  $10,000  in the  aggregate  or less and to deduct  from the
purchase  price the amount  necessary  to do so.  Seller  agrees to furnish  the
Escrow Holder with customary  affidavits at Closing,  enabling the Escrow Holder
to waive the  general  exceptions.  If the  Closing is not  consummated  for any
reason other than Seller's default,  Purchaser will be responsible for any title
insurer cancellation charges.

      6.  Representations and Warranties.

            6.1  Representations  and  Warranties  of  Seller.  As  used in this
Paragraph  6.1,  the phrase "to the best  knowledge  of  Seller"  means,  and is
limited  to, the actual  knowledge  of John Turney and Faye  Phillips,  Seller's
executive and management personnel having ongoing management responsibility with
respect to the Property. Seller hereby warrants and represents to Purchaser that
John Turney and Faye Phillips are the individuals currently working on behalf of
Seller who are most likely to have the information requested by Purchaser and:

                  6.1.1  Status of Seller  and  Closing  Documents.  Subject  to
Paragraph  8.15,  that this  Agreement  has been,  and all the  documents  to be
delivered by Seller to Purchaser at Closing will be, duly authorized,  executed,
and delivered by Seller,  will be sufficient to convey title, and this Agreement
does not, and will not at Closing,  violate any  provisions  of any agreement to
which Seller or the Property is subject. Seller will pay, or credit Purchaser at
Closing in an amount equal to, all broker's  commissions and tenant  improvement
costs  required to be paid by landlord upon renewal of the  following  leases if
notice of  renewal is  received  by Seller  prior to  Closing  from Big "B" Drug
Stores. In addition, if not sooner paid by Landlord to Winn-Dixie,  Inc., Seller
will  credit  Purchaser  at  Closing  the  amount  of   approximately   $80,000,
representing  reimbursement  due  Winn-Dixie,  Inc.  for  store  and  storefront
renovations.  Without  limiting  the  generality  of anything  contained in this
Agreement,  Purchaser  agrees to pay all  amounts  due on account of the credits
given by Seller and to  defend,  indemnify  and hold  Seller  harmless  from its
failure to do so as and when required by the terms of the Leases with respect to
which the credits are given.

                  6.1.2  Non-Foreign  Status.  Seller is not a "foreign  person"
within the meaning of Section  1445(f)(3) of the Internal  Revenue Code of 1986,
as amended,  and that Seller will  furnish to  Purchaser,  prior to Closing,  an
affidavit in form satisfactory to Purchaser confirming the same.

                  6.1.3  No  Default.   The   execution  and  delivery  of  this
Agreement, and consummation of the transaction described in this Agreement, will
not constitute a default under any contract, lease, or agreement to which Seller
is a party.


79025/4
                                      4


<PAGE>



                  6.1.4 No Suits.  To the best knowledge of Seller,  there is no
action, suit or proceeding pending against or materially adversely affecting the
Property or any portion thereof, or relating to or arising out of the ownership,
management  or  operation  of the  Property,  in any  court or  before or by and
federal, state, or municipal department,  commission, board, bureau or agency or
other governmental instrumentality.

                  6.1.5   Environmental   Condition.   Each  of  the   following
representations  is  wholly  qualified  by  (a)  any  matters  disclosed  in any
materials  delivered to Purchaser by Seller  pursuant to Paragraph  3.3 above or
otherwise,  (b) any matters  disclosed in any  environmental  reports or studies
obtained by Purchaser, and (c) any other matters known to Purchaser.  Subject to
the foregoing,  Seller represents (but does not warrant),  to the best knowledge
of Seller:

                        (i)  Seller  has  not  released,  generated  or  handled
      hazardous materials during Seller's ownership of the Property in violation
      of any applicable  laws, nor has Seller  knowingly  permitted the release,
      generation  or  handling of  hazardous  materials  on the  Property or the
      incorporation   thereof  in  any  buildings  or  improvements  thereon  in
      violation of any applicable laws; and

                        (ii)  Seller has not  received  any  summons,  citation,
      directive, letter or other communication, written or oral, from the United
      States or Georgia  Environmental  Protection  Agency  with  respect to the
      Property.

                  6.1.6  Georgia  Income  TaxSeller  is exempt  from  payment of
Georgia income taxes under Georgia Code Section 48-7-25.

            6.2  Representations  and Warranties of Purchaser.  Purchaser hereby
warrants and  represents  to Seller that this  Agreement  has been,  and all the
documents  to be  delivered  by  Purchaser  to Seller will be, duly  authorized,
executed, and are or will be legal, valid, and binding obligations of Purchaser,
are or will be enforceable in accordance  with their  respective  terms,  and do
not, and will not at Closing,  violate any  provisions of any agreement to which
Purchaser  is subject  and that  Solomon  Brothers,  Prudential  Securities  and
Robinson Humphry are Purchaser's (or its parent  corporation's)  sole investment
advisors with respect to Purchaser's decision to purchase the Property.

            6.3  Continuation.  The  continued  accuracy in all  respects of the
aforesaid  representations  and warranties will be a condition  precedent to the
parties' obligation to close. If any of said  representations and warranties are
not  correct  at the  time  the  same is made or as of the  Closing,  Seller  or
Purchaser,  as its sole remedy,  may elect in its  discretion to terminate  this
Agreement and there will be no further  liability on the part of either party to
the other,  except for the  obligations of Purchaser  pursuant to Paragraph 8.17
hereof.

     6.4 Condition of Property. Except as expressly set forth in this Agreement,
Seller has not made and does not hereby make any representations,  warranties or
other statements as to
79025/4
                                      5


<PAGE>



the condition of the Property and Purchaser  acknowledges  that at Closing it is
purchasing  the  Property  on an  "as  is"  basis  and  without  relying  on any
representations and warranties of any kind whatsoever,  express or implied, from
Seller, its agents or brokers as to any matters concerning the Property.

      7.  Closing.

            7.1 Closing of Sale. The purchase and sale contemplated  herein will
close (herein  referred to as the "Closing") at the office of the Escrow Holder,
or as  otherwise  mutually  agreed,  not later than  thirty  (30) days after the
expiration  of the Review  Period  provided for in Paragraph 3, or at such other
time agreed to by  Purchaser  and Seller.  At  Closing,  Seller will  deliver to
Purchaser a statutory  special  warranty  deed  ("Deed")  and the other  closing
documents  required  hereunder  and a policy of title  insurance  or later dated
marked up  commitment  for title  insurance  with  only such  exceptions  as are
permitted  pursuant to the  provisions of Paragraph 5 hereof and Purchaser  will
cause payment of the purchase price to be made to Seller by wire  transfer.  The
sale  (payment of purchase  price and  delivery of deed) will be closed  through
escrow with the Escrow Holder in accordance  with the general  provisions of the
usual form of escrow agreement used in similar transactions by the Escrow Holder
with  special  provisions  inserted  as may be  required  to  conform  with this
Agreement.

            7.2 Proration,  Adjustments.  Taxes,  rental,  and other income, and
operating  or other  expenses  of the  Property,  will be  prorated  as of 12:00
Midnight  prior to the date of  Closing.  Any  taxes  or other  expenses  of the
Property  for the period  prior to Closing  which are  payable by tenants of the
Property, but are not collected or delinquent as of the Closing, will reduce the
credit to  Purchaser  for such items.  Seller will also give  Purchaser a credit
against the purchase price for all security deposits held pursuant to the leases
and all  interest due thereon and will assign to  Purchaser  any other  deposits
held from  tenants.  Seller will be entitled  to a credit for  uncollected,  but
non-delinquent  base  rent,  capital  reimbursements  or other  income  due from
tenants,  but will not be entitled to credit for delinquent sums at the Closing.
Delinquent  sums will be considered any sums overdue more than thirty (30) days.
Delinquent  amounts  subsequently paid to Purchaser will be paid by Purchaser to
Seller  promptly  upon receipt;  provided that amounts  received from tenants by
Purchaser  will be first  applied to current  charges,  and the balance  will be
applied to make up  delinquencies  on a "last-in,  first out" basis (i.e.,  most
recent  delinquencies  relative  to receipt of payment are paid  first).  In the
event  Seller  receives   payment  of  rent  and  other  tenant   reimbursements
post-Closing for periods post-Closing,  Seller will promptly remit such rent and
other tenant  reimbursement to Purchaser.  Upon  reconciliation  in 1997 of 1996
expenses  payable by tenants  (whether  or not  against  estimates  paid by such
tenants during 1996),  Purchaser agrees to remit to Seller Seller's share of any
amounts thereof collected by Purchaser from tenants who were tenants both before
and after the date of Closing,  prorated as of 12:00  Midnight prior to the date
of Closing.  After the  Closing,  Seller will have no further  obligations  with
respect to any leases or other  agreements  affecting the  Property,  including,
without limitation,  tenant improvement work, leasing commissions and free rent.
Purchaser  will deliver the purchase price to Seller in good funds by 11:00 a.m.
local time on the

79025/4
                                      6


<PAGE>



day of Closing.  If Seller  does not receive the funds by such time,  prorations
will be made as of  Midnight  on the day  Seller  does  receive  the  funds.  At
Closing,  Seller and Purchaser  will  exchange  mutual  indemnities  in form and
substance  satisfactory to each in their reasonable  discretion,  whereby Seller
agrees to defend,  indemnify  and hold  Purchaser  harmless from all defaults of
Seller under the leases of the Property first accruing pre-Closing and Purchaser
agrees to defend,  indemnify  and hold  Seller  harmless  from all  defaults  of
Purchaser under the leases of the Property first accruing at or post-Closing.

            7.3 Proration of Utility Charges.  To the extent Seller,  as opposed
to tenants,  is responsible for payment of utility charges,  Seller will attempt
to have utility  meters read as of the Closing  Date. To the extent that this is
not possible and to the extent that any other obligation for continuing services
is incurred, and statements are rendered for such services covering periods both
before and after the  Closing  Date,  the amount  will be  adjusted  between the
parties as of the Closing Date on a time-elapsed  basis. Seller will forward any
such statements  which it receives to Purchaser and Purchaser will pay the same.
Seller will remit to Purchaser its proportionate share immediately upon demand.

            7.4 Closing Costs. Seller will pay (i) one-half of all escrow and/or
closing fees of Escrow Holder, (ii) all recordation or transfer taxes, (iii) the
cost of the  title  commitment  and  policy,  (iv) all  recording  fees to clear
Seller's title and, (v) the cost of the survey.  Purchaser will pay (i) one-half
of all  escrow  and/or  closing  fees of  Escrow  Holder,  (ii)  the cost of any
endorsements to the title policy required by Purchaser, (iii) all deed recording
fees,  and (iv) all costs of  Purchaser's  physical  inspections of the Property
(environmental,  engineering  and  other)  and other due  diligence  activities.
Except as otherwise  provided in Paragraph  8.9, each party will be  responsible
for its own attorneys' and other professional fees. Any other closing costs will
be apportioned according to local custom.

            7.5 Possession.  Possession of the Property will be delivered to the
Purchaser on the date of Closing and Seller will thereupon  deliver to Purchaser
the originals of all leases for tenants of the Property, all correspondence with
tenants  and any  tenant  ledger  cards,  supplies  and  advertising  materials,
booklets,  keys,  or  other  items  used in  connection  with  operation  of the
Property.

            7.6 Closing Documents.  As part of the Closing,  Seller will deliver
to Purchaser:  (a) the Deed;  (b) an affidavit in customary  form that Seller is
not a "foreign  person"  within the meaning of Section  1445(e) of the  Internal
Revenue Code of 1986; (c) such affidavits as are customarily  required by Escrow
Holder in connection  with issuance of the owner's title insurance  policy;  (d)
assignment  of leases;  (e) an  assignment  of  contracts;  (f) an assignment of
warranties;  (g) the mutual  indemnities  described in Paragraph 7.2 hereof; and
(h) a bill of sale conveying all personal property of Seller, if any, located at
the Property and used in connection with the  maintenance or operation  thereof;
(i) an Audit Representation  Letter in the form of Exhibit C attached hereto and
made a part hereof; (j) a Broker Lien Waiver as required by Georgia law; and

79025/4
                                      7


<PAGE>



(k) whatever  documentation is necessary to establish that Seller is exempt from
Georgia income tax withholding.

      8.  Miscellaneous.

            8.1 Modifications. This Agreement may be amended only in writing and
supersedes  any and all  agreements  between the parties  hereto  regarding  the
Property which are prior in time to this Agreement.

            8.2 Casualty and  Condemnation.  If the improvements on the Property
are  destroyed  or damaged to the extent that repairs cost in excess of $100,000
or in the event such  destruction or damage is of such a degree as to permit any
tenant of the Property to terminate its lease,  or if  condemnation  proceedings
are  commenced  against the  Property  between the date hereof and the  Closing,
Purchaser  may  terminate  this  Agreement.  If  Purchaser  elects to accept the
Property in its then  condition,  all proceeds of insurance (plus the applicable
deductible) or condemnation awards payable to Seller by reason of such damage or
condemnation  will be paid or assigned to  Purchaser.  In the event of any other
damage to the  Property,  which  damage  Seller is  unwilling to repair prior to
Closing, Purchaser will accept the Property in its then condition, in which case
Purchaser will be entitled to a reduction in the purchase price to the extent of
the cost of repairing  such damage,  as certified by an  independent  contractor
selected by the  parties.  In the event of any damage where  Purchaser  does not
have the right to  terminate  or elects not to  terminate  and Seller  elects to
repair such  damage,  the date of Closing will be delayed for the number of days
required to repair the damage.

            8.3  Time of Essence.  Time is of the essence of this Agreement.

            8.4 Notices.  All tenders and any notice required or permitted to be
given  under this  Agreement  must be in writing and will be deemed to have been
given as of: (a) the date of personal  delivery;  (b) two days after  deposit in
the United States mail,  registered or certified mail,  postage prepaid,  return
receipt  requested,  if a  response  is  required  to  such  tender  or  notice;
otherwise,  upon  deposit;  (iii) the date of  receipt if  successfully  sent by
facsimile  transmission  during business days between 8:00 a.m. and 6:00 p.m. in
the time zone of the recipient;  or, (iv) when  delivered by a private  contract
carrier, as the case may be and addressed as follows:

            If to Purchaser:        RRC Acquisitions, Inc.
                       121 West Forsythe Street, Suite 200
                           Jacksonville, Florida 32202
                        Facsimile Number: (904) 634-3428


79025/4
                                      8


<PAGE>



            with a copy to:         Ulmer, Murchison, Ashby & Taylor
                      200 West Forsythe Street, Suite 1600
                                    P.O. Box 479
                           Jacksonville, Florida 32201
                                    Attn: William E. Scheu
                        Facsimile Number: (904) 354-9100

            If to Seller:           The RREEF Funds
            ------------
                                    875 North Michigan Avenue
                                    Suite 4114
                                    Chicago, Illinois  60610
                                    Attn:  John Turney
                                    Facsimile Number: (312) 266-9346

            with a copy to:         D'Ancona & Pflaum
                                    30 North LaSalle Street
                                    Suite 2900
                                    Chicago, Illinois  60602
                                    Attn: Michael D. Miselman
                                    Facsimile Number:  (312) 580-0923

            If to Escrow Holder:    Slutzky, Wolfe & Bailey
                                    2255 Cumberland Parkway
                                    Building 1300
                                    Atlanta, Georgia   30339
                                    Attn: Bernard L. Wolfe, Esq.
                                    Facsimile Number: (770) 438-9657

Either  party may by notice to the other  designate  a  different  address.  Any
notice sent by  registered or certified  mail will be deemed  effective two days
after deposit thereof, as aforesaid.

            8.5  Successors  and Assigns.  This Agreement is be binding upon and
inures to the  benefit  of the heirs,  successors,  and  assigns of the  parties
hereto,  provided  Purchaser may not assign its rights or obligations  hereunder
without the prior written consent of Seller.  Notwithstanding the foregoing, but
provided  the sale to an  assignee  hereinafter  referred to does not cause this
transaction  to be a prohibited  transaction  as  described  in paragraph  8.16,
Purchaser  has the right to assign this  Agreement  and  Purchaser's  rights and
obligations  hereunder  to any entity  owned or  controlled  by or under  common
control with Purchaser or any principal of Purchaser.

            8.6   Governing Law.  The performance and interpretation of this
Agreement will be controlled by the law of the State in which the Property is
located.


79025/4
                                      9


<PAGE>



            8.7  Continuation  Until  Closing.  Between the date of execution of
this  Agreement  and the  Closing,  Seller  will  keep  and  perform  all of the
obligations  to be performed by landlord  under any leases or  applicable  laws.
Seller will not permit or consent to any new leases,  amendments,  or  subleases
without first  submitting  them to Purchaser  for  Purchaser's  approval,  which
approval will not be unreasonably withheld. Purchaser will have five (5) working
days to notify Seller of its approval of such leases,  amendments, or subleases,
and  in the  event  that  Purchaser  does  not so  notify  Seller,  the  leases,
amendments or  subleases,  as the case may be, will be deemed  approved.  Seller
will  maintain  or cause the  tenants to  maintain  the  Property  and  personal
property in condition at least as good as at the time of this Agreement and will
otherwise  operate the  Property in the same manner as before the making of this
Agreement, the same as though Seller were retaining the Property.

            8.8 Brokers.  Seller and Purchaser  each (a) represents and warrants
to the other that it has not dealt with any broker or finder in connection  with
the transaction  contemplated by this Agreement other than the parties,  if any,
to be paid a  commission  as  specified  in  Paragraph  8.11,  and (b) agrees to
defend,  indemnify  and hold the other  harmless  from and  against  any losses,
damages,  costs, or expenses (including  attorneys' fees) incurred by such other
party due to a breach of the foregoing warranty by the indemnifying party.

            8.9  Attorneys'  Fees.  If any  action is  brought  by either  party
against the other party, the party in whose favor final judgment is entered will
be entitled to recover court costs incurred and reasonable  attorneys'  fees, at
trial, upon appeal and on any petition for review.

            8.10 Remedies for  Non-Performance.  If Seller  defaults  hereunder,
Purchaser may terminate this Agreement or enforce  specific  performance of this
Agreement.  If said sale is not  consummated  because  of a default  under  this
Agreement  solely  on the part of  Purchaser,  the  Deposit  will be paid to and
retained by Seller as liquidated  damages.  The parties have agreed that, in the
event of such a  default  by  Purchaser,  Seller's  damages  would be  extremely
difficult or  impracticable to determine.  Therefore,  by placing their initials
below,  the parties  acknowledge  that the Deposit has been agreed  upon,  after
negotiation, as the parties' reasonable estimation of Seller's damages, Seller's
exclusive remedy against  Purchaser,  at law or in equity in the event of such a
default  under  this  Agreement  solely  on the  part of  Purchaser  and as full
liquidated  damages  pursuant to Official Code of Georgia  Annotated ss. 13-6-7.
Purchaser  covenants not to bring any action or suit  challenging  the amount of
liquidated  damages  provided  hereunder  in the  event  of such  default.  This
provision expressly survives termination of this Agreement.

                        INITIALS: SELLER _________   PURCHASER ________

            8.11 Broker's  Commission.  Seller will be responsible for brokerage
commissions payable to Ben Carter Properties, the listing broker. Regency Realty
Group, Inc., the cooperating  broker, will be paid whatever commission is due it
from the commission Seller pays to the listing broker.


79025/4
                                      10


<PAGE>



            8.12 Continuation and Survival of Covenants. All representations and
warranties  by the  respective  parties  contained in this  Agreement or made in
writing  pursuant to this Agreement are intended to and will be true and correct
as of the Closing.  None of Seller's  representations  and warranties  contained
herein, nor any claims,  damages or injury for the breach thereof,  will survive
the date of Closing.

            8.13 Merger of Prior  Agreements.  This  Agreement  constitutes  the
entire  agreement  between the parties  with respect to the purchase and sale of
the Property and supersedes all prior agreements and understandings  between the
parties hereto relating to the subject matter of this Agreement.

            8.14  Invalidity of Provisions.  In the event any provisions of this
Agreement  are  declared  invalid  or are  unenforceable  for any  reason,  such
provisions  will be deleted from such document and will not invalidate any other
provision.

            8.15  Seller's Investment Approval.  INTENTIONALLY DELETED.

            8.16  ERISA.  Within  ten (10) days  after  full  execution  of this
Agreement, Purchaser will furnish to Seller all information regarding Purchaser,
its affiliates and the  shareholders or partners of each of them  (collectively,
the "Purchaser Related Parties") as Seller requests in order to enable Seller to
determine to Seller's sole satisfaction that the transaction contemplated hereby
will not  constitute  a sale to a  "party-in-interest"  within  the  meaning  of
Section  3(14) of the  Employee  Retirement  Security  Act of 1974,  as  amended
("ERISA"),  with  respect to any  investor  in Seller.  Purchaser  agrees not to
assign this  Agreement to any person on entity Seller  believes in good faith to
be a "party-in-interest". Any such attempted assignment will be null and void.

            8.17 Entry and Indemnity. In connection with any entry by Purchaser,
or its agents,  employees or contractors onto the Property,  Purchaser agrees to
give Seller  reasonable  advance notice of such entry and agrees to conduct such
entry and any  inspections  in  connection  therewith so as to minimize,  to the
greatest extent possible,  interference  with Seller's business and the business
of Seller's tenants and otherwise in a manner  reasonably  acceptable to Seller.
Without  limiting  the  foregoing,  prior to any entry to  perform  any  on-site
testing,  Purchaser agrees to give Seller written notice thereof,  including the
identity  of the  company or  persons  who will  perform  such  testing  and the
proposed  scope of the testing.  Seller will approve or disapprove  the proposed
testing  within  three (3)  business  days  after  receipt  of such  notice.  If
Purchaser  or its  agents,  employees  or  contractors  take any sample from the
Property in connection with any such approved testing, Purchaser will provide to
Seller a portion of such sample being tested to allow Seller,  if it so chooses,
to perform its own testing.  Purchaser will offer the  opportunity for Seller or
its  representative  to be present to observe  any  testing or other  inspection
performed on the Property.  Purchaser will promptly  deliver to Seller copies of
any  reports  relating  to any  testing  or  other  inspection  of the  Property
performed by Purchaser or its agents,  employees or contractors.  Purchaser will
maintain, and agrees to assure that its

79025/4
                                      11


<PAGE>



contractors maintain,  public liability and property damage insurance in amounts
and in form and substance adequate to insure against all liability of Purchaser,
its agents, employees or contractors, arising out of any entry or inspections of
the Property  pursuant to the  provisions  hereof,  and  Purchaser  will provide
Seller  with  evidence  of such  insurance  coverage  upon  request  by  Seller.
Purchaser agrees to indemnify,  defend and hold Seller harmless from and against
any costs, damages,  liabilities,  losses, expenses, liens or claims (including,
without  limitation,  reasonable  attorneys' fees) arising out of or relating to
any entry on the Property by Purchaser,  its agents, employees or contractors in
the course of performing the inspections,  testings or inquiries provided for in
this Agreement,  including without  limitation damage to the Property or release
of hazardous substances or materials onto the Property.  The foregoing indemnity
will survive beyond the Closing,  or if the sale is not consummated,  beyond the
termination of this Agreement.

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the dates set forth below.


SELLER:

RREEF MA-II Cambridge Square, Inc., a
Delaware corporation

By:   ________________________
      John Turney, an authorized
      representative

Dated:__________________________
PURCHASER:

RRC Acquisition, Inc., a Florida
corporation

By:_____________________________
      Name: _______________________
      Its:___________________________

Dated:__________________________



79025/4
                                      12


<PAGE>



                                   EXHIBIT A

TRACT I

All that tract or parcel of property  lying and being in Land Lots 301, 302, 305
and  306 of the  18th  District  of  DeKalb  County,  Georgia,  and  being  more
particularly described as follows:

TO FIND THE POINT OF BEGINNING  commence at a point at the  intersection  of the
northeastern  side of Johnson Ferry Road  (Johnson  Ferry Road having a 100 foot
right-of-way)   with   the   southwestern   side   of   Ashford-Dunwoody    Road
(Ashford-Dunwoody   Road   having  an  80  foot   right-of-way);   thence  in  a
northwesterly  direction along the northern  right-of-way  line of Johnson Ferry
Road and following the curvature thereof a distance of 271.7 feet to an iron pin
and the POINT OF BEGINNING;  thence in a westerly  direction  along the northern
right-of-way  line of Johnson Ferry Road and  following the curvature  thereof a
distance of 328.0 feet to a point;  continuing  thence  along said  right-of-way
south 84  degrees 48 minutes  40  seconds  west a distance  of 480.00  feet to a
point;  thence leaving said  right-of-way  north 04 degrees 14 minutes 0 seconds
east 486.26 feet to a marker;  thence north 84 degrees 53 minutes 0 seconds east
a distance of 533.0 feet to a point; thence north 67 degrees 0 minutes 0 seconds
east a  distance  of  215.0  feet to an  iron  pin on the  southwestern  side of
Ashford-Dunwoody  Road; thence in a southeasterly  direction along the southwest
side of  Ashford-Dunwoody  Road south 22  degrees  45  minutes 0 seconds  east a
distance of 459.9 feet to an iron pin; thence leaving said right-of-way south 84
degrees 53 minutes  west a distance  of 150.0 feet to a point;  thence  south 05
degrees 07 minutes east a distance of 138.7 feet to the POINT OF BEGINNING.

TRACT II

All that tract or parcel of property lying and being in Land Lots 301 and 306 of
the 18th  District  of  DeKalb  County,  Georgia,  and being  more  particularly
described as follows:

BEGINNING at a point in the  northeasterly  line of the Johnson  Ferry Road (100
foot right-of-way) said point being distant 50.68 feet, northwesterly,  from its
intersection  with  the  southwesterly  line of  Ashford-Dunwoody  Road (80 foot
right-of-way)  if said  right-of-way  lines were  projected to an  intersection;
thence,  Northwesterly,  along the northeasterly line of Johnson Ferry Road on a
curve to the left,  having a radius of 1050.00  feet an arc  distance  of 221.02
feet,  to a point;  thence north 05 degrees 07 minutes west a distance of 138.70
feet to a point;  thence  north 84 degrees 53 minutes  east a distance of 150.00
feet to a point in the southwesterly right-of-way line of Ashford-Dunwoody Road;
thence,  south 22 degrees 56 minutes east a distance of 30.65 feet to a point of
curvature;  thence still along the southwesterly line of Ashford-Dunwoody  Road,
on a curve to the left,  having a radius  of 1530.3  feet,  an arc  distance  of
176.10 feet to a point; thence,  southwesterly on a curve to the right, having a
radius of 50.00 feet an arc distance of 22.08 feet to the POINT OF BEGINNING.

Excepting therefrom that part thereof described as follows:

79025/4


<PAGE>



All that  tract or  parcel  of land  lying and being in Land Lot 301 of the 18th
District of DeKalb County, Georgia, and more particularly described as follows:

BEGINNING at an iron pin placed at the  northerly  right of way of Johnson Ferry
Road,  a 100- foot right of way, in a location  such that said iron pin is 59.51
feet  perpendicular  from the  centerline of  Ashford-Dunwoody  Road, run thence
along a curve on said right of way of  Johnson  Ferry  Road an arc  distance  of
220.83 feet, said curve having a chord bearing of north 77 degrees 53 minutes 00
seconds west for 220.62 feet and a radius of 1450.00 feet, to an iron pin found;
thence  north 6 degrees 47 minutes 00 seconds  west a distance of 138.70 feet to
an iron pin  placed;  thence  north 83 degrees  13  minutes  00  seconds  east a
distance of 150.00 feet to an iron pin placed on the southwesterly  right of way
of  Ashford-Dunwoody  Road, an 80-foot right of way;  thence along said right of
way south 24 degrees 36  minutes 00 seconds  east a distance  of 30.65 feet to a
nail  placed in  asphalt;  thence  along  said right of way along a curve an arc
distance of 176.03 feet,  said curve having a chord  bearing of south 27 degrees
53 minutes 48 seconds  east for 176.00  feet and a radius of 2741.40  feet to an
iron pin placed;  thence along a curve an arc distance of 22.08 feet, said curve
having a chord  bearing  south 33 degrees  07 minutes 30 seconds  west for 21.90
feet and a radius of 50.00 feet, to the POINT OF BEGINNING.



79025/4


<PAGE>



                                   EXHIBIT B

                                ESTOPPEL LETTER



RRC Acquisitions, Inc.
c/o The RREEF Funds
875 N. Michigan Avenue
Suite 4114
Chicago, IL  60611

Re:   Cambridge Shopping Center     Store:
      Atlanta, Georgia              Tenant:


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 the 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  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
 $__________].


79025/4


<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.    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.

      9.    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:__________________________________.

     10.  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  dry  cleaning  solvents and volatile
petroleum  products  and  derivatives.  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

79025/4


<PAGE>



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:______________________________
- -----------------------------


79025/4


<PAGE>



                                   EXHIBIT C

                          AUDIT REPRESENTATION LETTER

79025/4




                        AGREEMENT OF PURCHASE AND SALE



                                BY AND BETWEEN


                REAL ESTATE COLLATERAL MANAGEMENT COMPANY, INC.
                            a Delaware corporation

                                   AS SELLER


                                      AND


                            RRC ACQUISITIONS, INC.
                             a Florida corporation

                                   AS BUYER



                                  RELATING TO

                            OLD ST. AUGUSTINE PLAZA





                                  DATED AS OF

                              September 23, 1996




<PAGE>



SECTION                                                                   PAGE

1.    Definitions..........................................................  1

2.    Purchase and Sale....................................................  4

3.    Purchase Price.......................................................  4
      3.1  Deposit.........................................................  4
      3.2  Cash Balance....................................................  5

4.    Cancellation Fees and Expenses.......................................  5

5.    Deliveries at Closing................................................  6

      5.1   By Seller......................................................  6
      5.2   By Buyer.......................................................  6
      5.3   By Buyer and Seller............................................  7

6.    Condition of Title...................................................  7

      7.    Conditions to the Close of Escrow..............................  7
      7.1   Conditions Precedent to Buyer's Obligations....................  7
            7.1.1  Title...................................................  7
            7.1.2  Inspections and Studies.................................  9
            7.1.3  Representations, Warranties and Covenants
                    of Seller..............................................  9
            7.1.4  Seller's Deliveries.....................................  9
            7.1.5  Estoppel Letter..........................................
            7.1.6  Tenant Matters..........................................
            7.1.7  Environmental Matters...................................
      7.2   Conditions Precedent to Seller's Obligations................... 10

8.    Due Diligence Period................................................. 10
      8.1   Matters To Be Reviewed......................................... 10
      8.2   Delivery of Copies............................................. 11
      8.3   Termination; Notice of Objections.............................. 12
      8.4   Material New Matters........................................... 12

9.    Property "As-Is"..................................................... 13
      9.1  Acquired in Connection with Foreclosure......................... 13
      9.2  NO SIDE AGREEMENTS OR REPRESENTATIONS; AS-IS
             PURCHASE...................................................... 13
      9.3  RELEASE......................................................... 16




<PAGE>


SECTION                                                                   PAGE



      9.4  Disclosures; Specific Acknowledgment Regarding
            Condition of Property.......................................... 17
      9.5  Estoppel Certificates...........................................
 17


10.   Costs and Expenses................................................... 18

11.   Prorations........................................................... 18
      11.1  Taxes and Assessments.......................................... 18
      11.2  Rents and Deposits............................................. 19
      11.3  Utilities...................................................... 19
      11.4  Method of Proration............................................ 20

12.   Joint Representations and Warranties................................. 20
      12.1  Authority...................................................... 21
      12.2  Actions........................................................ 21
      12.3  Due Execution.................................................. 21
      12.4  Valid and Binding.............................................. 21

13.   Seller's Warranties and Representations.............................. 21
      13.1  Lease.......................................................... 21
      13.2  Non-Foreign Entity............................................. 21
      13.3  Pre-Closing Covenants.......................................... 21

14.   Condemnation and Destruction......................................... 22
      14.1  Eminent Domain or Taking....................................... 22
      14.2  Damage or Destruction.......................................... 22

15.   Indemnification...................................................... 23
      15.1  Indemnification By Seller...................................... 23
      15.2  Indemnification by Buyer....................................... 24
      15.3  Survival....................................................... 24

16.   Hazardous Substances................................................. 24
      16.1  Definitions.................................................... 24
      16.2  Seller's Representations and Warranties........................ 24
      16.3  Notices Regarding Hazardous Substances......................... 25
      16.4  Mutual Indemnifications........................................ 25
      16.5  Environmental Release.......................................... 26
      16.6  Environmental Audit............................................ 26

17.   Waiver of Jury Trial ................................................ 27

18.   Notices.............................................................. 28

19.   Broker............................................................... 28



<PAGE>




20.   Entry................................................................ 28

21.   Legal and Equitable Enforcement of this Agreement.................... 29
      21.1  Default by Seller ............................................. 29
      24.2  Default by Buyer............................................... 30

22.   Assignment........................................................... 30

23.   Miscellaneous........................................................ 31
      26.1  Counterparts................................................... 31
      23.2  Partial Invalidity............................................. 31
      23.3  Possession of the Property..................................... 31
      23.4  Waivers........................................................ 31
      23.5  Successors and Assigns......................................... 31
      23.6  Professional Fees.............................................. 31
      23.7  Entire Agreement............................................... 31
      23.8  Time of Essence................................................ 32
      23.9  Construction................................................... 32
      23.10  Governing Law................................................. 32
      23.11  Confidentiality............................................... 32
      23.12  Wear and Tear................................................. 32
      23.13  No Recordation................................................ 32
      23.14  Financing..................................................... 33
      23.15  Survival...................................................... 33
      23.16  Back-up Contracts ............................................ 33
      23.17  Not an Offer; Last Date for Submission........................ 33
      23.18  Radon Gas .................................................... 33




<PAGE>




                        AGREEMENT OF PURCHASE AND SALE


      THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made and entered into
as of September  __,  1996,  by and between  Real Estate  Collateral  Management
Company, Inc., a Delaware corporation  ("Seller") and RRC Acquisitions,  Inc., a
Florida corporation ("Buyer").

      Buyer and Seller agree as follows:

     1. Definitions: For the purposes of this Agreement the following terms will
be defined as follows:

     (a) "Actual  Knowledge of Seller":  Actual Knowledge of Seller means and is
limited to the actual  knowledge of Joan M. Uhler without  having  conducted any
independent inquiry or inspection.

     (b)  "Assignment and  Assumption":  Shall have the meaning given thereto in
Section 6 hereof.

            (c)  "Bank":  Means  Bank of  America  National  Trust  and  Savings
Association,  a national  banking  association,  and includes its predecessor by
merger Security Pacific National Bank, a national banking association.

     d) "Bill of Sale":  Shall have the  meaning  given  thereto in Section  5.1
hereof.

     (e) "Broker": The Seller's Broker is CB Commercial Realty Group, Inc. There
is no Buyer's Broker under this Agreement.
            
          (f) "Closing Date":  The Closing Date shall be on or before five (5)
days after the  expiration of the Due  Diligence  Period and is the last date on
which the  Closing  can occur,  subject to  extension  as  provided  for in this
Agreement.

            (g) "Closing" and "Close of Escrow": Closing and Close of Escrow are
terms used interchangeably in this Agreement. The Closing or the Close of Escrow
will be deemed to have  occurred  when  Seller  delivers  to Buyer  those  items
referred to in Section 5.1 hereof, Buyer delivers to Seller those items referred
to in Section 5.2 hereof and each of Seller and Buyer,  as applicable,  delivers
any documents required under Section 5.3.

            (h)  "Deposit":  consists  of  the  initial  deposit  (the  "Initial
Deposit")  of  $25,000.00  which will be placed  into  escrow on or prior to the
Effective  Date with Escrow Holder and the additional  deposit (the  "Additional
Deposit") of  $100,000.00  which Buyer will place into escrow with Escrow Holder
at the end of the Due Diligence Period as defined in Subparagraph (i) below.

     (i) "Due Diligence  Period":  The Due Diligence Period is the 45 day period
starting  on the  Effective  Date  during  which  Buyer  must  complete  its due
diligence as described in Section 8.


                                    - 1 -


<PAGE>



            (j) "Effective  Date":  The Effective  Date,  which is the date from
which all dates in this Agreement will be measured,  shall be the date that this
Agreement is executed by Seller and delivered to Buyer's  counsel at the address
indicated in Section 1(t) of this Agreement.

            (k) "Environmental Audit":  Shall have the meaning given thereto in
Section 16 hereof.

            (l)   "Environmental Law":  Shall have the meaning given thereto in
Section 16 hereof.

     (m) "Environmental Report": The Environment Report means that certain Phase
I report prepared by PSI Consulting and dated May 8, 1995.

     (n) "Escrow Holder": The Escrow Holder is Kirkpatrick & Lockhart LLP.
            
(o)   "Exhibits":  Exhibits means the following, each of which is attached
hereto and incorporated herein by this reference:

                  Exhibit A - Legal  Description  Exhibit  B - Special  Warranty
                  Deed  Exhibit  C  -  FIRPTA  Affidavit  Exhibit  D -  No  Lien
                  Affidavit  Exhibit E - Bill of Sale Exhibit F - Assignment and
                  Assumption  Exhibit G -  Memorandum  of  Assignment  of Leases
                  Exhibit  H  -  Disclosures   Exhibit  I  -  Form  of  Estoppel
                  Certificate  Exhibit  J - List of  Tenants  Exhibit  K - Audit
                  Representation Letter

     (p) "FIRPTA Certificate": Shall have the meaning given thereto in Section 5
hereof.

     (q) "Hazardous  Substance:" Shall have the meaning given thereto in Section
16 hereof.
            
(r)   "Improvements":  All improvements and fixtures actually owned by Seller
and situated on the Real Property.

       (s)   "Memorandum of Assignment of Leases":  Shall have the meaning given
thereto in Section 5 hereof.

            (t)   "Notices":  will be sent as follows to:

Seller:
                 Real Estate Collateral Management Company, Inc.
                              c/o Bank of America NT&SA

                                    - 2 -


<PAGE>



                              560 Davis Street
                              San Francisco, California 94111
                              Attn: Joan M. Uhler
                              Telephone: (415) 622-5940
                              Telecopy No.(415) 953-5889

with a copy to:               Kirkpatrick & Lockhart LLP
                              Miami Center - 2000
                              201 South Biscayne Blvd.
                              Miami, Florida  33131
                              Attn:  Laura A. Gangemi, Esq.
                              Telephone: (305) 539-3371
                              Telecopy No.(305) 358-7095

Buyer:                        RRC Acquisitions, Inc.
                              121 West Forsyth Street, Suite 200
                              Jacksonville, Florida  32202
                              Attn:  Robert L. Miller
                              Telephone:(904) 356-7000
                              Telecopy No.(904) 634-3428

with a copy to:               Ulmer, Murchison, Ashby & Taylor
                              SunTrust Building, Suite 1600
                              200 W. Forsyth Street
                              Jacksonville, FL 32202
                              Attn:  William E. Scheu, Esq.
                              Telephone:(904) 354-9000
                              Telecopy No.(904) 354-9100

Escrow Holder:                Kirkpatrick & Lockhart LLP
                              Miami Center - 2000
                              201 South Biscayne Blvd.
                              Miami, Florida  33131
                              Attn:  Laura A. Gangemi, Esq.
                              Telephone: (305) 539-3371
                              Telecopy No.(305) 358-7095


           (u) "Permitted Exceptions":  Shall have the meaning given thereto in
Section 6 hereof.

     (v) "Personal  Property":  The equipment,  furniture and fixtures and other
personal property, if any, which are actually owned by Seller and located on the
Real Property.
            
(w)   "Property":  Collectively, (i) the Real Property, (ii) the Improvements,
and (iii) the Personal Property.


                                    - 3 -


<PAGE>



     (x) "Purchase Price":  The Purchase Price for the Property is Nine Million,
Five Hundred Thousand and No/100 Dollars ($9,500,000.00).
            
     (y) "Real  Property":  That certain real property  located in the County of
Duval,  State of Florida and commonly  known as St.  Augustine  Plaza,  and more
particularly described in Exhibit A attached hereto.

            (z) "Special Warranty Deed"" Shall have the meaning given thereto in
Section 5 hereof.

            (aa)  "Title Company":  The Title Company is Chicago Title Insurance
Company.

     (ab)  "Title  Policy":  Shall have the meaning  given  thereto in Section 7
hereof.

2. Purchase and Sale:  Upon and subject to the terms and conditions set forth in
this  Agreement,  Seller  agrees to sell to Buyer  and Buyer  agrees to buy from
Seller the Property,  together with all easements,  hereditaments,  entitlements
(to the  extent  transferable)  and  appurtenances  thereto.  Seller  shall also
transfer, by quitclaim,  without any representation of warranty,  those items of
personalty  located  on the Real  Property  that are not  owned  by  Seller.  In
consideration  of Seller's sale of the Property to Buyer,  Buyer will (a) pay to
Seller the Purchase  Price at the Closing,  and (b) perform all of Buyer's other
obligations  hereunder,  which will  include the various  indemnities  set forth
herein whether or not the Closing occurs hereunder.

3. Purchase Price:  The Purchase Price for the Property will be paid as follows:

      3.1  Deposit.  On or prior to the  Effective  Date,  Buyer will deliver to
Escrow Holder in cash,  by confirmed  wire transfer or by certified or cashier's
check  collectible in same day funds,  the Initial  Deposit.  Escrow Holder will
invest the Initial  Deposit in an interest  bearing  account and  interest  will
accrue for the account of Buyer except as otherwise  provided in this  Agreement
and will be applied against the Purchase Price at Closing.

      No later  than the  expiration  of the Due  Diligence  Period,  Buyer will
deliver the  Additional  Deposit to Escrow Agent in cash, by wire transfer or by
certified or  cashier's  check  collectible  in same day funds.  Provided  Buyer
delivers  to Escrow  Holder an IRS Form  W-9,  Escrow  Holder  will  invest  the
Additional  Deposit,  together with the Initial Deposit (The Initial Deposit and
the  Additional  Deposit shall  hereinafter be referred to  collectively  as the
"Deposit")  in an  interest  bearing  account and  interest  will accrue for the
account of Buyer  except as  otherwise  provided in this  Agreement  and will be
applied  against the Purchase  Price at Closing.  Except as  expressly  provided
otherwise in this Agreement,  the Deposit will become nonrefundable at and as of
the  first  day  following  the end of the Due  Diligence  Period  unless  Buyer
terminates this Agreement on or before the end of the Due Diligence Period.

      3.2 Cash Balance. At Closing,  Buyer will deliver to Seller the balance of
the Purchase Price in cash, by confirmed wire transfer of funds, or by certified
or cashier's check collectible in same day funds.


                                    - 4 -


<PAGE>



4.    Intentionally left blank.

5.    Deliveries at Closing:

     5.1 By Seller. At Closing,  Seller will deliver or cause to be delivered to
Buyer the following items:

            (a) A Special Warranty Deed ("Special  Warranty Deed"),  in the form
attached to this  Agreement  as Exhibit B, duly  executed  and  acknowledged  by
Seller and in recordable form, conveying the Property to Buyer.

            (b) A Transferor's  Certificate  of  Non-Foreign  Status in the form
attached to this Agreement as Exhibit C ("FIRPTA Certificate") properly executed
by Seller.

            (c) A  Seller's  No-Lien  Affidavit  in the  form  attached  to this
Agreement as Exhibit D ("No-Lien Affidavit") properly executed by Seller.

            (d) An executed  bill of sale ("Bill of Sale") in the form  attached
to this Agreement as Exhibit E.

            (e) Two (2) executed counterpart copies of assignment and assumption
of leases and contracts,  ("Assignment  and Assumption") in the form attached to
this Agreement as Exhibit F.

            (f) If any lease has been  recorded,  two (2)  executed  counterpart
copies of a memorandum  of assignment  of leases  ("Memorandum  of Assignment of
Leases") in the form attached to this Agreement as Exhibit G.

            (g)   A closing statement.

            (h)  An  Audit  Representation  Letter  (the  "Audit  Representation
Letter") in substantially the form attached to this Agreement as Exhibit K, from
The Allen Morris Company. If such Audit  Representation  Letter is not delivered
at  Closing,  then  Seller  shall  not be  deemed to be in  default  under  this
Agreement and Buyer's sole remedy shall be to cancel this  Agreement and receive
a return of the Deposit, together with any interest accrued thereon.

     5.2 By Buyer.  At Closing,  Buyer will  deliver or cause to be delivered to
Seller the following items:

           (a)   The balance of the Purchase Price in accordance with Section 3.

            (b) The amount due Seller, if any, after the prorations are computed
in accordance with Section 11.

            (c) Such corporate resolutions, certificates of good standing and/or
other  corporate or  partnership  documents  relating to Buyer as are reasonably
required in connection with this transaction.


                                    - 5 -


<PAGE>



            (d)  Two (2) executed counterparts of the Assignment and Assumption.

     (e) If applicable, two (2) executed counterpart copies of the Memorandum of
Assignment of Leases.
            
(f)   A closing statement.

      5.3 By Buyer and  Seller.  Buyer and Seller will each  deposit  such other
instruments  consistent with this Agreement as are reasonably required by Escrow
Holder,  Title  Company or otherwise  required to  consummate  the  Closing.  In
addition Seller and Buyer hereby  designate Buyer as the "Reporting  Person" for
the transaction pursuant to Section 6045(e) of the Internal Revenue Code.

     6. Condition of Title: At Closing, fee simple title to the Property will be
conveyed  to Buyer by Seller  by  Special  Warranty  Deed,  subject  only to the
following matters ("Permitted Exceptions"):

          (a)   a lien for real property taxes and assessments not yet payable;

            (b)  matters of title  respecting  the  Property  approved or deemed
approved  by  Buyer  in  accordance  with  this  Agreement,  including,  without
limitation, all leases of the Property;

     (c) matters  affecting the condition of title to the Property created by or
with the written consent of Buyer;

     (d) any  matters  which  would be shown by an  inspection,  a survey of the
Property or by inquiry of persons in possession of the Property;
            
(e)   all applicable zoning ordinances and regulations; and

            (f) The parties  agree that (i) except as  specifically  provided in
the  Special  Warranty  Deed,  Seller  makes no express  or  implied  warranties
regarding the  condition of title to the Property,  and (ii) Buyer shall rely on
the Title Policy for protection against any title defects.

7.    Conditions to the Closing:

     7.1 Conditions Precedent to Buyer's  Obligations.  The following conditions
must be  satisfied  not later than the Closing Date or such other period of time
as may be specified below:
      
      7.1.1 Title.  Seller will furnish or cause to be furnished to Buyer,
as soon as  available,  a standard  title  insurance  commitment  ("Commitment")
issued by the Title Company  agreeing to issue to Buyer,  upon  recording of the
deed to  Buyer,  an  owner's  policy  of title  insurance  in the  amount of the
Purchase Price, subject only to the Permitted Exceptions ("Title Policy").


                                    - 6 -


<PAGE>



      Buyer will have 15 days after  receipt of the  Commitment  within which to
(1) examine the Commitment (2) review matters referred to in Paragraph 6(d), and
(3) notify Seller in writing of any exceptions which Buyer  disapproves or other
objections  to title.  If Buyer fails to notify Seller of any  exceptions  which
Buyer  disapproves or other objections to title,  title will be deemed accepted.
If Buyer timely  notifies  Seller of specific  disapproved  exceptions  or other
objections  to title  within such 15 day period,  Seller will have 10 days after
receipt  of  Buyer's  notification  of  any  disapproved   exceptions  or  other
objections to title in which to advise Buyer that:

            (i) Seller will cause the disapproved exceptions or other objections
      to title to be removed or remedied or obtain  appropriate  endorsements to
      the Title Policy on or before the Closing Date; or

            (ii)  Seller  will not cause  the  disapproved  exceptions  or other
      objections  to title  to be  removed  or  remedied  or  cause  appropriate
      endorsements to the Title Policy to be issued.

            (iii) If Seller does not notify Buyer of its election  within the 10
      day  period,  Seller  will be  deemed  to have  elected  to not  cause the
      disapproved exceptions to be removed.

            In any event,  if the Commitment or any supplement  thereto  reveals
either (1) a mechanic's lien affirmatively  caused by Seller; or (2) an existing
financing lien created by Seller, then Seller; or (3) monetary judgments against
Seller,  then  Seller  shall  agree to cause these items to be paid off from the
closing proceeds.

            If Seller  elects to not cause the  disapproved  exceptions or other
objections to title to be removed or remedied or cause  appropriate  endorsement
to the Title Policy to be issued,  Buyer will have 10 days to elect, as its sole
remedy, to:

            (i) proceed with the  purchase  and acquire the Property  subject to
      the disapproved exceptions and other objections to title without reduction
      in the Purchase Price; or

            (ii) cancel this  Agreement  by written  notice to Seller and Escrow
      Holder, in which case the Deposit and any interest accrued thereon will be
      returned to Buyer.

            If Buyer does not give Seller notice of its election within 10 days,
Buyer will be deemed to have elected to proceed with this transaction.

            If Seller  commits to remove any  disapproved  exception to title or
remedy  any other  objection  to title and fails to do so by the  Closing  Date,
Seller shall not be deemed to be in default under this  Agreement and Buyer may,
as its sole option, terminate this Agreement and receive a refund of its Deposit
plus any interest  accrued  thereon.  Notwithstanding  the foregoing,  if Seller
fails  to  pay  off  from  closing   proceeds   either  (a)  a  mechanic's  lien
affirmatively  caused by Seller;  or (b) an existing  financing  lien created by
Seller;  or (c) monetary  judgments  against  Seller,  then Buyer shall have the
right to seek specific performance of Seller's obligation to pay off such liens,
subject to the limitations of Paragraph 21.1 herein. If Buyer does not terminate

                                    - 7 -


<PAGE>



this  Agreement  as set forth in this  paragraph,  Buyer  will be deemed to have
waived its  objections to title,  and this Agreement will continue in full force
and effect.

            7.1.2  Inspections  and Studies.  If Buyer does not  terminate  this
Agreement  prior to the expiration of the Due Diligence  Period,  Buyer shall be
deemed to have approved the results of any and all inspections,  investigations,
tests and  studies as Buyer may have  elected  to make or obtain  within the Due
Diligence  Period.  If Buyer  does not  terminate  this  Agreement  prior to the
expiration  of the Due Diligence  Period,  Buyer will be deemed to have accepted
the  condition  of the  Property  and all matters  relating  to the  Property as
referenced in Paragraph 8.1. Buyer will pay for all such inspections,  tests and
studies. In the event this Agreement is terminated prior to Closing,  Buyer will
give copies of all inspections,  investigations, tests or studies to Seller as a
condition precedent to the return of the Deposit.

            7.1.3  Representations,  Warranties and Covenants of Seller.  Seller
will have duly  performed  each and every  agreement  to be  performed by Seller
hereunder and,  subject to the  provisions of Paragraphs  8.1 and 8.4,  Seller's
express  representations and warranties set forth in this Agreement will be true
and correct as of the Closing Date.

     7.1.4 Seller's  Deliveries.  Seller will have delivered the items described
in Paragraph 5.1.

            7.1.5 Estoppel Letters.  Estoppel  certificates in substantially the
form as  attached  hereto as  Exhibit I shall have been  obtained  by Seller and
delivered  to Buyer by the  Closing  Date from Lasco  Video,  Hallmark,  Publix,
Eckerds,  Waccamaw,  McDonalds 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 of estoppel letter attached to this
Agreement  as Exhibit I and which  materially  conforms to the  information  set
forth on the rent roll delivered by Seller to Buyer.

            7.1.6 Tenant Matters. None of the following shall have occurred with
respect to any tenant leasing space in excess of 5,000 square or with respect to
more than twenty  percent  (20%) of the other tenants who have signed leases for
any portion of the Property:

            (i)   The commencement of any voluntary or involuntary case or other
proceeding seeking relief under any bankruptcy or insolvency law;

            (ii)  A vacating of the leased premises;

     (iii) An assignment of the lease in violation of the terms of the lease; or

            (iv) Any  uncured  default in  payment  of base rent or common  area
maintenance  charges,  tax and insurance pass-thrus under the terms of the lease
for a period of greater than thirty (30) days.

            7.1.7  Environmental  Matters.  No act, omission or event shall have
occurred  after  the  expiration  of the Due  Diligence  Period  that  causes  a
violation of applicable  Environmental  Laws the costs of  remediation  of which
equals  or  exceeds  $50,000  as  determined  by  an  independent   third  party
environmental consultant reasonably acceptable to Seller and

                                    - 8 -


<PAGE>



Buyer.  In the event the costs of  remediation  are  determined  to be less than
$50,000, then Buyer shall receive a credit against the Purchase Price at Closing
for the estimated  costs of such  remediation as determined by such  independent
third party environmental consultant.

      The conditions set forth in this Section 7.1 are solely for the benefit of
Buyer and may be waived only by Buyer. At all times Buyer has the right to waive
any  condition.  Such  waiver or waivers  must be in  writing to Seller.  If any
conditions are not satisfied on or before the end of the Due Diligence Period or
the Closing Date, as applicable (unless such conditions are deemed satisfied for
failure to notify  Seller of  disapproval  when such  notice of  disapproval  is
required  by the  terms  of  this  Agreement),  and  Buyer  has not  waived  the
unsatisfied  conditions,  Seller will not be deemed to be in default and Buyer's
sole remedy will be to  terminate  this  Agreement  and obtain the refund of the
Deposit together with interest accrued thereon.

      7.2 Conditions Precedent to Seller's Obligations. The Closing and Seller's
obligations  with  respect to this  transaction  are  subject  to the  following
conditions  precedent:  (a) Buyer's  delivery to Seller on or before the Closing
Date, of the Purchase Price and the other items  described in Paragraph 5.2, and
(b) Buyer  having duly  performed  each and every  agreement  to be performed by
Buyer hereunder, and Buyer's representations, warranties and covenants set forth
in this Agreement, continuing to be true and correct as of the Closing Date. The
conditions  set forth in this Paragraph 7.2 are solely for the benefit of Seller
and may be waived only by Seller, with such waiver to be in writing to Buyer.

8.    Due Diligence Period:

      8.1 Matters To Be Reviewed.  During the Due  Diligence  Period,  Buyer may
conduct any and all inspections it deems appropriate, subject to the limitations
set  forth in  Paragraphs  20 and 16  below.  If Buyer  does not  terminate  the
Agreement  prior to the expiration of the Due Diligence  Period,  Buyer shall be
deemed to have approved the following matters within the Due Diligence Period:

     (a) the physical condition of the Property, including without limitation:

     (i) soil, seismic, hydrological, geological and topographical conditions,


                (ii)  the availability of adequate utilities and public access,

             (iii) the status and nature of any existing or proposed assessment
      districts and the amount of any assessment liability,

               (iv)  the character and amount of any fee or charge which may be
imposed in connection with the development of the Property,

         (v)   whether or not the Property is located in a Special Flood Hazard
      Area,

            (vi)  the status of the Property with respect to asbestos and other
      hazardous and toxic materials,

                                    - 9 -


<PAGE>




                  (vii) all matters disclosed by the Environmental Report, and

                  (viii)  compliance of the Property with all  applicable  laws,
      including Environmental Laws (defined below).

            Seller will allow Buyer and/or its agents  access to the Property to
perform any and all  investigations  and inspections  desired by Buyer (provided
that any  entry  will be  subject  to the  provisions  of  Paragraph  20 and any
Environmental  Audit  (defined  below)  will be  subject  to the  provisions  of
Paragraph 16);

            (b) applicable  government  ordinances,  rules and  regulations  and
evidence  of  compliance  therewith,  including  without  limitation  zoning and
building regulations;

            (c) all private restrictions  applicable to the Property,  including
without  limitation,  declarations  of covenants,  conditions and  restrictions,
reciprocal  easement and operating  agreements,  architectural  restrictions and
owners' association governing documents;

            (d)  all  licenses,   permits,   subdivision  maps  and  conditions,
improvement agreements,  bonds,  development  agreements,  and any and all other
governmental approvals and/or authorizations relating to the Property;

     (e)  leases,  agreements,   contracts,  documents,   instruments,  reports,
surveys, books and records relating to the Property; and
            
          (f) any and all other matters concerning the current and future use,
feasibility or value, or governmental  permissions or entitlements pertaining to
the  Property,  or any other  matter or  circumstance  relevant  to Buyer in its
discretion concerning the Property and its marketability.

      8.2 Delivery of Copies.  Within 5 days after the  Effective  Date,  Seller
will provide to Buyer,  or make  reasonably  available to Buyer for  inspecting,
copies of all items described in  Subparagraphs  8.1(d) and (e) above as well as
copies of all other  materials  related to the  Property  which are in  Seller's
possession, except:

            (a)   the contents of any loan files maintained by Seller or Bank;

            (b)   appraisals; and

            (c)  information  which is privileged,  confidential or proprietary,
including, but not limited to: internal memoranda,  analyses and business plans;
financial  information;  and  correspondence  and  other  materials  to or  from
Seller's attorneys and potential third party buyers.

Buyer  expressly  agrees that Seller is furnishing  copies of all such documents
and   information  to  Buyer  for   informational   purposes  only  and  without
representation or warranty as to the accuracy or completeness of the contents of
such  materials.  Buyer  covenants  and  agrees  that it will  not  rely on such
documents and  information and will conduct its own due diligence on all matters
referred to in such  documents  and  information,  or otherwise  relating to the
Property.

                                    - 10 -


<PAGE>



The  originals  of the items  described  in (d) and (e), if  available,  will be
delivered to Buyer at Closing.

      8.3   Termination; Notice of Objections.

            (a)  Within  the  Due  Diligence  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 Due  Diligence  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
Holder  shall  return to Buyer the Deposit  together  with any  interest  earned
thereon.

            (b) If Buyer  does  not  terminate  this  Agreement  during  the Due
Diligence  Period,  then Buyer will be deemed to have  approved  the matters set
forth in  paragraphs  (a)  through  (f) of  Paragraph  8.1 or  otherwise  deemed
relevant to Buyer in respect of the Property.

            (c) If Buyer  notifies  Seller in writing of any  objections  to the
condition  of the  Property or any other  matters  relating  to the  Property as
referred to in  Subparagraph  (a) through  (f) of  Paragraph  8.1 within the Due
Diligence  Period,  the  parties  will  have 5  business  days to  agree  upon a
resolution  of the  objection(s).  If the  parties  cannot  agree  within  the 5
business day period,  then either party may terminate  this Agreement by written
notice to the other, which notice must be given within 3 business days after the
expiration of the 5 business day period and Buyer,  as its sole remedy,  will be
entitled to the return of the Deposit and any interest accrued thereon.

            (d)  However,  if Buyer  gives  Seller  notice  of its  election  to
terminate this Agreement under the preceding subparagraph (c), Seller may elect,
by  written  notice to Buyer  and to  Escrow  Holder  within  10  business  days
following  Seller's  receipt of Buyer's  notice,  to correct  the  objectionable
matter  prior to the  Closing.  If Seller  elects to correct  the  objectionable
matter,  Seller will be entitled to extend the Closing for not more than 30 days
in order to correct the objectionable  matter and, in such event, this Agreement
will not terminate.  If Seller fails to correct the objectionable  matter by the
Closing  Date,  as extended,  Seller shall not be deemed to be in default  under
this Agreement and Buyer,  as Buyer's sole option,  may terminate this Agreement
and receive a refund of its Deposit and any interest accrued thereon.

            (e) If Buyer does not terminate this  Agreement  under the preceding
subparagraph  (c), Buyer will be deemed to have waived its objections,  and this
Agreement will continue in full force and effect.

            (f) Nothing in  subparagraph  (c) above will affect Buyer's right to
terminate the Agreement prior to the expiration of the Due Diligence Period, for
any reason whatsoever, without giving Seller an opportunity to cure any specific
objections under  subparagraph (d) above. If Buyer thus terminates the Agreement
prior to the expiration of the Due Diligence  Period,  then this Agreement shall
terminate,  Buyer shall receive a refund of its Deposit and any interest accrued
thereon,  and all rights and obligations of the parties hereunder,  except those
which are specifically designated to survive this Agreement, shall terminate.


                                    - 11 -


<PAGE>



     8.4 Material New Matters.  If Buyer  discovers  any new matter  between the
expiration of the Due Diligence Period and the Closing Date which:
      
     (a) was not  disclosed by Seller or any other  person or entity  during the
Due Diligence Period; and
      
      (b)   was not reasonably discoverable during the Due Diligence Period; and

            (c)   that matter is one which:

      (i)   would appear as an exception in the Title Policy (but excluding any
such exception approved or caused by Buyer);

       or

                  (ii) is materially inconsistent with a disclosure by Seller in
Exhibit H or with Seller's representations or warranties contained in Paragraphs
12 or 15;

      and

            (d) such new matter is of such a nature that, in Buyer's  reasonable
judgment, it would materially and adversely affect the acquisition, development,
sale or use of the Property;

      then Buyer is entitled to treat such new matter as a failure of condition
 to the Closing.

      If Buyer  elects to treat such new matter as a failure of condition to the
Closing,  Buyer must give notice to Seller of Buyer's election to terminate this
Agreement  within 3 business  days of Buyer's  obtaining  knowledge  of such new
matter.  If Buyer does not give such  notice  within the 3 business  day period,
Buyer  will be deemed to have  waived  its  objection  to such  matter  and this
Agreement will continue in full force and effect.

      However,  if Buyer gives Seller  notice of its election to terminate  this
Agreement,  Seller may elect,  by written  notice to Buyer and to Escrow  Holder
within 10 business days following Seller's receipt of Buyer's notice, to correct
the new matter prior to the Closing. If Seller elects to correct the new matter,
Seller will be entitled to extend the Closing for not more than 30 days in order
to correct the new matter and, in such event, this Agreement will not terminate.
If Seller  fails to correct the new matter by the  Closing  Date,  as  extended,
Seller shall not be deemed to be in default under this  Agreement and Buyer,  as
Buyer's sole option,  may terminate  this  Agreement and receive a refund of its
Deposit and any interest  accrued  thereon.  Notwithstanding  the foregoing,  if
Seller  fails to pay off from  closing  proceeds  either (a) a  mechanic's  lien
affirmatively  caused by Seller or (b) an  existing  financing  lien  created by
Seller or (c) monetary judgments against Seller, then Buyer shall have the right
to seek  specific  performance  of  Seller's  obligation  to pay off such liens,
subject to the limitations of Paragraph 21.1 herein. If Buyer does not terminate
this Agreement pursuant to this Section, Buyer will be deemed to have waived its
objections and this Agreement will continue in full force and effect.


                                    - 12 -


<PAGE>



9.    Property "As-Is":

      9.1 Acquired in  Connection  with  Foreclosure.  Buyer  acknowledges  that
Seller acquired the Property pursuant to foreclosure  proceedings or proceedings
in  lieu  of  foreclosure;  and  that  neither  Seller  nor  Bank  developed  or
constructed the Property.

      9.2  NO  SIDE  AGREEMENTS  OR  REPRESENTATIONS;   AS-IS  PURCHASE.   BUYER
REPRESENTS,  WARRANTS AND  COVENANTS  TO SELLER THAT BUYER WILL,  DURING THE DUE
DILIGENCE  PERIOD,   INDEPENDENTLY  AND  PERSONALLY  INSPECT  THE  PROPERTY  AND
IMPROVEMENTS,  IF ANY, AND THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON
ITS RIGHTS AND  INTENTIONS TO MAKE SUCH  PERSONAL  EXAMINATION  AND  INSPECTION.
BUYER AGREES THAT BUYER WILL ACCEPT THE PROPERTY,  IN ITS THEN  CONDITION  AS-IS
AND WITH ALL ITS FAULTS, INCLUDING WITHOUT LIMITATION, ANY FAULTS AND CONDITIONS
SPECIFICALLY  REFERENCED IN THIS AGREEMENT. NO PERSON ACTING ON BEHALF OF SELLER
IS AUTHORIZED TO MAKE, AND BY EXECUTION  HEREOF,  BUYER  ACKNOWLEDGES AND AGREES
THAT,  EXCEPT AS SPECIFICALLY  PROVIDED IN THIS AGREEMENT,  SELLER HAS NOT MADE,
DOES  NOT MAKE AND  SPECIFICALLY  NEGATES  AND  DISCLAIMS  ANY  REPRESENTATIONS,
WARRANTIES,  PROMISES,  COVENANTS,  AGREEMENTS  OR  GUARANTIES  OF ANY  KIND  OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT
OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO:

      (I)   THE VALUE OF THE PROPERTY;

      (II)  THE INCOME TO BE DERIVED FROM THE PROPERTY;

      (III) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES
      AND USES WHICH BUYER MAY CONDUCT THEREON, INCLUDING ANY
      DEVELOPMENT OF THE PROPERTY;

      (IV)  THE HABITABILITY, MERCHANTABILITY, MARKETABILITY,
      PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
      PROPERTY;

      (V)   THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF
      THE PROPERTY;

      (VI)  THE NATURE, QUALITY OR CONDITION OF THE PROPERTY,
      INCLUDING WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY;

      (VII) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION
      WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
      APPLICABLE GOVERNMENTAL AUTHORITY OR BODY;

      (VIII) THE MANNER, CONDITION OR QUALITY OF THE CONSTRUCTION OR
      MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY;


                                    - 13 -


<PAGE>



      (IX) COMPLIANCE WITH ANY ENVIRONMENTAL  PROTECTION,  POLLUTION OR LAND USE
      LAWS, RULES, REGULATION, ORDERS OR REQUIREMENTS, INCLUDING BUT NOT LIMITED
      TO,  THE  ENDANGERED   SPECIES  ACT,  TITLE  III  OF  THE  AMERICANS  WITH
      DISABILITIES  ACT OF 1990 OR ANY OTHER LAW, RULE OR  REGULATION  GOVERNING
      ACCESS BY DISABLED  PERSONS,  THE FEDERAL WATER POLLUTION CONTROL ACT, THE
      FEDERAL  RESOURCE  CONSERVATION  AND RECOVERY ACT, THE U.S.  ENVIRONMENTAL
      PROTECTION  AGENCY  REGULATIONS AT 40 C.F.R.,  PART 261, THE COMPREHENSIVE
      ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED,
      THE RESOURCES  CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT,
      THE SAFE DRINKING WATER ACT, THE HAZARDOUS  MATERIALS  TRANSPORTATION ACT,
      THE TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS  PROMULGATED UNDER ANY OF
      THE FOREGOING;

      (X)   THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON,
      UNDER, OR ADJACENT TO THE PROPERTY;

      (XI)  THE CONTENT, COMPLETENESS OR ACCURACY OF THE DUE
      DILIGENCE MATERIALS, INCLUDING ANY INFORMATIONAL PACKAGE,
      COST TO COMPLETE ESTIMATE OR OTHER MATERIALS PREPARED BY
      SELLER;

      (XII) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR
      SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY PLANS AND
      SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO BUYER;


      (XIII) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR
      FUTURE APPLICABLE ZONING OR BUILDING REQUIREMENTS;

      (XIV) DEFICIENCY OF ANY UNDERSHORING;

      (XV)  DEFICIENCY OF ANY DRAINAGE;

      (XVI)  THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING
      ENTITLEMENTS AFFECTING THE PROPERTY, OR

      (XVII) WITH RESPECT TO ANY OTHER MATTER  CONCERNING THE PROPERTY EXCEPT AS
MAY BE OTHERWISE  EXPRESSLY  STATED  HEREIN,  INCLUDING ANY AND ALL SUCH MATTERS
REFERENCED,  DISCUSSED  OR  DISCLOSED  IN ANY  DOCUMENTS  DELIVERED BY SELLER TO
BUYER,  IN ANY PUBLIC  RECORDS OF ANY  GOVERNMENTAL  AGENCY OR ENTITY OR UTILITY
COMPANY, OR IN ANY OTHER DOCUMENTS AVAILABLE TO BUYER.

      BUYER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN
GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY AND REVIEW
INFORMATION AND DOCUMENTATION AFFECTING THE PROPERTY, BUYER IS

                                    - 14 -


<PAGE>



RELYING  SOLELY ON ITS OWN  INVESTIGATION  OF THE  PROPERTY  AND  REVIEW OF SUCH
INFORMATION  AND  DOCUMENTATION,  AND NOT ON ANY  INFORMATION  PROVIDED OR TO BE
PROVIDED BY SELLER.  BUYER FURTHER  ACKNOWLEDGES AND AGREES THAT ANY INFORMATION
MADE  AVAILABLE TO BUYER OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER
WITH RESPECT TO THE  PROPERTY  WAS  OBTAINED  FROM A VARIETY OF SOURCES AND THAT
SELLER  HAS NOT MADE  ANY  INDEPENDENT  INVESTIGATION  OR  VERIFICATION  OF SUCH
INFORMATION AND MAKES NO  REPRESENTATIONS  AS TO THE ACCURACY OR COMPLETENESS OF
SUCH  INFORMATION  EXCEPT AS MAY OTHERWISE BE PROVIDED  HEREIN.  BUYER AGREES TO
FULLY AND  IRREVOCABLY  RELEASE ALL SUCH SOURCES OF INFORMATION AND PREPARERS OF
INFORMATION AND DOCUMENTATION TO THE EXTENT SUCH SOURCES OR PREPARERS ARE SELLER
OR BANK,  OR THEIR  EMPLOYEES,  OFFICERS,  DIRECTORS,  REPRESENTATIVES,  AGENTS,
SERVANTS, ATTORNEYS, AFFILIATES, PARENT COMPANIES,  SUBSIDIARIES,  SUCCESSORS OR
ASSIGNS  FROM ANY AND ALL  CLAIMS  THAT THEY MAY NOW HAVE OR  HEREAFTER  ACQUIRE
AGAINST  SUCH  SOURCES  AND  PREPARERS  OF  INFORMATION  FOR  ANY  COSTS,  LOSS,
LIABILITY,  DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH
INFORMATION OR DOCUMENTATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY
ORAL OR WRITTEN  STATEMENTS,  REPRESENTATIONS  OR INFORMATION  PERTAINING TO THE
PROPERTY,  OR THE OPERATION THEREOF,  FURNISHED BY ANY OF THE FOREGOING ENTITIES
AND INDIVIDUALS OR ANY OTHER  INDIVIDUAL OR ENTITY.  BUYER FURTHER  ACKNOWLEDGES
AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY
AS  PROVIDED  FOR  HEREIN IS MADE ON AN  "AS-IS"  CONDITION  AND BASIS  WITH ALL
FAULTS,  AND THAT SELLER HAS NO  OBLIGATIONS  TO MAKE REPAIRS,  REPLACEMENTS  OR
IMPROVEMENTS EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED HEREIN.

      9.3 RELEASE.  EXCEPT AS EXPRESSLY  PROVIDED IN THIS  AGREEMENT,  INCLUDING
WITHOUT LIMITATION, ARTICLE 16 HEREOF, AND EXCEPT FOR SELLER'S WARRANTIES IN THE
SPECIAL  WARRANTY  DEED,  BUYER AND ANYONE  CLAIMING BY,  THROUGH OR UNDER BUYER
HEREBY  FULLY  AND  IRREVOCABLY  RELEASES  SELLER  AND  BANK,  AND EACH OF THEIR
EMPLOYEES,  OFFICERS, DIRECTORS,  REPRESENTATIVES,  AGENTS, SERVANTS, ATTORNEYS,
AFFILIATES,  PARENT  COMPANIES,  SUBSIDIARIES,  SUCCESSORS AND ASSIGNS,  AND ALL
PERSONS, FIRMS,  CORPORATIONS AND ORGANIZATIONS ACTING ON THEIR BEHALF, FROM ANY
AND ALL CLAIMS THAT IT MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SELLER OR BANK,
OR  ANY  OF  THEIR  EMPLOYEES,  OFFICERS,  DIRECTORS,  REPRESENTATIVES,  AGENTS,
SERVANTS, ATTORNEYS, AFFILIATES, PARENT COMPANIES, SUBSIDIARIES,  SUCCESSORS AND
ASSIGNS, AND ALL PERSONS, FIRMS,  CORPORATIONS AND ORGANIZATIONS ACTING ON THEIR
BEHALF FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSES, DEMAND, ACTION OR CAUSE
OF ACTION ARISING FROM OR RELATED TO ANY CONSTRUCTION DEFECTS, ERRORS, OMISSIONS
OR OTHER CONDITIONS,  LATENT OR OTHERWISE,  GEOTECHNICAL AND SEISMIC,  AFFECTING
THE  PROPERTY  OR  ANY  PORTION  THEREOF  INCLUDING,   WITHOUT  LIMITATION,  (1)
ENVIRONMENTAL MATTERS WHICH WERE:

                                    - 15 -


<PAGE>




            (i)   DESCRIBED OR REFERRED TO IN THE ENVIRONMENTAL
      REPORT(S) OR IN ANY ENVIRONMENTAL AUDIT OBTAINED BY BUYER; OR

            (ii)  REASONABLY DISCOVERABLE BY PRUDENT INVESTIGATION
      DURING THE DUE DILIGENCE PERIOD; OR

            (iii) OTHERWISE DISCLOSED BY SELLER TO BUYER OR DISCOVERED
      BY BUYER AT ANY TIME PRIOR TO THE CLOSING;

AND (2) THE ITEMS DESCRIBED IN SECTION 9.2 ABOVE.

THIS RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY  UNAWARE OR WHICH BUYER
DOES NOT PRESENTLY  SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER,  WOULD MATERIALLY
AFFECT BUYER'S RELEASE TO SELLER.

      THE FOREGOING SHALL NOT BE DEEMED TO RELEASE THE ALLEN MORRIS COMPANY FROM
ANY LIABILITY IN CONNECTION WITH ITS STATEMENTS AND REPRESENTATIONS IN THE AUDIT
REPRESENTATION  LETTER,  NONE OF WHICH  SHALL BE IMPUTED TO OR BE DEEMED TO HAVE
BEEN MADE BY SELLER.

      IT IS UNDERSTOOD  AND AGREED THAT THE PURCHASE  PRICE HAS BEEN ADJUSTED BY
PRIOR  NEGOTIATIONS  TO REFLECT  THAT ALL OF THE  PROPERTY IS SOLD BY SELLER AND
PURCHASED BY BUYER SUBJECT TO THE  FOREGOING.  IT IS NOT  CONTEMPLATED  THAT THE
PURCHASE PRICE WILL BE INCREASED IF COSTS TO BUYER  ASSOCIATED WITH THE PROPERTY
PROVE TO BE LESS THAN  EXPECTED  NOR WILL THE  PURCHASE  PRICE BE REDUCED IF THE
BUYER'S PLAN FOR THE PROPERTY LEADS TO HIGHER COST PROJECTIONS.  THE SOLE REMEDY
OF THE BUYER WILL BE TO TERMINATE THIS AGREEMENT AS PROVIDED HEREIN PRIOR TO THE
END OF THE DUE DILIGENCE PERIOD.

            --------------------          -------------------
            Buyer's initials                  Seller's initials

      9.4 Disclosures;  Specific Acknowledgment Regarding Condition of Property.
Buyer  acknowledges  the  disclosures  made by Seller and set forth in Exhibit H
attached  hereto.  Additionally,  and without  limiting  the  generality  of the
foregoing  Paragraph 9.4, Buyer is aware that the  Environmental  Report reveals
certain   conditions  with  respect  to  the  Property,   and  that  groundwater
contamination from BP Oil may exist on the Property.

      9.5  Estoppel  Certificates.  Seller  will use its  reasonable  efforts to
obtain and deliver to Buyer estoppel certificates on the form attached hereto on
Exhibit I, from tenants in the Property;  however  reasonable  efforts shall not
include  calling a default under any existing  lease if such lease  requires the
tenant to deliver an estoppel certificate and the tenant fails to do so.

10.   Costs and Expenses:

      Seller will pay:


                                    - 16 -


<PAGE>



        (a)   all state, county and city surtax and documentary transfer taxes;

            (b)   all premiums for the Title Policy; and

            (c)   Seller's share of prorations.

      Buyer will pay:

            (a)   all document recording charges;

     (b) the cost of any survey  and the cost of any  endorsements  required  by
Buyer; and
            
          (c)   Buyer's share of prorations.

      Buyer and Seller will each pay all legal and professional fees and fees of
other consultants incurred by Buyer and Seller,  respectively.  All other normal
costs and expenses will be allocated between Buyer and Seller in accordance with
the customary practice in the county in which the Property is located.

11.   Prorations:

      11.1 Taxes and  Assessments.  All  non-delinquent  real  estate  taxes and
assessments  on the  Property  will be prorated  as of the Closing  based on the
actual current tax bill. If the Closing takes place before the real estate taxes
are fixed for the tax year in which the Closing  occurs,  the  apportionment  of
real  estate  taxes will be made on the basis of the real  estate  taxes for the
immediately  preceding tax year applied to the latest  assessed  valuation.  All
delinquent taxes and all delinquent assessments, if any, on the Property will be
paid at the Closing from funds accruing to Seller. All supplemental taxes billed
after the  Closing for periods  prior to the  Closing  will be paid  promptly by
Seller.  Any tax refunds  received by Buyer  which are  allocable  to the period
prior to Closing will be paid by Buyer to Seller.

      11.2  Rents and  Deposits.  If there are any leases of the  Property,  all
rents which are actually  received by Seller as of the Closing will be prorated.
Delinquent  rents and rents not paid by Closing  will not be prorated and Seller
can continue to collect such rents,  provided Seller's collection efforts do not
involve  dispossession of the delinquent  tenant.  Rents allocable to the period
prior to  Closing  will be the  property  of Seller and rents  allocable  to the
period after Closing will be the property of Buyer. All rents collected by Buyer
or Seller after  Closing will be applied  first to current rents due and payable
and next in satisfaction of the newest accrued rent.

      Buyer  acknowledges  that (i) Seller  acquired  title to the  Property  by
foreclosure or deed in lieu of foreclosure,  (ii) Seller may not have received a
transfer of  security  deposits  from the prior  owner,  and (iii)  except as to
rental  agreements  entered  into by  Seller,  Seller's  rent  roll is wholly or
partially  based on  information  provided  by the  prior  owner or other  third
parties.


                                    - 17 -


<PAGE>



      All security and other  deposits of existing  tenants,  together  with all
interest  accrued  thereon,  if any, as of the Closing Date shall be transferred
and assigned to Buyer or Buyer shall  receive a credit at Closing for the amount
of such deposits as are actually held by Seller.

       Buyer assumes the obligation to repay all security  deposits owing to all
tenants of the Property and shall  indemnify  and hold Seller  harmless from any
claims for damages by tenants in regard to said deposits.  The provisions hereof
shall  survive the Closing.  Seller shall not give Buyer a credit at Closing for
any  security  deposits or prepaid  rent not paid or received by Seller,  unless
otherwise stated in the tenant estoppel letters, which shall take priority.

      11.3  Utilities.  Seller will notify all utility  companies  servicing the
Property  of the sale of the  Property  to  Buyer  and will  request  that  such
companies  send Seller a final bill for the period ending on the last day before
the Closing.  Buyer will notify the utility companies that all utility bills for
the period  commencing on the Closing Date are to be sent to Buyer.  In addition
to the Purchase Price,  Buyer will pay to Seller an amount equal to the total of
all utility  deposits held by utility  companies and Seller will assign to Buyer
all of  Seller's  right,  title  and  interest  in any  such  utility  deposits;
provided, however, Seller reserves the right to receive a return of such utility
deposits and in such event, Buyer will arrange for substitute  deposits with the
utility  companies as may be required.  If following the Closing either Buyer or
Seller receives a bill for utilities or other services  provided to the Property
for the period in which the Closing  occurred,  Buyer and Seller will  equitably
prorate the bill.

     11.4 Method of Proration.  All prorations  will be made as of 11:59 p.m. on
the  date  preceding  the  date of  Closing  based on a 365 day year or a 30 day
month, as applicable.

     12.  Joint  Representations  and  Warranties:  In  addition  to any express
agreements  of  the  parties   contained   herein,   the  following   constitute
representations and warranties of the parties each to the other:

      12.1  Authority.  Each party has the legal power,  right and  authority to
enter  into  this  Agreement  and  the  instruments  referenced  herein,  and to
consummate this transaction.

      12.2 Actions.  All requisite  action  (corporate,  trust,  partnership  or
otherwise) has been taken by each party in connection  with the entering into of
this Agreement,  the instruments referenced herein, and the consummation of this
transaction. No further consent of any partner, shareholder, creditor, investor,
judicial  or  administrative  body,  governmental  authority  or other  party is
required.

      12.3 Due  Execution.  The  individuals  executing  this  Agreement and the
instruments referenced herein on behalf of each party and the partners, officers
or trustees of each  party,  if any,  have the legal  power,  right,  and actual
authority to bind each party to the terms and conditions of those documents.

      12.4 Valid and Binding. This Agreement and all other documents required to
close this transaction are and will be valid, legally binding obligations of and
enforceable  against each party in accordance with their terms,  subject only to
applicable bankruptcy,  insolvency,  reorganization,  moratorium laws or similar
laws or equitable  principles  affecting  or limiting the rights of  contracting
parties generally.

                                    - 18 -


<PAGE>




13.  Seller's  Warranties  and  Representations:   Seller  makes  the  following
representations,  covenants and warranties and acknowledges that Buyer will rely
on such  representations,  covenants  and  warranties in acquiring the Property,
each of which will survive the Closing for a period of 1 year; provided that any
claims must be made in writing to Seller within the 1 year period.

      13.1 Lease.  Seller has not entered into any lease or other  agreement for
possession  with any  person or entity  (except  Buyer)  pursuant  to which such
person or entity has any current or future right or interest to occupy,  possess
or use all or any portion of the  Property,  except with  respect to the tenants
listed on Exhibit J attached hereto.

     13.2  Non-Foreign  Entity.  Seller is not a  "foreign  person"  within  the
meaning of Section 1445(f)(3) of the Internal Revenue Code.
      
     13.3 Pre-Closing Covenants. So long as this Agreement remains in full force
and effect:

            (a)  Without  the prior  written  consent of Buyer,  Seller will not
convey any  interest in the  Property  and will not subject the  Property to any
additional liens, encumbrances,  covenants, conditions, easements, rights of way
or similar matters after the date of this Agreement,  except as may be otherwise
provided  for in this  Agreement,  which  will  not be  eliminated  prior to the
Closing.

            (b) Seller will not make any  material  alterations  to the Property
without Buyer's consent, which will not be unreasonably withheld or delayed.

            (c) Seller will not enter into any new leases for any portion of the
Property or extend the terms of any  existing  leases  without  Buyer's  written
consent, which will not be unreasonably withheld or delayed.

            (d)  Seller  will  not  remove  from  the  Improvements  or the Real
Property any article owned by Seller that is included in the Personal Property.

            (e) Seller shall  maintain such casualty and liability  insurance on
the Property as it is presently being maintained.

14.   Condemnation and Destruction:

      14.1 Eminent  Domain or Taking.  If  proceedings  under a power of eminent
domain  relating to the  Property or any part  thereof  are  commenced  prior to
Closing, Seller will promptly inform Buyer in writing.

            (a) If such  proceedings  involve  the  taking  of title to all or a
material interest in the Property, either Buyer or Seller may elect to terminate
this  Agreement  by notice in writing  sent within 10 days of  Seller's  written
notice to Buyer of such proceedings,  in which case the Deposit and any interest
accrued  thereon,  will be  returned to Buyer,  and neither  party will have any
further  obligation  to or  rights  against  the  other  except  any  rights  or
obligations of either party which are expressly stated to survive termination of
this Agreement.


                                    - 19 -


<PAGE>



            (b) If the  proceedings do not involve the taking of title to all or
a material  interest in the  Property,  or if neither Buyer nor Seller elects to
terminate  this  Agreement,  this  transaction  will be consummated as described
herein and any award or settlement  payable with respect to such proceeding will
be paid or assigned to Buyer upon Closing.

            (c) If this sale is not consummated for any reason, any condemnation
award or settlement will belong to Seller.

            (d) For purposes  hereof,  "material" is deemed to be eminent domain
proceedings  relating  to 10% or more of the  Property  or a loss  that  gives a
tenant of the Property the right to cancel its lease or abate rent.

      14.2 Damage or Destruction. Except as provided in this Paragraph, prior to
the Closing the entire risk or loss of damage by earthquake,  hurricane,  flood,
landslide,  fire or other casualty is borne and assumed by Seller.  If, prior to
the Closing, any part of the Improvements is damaged or destroyed by earthquake,
hurricane, flood, landslide, fire or other casualty, Seller will promptly inform
Buyer of such fact in writing  and  advise  Buyer as to the extent of the damage
and whether it is "material" or not "material".

            (a) If such damage or destruction is "material", Buyer or Seller may
terminate  this  Agreement upon written notice to the other given not later than
10 days after  receipt of  Seller's  written  notice to Buyer  advising  of such
damage or destruction.

            (b) For purposes  hereof,  "material"  is deemed to be any damage or
destruction  to the  Improvements  where the cost of repair  or  replacement  is
estimated  to be more than 10% of the  Purchase  Price of the  Property and will
take more than 60 days to repair,  both as  determined by an  independent  third
party contractor reasonably acceptable to Buyer and Seller.

            (c) If this Agreement is so  terminated,  Escrow Holder shall return
the Deposit together with any accrued interest to Buyer.

            (d) If neither Buyer nor Seller terminates this Agreement, or if the
casualty is not  material,  Seller will reduce the  Purchase  Price by the value
reasonably  estimated  the third party  contractor  referred to in  subparagraph
14.2(b) above to repair or restore the damaged portion of the Improvements, less
any sums expended by Seller to make emergency repairs to the Improvements or the
Property or otherwise protect the physical  condition of the Improvements or the
Property,  and  this  transaction  will  close  pursuant  to the  terms  of this
Agreement.

            (e) If the damage is not material,  Seller's  notice to Buyer of the
damage or destruction  will also set forth Seller's  reduced  Purchase Price and
Seller's  allocation of value to the damaged  portion of the  Improvements,  and
this  transaction  shall close pursuant to the terms of this Agreement  provided
either (i) no tenant of the  Property has the right to cancel its lease or abate
or reduce rent as a result of the casualty,  or (ii) if any tenant has the right
to so cancel its lease or abate or reduce rent,  Seller either  assigns to Buyer
at closing the  applicable  proceeds of Seller's  rent  insurance or at Seller's
sole option,  if rent  insurance  either is not available or is not payable with
respect to the tenant(s), provides Buyer with a credit against the

                                    - 20 -


<PAGE>



Purchase Price for the applicable  amount.  If Seller does not have  appropriate
rent  insurance  (or if  rent  insurance  is not  payable  with  respect  to the
tenant(s))  and Seller  elects not to provide  Buyer with a credit  against  the
Purchase  Price, or in the event any tenant has the right to cancel its lease by
reason of such  casualty,  then Buyer's  sole remedy will be to  terminate  this
Agreement and Escrow  Holder shall return the Deposit  together with any accrued
interest to Buyer.

            (f)  Whether  or  not  the  sale  of  the  Property  is  consummated
hereunder,  all rights to  insurance  claims or proceeds in respect of damage or
destruction to the  Improvements  occurring  prior to the Closing will belong to
Seller.

15.   Indemnification:

      15.1  Indemnification  By Seller.  Seller agrees to indemnify,  defend and
hold  Buyer  harmless  for,  from  and  against  any  and all  claims,  demands,
liabilities,  costs, expenses, damages and losses, cause or causes of action and
suit or suits of any nature  whatsoever  arising from any  misrepresentation  or
breach of warranty or covenant by Seller in this Agreement.  This indemnity does
not apply, however, to any item, matter, occurrence or condition which was known
to or reasonably discoverable by Buyer prior to the Closing Date.

      15.2 Indemnification by Buyer. Buyer agrees to indemnify,  defend and hold
Seller harmless for, from and against any and all claims, demands,  liabilities,
costs, expenses, damages and losses, cause or causes of action and suit or suits
of any nature  whatsoever  arising out of the ownership  and/or operation of the
Property after the Closing Date or any  misrepresentation  or breach of warranty
or covenant  by Buyer in this  Agreement  or any  document  delivered  to Seller
pursuant to this Agreement.

      15.3  Survival.  The provisions of this Paragraph 15 will survive the
Close of Escrow.
            --------

16.   Hazardous Substances:

     16.1 Definitions.  For the purposes of this Agreement,  the following terms
have the following meanings:
      
      (a)  "Environmental  Law"  means  any  law,  statute,  ordinance  or
regulation   pertaining  to  health,   industrial  hygiene  or  the  environment
including,  without  limitation CERCLA  (Comprehensive  Environmental  Response,
Compensation  and Liability Act of 1980) and RCRA  (Resources  Conservation  and
Recovery Act of 1976).

            (b) "Hazardous  Substance"  means any  substance,  material or waste
which is or becomes  designated,  classified  or regulated  as being  "toxic" or
"hazardous"  or a  "pollutant"  or which  is or  becomes  similarly  designated,
classified  or  regulated,  under any  Environmental  Law,  including  asbestos,
petroleum and petroleum products.

            (c) "Environmental  Audit" means an environmental  audit,  review or
testing of the  Property  performed  by Buyer or any third  party or  consultant
engaged by Buyer to conduct such study.


                                    - 21 -


<PAGE>



      16.2  Seller's Representations and Warranties:

            Seller has  obtained the  Environmental  Report for the Property and
will furnish a copy to Buyer.  As of the date of this  Agreement,  to the Actual
Knowledge of Seller and except as referred to in the Environmental Report:

            (a) since  the date of  Seller's  acquisition  of the  Property,  no
Hazardous  Substances  are now or have been  used or  stored  on or  within  any
portion of the Property except those  substances  which are or have been used or
stored on the Property in the normal course of use and operation of the Property
and in compliance with all applicable Environmental Laws;

            (b) since the date of Seller's  acquisition  of the Property,  there
are and have been no federal,  state or local  enforcement,  clean-up,  removal,
remedial or other  governmental  or regulatory  actions  instituted or completed
affecting the Property; and

            (c) no  claims  have been made by any  third  party  against  Seller
relating to any Hazardous Substances on or within the Property.

      16.3 Notices Regarding  Hazardous  Substances.  Except as disclosed in the
Environmental  Report,  from the Effective Date through the Closing Date, Seller
will promptly notify Buyer if to the Actual Knowledge of Seller there may be any
Hazardous Substance on the Property,  or in the soil,  groundwater or soil vapor
on or under the  Property,  or that Seller or the Property may be subject to any
threatened or pending  investigation by any  governmental  agency under any law,
regulation  or  ordinance  pertaining  to  any  Hazardous  Substance.   Any  new
disclosure  by Seller  made after the end of the Due  Diligence  Period  will be
governed by the provisions of Paragraph 8.4.

      16.4  Mutual Indemnifications.

            (a) Subject to  Paragraph  16.5 below,  if there are any Third Party
Claims  against Buyer which arise out of any Hazardous  Substances  which became
located in, on or under the Property during Seller's  ownership of the Property,
Seller  will  indemnify,  defend (by  counsel  reasonably  acceptable  to Buyer)
protect  and hold Buyer  harmless  for,  from and  against  any and all  claims,
liabilities,  penalties,  forfeitures,  losses or expenses (including attorneys'
fees) arising therefrom, less any credit received by Buyer pursuant to Paragraph
7.1.7 of this Agreement.

            (b) If there are any Third Party Claims  against  Seller which arise
out of any  Hazardous  Substances  which  became  located  in,  on or under  the
Property after the Closing, Buyer will indemnify,  defend (by counsel reasonably
acceptable to Seller) protect and hold Seller harmless for, from and against any
and  all  claims,  liabilities,   penalties,  forfeitures,  losses  or  expenses
(including attorneys' fees) arising therefrom.

            (c) As used in this Paragraph 16.4, "Third Party Claims" are defined
as any  claims  or  rights  of  recovery  by any  person  or  entity  (including
governmental agencies):

                  (i)   which result from injury, damage or loss to or of any
person or property; or

                                    - 22 -


<PAGE>




                (ii) for cost recovery, removal or remedial action.

Third Party  Claims will also  include any costs paid or payable by either party
for damage, loss, injury, investigation, removal, remediation or other liability
in response to any third party claim or in  anticipation  of any  enforcement or
remedial  action  undertaken or threatened by any  government  agency or private
party.

      16.5  Environmental  Release.  Nothing in Paragraph 16.4 above is meant to
diminish any party's rights or obligations under any federal, state or local law
pertaining to or concerning Hazardous Substances;  but Seller will not be liable
to Buyer under and Buyer hereby releases Seller from any and all liability under
any such law, for any Third Party Claims or any other claims  (including  claims
by Buyer) which are attributable to any environmental condition which:

     (i) was  described  or  referred to in the  Environmental  Report or in any
Environmental Audit obtained by Buyer; or
                
(ii) was reasonably discoverable by prudent investigation during the Due
      Diligence Period; or

               (iii) was otherwise disclosed by Seller to Buyer or discovered by
      Buyer at any time prior to the Closing.

            The provisions of Paragraphs 16.4 and 16.5 will survive the Closing.
The  provisions of this  Paragraph  16.5 are not intended to diminish in any way
the release set forth in Section 9.3 above.

     16.6  Environmental  Audit. If during the Due Diligence Period Buyer elects
to perform an Environmental Audit:
      
      (a) The Environmental  Audit will be conducted  pursuant to standard
quality control/quality  assurance procedures and in accordance with Section 20.
Buyer will give  Seller at least 2 business  days'  prior  notice of any on-site
testing of soil or subsurface conditions.

            (b) If any report is  prepared  as the  result of the  Environmental
Audit,  such report  will be  conspicuously  labeled as a draft,  and Buyer will
promptly give Seller a copy of the draft report. If the report indicates that no
further action is required, it may then be delivered in final form. Prior to the
Closing,  Buyer will keep the draft report and the information contained therein
confidential  and will not disclose it to any person or entity without  Seller's
prior written consent; provided,  however, that Buyer may furnish a copy of said
draft  report  to any  proposed  lender in  connection  with  prosecution  of an
application  for a mortgage  loan and to any person or entity  contemplating  an
investment  in the Property as a partner or permitted  assignee of Buyer,  or to
any consultant engaged in, or commenting upon the results of, said draft report.

     (c) If Buyer  elects  during the Due  Diligence  Period not to acquire  the
Property or if the Closing fails to occur for any reason other than a default by
Seller,  if Seller requests copies of the draft report,  then Buyer will deliver
all copies of the draft report to, and they will become the property of,  Seller
provided Seller pays Buyer for the costs of the report. Buyer
                                    - 23 -


<PAGE>



will not disclose to any party the contents of the draft report except  pursuant
to valid legal process or with the written consent of Seller.

            (d) Any ground water,  soil or other samples taken from the Property
will be  properly  disposed of by Buyer at Buyer's  sole cost and in  accordance
with all applicable laws.

17.  WAIVER OF JURY TRIAL:  BUYER AND SELLER DO HEREBY  KNOWINGLY,  VOLUNTARILY,
IRREVOCABLY,  UNCONDITIONALLY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY
IN RESPECT OF ANY  LITIGATION  BASED  HEREON,  OR  ARISING  OUT OF,  UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ALL OTHER DOCUMENTS OR ANY COURSE OF CONDUCT,
COURSE OF  DEALING,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF ANY
PERSON.  THIS  IRREVOCABLE  WAIVER  OF THE RIGHT TO A JURY  TRIAL IS A  MATERIAL
INDUCEMENT FOR SELLER TO ENTER INTO THIS TRANSACTION.

            --------------------          -------------------
            Buyer's initials                  Seller's initials

18. Notices: All notices or other communications required or permitted hereunder
must be in writing,  and must be  personally  delivered  (including  by means of
professional  messenger  service)  or  sent  by  overnight  courier,  or sent by
registered or certified mail,  postage prepaid,  return receipt requested to the
addresses  set forth in  Paragraph  1. All  notices  sent by mail will be deemed
received 4 days after the date of mailing  and all  notices  sent by other means
permitted herein shall be deemed received on the date delivered.

19. Broker:  Subject to the completion of the transactions  contemplated  herein
and the  Closing,  Seller will pay Seller's  Broker a  commission  pursuant to a
separate  agreement  between Seller and Seller's  Broker.  Said Broker may enter
into an agreement regarding the sharing of such commission or other compensation
which  may be  paid by  Seller  to  Seller's  Broker,  but  Seller  will  not be
responsible  for any such  agreement  between  Seller's  Broker and any  Buyer's
Broker or the implementation  thereof.  Seller represents and warrants to Buyer,
and Buyer  represents and warrants to Seller,  that no broker or finder has been
engaged by them, respectively other than the Broker whose name appear in Section
1, in connection with any of the transactions contemplated by this Agreement, or
to its knowledge is in any way connected  with any of such  transactions.  Buyer
will  indemnify,  save harmless and defend Seller from any  liability,  cost, or
expense  arising  out of or  connected  with any  claim  for any  commission  or
compensation  made by any person or entity  claiming  to have been  retained  or
contacted by Buyer in connection with this  transaction,  other than the Broker.
Seller will indemnify, save harmless and defend Buyer from any liability,  cost,
or expense  arising out of or  connected  with any claim for any  commission  or
compensation  made by any person or entity  claiming  to have been  retained  or
contacted by Seller in connection with this transaction,  other than the Broker.
This indemnity  provision will survive the Closing or any earlier termination of
this Agreement.

     20. Entry:  Buyer and Buyer's  representatives,  agents and designees  will
have the right, at reasonable times and upon no less than two (2) business days'
written  notice to Seller,  (which notice must describe the scope of the planned
testing and  investigations)  to enter upon the  Property,  in  connection  with
Buyer's proposed purchase of the Property. Buyer shall have the
                                    - 24 -


<PAGE>



right to have due diligence  interviews and other  discussions  or  negotiations
with tenants provided Buyer affords to Seller  reasonable notice of the time and
place of the interviews and an opportunity to be present.  However, Buyer agrees
that:

   (a)   all tests and investigations will be at Buyer's sole cost and expense;

            (b) the persons or entities performing such tests and investigations
will be properly  licensed and qualified and will have obtained all  appropriate
permits therefor;

            (c)  Seller  will  have the  right of  approval  (which  will not be
unreasonably withheld or delayed) of any proposed physical testing or drilling;

            (d) Buyer  will  advise  Seller in advance of the dates of all tests
and investigations and will schedule all tests and investigations  during normal
business hours whenever feasible unless otherwise requested by Seller;

            (e) Seller  will have the right to have a  representative  of Seller
accompany Buyer and Buyer's representatives,  agents or designees while they are
on the Property;

    (f)   any entry by Buyer, its representatives, agents or designees will not
interfere with Seller's or any tenant's use of the Property;

            (g) Buyer will indemnify,  defend and hold Seller harmless for, from
and  against  any  and  all  claims,  damages,  costs,  liabilities  and  losses
(including  mechanics'  liens)  arising out of any entry by Buyer or its agents,
designees or representatives; and

            (h) Buyer will restore the Property at Buyer's sole cost and expense
if this transaction does not close.  Until  restoration is complete,  Buyer will
take all steps  necessary to ensure that any conditions on the Property  created
by Buyer's testing will not interfere with the normal  operation of the Property
or  create  any  dangerous,  unhealthy,  unsightly  or noisy  conditions  on the
Property.

In addition,  prior to any entry involving  physical testing,  drilling or other
physical disturbance,  Buyer will obtain,  maintain and provide Seller, or shall
cause any  consultant,  contractor  or other  person  entering  the  Property to
obtain,  maintain  and  provide  Seller,  with  proof of  comprehensive  general
liability  insurance in the amount of at least  $1,000,000.00  combined,  single
limit  coverage,  naming  Seller as an  additional  insured  and with  coverages
reasonably  satisfactory  to Seller.  The  foregoing  indemnity  provision  will
survive the Closing or any earlier termination of this Agreement.

21.   Legal and Equitable Enforcement of this Agreement:

     21.1 Default by Seller.  (a) In the event the Closing and the  consummation
of the  transaction  contemplated  by this  Agreement  do not occur by reason of
material default by Seller, Buyer may either:
      
      (i) terminate  this  Agreement by notice to Seller,  whereupon  this
      Agreement will  terminate and neither party will have any further  rights,
      obligations or liabilities

                                    - 25 -


<PAGE>



      hereunder  (except as to any obligations that would otherwise be deemed to
      survive the termination or Closing) and except that Buyer will be entitled
      to a return of the Deposit, including any interest accrued thereon; or

            (ii)  pursue  the  remedy  of  specific   performance   of  Seller's
      obligation to convey the Property under this Agreement and to pay off from
      closing proceeds any mechanics' liens  affirmatively  caused by Seller and
      any existing  financing lien created by Seller and any monetary  judgments
      against Seller.

The foregoing notwithstanding, in order to pursue any remedy under subparagraphs
(i) or (ii) above, the following conditions precedent must be met:

            (i) Buyer cannot,  at any time during this  Agreement,  have been in
      material default under the terms of this Agreement;

            (ii) Buyer must have given Seller written notice of such default and
      given Seller 10 days to cure such default;

            (iii)  If  Buyer  seeks  specific  performance  as  provided  above,
      Seller's sole obligation,  if such specific performance is awarded,  shall
      be to convey the  Property as provided  in this  Agreement  upon tender by
      Buyer of the Purchase Price in cash, and to pay off from closing  proceeds
      any  mechanics'  liens  affirmatively  caused by Seller  and any  existing
      financing  lien  created  by Seller  and any  monetary  judgments  against
      Seller,  and under no circumstances  shall Seller be obligated or required
      to otherwise  expend any sums to cure any defaults  under this  Agreement,
      secure any permits or  approvals,  change the condition of the Property or
      restore the  Property,  or take any other action  whatsoever  and Seller's
      failure to expend  such sums or conduct any such acts shall not be a basis
      for the filing of any suit for specific performance;

            (iv)  Buyer  must  file a suit for  specific  performance  within 10
      business days of the end of Seller's 10 day cure period; and

            (v) Buyer must  deposit  with the Escrow  Holder the  balance of the
      Purchase  Price and any costs to be paid by Buyer under Section 10 hereof.
      If Buyer  prevails,  Seller shall pay the costs Seller is obligated to pay
      under Section 10 hereof.

Except as set forth in this Section, Buyer hereby expressly waives, relinquishes
and  releases  any  other  right or remedy  available  to it at law in equity or
otherwise by reason of Seller's  failure to perform its  obligations  hereunder,
including without  limitation,  any rights the Buyer may have to bring an action
or proceeding to recover actual,  consequential,  punitive,  and/or  speculative
damages or any other  damages.  The  provisions  of this Section shall in no way
impair  Seller's  rights  against  Buyer in the event of a Buyer  default  under
Section 21.2 below.

      Buyer's Initials: __________   Seller's Initials: __________

      21.2  Default by Buyer.  IN THE EVENT THE CLOSING AND THE
CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DOES NOT
OCCUR AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, BUYER

                                    - 26 -


<PAGE>



AND  SELLER  AGREE  THAT IT WOULD BE  IMPRACTICAL  AND  EXTREMELY  DIFFICULT  TO
ESTIMATE  THE  DAMAGES  SUFFERED  BY SELLER AS A RESULT OF  BUYER'S  FAILURE  TO
COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT, AND THAT UNDER
THE  CIRCUMSTANCES  EXISTING AS OF THE DATE OF THIS  AGREEMENT,  THE  LIQUIDATED
DAMAGES  PROVIDED FOR IN THIS PARAGRAPH  REPRESENT A REASONABLE  ESTIMATE OF THE
DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH FAILURE;  PROVIDED,  HOWEVER
THAT THIS PROVISION WILL NOT LIMIT SELLER'S RIGHT TO RECEIVE  REIMBURSEMENT  FOR
ATTORNEYS' FEES, NOR WAIVE OR AFFECT BUYER'S INDEMNITY  OBLIGATIONS AND SELLER'S
RIGHTS TO THOSE INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT,  NOR WAIVE OR AFFECT
BUYER'S  OBLIGATIONS TO RETURN OR PROVIDE TO SELLER DOCUMENTS,  REPORTS OR OTHER
INFORMATION  PROVIDED  TO OR PREPARED  BY OR FOR BUYER  PURSUANT  TO  APPLICABLE
PROVISIONS OF THIS AGREEMENT. THEREFORE, BUYER AND SELLER DO HEREBY AGREE THAT A
REASONABLE  ESTIMATE OF THE TOTAL NET DETRIMENT  THAT SELLER WOULD SUFFER IN THE
EVENT THAT BUYER  DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY IS
AN AMOUNT EQUAL TO THE DEPOSIT (WHICH  INCLUDES ANY ACCRUED  INTEREST  THEREON).
SAID AMOUNT WILL BE THE FULL,  AGREED AND  LIQUIDATED  DAMAGES FOR THE BREACH OF
THIS AGREEMENT BY BUYER. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT
INTENDED AS A  FORFEITURE  OR PENALTY BUT IS INTENDED TO  CONSTITUTE  LIQUIDATED
DAMAGES TO SELLER. UPON DEFAULT BY BUYER, THIS AGREEMENT WILL BE TERMINATED AND,
EXCEPT FOR BUYER'S INDEMNITY AND OTHER SPECIFIC  OBLIGATIONS  REFERRED TO HEREIN
WHICH MAY BE ENFORCED BY SELLER (IN  ADDITION TO  COLLECTION  AND  RETENTION  BY
SELLER OF BUYER'S  DEPOSIT AS PROVIDED  HEREUNDER),  NEITHER PARTY WILL HAVE ANY
FURTHER RIGHTS OR OBLIGATIONS HEREUNDER,  EACH TO THE OTHER EXCEPT FOR THE RIGHT
OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER AND ESCROW HOLDER.

      Buyer's Initials: __________   Seller's Initials: __________

22. Assignment:  Buyer will not assign this Agreement without obtaining Seller's
prior written  consent,  which consent may be withheld by Seller in its sole and
absolute discretion for any reason whatsoever.  Any attempted assignment without
Seller's  prior  written  consent  will,  at Seller's  option,  be voidable  and
constitute  a  material  breach  of this  Agreement.  If Seller  consents  to an
assignment,  the  assignment  will not be effective  against  Seller until Buyer
delivers to Seller a fully  executed copy of the  assignment  instrument,  which
instrument  must be  satisfactory  to  Seller  in both  form and  substance  and
pursuant to which the assignee  assumes and agrees to perform for the benefit of
Seller the obligations of Buyer under this Agreement,  and pursuant to which the
assignee makes the warranties and  representations  required of Buyer under this
Agreement and such other representations and warranties as Seller may reasonably
require.  Any such assignment will not release Buyer from any of its obligations
under this  Agreement.  Notwithstanding  the  foregoing,  Buyer may assign  this
Agreement to RRC Fl Three, Inc., a Florida  corporation,  or to any other wholly
owned subsidiary of Regency Realty Corporation, a Florida corporation,  provided
Buyer delivers to Seller a fully executed copy of the assignment  instrument not
less than three (3) business days prior to the Closing Date, and such instrument

                                    - 27 -


<PAGE>



must be  satisfactory to Seller in both form and substance and pursuant to which
the  assignee  assumes  and  agrees to  perform  for the  benefit  of Seller the
obligations  of Buyer under this  Agreement,  and pursuant to which the Assignee
makes the warranties and representations  required of Buyer under this Agreement
and such other representations and warranties as Seller may reasonable require.

23.   Miscellaneous:

      23.1  Counterparts.  This Agreement may be executed in counterparts.

      23.2 Partial  Invalidity.  If any term or provision of this Agreement will
be deemed to be invalid or  unenforceable  to any extent,  the remainder of this
Agreement will not be affected thereby, and each remaining term and provision of
this Agreement will be valid and be enforced to the fullest extent  permitted by
law.

      23.3  Possession  of the Property.  Seller will deliver  possession of the
Property to Buyer upon the Closing, subject to the right of any tenants.

      23.4  Waivers.  No  waiver  of any  breach of any  covenant  or  provision
contained  herein will be deemed a waiver of any preceding or succeeding  breach
thereof, or of any other covenant or provision contained herein. No extension of
time for performance of any obligation or act will be deemed an extension of the
time for performance of any other  obligation or act except those of the waiving
party,  which  will be  extended  by a period of time equal to the period of the
delay.

      23.5 Successors and Assigns.  This Agreement is binding upon and inures to
the benefit of the permitted successors and assigns of the parties hereto.

      23.6  Professional  Fees.  In the  event of the  bringing  of any  action,
arbitration or suit by a party hereto against  another party hereunder by reason
of any breach of any of the  covenants,  agreements or provisions on the part of
the other party arising out of this Agreement, then in that event the prevailing
party will be  entitled  to have the  recovery  of and from the other  party all
costs and expenses of the action,  arbitration or suit,  actual  attorneys' fees
(including the allocated costs of Seller's in-house  counsel),  witness fees and
any other professional fees resulting therefrom.

      23.7 Entire  Agreement.  This Agreement  (including all Exhibits  attached
hereto)  constitutes the entire contract between the parties hereto with respect
to the subject matter hereof and may not be modified  except by an instrument in
writing signed by the party to be charged.

      23.8 Time of Essence.  Seller and Buyer hereby  acknowledge and agree that
time is strictly of the essence with respect to each and every term,  condition,
obligation and provision hereof.

      23.9  Construction.  This  Agreement  has been  prepared by Seller and its
professional  advisors  and  reviewed  by Buyer and its  professional  advisers.
Seller and Buyer and their  respective  advisors  believe that this Agreement is
the product of all of their efforts,  that it expresses their agreement and that
it should not be interpreted in favor of or against either Buyer

                                    - 28 -


<PAGE>



or Seller.  The parties  further agree that this  Agreement will be construed to
effectuate the normal and reasonable  expectations of a sophisticated Seller and
Buyer.

      23.10  Governing  Law.  The  parties  hereto  expressly  agree  that  this
Agreement will be governed by,  interpreted under, and construed and enforced in
accordance  with the laws of the State in which the Property is located  without
regard to the provisions  thereof  regarding  conflicts of laws. Any legal suit,
action or  proceeding  arising  out of or relating  to this  Agreement  shall be
instituted in any federal or state court in Duval County, Florida, and Buyer and
Seller waive any objections which either may now or hereafter have to the laying
of venue on any such action,  suit or  proceeding,  and Buyer and Seller  hereby
irrevocably  submit to the jurisdiction of any such court in any suit, action or
proceeding.

      23.11 Confidentiality. Unless otherwise agreed to in writing by Seller and
Buyer,  each party will keep confidential all documents,  financial  statements,
reports  or other  information  provided  to, or  generated  by the other  party
relating to the  Property  and will not  disclose  any such  information  to any
person other than (i) those employees and agents of Seller or Buyer;  (ii) those
who are actively and directly  participating  in the  evaluation of the Property
and the negotiation and execution of this Agreement or financing of the purchase
of the Property and (iii) governmental,  administrative,  regulatory or judicial
authorities  in  the  investigation  of the  compliance  of  the  Property  with
applicable legal  requirements.  However,  Buyer expressly  covenants and agrees
that it will not disclose any code compliance, environmental or other regulatory
matters to governmental or other  authorities  without the express prior written
approval by Seller. Upon any termination of this Agreement for any reason, Buyer
will  promptly  return to Seller  copies of all  documents or other  information
pertaining  to the  Property  provided  to Buyer by Seller,  including,  without
limitation, pursuant to Section 8. The provisions of this Paragraph will survive
the termination of this Agreement other than by Closing.

      23.12 Wear and Tear.  Buyer  specifically  acknowledges  that  Seller will
continue to use the  Property in the course of its business and accepts the fact
that reasonable wear and tear will occur after the date of this Agreement. Buyer
specifically agrees that Seller is not responsible for repairing such reasonable
wear and tear and that Buyer is prohibited  from raising such wear and tear as a
reason for not  consummating  this  transaction or for requesting a reduction in
the Purchase Price.

      23.13 No  Recordation.  No memorandum or other  document  relating to this
Agreement will be recorded without the prior written consent of Seller,  and any
such consent or approval will be conditioned  upon Buyer providing Seller with a
quitclaim deed fully executed and  acknowledged by Buyer,  quitclaiming  any and
all interests that it may have in the Property to Seller,  which  quitclaim deed
Seller  may  record  in the event  that  this  Agreement  is  terminated  or the
transaction contemplated herein is not consummated.

      23.14  Financing.  Buyer  represents and warrants to Seller that Buyer has
not and will not obtain any  financing in  connection  with sale of the Property
from  BankAmerica  Corporation  or any  subsidiary  or affiliate of  BankAmerica
Corporation, including without limitation Bank.

      23.15 Survival.  All obligations of the parties  contained herein which by
their terms do not arise until  after the  Closing and any other  provisions  of
this  Agreement  which by their terms  survives the Closing,  shall  survive the
Closing.

                                    - 29 -


<PAGE>




     23.16  Back-up  Contracts.  Seller  shall have the right to accept  back-up
contracts  between the  Effective  Date and the  expiration of the Due Diligence
Period.
      
23.17  Not an  Offer;  Last  Date for  Submission.  Seller's  delivery  of
unsigned  copies of this  Agreement  is solely for the  purpose of review by the
party to whom delivered,  and neither the delivery nor any prior  communications
between the parties, whether oral or written, will in any way be construed as an
offer by Seller,  nor in any way imply that  Seller is under any  obligation  to
enter the  transaction  which is the subject of this  Agreement.  The signing of
this Agreement by Buyer  constitutes an offer which will not be deemed  accepted
by Seller  unless and until  Seller has signed this  Agreement  and  delivered a
duplicate original or copy, fully executed, to Buyer. Seller shall not entertain
any offer after,  and the last date on which this  Agreement  can be executed by
Buyer is, _______________,  1996; provided, however, execution of this Agreement
by Seller at anytime  after  execution  by Buyer shall be deemed  acceptance  by
Seller of Buyer's  offer unless  Buyer's  offer has  previously  been revoked in
writing by Buyer to Seller.

      23.18 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.

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the date and year hereinabove written.

      "SELLER"                            "BUYER"

REAL ESTATE COLLATERAL                    RRC ACQUISITIONS, INC.,
  MANAGEMENT COMPANY, INC.                  a Florida corporation
  a Delaware corporation


By:_________________________              By:_______________________
  Its:________________________            Its:_______________________


By:________________________               By:_______________________
  Its:_______________________             Its:_______________________


                                    - 30 -


<PAGE>



                            EXHIBIT A TO GRANT DEED

                         LEGAL DESCRIPTION OF PROPERTY




                                    - 1 -


<PAGE>



                                   EXHIBIT B


This Instrument Prepared By:
Rosa Eckstein Schechter, Esq.
Kirkpatrick & Lockhart
Miami Center - Suite 2000
201 So. Biscayne Boulevard
Miami, Florida  33131


                             SPECIAL WARRANTY DEED


      THIS SPECIAL WARRANTY DEED, made the _______ day of ____________, 199_, by
_____________________________________  ("Grantor"), to ________________________,
whose post office address is ______________________________, ("Grantee"):

                             W I T N E S S E T H:

      That  Grantor,  for and in  consideration  of the  sum of Ten  And  No/100
Dollars  ($10.00)  and other  valuable  consideration,  receipt and  sufficiency
whereof is hereby acknowledged, hereby grants, bargains, sells, aliens, remises,
releases,  conveys and confirms unto  grantee,  all that certain land situate in
_______________ County, Florida, viz:

            See Exhibit "A" Attached Hereto And Made A Part Hereof


      Property Identification No. ___________________


Subject only to:

       1.   Easements, restrictions, and other matters of record, without
 reimposing same.

       2.   Real Estate Taxes for the current year and subsequent years.

      TOGETHER with the all tenements,  hereditaments and appurtenances  thereto
belonging or in anywise appertaining.

      TO HAVE AND TO HOLD, the same in fee simple forever.

      AND Grantor  hereby  covenants  with  Grantee that the Grantor is lawfully
seized  of said land in fee  simple;  that  Grantor  has good  right and  lawful
authority to sell and convey said land;  that Grantor  hereby fully warrants the
title to said land and will  defend the same  against  the lawful  claims of all
persons claiming by, through or under said Grantor.

                                    - 1 -


<PAGE>




      IN WITNESS  WHEREOF,  Grantor has signed and sealed these presents the day
and year first above written.

Signed, sealed and delivered in the
presence of:



(Signature of Witness)


(Printed Name of Witness)


(Signature of Witness)


(Printed Name of Witness)





By:

Name:

Title:

Address:



STATE OF _______________
                              SS:
COUNTY OF ______________

      The  foregoing  instrument  was  acknowledged  before  me this ____ day of
________________,  199__,  by  ___________________________,  as  ____________ of
_____________________________.  He/she is personally known to me or has produced
____________________, No. __________________, as identification.


My commission expires:              NOTARY PUBLIC:


                          (Signature of Notary Public)


                         (Printed Name of Notary Public)

                                    STATE OF _____________________ AT LARGE
                                     (SEAL)

                                    - 2 -


<PAGE>



                                   EXHIBIT C

                           Seller's FIRPTA Affidavit

                      CERTIFICATION OF NON-FOREIGN STATUS

            Section 1445 of the Internal Revenue Code provides that a transferee
of a U.S.  real  property  interest  must  withhold tax if the  transferor  is a
foreign person. To inform the transferee that withholding of tax is not required
upon   the    disposition    of   a   U.S.    real    property    interest    by
____________________________  ("Transferor"),  the undersigned  hereby certifies
the following on behalf of Transferor:

     1. Transferor is not a foreign corporation,  foreign  partnership,  foreign
trust and foreign  estate (as those terms are  defined in the  Internal  Revenue
Code and Income Tax Regulations);

     2. Transferor's U.S. employer identification number is ____________; and

            3.    Transferor's office address
                                                                             .

            Transferor  understands that this  certification may be disclosed to
the  Internal  Revenue  Service  by  transferee  and  that any  false  statement
contained herein could be punished by fine, imprisonment or both.

            Under  penalties  of  perjury I declare  that I have  examined  this
certification and to the best of my knowledge and belief it is true, correct and
complete,  and I further  declare that I have  authority to sign the document on
behalf of the Transferor.




                                          By:
                                          Title:


                                          By:
                                          Title:

                                    - 1 -


<PAGE>



                                   EXHIBIT D

                               NO LIEN AFFIDAVIT

COUNTY OF               )
STATE OF                )

      Before    me,   the    undersigned    authority,    personally    appeared
___________________      ("Affiant"),      the      _____________________     of
___________________________________  (the "Seller"), who being by me duly sworn,
on oath, deposes and says:

      1    That Seller is the owner of the following described property, to wit:

            See Exhibit "A" attached hereto and made a part hereof

      2.  That the above  described  property  is free and  clear of all  liens,
taxes, encumbrances and claims of every kind, nature and description whatsoever,
except  for real  estate  and  personal  property  taxes  for the year  ____ and
subsequent years and except for matters shown on Title  Commitment  issued under
Agent No.___________________.

      3. That within the past ninety (90) days there have been no  improvements,
alternations,  or repairs to the above  described  property  for which the costs
thereof remain unpaid, and that within the past ninety (90) days there have been
no claims for labor or material  furnished  for repairing or improving the same,
which remain unpaid, except the following:

                                    NONE

     4. That there are no mechanic's,  materialmen's  or laborer's liens against
the above described property.
      
5. That the personal property contained in the buildings on said property,
or on the said premises,  and which,  if any, is being sold to the  purchaser(s)
mentioned below, is also free and clear of all liens,  encumbrances,  claims and
demands whatsoever.

      6.    That this affidavit is made for the purpose of inducing ___________
to purchase said property from Seller.

      7.    That no one except Seller is in possession of said premises or any 
party thereof, except for the following tenants:

      8. That there are no matters  pending  against  the Seller that could give
rise to a lien that would attach to the property  between the  disbursing of the
funds and the  recording of the interest to be insured,  and that the Seller has
not and will not execute any instrument that would adversely affect the title or
interest to be insured.

     9. Affiant(s) further state that he/she is each familiar with the nature of
an oath;  and with the penalties as provided by the laws of the State  aforesaid
for falsely swearing to
                                    - 1 -


<PAGE>



statements made in an instrument of this nature. Affiant(s) further certify that
he/she has read, or has heard read to him/her, the full facts of this affidavit,
and understand its context.


                                      (SEAL)
   (SEAL)
                                                                  , as
                                      (SEAL)    of




COUNTY OF               )
STATE OF                )

      Sworn to and subscribed  before me this ____ day of ____________,  199_ by
_________________ as  _________________ of  ___________________________________.
He/She is personally  known to me or who has produced  _____________________  as
identification.



                                          Printed Name:
This Document Prepared By:          NOTARY PUBLIC

                             My Commission Expires:
Rosa Eckstein Schechter, Esq.
Kirkpatrick & Lockhart LLP
201 South Biscayne Boulevard
Miami Center - 20th Floor
Miami, Florida 33131

                                    - 2 -


<PAGE>



                                   EXHIBIT E

                                 BILL OF SALE


     For  good and  valuable  consideration,  the  receipt  of  which is  hereby
acknowledged,  _________________________________________  ("Seller") does hereby
sell,  transfer,  and  convey  to:  __________________________   ("Buyer"),  all
personal  property of Seller, if any, located on and used in connection with the
operation  of the  improvements  on the real  property  located in the County of
_________________,   City  of   ______________,   State  of  Florida,   as  more
particularly  described on Exhibit A attached  hereto,  except for the following
items:
      ==================================================================
      ==================================================================
      ==================================================================

            Buyer  accepts such personal  property in its "AS-IS"  condition and
"WITH  ALL  FAULTS".  Seller  specifically  disclaims  all  express  or  implied
warranties  regarding  the existence or condition of, or title to, such personal
property, including without limitation the implied warranties of merchantability
and suitability for a particular purpose.


            Date:                , 19




                                          By:
                                          Title:


                                          By:
                                          Title:





<PAGE>



                           EXHIBIT A TO BILL OF SALE





<PAGE>



                                   EXHIBIT F

                           ASSIGNMENT AND ASSUMPTION


            FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
_________________________________________  (herein  referred to as  "Assignor"),
hereby  assigns,  transfers  and  conveys  to  _______________________,  (herein
referred to as  "Assignee"),  all leases (the "Leases")  described on Schedule 1
attached and all contracts  (the  "Contracts")  described on Schedule 2 attached
affecting that certain real property in the County of  _______________,  City of
____________,   State  of   Florida   (the   "Property"),   commonly   known  as
_________________________________________  and more  particularly  described  in
Exhibit A attached hereto.

            Assignee hereby assumes and agrees to keep,  perform and fulfill all
of Assignor's  obligations  under the Leases and under the  Contracts  which are
required to be kept, performed and fulfilled by Assignor  thereunder,  effective
from and  after  the  date on  which a deed of the  Property  from  Assignor  to
Assignee is recorded (the  "Closing  Date").  Such  assumption is subject to and
limited by any and all exculpatory provisions expressly contained in such Leases
and Contracts.

            The  covenants  and  warranties  contained  herein will  survive the
closing  of the  purchase  and sale of the  Property  to which  this  Assignment
relates, and such covenants and warranties will not be deemed merged in the deed
delivered by Assignor to Assignee.

            This  Assignment  will be binding on and inure to the benefit of the
parties hereto, their heirs, executors,  administrators,  successors in interest
and assigns.

            IN  WITNESS  WHEREOF,  the  undersigned  have  executed  the  within
instrument as of , 19 .

                  ASSIGNOR:



                                          By:
                                          Title:


                                          By:
                                          Title:


                  ASSIGNEE:





<PAGE>



                    EXHIBIT A TO ASSIGNMENT AND ASSUMPTION

                         LEGAL DESCRIPTION OF PROPERTY





<PAGE>



                              Schedule 1 - Leases





<PAGE>



                            Schedule 2 - Contracts





<PAGE>



                                   EXHIBIT G

                  FORM OF MEMORANDUM OF ASSIGNMENT OF LEASES


This Instrument Prepared By And
When Recorded, Return To:

Rosa Eckstein Schechter, Esq.
Kirkpatrick & Lockhart LLP
201 South Biscayne Boulevard
Miami Center - 20th Floor
Miami, Florida 33131




                   Space Above This Line For Recorder's Use



                      MEMORANDUM OF ASSIGNMENT OF LEASES


      THIS  MEMORANDUM  OF  ASSIGNMENT  OF LEASES  ("Memorandum")  is made as of
________________, 199_ between  _________________________________  ("Assignor"),
and ________________________ ("Assignee"), with respect to the following facts:

      A. Assignor (or Assignor's predecessors in interest) is the Landlord under
certain leases  described more  particularly  on Exhibit A attached  hereto (the
"Leases")   affecting   portions  of  that  certain  real  property  located  in
___________________  County,  Florida, more particularly  described on Exhibit B
attached hereto (the "Property").

      B. Pursuant to that certain Assignment and Assumption between Assignor and
Assignee  dated as of even date herewith  ("Assignment"),  Assignor  assigned to
Assignee and Assignee has assumed all of Assignor's right, title and interest as
Landlord in and to the Leases, which assumption is subject to and limited by any
and all exculpatory provisions expressly contained in such Leases.

     C.  Assignor and Assignee now desire to record this  Memorandum  evidencing
the Assignment.

      NOW, THEREFORE, the parties hereto have entered into this Memorandum which
constitutes  a memorandum  of that certain  unrecorded  Assignment  covering the
Leases affecting the Property,  all the terms and conditions of which are hereby
made a part  hereof  with the same  force and  effect as though  fully set forth
herein.




<PAGE>




      IN WITNESS  WHEREOF,  the parties hereto have caused this instrument to be
assigned as of the date first set forth above.



"ASSIGNOR"                                "ASSIGNEE"





By:
      Its:


By:
      Its:



<PAGE>




                                   EXHIBIT A

                                      TO

                           MEMORANDUM OF ASSIGNMENT

                                   OF LEASES

                                LIST OF LEASES





<PAGE>



                                   EXHIBIT B

                                      TO

                           MEMORANDUM OF ASSIGNMENT

                                   OF LEASES

                               LEGAL DESCRIPTION






<PAGE>




COUNTY OF               )

STATE OF                      )


      The  foregoing  instrument  was  acknowledged  before  me this ____ day of
_____________,   199___  by  ________________________  as  _________________  of
_______________________.  He/she  is  personally  known  to me or  has  produced
___________________ as identification.


                                    Notary Public:




                                    Printed Name:

My Commission Expires:              STATE OF ______________ AT LARGE





<PAGE>




COUNTY OF               )

STATE OF                )

      The  foregoing  instrument  was  acknowledged  before  me this ____ day of
_________________,  199___ by  ________________________.  He/she  is  personally
known to me or has produced ___________________ as identification.


                                    Notary Public:




                                    Printed Name:

My Commission Expires:              STATE OF _____________ AT LARGE





<PAGE>



                                   EXHIBIT H

                                  DISCLOSURES


                                     NONE





<PAGE>



                                   EXHIBIT I

                            FORM OF ESTOPPEL LETTER


                        ______________________, 199___



      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
     $____________].

      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.



<PAGE>




      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 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 A TO ESTOPPEL

                                     LEASE





<PAGE>


                                   EXHIBIT J

                                LIST OF TENANTS








                          PURCHASE AND SALE AGREEMENT


      THIS AGREEMENT is made as of the 7th day of November, 1996, between DURHAM
WOODCROFT ASSOCIATES LIMITED  PARTNERSHIP,  a North Carolina limited partnership
("Seller"), and RRC ACQUISITIONS, INC., a Florida corporation ("Buyer").

                                  Background

      Buyer wishes to purchase a shopping center in the City of Durham, State of
North  Carolina,  owned by Seller,  known as the Woodcroft  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 1.3.

   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 business 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 Section 2.2 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 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 6901 et seq.,  Federal
Water  Pollution  Control Act, as amended by the Clean Water Act of 1977, 33 USC
1251 et seq.,  Clean Air Act of 1966,  as  amended,  42 USC 7401 et seq.,  Toxic
Substances  Control  Act of  1976,  15 USC  2601 et  seq.,  Hazardous  Materials
Transportation  Act,  49 USC App.  1801,  Occupational  Safety and Health Act of
1970, as amended,  29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et
seq.,  Emergency  Planning and Community  Right-to-Know Act of 1986, 42 USC App.
11001 et seq., National  Environmental  Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking  Water Act of 1974,  as amended by 42 USC 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 Ulmer, Murchison, Ashby & Taylor, Attorneys, whose
address is Suite 1600, SunTrust Building, 200 West Forsyth Street, Jacksonville,
Florida 32202 (Fax 904/354-9100), 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   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.


                                     -2-


<PAGE>



      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 any buildings,  structures or other  improvements
situated on the Real  Property,  including  but not  limited to store  buildings
containing  approximately 85,353 square feet of leasable area, and paved parking
areas containing approximately 321 parking spaces.

      1.17  Inspection  Period means the period of time which expires at the end
of business on the  forty-fifth  (45th) day after the date of  execution  by the
last of Buyer or Seller to execute this Agreement and transmit a copy thereof to
the  other.  If such  expiration  date is a weekend  or  national  holiday,  the
inspection  period shall  expire at the end of business on the next  immediately
succeeding business day.

      1.18 Leases  means all leases and other  occupancy  agreements  permitting
persons to lease or occupy all or a portion of the Property.

      1.19  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.

      1.20  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.

      1.21  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.


                                     -3-


<PAGE>



      1.22  Property means collectively the Real Property, the Improvements and
the Personal Property.

      1.23 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.

      1.24 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).

      1.25 Real Property means a parcel of land containing  approximately 12.613
acres located at the northeast  corner of the  intersection of NC Highway 54 and
Hope Valley Road, in the City of Durham, County of Durham, North Carolina,  more
particularly  described on Exhibit 1.25, together with all easements,  licenses,
privileges,  rights of way and other appurtenances  pertaining to or accruing to
the benefit of such lands.

      1.26 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.

      1.27 Rent Roll means the list of Leases  attached  hereto as Exhibit 1.27,
identifying  with  particularity  the  space  leased  by each  tenant,  the term
(including  extensions),   square  footage  and  applicable  rent,  common  area
maintenance, tax and other reimbursements, security deposits and similar data.

   1.28  Seller means the party identified as Seller on the initial page hereof.

      1.29 Seller Financial Statements means the unaudited statements of income,
expense and cash flow, and, if available,  balance sheets, 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.

      1.30 Shopping Center means the Shopping  Center  identified on the initial
page hereof which is located on the Real Property.

      1.31 Survey  means a 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

                                     -4-


<PAGE>



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.

      1.32 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 1.32, 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.

      1.33 Title Defect means any exception in the Title Insurance Commitment or
any matter disclosed by the Survey, other than a Permitted Exception.

      1.34 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 a title insurer acceptable
to Buyer.

      1.35 Title Insurance  Commitment  means a binder whereby the title insurer
agrees to issue the Title Insurance to Buyer.

      1.36  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.

                        2.  PURCHASE PRICE AND PAYMENT

      2.1   Purchase Price; Payment.

            (a)    Purchase Price and Terms.  The total Purchase Price for the
Property shall be $6,550,000.  The Purchase Price shall be payable 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);

                   (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


                                     -5-


<PAGE>



                   (3)  subtracting  the amount of  security  deposits,  prepaid
rents from tenants under the Leases  (prorated as of the Allocation  Date),  and
credit balances,  if any, of any tenants. Any rents,  percentage rents or tenant
reimbursements payable after the Allocation Date but applicable to periods on or
prior to the  Allocation  Date shall be remitted  to Seller by Buyer  within ten
(10)  days  after   receipt.   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 ten (10) 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
$25,000  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 held as  specifically  provided in
this Agreement and 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;

                   (3)  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 5.3 of this Agreement; and

                   (5)  Seller's attorneys' fees relating to the sale of the 
Property.


                                     -6-


<PAGE>



            (b)    Buyer shall pay:

                   (1)  Cost of Buyer's due diligence inspection;

                   (2)  Costs of the Survey and of the environmental site
assessments to be obtained by Buyer;

                   (3)  Cost of recording the deed;

                   (4)  Title insurance premium for the policy to be issued at
Closing, including the fees of the certifying attorney; and

                   (5)  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,  provided Buyer and its  representatives do not unreasonably  interfere
with the operation of the Shopping Center.  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
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 not be refundable  except upon the
terms otherwise set forth herein.

            (b) Subject to the provisions of Section 3.1(a),  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,
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  borings,  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

                                     -7-


<PAGE>



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. All such information  shall be held  confidential by Buyer
and its  representatives,  and  shall be  returned  to Seller if the sale of the
Shopping Center does not close.

      3.2 Hazardous  Material.  Prior to the end of the Inspection  Period Buyer
may  order  an  environmental  assessment  of the  Property,  and a copy  of any
assessment  report, if made, shall be furnished by Buyer to Seller promptly upon
its  completion.  If  the  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 five
(5)  business  days after  receipt of the  assessment  report  that it elects to
terminate this  Agreement,  whereupon this Agreement  shall terminate and Escrow
Agent shall return to Buyer its Earnest Money Deposit.

      3.3 Time and Place of Closing. Unless otherwise agreed by the parties, the
Closing  shall take place at the  offices  of Escrow  Agent at 10:00 A.M.  on or
before December 17, 1996,  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.  Seller is duly organized,  validly existing
and in good standing under the laws of the State of North Carolina, 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 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 Seller 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  Seller  enforceable  against  it  in
accordance with its terms.

      4.3 Title.  On the  Closing  Date Seller will own in fee simple all of the
Property,  subject only to the Permitted Exceptions.  Seller represents to Buyer
that  Seller  currently  ground  leases  the Real  Property  from  Paine  Webber
Qualified Plan Property Fund Three, L.P., and owns the Improvements and Personal
Property in fee simple. The interest of the ground

                                     -8-


<PAGE>



lessor shall be acquired by Seller and conveyed to Buyer without additional cost
to Buyer at Closing, subject however to Section 8.3 hereof.

      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 Lat Purser &  Associates,  Inc.  (the  individual  broker  being Rob
Carter),  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.

      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  accounting  principles  generally used in the shopping  center
industry,  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,
1995. Buyer and its independent  certified  accountants shall be given access to
Seller's books and records at any time prior to and for six (6) months following

                                     -9-


<PAGE>



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 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, unless replaced with article(s) of comparable quality. Seller
covenants  to maintain  through the Closing  Date 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.  To the best  knowledge  of  Seller,  the
Property is properly  zoned for its  present  use as a retail  shopping  center.
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
                                     -10-


<PAGE>



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 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 except as
provided in Section  8.3; 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  Environmental Matters.

            (a)    Seller represents and warrants as of the date hereof and as
of the Closing that:


                                     -11-


<PAGE>



                   (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) drycleaning  plant or other facility using drycleaning  solvents;  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 4.17. . This indemnity  shall survive Closing for a period of three
(3) months, and shall be in addition to the post-closing  indemnities  contained
in Section 10.01.

            (c) It is expressly  understood and agreed that the  representations
and warranties in this Section 4.17 are limited to the actual knowledge of James
T. Cobb, who is the general partner of the general partner of Seller and who has
personal knowledge of and management responsibility for the Property.

      4.18 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.

      4.19  Property  Conveyed "As Is".  Except as  expressly  set forth in this
Agreement the Property is being sold and conveyed to Buyer "as is" and "with all
faults". Except as expressly stated in this Agreement, Seller has not made, does
not make,  and hereby  disclaims any and all express or implied  representations
and warranties  regarding or relating to: the condition of the Shopping  Center,
the Improvements or the Personal Property;  their suitability for any particular
purpose;  the susceptibility to flooding of the Real Property;  the value of the
Shopping Center; the layout or leasable square footage of the Improvements;  the
projected  income or  expenses  of the  Shopping  Center for  periods  after the
Closing Date; use and

                                     -12-


<PAGE>



occupancy restrictions  applicable to the Shopping Center; the current manner of
operation of the Shopping Center;  and all matters  affecting or relating to the
Shopping Center.  Buyer acknowledges that, except as expressly set forth in this
Article  4,  and  as may  be  set  forth  in  the  closing  documents,  no  such
representations or warranties,  express or implied, have been made by Seller, or
by any other person  representing or purporting to represent Seller. In agreeing
to purchase the Shopping Center "as is" and without  representation or warranty,
express or  implied,  except as  expressly  set forth in this  Agreement,  Buyer
acknowledges  and  represents  that it has factored the "as is" condition of the
Shopping  Center  into the price it has hereby  agreed to pay for the  Property,
subject  however  to  its  findings  during  the  Inspection   Period,  and  any
conclusions it may make as a consequence thereof.

            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 Lat
Purser & Associates,  Inc., and its employee Rob Carter,  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

                                     -13-


<PAGE>



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)  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. Prior to the end of the Inspection Period Buyer
shall order the Title Insurance  Commitment from Chicago Title Insurance Company
and the Survey from a reputable  surveyor  familiar  with the  Property  (Seller
agreeing  to  furnish  to  Buyer  copies  of  any  existing  surveys  and  title
information in its possession promptly after execution of this Agreement). Buyer
will have until the  expiration  of the  Inspection  Period 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 them.

            (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  transactions
contemplated hereby have been

                                     -14-


<PAGE>



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 Property.

            (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  special  warranty  deed  or  deeds  in  proper  form  for
recording,  duly executed and  acknowledged  so as to convey to Buyer the entire
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  Contracts,
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;


                                     -15-


<PAGE>



                (5) 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;

                (6) All Tenant Estoppel Letters  obtained by Seller,  which must
include Food Lion, Kerr Drugs,  True Value Hardware,  Sushi House Yama and Video
Plaza 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;

                (7)  A general assignment of all assignable existing warranties
relating to the Property;

                (8)  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;

                (9) 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;

               (10)  Resolutions of Seller authorizing the transactions
described herein;

               (11)  All keys and other means of access to the Improvements in
the possession of Seller or its agents;

               (12)  Materials; and

               (13) Such  other  documents  as Buyer may  reasonably  request to
effect the transactions contemplated by this Agreement.

            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 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 9.

      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:


                                     -16-


<PAGE>



            (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  assumption  agreement,  pursuant  to which Buyer shall
assume the  obligations  of Seller under the Leases and the  Contracts  that are
being assumed by Buyer,  and by which Buyer shall  indemnify  Seller against any
and all claims,  actions,  charges,  expenses  (including,  without  limitation,
attorney's fees and court costs) and  liabilities  relating to the Leases or the
assumed Contracts  arising in connection with acts or omissions  occurring after
the Closing  Date;  and  pursuant to which  Seller  shall  indemnify  Buyer in a
reciprocal fashion for all such matters arising prior to the Closing Date;

                  (3) A  certified  copy of the  Articles of  Incorporation  and
Bylaws of Buyer,  or its  acquiring  affiliate,  as well as a copy of Buyer's or
Buyer's  acquiring  affiliate's  Certificate  of Authority,  duly filed with the
North Carolina Secretary of State;

                  (4) A copy of any  resolution  required under the terms of the
Bylaws of Buyer or Buyer's acquiring  affiliate  authorizing certain officers of
Buyer or of such affiliate to execute and deliver the closing documents required
by this Section 8.2;

                  (5) Such other  documents as Seller may reasonably  request to
effect the transactions 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 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 9.

      8.3 Special Condition.  Seller's obligations under this Agreement shall be
conditioned  upon the receipt by Seller,  on or before November 15, 1996, of the
written approval of the Paine Webber Properties  Investment  Committee to accept
$5,485,000  as payment  in full of all  obligations  of Seller  under the ground
lease and first deed of trust covering the Shopping Center. Seller agrees to use
reasonable good faith efforts to obtain that

                                     -17-


<PAGE>



approval, Seller shall have the right, exercisable by delivery of written notice
to Buyer on or before November 20, 1996, to terminate this  Agreement,  and upon
such termination,  the Deposit and all interest, if any, earned thereon shall be
returned to Buyer and this  Agreement  shall be deemed null and void.  If Seller
fails to delivery such written notice of termination in a timely manner,  Seller
shall be deemed to have waived the condition set forth in this Section 8.3.

      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  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.  POST CLOSING INDEMNITIES AND COVENANTS

      10.1 Seller's Indemnity. Should this transaction close, Seller, subject to
the  limitations  set forth herein,  shall  indemnify,  defend and hold harmless
Buyer from all  claims,  demands,  liabilities,  damages,  penalties,  costs and
expenses,   including,  without  limitation,   reasonable  attorneys'  fees  and
disbursements,  which may be imposed upon,  asserted against or incurred or paid
by Buyer by reason  of,  or on  account  of,  any  breach by Seller of  Seller's
warranties,  representations and covenants. Seller's warranties, representations
and  covenants,  and the  foregoing  indemnity,  shall survive the Closing for a
period of three (3) months,  after  which  Buyer shall have no further  remedies
against  Seller except with respect to  warranties  and covenants in the closing
documents.  Buyer's  rights  and  remedies  herein  against  Seller  shall be in
addition to, and not in lieu of all other rights and remedies of Buyer at law or
in equity.

     10.2  Buyer's  Indemnity.   Should  this  transaction  close,  Buyer  shall
indemnify,   defend  and  hold  harmless   Seller  from  all  claims,   demands,
liabilities, damages, penalties, costs and
                                     -18-


<PAGE>



expenses,   including,  without  limitation,   reasonable  attorneys'  fees  and
disbursements,  which may be imposed upon,  asserted against or incurred or paid
by  Seller by  reason  of, or on  account  of,  any  breach by Buyer of  Buyer's
warranties,  representations and covenants. Buyer's warranties,  representations
and  covenants,  and the  foregoing  indemnity,  shall survive the Closing for a
period of three (3) months,  after which Seller  shall have no further  remedies
against  Buyer except with respect to  warranties  and  covenants in the closing
documents.  Seller's  rights  and  remedies  herein  against  Buyer  shall be in
addition  to, and not in lieu of all other  rights and remedies of Seller at law
or in equity.

                              11.  MISCELLANEOUS

      11.1   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.

      11.2 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.

      11.3  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:

            As to Seller:     Durham Woodcroft Associates Limited Partnership
                              Attention: James T. Cobb
                              5821 Fairview Road, Suite 302
                              Charlotte, North Carolina 28209
                              Facsimile: (704) 553-0879

            With a copy to:   Robinson, Bradshaw & Hinson, P.A.
                              Attention: Brent A. Torstrick
                              101 North Tryon Street, Suite 1900
                              Charlotte, North Carolina 28246
                              Facsimile: (704) 378-4000

            As to Buyer:      RRC Acquisitions, Inc.
                              Attention:  Robert L. Miller
                              Suite 200, 121 W. Forsyth St.
                              Jacksonville, Florida 32202
                              Facsimile: (904) 634-3428


                                     -19-


<PAGE>



            With a copy to:   Ulmer, Murchison, Ashby & Taylor
                              Attention:  William E. Scheu, Esq.
                              P. O. Box 479
                              Suite 1600, 200 W. Forsyth St.
                              Jacksonville, FL 32201 (32202 for courier)
                              Facsimile: (904) 354-9100

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.

      11.4 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.

      11.5  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.

      11.6 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.

      11.7  Time of Essence.  Time is of the essence of this Agreement.

      11.8 Governing Law. This Agreement  shall be governed by the laws of North
Carolina 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 Durham County,  State of North  Carolina.  Each party
waives its right to jurisdiction or venue in any other location.

      11.9  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.


                                     -20-


<PAGE>



      11.10 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.

      11.11 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.

     11.12  Further  Instruments,  Etc.  Seller  and  Buyer  shall,  at or after
Closing,  execute any and all documents and perform any and all acts  reasonably
necessary to fully implement this Agreement.

     11.13  Survival.  The  obligations  of  Seller  and  Buyer  intended  to be
performed after the Closing shall survive the closing.
      
     11.14 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, INC.,
____________________________        a Florida corporation
[ - - - - - - - - - - - - - - - - - ]
Name (Please Print)
                                    By:
____________________________           Its:
[ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Date: October ____, 1996
Name (Please Print)
                        Tax Identification No. 59-3210155

                                          "BUYER"








                                     -21-


<PAGE>



                       DURHAM WOODCROFT ASSOCIATES LIMITED
                                    PARTNERSHIP, a North Carolina limited
                                    partnership

                                    By Its General Partner:

                                       Durham Woodcroft Company Limited
____________________________           Partnership
[ - - - - - - - - - - - - - - - - - ]
Name (Please Print)
                                       By:
____________________________                 James T. Cobb
[ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ]        Managing General Partner
Name (Please Print)
                                    Date: October ___, 1996

                                    Tax Identification No:

                                          "SELLER"




                            JOINDER OF ESCROW AGENT

      1.  Duties.  Escrow  Agent joins  herein for the purpose of  acknowledging
receipt of the initial Earnest Money Deposit and agrees 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 Section 2.2 of the foregoing Agreement.

      2. Indemnity.  Escrow Agent shall not be liable to either party except for
claims  resulting  from the gross  negligence  or willful  misconduct  of Escrow
Agent. If the escrow is involved in any  controversy or litigation,  the parties
hereto  shall  jointly and  severally  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.  If the indemnity amounts payable hereunder result from the fault of
Buyer or Seller (or their respective agents),  the party at fault shall pay, and
hold the other party harmless against, such amounts.

      3.    Conflicting Demands.  If conflicting demands are made upon Escrow
Agent with respect to the escrow, the parties hereto expressly agree that
Escrow Agent shall have the

                                     -22-


<PAGE>



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 final  appropriate  legal  proceedings  or  otherwise  as it may
require; or (ii) file suit for declaratory relief and/or interpleader 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 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 fourteen (14) days after a
written  request for  approval is received by the party whose  approval is being
requested.  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 2.2
and 3.1(a) 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 14 days after  receipt of Escrow
Agent's notice. 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.

                        ULMER, MURCHISON, ASHBY & TAYLOR


                                    By:
                              Its Authorized Agent

                                    Date: October ___, 1996

                                 "ESCROW AGENT"


                                     -23-


<PAGE>



                                  EXHIBIT 1.3

                          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 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).

          b.    Material gain or loss contingencies (including oral and written
guarantees) that are required to be accrued or disclosed by SFAS No. 5.




<PAGE>



            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 1.25

                      Legal Description of Real Property



<PAGE>



                                 EXHIBIT 1.27

                                   Rent Roll



<PAGE>



                                 EXHIBIT 1.32

                            Form of Estoppel Letter

                          _____________________, 199_


      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
            $______________].

      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.




<PAGE>


      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 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 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:_________________________________
- ----------------------------



I:\USERS\WES\REG\WOODCROF\PSA





                                      17


                                TABLE OF CONTENTS

1.
    Definitions.  ........................................................1
    1.1.  Assignment of
          Leases.  .........................................1
    1.2.  Assignment of Service
          Contracts.  ..............................1
    1.3.  Bill of
          Sale.  .................................................1
    1.4.
          Closing.  ......................................................1
    1.5.  Closing
          Date.  .................................................1
    1.6.  Contract
          Period.  ..............................................1
    1.7.
          Deed.  .........................................................1
    1.8.  Hazardous
          Material.  ...........................................1
    1.9.
          Improvements.  .................................................2
    1.10.
          Land.  ........................................................2
    1.11.
          Leases.  ......................................................2
    1.12.  Permitted
          Exceptions.  ........................................2
    1.13.  Personal
          Property.  ...........................................2
    1.14.
          Project.  .....................................................2
    1.15.  Purchase
          Price.  ..............................................2
    1.16.  Schedule of
          Leases.  ..........................................2
    1.17.  Service
          Contracts.  ...........................................3
    1.18.
          Survey.  ......................................................3
    1.19.
          Tenant.  ......................................................3
    1.20.  Tenant
          Estoppel.  .............................................3
    1.21.  Title
          Insurer.  ...............................................3
    1.22.  Title
          Policy.  ................................................3
    1.23.  Title
          Report.  ................................................3

2.  Purchase and
    Sale.  ..................................................3

3.  Purchase Price; Payment
    Thereof.  ....................................3

4.  Closing Date;
    Closing.  ..............................................4
    4.1.  Closing
          Date.  .................................................4
    4.2.
          Closing.  ......................................................4

5.  Adjustments and Prorations; Closing
    Expenses.  .......................5
    5.1.  Adjustments and
          Prorations.  ...................................5
    5.2.  Closing
          Expenses.  .............................................6

6.
    Covenants.  ..........................................................6
    6.1.  Covenants of
          Seller.  ..........................................6
    6.2.  Covenants of
          Buyer.  ...........................................7
    6.3.  Earn
          Out.  .....................................................8

7.  Representations and Warranties of
    Seller.  ...........................9

8.  Environmental
    Conditions..............................................11

9.  Representations and Warranties of
    Buyer.  ............................12

10.  Damage or
    Destruction.  .............................................12

11.  Eminent
    Domain.  ....................................................12

12.  Conditions to
    Closing.  .............................................13
    12.1.  Buyer's
          Conditions.  ..........................................13
    12.2.  Seller's
          Conditions.  .........................................13

13.
    Brokerage.  .........................................................13

14.
    Notices.  ...........................................................13

15.
    Counterparts.  ......................................................14

16.  Governing
    Law.  .....................................................15

17.  Entire
    Agreement.  ..................................................15

18.  Attorneys'
    Fees.  ...................................................15

19.  Titles and
    Headings.  ...............................................15

20.  Non-Waiver of
    Rights.  ..............................................15

21.
    Exhibits.  ..........................................................15

22.  Pronouns; Joint and Several

    Liability.  .............................15

23.  Further
    Assurances.  ................................................15

24.  No
    Assignment.  .....................................................16

25.  Time of
    Essence.  ...................................................16

26.  Radon
    Gas.  .........................................................16


      EXHIBITS

Exhibit A    Assignment of Leases
Exhibit B    Assignment of Service Contracts
Exhibit C    Bill of Sale
Exhibit D    Land
Exhibit E    Permitted Exceptions
Exhibit F    Personal Property
Exhibit G    Schedule of Leases
Exhibit H    Service Contracts
Exhibit I    Tenant Estoppel
Exhibit J    Project Documents
Exhibit K    Leasing Parameters
Exhibit L    Notices of Violation




<PAGE>



                                    AGREEMENT
                                       OF
                                PURCHASE AND SALE
                 WELLINGTON TOWN SQUARE, WELLINGTON, FLORIDA


      AGREEMENT OF PURCHASE AND SALE ("Agreement") made as of the 10th  day of
December, l996, by and between C. M. WELLINGTON TOWN SQUARE LIMITED
PARTNERSHIP, an Illinois limited partnership the general partner of which is
C. M. General, Inc., a Delaware corporation  ("Seller") and RRC ACQUISITIONS,
INC., a Florida corporation ("Buyer").

                              W I T N E S S E T H :


      |1.  Definitions.

      For  purposes of this  Agreement,  the  following  terms have the meanings
indicated in this Section 1.

            1.1.  Assignment of Leases.

            An assignment of the Leases,  executed and acknowledged by Seller in
      favor of Buyer, in the form of Exhibit A.

            1.2.  Assignment of Service Contracts.

            An assignment of the Service Contracts, executed and acknowledged by
      Seller in favor of Buyer, in the form of Exhibit B.

            1.3.  Bill of Sale.

            A good and  sufficient  bill of sale with  respect  to the  Personal
      Property, executed by Seller in favor of Buyer, in the form of Exhibit C.

            1.4.  Closing.

            The  accomplishment (or waiver by the party in whose favor each such
      activity  runs) of each  and  every  one of the  activities  described  in
      Section 4.2 below.

            1.5.  Closing Date.

            The date on which the Closing occurs.

            1.6.  Contract Period.

            The period commencing upon the execution by both Buyer and Seller of
      this  Agreement  and ending  upon the first to occur of the Closing or the
      termination of this Agreement.

            1.7.  Deed.

            A special  warranty  deed,  executed and  acknowledged  by Seller in
      favor of Buyer.

            1.8.  Hazardous Material.

            Any substance:

            (i) the  presence of which  requires  investigation  or  remediation
            under any federal,  state or local statute,  regulation,  ordinance,
            order, action, policy or common law; or

            (ii)  which is or becomes defined as a "hazardous waste,"
            "hazardous substance," pollutant or contaminant under any
            federal, state or local statute, regulation, rule or ordinance or
            amendments thereto including, without limitation, the
            Comprehensive Environmental Response, Compensation and Liability
            Act (42 U.S.C. section 9601 et seq.) and/or the Resource
            Conservation and Recovery act (42 U.S.C. section 6901 et seq.); or

            (iii) which is toxic, explosive, corrosive,  flammable,  infectious,
            radioactive,  carcinogenic, mutagenic, or otherwise hazardous and is
            or  becomes  regulated  by  any  governmental   authority,   agency,
            department,  commission,  board,  agency or  instrumentality  of the
            United  States,  the State of Florida or any  political  subdivision
            thereof.

            1.9.  Improvements.



            All buildings, structures, parking lots, walks, and walkways and all
      fixtures  and  equipment   (including  without  limitation  all  plumbing,
      electrical,  heating,  air conditioning and ventilating  lines and systems
      and boilers) and each and every other type of physical improvement located
      at, on or affixed to the Land to the full extent such items  constitute or
      are or can or may be  construed  as realty  under the laws of the state of
      Florida.

            |1.10.  Land.

            All that certain land particularly  described in Exhibit D, together
      with all  appurtenances  thereto  (including  an easement  for ingress and
      egress over the private road known as "Club Road" along the westerly  line
      of the Land),  including  without  limitation any land lying in the bed of
      any  street,  road or avenue,  open or  proposed,  in front of,  within or
      adjoining or adjacent to the land described in Exhibit D.

            1.11.  Leases.

            The leases  described in the Schedule of Leases,  and all amendments
      and modifications thereof.

            1.12.  Permitted Exceptions.

            Those certain matters constituting exceptions to and/or encumbrances
      against the Land and Improvements, which matters are enumerated in Exhibit
      E , and such other  matters as may be  approved  by Buyer  pursuant to the
      terms of this Agreement.

            1.13.  Personal Property.

            All tools, equipment,  supplies,  inventory,  fixtures and equipment
      not deemed or constituting  realty,  furniture,  furnishings and all other
      items  of  personal  property  owned  by  Seller  and  used  at,  on or in
      connection  with the  Project,  including  without  limitation  all  items
      enumerated in Exhibit F.

            1.14.  Project.

            The Land, the Improvements and the Personal Property,
      collectively.

            1.15.  Purchase Price.

            The  aggregate  consideration,  specified in Section 3 below,  to be
      paid by Buyer for the Project.

            1.16.  Schedule of Leases.

            Exhibit G hereto, which shall be updated by Seller immediately prior
      to the Closing.

            1.17.  Service Contracts.

            Those  agreements and  arrangements  entered into by or on behalf of
      Seller  pursuant  to which  goods,  services,  supplies or any other items
      whatever are  furnished  or to be  furnished to the Project,  set forth on
      Exhibit H hereto.

            1.18.  Survey.

            A plot of the results of an instrument  survey of the Land made by a
      surveyor or civil engineer duly licensed in the  jurisdiction in which the
      Project is located,  dated not earlier than the date of this Agreement and
      certified to Buyer and to the Title  Insurer in a manner which will permit
      the  issuance  of the Title  Policy  and in form and  substance  otherwise
      satisfactory to Buyer and the Title Insurer.

            1.19.  Tenant.

            The  holder  of any  right to  occupy  or use all or any part of the
      Project pursuant to a Lease.

            1.20.  Tenant Estoppel.

            A  certification  substantially  in the form of  Exhibit I  attached
      hereto, executed by a Tenant.

            1.21.  Title Insurer.

            Chicago Title Insurance Company, whose address is Suite 1000,
      SunTrust Building, 200 W. Forsythe Street, Jacksonville, FL  32202

            1.22.  Title Policy.

            A most current form ALTA owner's policy of title insurance, or local
      equivalent, dated the Closing Date and with liability in the amount of the
      Purchase  Price,   insuring  Buyer  as  owner  of  good,   marketable  and
      indefeasible fee title to the Land and  Improvements,  subject only to the
      Permitted Exceptions.

            1.23.  Title Report.

            A  certificate  of title or title report issued by the Title Insurer
      to Buyer,  which must disclose  Seller as owner of fee simple  interest in
      the Land and Improvements  and shall disclose,  and shall have attached to
      it copies of all  documents  underlying,  all  exceptions to title and all
      encumbrances  on and  other  matters  of  record  affecting  the  Land and
      Improvements.


      |2.  Purchase and Sale.

      In  consideration  of the Purchase  Price and subject to and in accordance
with all terms and conditions and based upon all  representations and warranties
set forth in this  Agreement,  Buyer agrees to Purchase from Seller,  and Seller
agrees to sell Buyer, the Project.


      |3.  Purchase Price; Payment Thereof.

      The  Purchase  Price is  Eight  Million  Seven  Hundred  Thousand  Dollars
($8,700,000.00),  subject to prorations and  adjustments as described in Section
5.1 below, and is payable by Buyer to Seller as follows:

            (a) The sum of Two Hundred Fifty Thousand Dollars ($250,000.00) (the
      "Deposit")  is payable by Buyer to Seller  within  two (2)  business  days
      following the execution by all parties of this Agreement, by wire or other
      mutually  agreeable  transfer of immediately  available funds. The Deposit
      shall be held in escrow by the  Title  Insurer  or  another  escrow  agent
      mutually acceptable to the parties hereto, pursuant to escrow instructions
      reasonably  acceptable to Buyer, Seller and the escrow agent. The Deposit,
      together  with all accrued  interest  thereon  (which shall be for Buyer's
      account)  shall be paid (i) to Seller,  at the Closing as a portion of the
      Purchase Price;  (ii) to Seller, if the Closing does not occur as a result
      of Buyer's  default  hereunder,  (iii) to Buyer,  if the Closing  does not
      occur as a result of  Seller's  default  hereunder  or (iv)  otherwise  as
      expressly provided in this Agreement.

            (c) The balance of the Purchase  Price is payable by Buyer to Seller
      at the Closing by wire or other mutually agreeable transfer of immediately
      available funds.


      4.  Closing Date; Closing.



            4.1.  Closing Date.

            The Closing Date shall be December 10, 1996 or such earlier or later
      date as may be agreed upon in writing by Buyer and Seller, but in no event
      later than December 31, 1996.

            |4.2.  Closing.

            The Closing  shall take place at 10:00 a.m. on the Closing  Date, at
      the offices of the Title Insurer.  At the Closing,  the following  actions
      shall be taken,  all of which will be deemed taken  simultaneously  and no
      one of which will be deemed completed until all have been completed:

            (a) The  Deed  and  such  easements  as  Seller  shall  be  required
      hereunder to obtain shall be delivered to Buyer.

            (b) The  balance of the  Purchase  Price  shall be paid to Seller in
      accordance with Section 3.

            (c)   The Assignment of Leases shall be delivered to Buyer.

            (d)   The Bill of Sale shall be delivered to Buyer.

            (e)   The Title Policy shall be delivered to Buyer.

            (f)   The Assignment of Service Contracts shall be delivered to
      Buyer.

            (h) The original lessor/landlord  counterparts (or, if originals are
      not in  Seller's  possession,  copies  thereof)  of all  Leases  shall  be
      delivered to Buyer.

            (i) Tenant  Estoppels,  each dated not earlier than thirty (30) days
      prior to the Closing Date,  from the Publix,  Eckerd Drugs,  Great Western
      Bank and at least 75% of the  remaining  occupied  square  footage  of the
      Project shall be delivered to Buyer.

            (j)  Seller  shall  deliver  to Buyer and the Title  Insurer:  (i) a
      certified copy of Seller's  certificate of limited  partnership  issued by
      the State of Illinois; (ii) a long form good standing certificate of C. M.
      General,  Inc.  issued by the State of Delaware;  (iii) a  certificate  of
      registration of Seller as a foreign limited  partnership in Florida issued
      by the  State  of  Florida;  and (iv) a  certificate  to the  effect  that
      Seller's general partner is qualified to do business in Florida, issued by
      the State of Florida,  each dated not earlier  than thirty (30) days prior
      to the Closing Date.

            (k) An  affidavit  of  Seller  to the  effect  that  Seller is not a
      "foreign person" for purposes of FIRPTA shall be delivered to Buyer.

            (l) Any and all  documents,  affidavits  and  agreements  reasonably
      required by the Title Insurer to issue the Title Policy shall be delivered
      by Seller to the Title Insurer.

            (m) An audit representation letter, signed by Seller or the property
      manager,  substantially  in the form  specified  by KMPG Peat  Marwick and
      previously furnished to Seller, shall be delivered to Buyer.


      |5.  Adjustments and Prorations; Closing Expenses.



            5.1.  Adjustments and Prorations.

            The following  items are to be apportioned  between Buyer and Seller
      as of 11:59 p.m.  of the day next  preceding  the  Closing  Date (it being
      understood  and agreed that Buyer and Seller shall endeavor to compute all
      closing  adjustments  at least five (5) business days prior to the Closing
      Date,  and Seller,  by such time,  shall supply  satisfactory  documentary
      supporting evidence for all such adjustments):

            (a) Rents and charges  actually  received from Tenants for the month
      in which the Closing occurs,  which rents and charges include, but are not
      limited to,  basic rents,  percentage  rents and  escalation  payments for
      taxes,  utilities and operating expenses.  Percentage rents and escalation
      payments  allocable to periods prior to the Closing and not fully adjusted
      at Closing  shall be  prorated  promptly  after such rents and charges are
      paid by  Tenants.  If at the time of  Closing  there are past due rents or
      charges owed by Tenants and Seller is entitled to all or part of the same,
      then the rents  received from and after the closing  shall,  to the extent
      designated by tenants as attributable to rents or additional rent accruing
      prior to the  Closing,  be applied to  Seller's  account and to the extent
      undesignated,  be  applied  to the  first  monies  due  under  such  Lease
      following Closing.  Buyer will make reasonable  efforts,  without suit, to
      collect  any past due rents and  charges for the account of Seller and any
      such rents and charges  received by Buyer for the account of Seller  shall
      upon receipt,  be promptly remitted by Buyer to Seller. Any past due rents
      and charges  not so  collected  by Buyer  within the period of ninety (90)
      days  following  the Closing  shall  remain the property of Seller who may
      pursue such remedies (not including  termination of the particular  Lease)
      for collection thereof,  for its own account, as it may deem advisable and
      available  to it. All prepaid  rents and charges for the period  following
      the Closing and all  security or other  deposits of Tenants held by Seller
      shall be paid over by Seller to Buyer.  Seller  agrees to and does  hereby
      indemnify  and hold  Buyer  harmless  against  any  liability  or  expense
      incurred by Buyer in respect of any Tenant security  deposit (and interest
      thereon,  if  required  by law)  collected  by  Seller  and not  paid  (or
      credited)  to Buyer at the  Closing.  This  provision  shall  survive  the
      Closing.

            (b) Real and personal  property  taxes and  assessments  for the tax
      year in which the Closing  occurs,  based upon the lowest  amount  payable
      under  applicable  bills  taking  into  account  all  discounts  for early
      payment.  In the event a final tax bill is not  available for such year at
      the Closing, the required proration shall be made on the basis of the most
      recent  available  final  tax bill and a further  proration  shall be made
      between the parties  when the final tax bill for the tax year in which the
      Closing  occurs  becomes  available.  This  provision  shall  survive  the
      Closing.

            (c) Fees and  charges  under such of the  Service  Contracts  as are
      being assigned to and assumed by Buyer at the Closing, on the basis of the
      periods to which such Service Contracts relate.

            (d) Utility charges,  including water,  sewer,  electricity and gas,
      vault taxes and maintenance  charges,  if any, for sewers.  In conjunction
      with such  prorations,  Seller will notify,  or cause to be notified,  all
      utilities servicing the Project of the change in ownership and direct that
      all future billings be made to Buyer at the address of the Project with no
      interruption  of  service.  Seller  shall use its best  efforts to procure
      final meter  readings for all utilities as of the Closing Date and to have
      bills rendered directly to Seller.

            5.2.  Closing Expenses.

            The following closing expenses shall be paid by Seller: (a) fees and
      expenses in  connection  with the  preparation  of the  Survey,  except as
      provided below;  (b) any fees,  costs and premiums  incurred in connection
      with the prepayment of the existing mortgage  encumbering the Project; (c)
      one half of any escrow fees and recording costs for recording the Deed and
      Assignment of Leases, and (d) any state,  county and local transfer and/or
      documentary  stamp taxes. The following  closing expenses shall be paid by
      Buyer:  (i) the  premium  for,  and search fees and  expenses  incurred in
      connection  with,  the Title  Policy;  (ii) fees and expenses  incurred in
      satisfying any special or extraordinary requirements of Buyer with respect
      to the Survey;  and (iii) one half of any escrow fees recording  costs for
      recording the Deed and Assignment of Leases. Each party shall pay the fees
      and expenses of its own legal counsel and other advisors and  consultants,
      and Buyer shall pay any and all costs and expenses in connection  with any
      financing by Buyer.  All other  expenses  incurred in connection  with the
      Closing shall be allocated  between the parties in  accordance  with local
      custom.


      |6.  Covenants.

            6.1.  Covenants of Seller.

            Seller hereby covenants and agrees with Buyer as follows:

            (a) At all times during the Contract  Period,  Seller shall  operate
      and manage the Project in the normal and  ordinary  course of business and
      in accordance with Seller's past practices,  but Seller shall not, without
      the advance written  consent of Buyer,  (i) effect any change in any Lease
      or Service Contract, (ii) renew or extend the term of any Lease or Service
      Contract,  (iii) enter into any new Lease or Service Contract or cancel or
      terminate  any Lease or Service  Contract  (except as  expressly  provided
      herein). Buyer shall not unreasonably withhold or delay its consent to any
      new Lease proposed by Seller,  and Buyer shall,  at the Closing assume all
      liability for any brokerage  commissions  incurred in connection  with any
      new Lease executed in accordance  with the  foregoing,  and for any tenant
      improvement  allowances and other concessions  granted to the Tenant under
      any such new  Lease.  If  Seller  has paid any  brokerage  commissions  or
      disbursed  any tenant  improvement  allowances or similar  concessions  to
      Tenants in respect of such new Leases,  Buyer shall reimburse such amounts
      to Seller at the Closing.

            (b) At all times during the Contract  Period,  Seller shall duly and
      punctually  pay and  perform all of its  obligations  under the Leases and
      Service Contracts.

            (c) At all times during the Contract  Period,  Seller shall maintain
      in full  force and effect and pay all  premiums  on any fire and  extended
      coverage or liability insurance policies currently covering the Project.

            (d) If there  are any  title  exceptions  other  than the  Permitted
      Exceptions,  then (i) to the extent  such  exceptions  can be cured by the
      payment of money not to exceed $50,000 in the  aggregate,  Seller shall do
      so or, if Seller so elects,  such exceptions shall be satisfied out of the
      proceeds  from this sale,  or (ii) with  respect to all other  exceptions,
      Seller  shall have the right to adjourn  the Closing for up to ninety (90)
      days in which to attempt  to cure such  defects.  If Seller  elects not to
      cure such  defects,  or fails to do so within such  period of time,  Buyer
      shall have the right to proceed with the Closing and take title subject to
      such  exceptions,  without  reduction of the Purchase  Price, or terminate
      this  Agreement by written  notice to Seller,  in which event the Deposit,
      together with all accrued  interest  thereon,  shall be returned to Buyer,
      any documents or other information theretofore delivered to Buyer shall be
      returned  to Seller and  thereafter  neither  party shall have any further
      rights or obligation  hereunder.  It is expressly  understood  that Seller
      shall  cause the  existing  mortgage  in favor of New York Life  Insurance
      Company to be paid off from the proceeds of this sale.

            (e) At no time during the Contract  Period shall Seller  encumber or
      permit  to be  encumbered  with  any lien or other  claim  or  right,  the
      Project,  the Leases or any other  rights,  appurtenances  or  property or
      properties, real or personal, to be conveyed pursuant to this Agreement.

            (f)  Seller  shall  take  all  actions  required  of it in  order to
      properly effectuate the purpose and intent of this Agreement; and, without
      limitation, Seller shall take all actions and make all deliveries required
      of it at the Closing.

            6.2.  Covenants of Buyer.

            Buyer hereby covenants and agrees with Seller as follows:

             (a) Buyer shall notify  Seller in writing of any Service  Contracts
      Buyer does not desire to assume and that is, by its terms, terminable upon
      written notice from Seller. However, Seller shall assume no responsibility
      for the  termination  of any Service  Contracts  by the Closing  Date (and
      Buyer shall assume any Service Contracts not so terminated) unless Buyer's
      notice to Seller is given in sufficient  time to permit Seller to give any
      notice of termination required under the terms of such Service Contracts.

            6.3.  Earn Out.



             (a) Suites 6, 7, 29 and 34 of the  Project  are  currently  vacant.
      Such  suites   together   with  Suite  26  shall  be  referred  to  herein
      collectively  as the "Vacant  Space."  There  shall be  withheld  from the
      Purchase Price and deposited in escrow with the Title Insurer, pursuant to
      an escrow  agreement  reasonably  acceptable  to the parties and the Title
      Insurer,  the sum of One Hundred Fifty Thousand Dollars ($150,000),  to be
      held in connection  with the Vacant Space and disbursed in accordance with
      the terms of this  section  6.3.  The term of the escrow  agreement  shall
      commence on the Closing Date and expire on the first anniversary  thereof,
      subject to extension in accordance with subsection 6.3 (e) below.

             (b) Following the Closing, Buyer shall use reasonable, diligent and
      good faith  efforts  to lease the  Vacant  Space,  giving  preference,  if
      possible,  to the Vacant Space over other space in the Project taking into
      account  the size and  location of the space  required by the tenant,  and
      Seller  shall have the right to seek  prospective  tenants  for the Vacant
      Space, in each case upon terms and conditions  consistent with the leasing
      parameters  set forth in Exhibit K hereto (the "Leasing  Parameters").  If
      Seller presents a tenant or tenants for one or more suites of Vacant Space
      who is willing  to enter  into a lease  which  conforms  with the  Leasing
      Parameters,  who is not related to or affiliated  with Buyer or Seller and
      whose  creditworthiness,  reputation,  experience  in the  business  to be
      operated at the premises and proposed use of the space are  acceptable  to
      Buyer, in its reasonable judgment, Buyer shall use all reasonable and good
      faith  efforts to execute a lease with such  tenant.  A lease  executed in
      accordance  with the  foregoing  covenants  shall be referred to as a "New
      Lease."

             (c) Upon the  execution of a New Lease by landlord and tenant,  the
      parties shall execute written  instructions  authorizing the Title Insurer
      to  disburse  from escrow (i) to the  leasing  broker or brokers,  leasing
      commissions  due and payable in  connection  with the New Lease,  provided
      that the amount  disbursed  from escrow shall not exceed five percent (5%)
      of the total  fixed  minimum or base rents due during the base term of the
      New Lease,  minus any free rent, rent credits or similar rent concessions,
      (ii) to or as  directed  by Buyer,  the amount of any  tenant  improvement
      allowances  provided  for in the New Lease , not to exceed  three  dollars
      ($3.00)  per square foot (and Buyer shall be  responsible  for  disbursing
      same to the  tenant  pursuant  to the terms of the New Lease) and (iii) to
      Seller the lesser of the "Earn Out Amount" as  hereinafter  defined or the
      balance of the funds held in escrow.

             (d) For  purposes of  calculating  the "Earn Out  Amount," the term
      "Effective Rent" shall mean the average annual fixed rent over the term of
      the New Lease,  taking  into  account  the  amount of any free rent,  rent
      credits or similar  rent  concessions  but  without  reduction  for tenant
      improvement  allowances and/or leasing commissions.  The "Earn Out Amount"
      shall mean the Effective Rent divided by 0.11 for a particular New Lease.

             (e) Upon  Seller's  request,  no more often than once every two (2)
      months,  Buyer shall provide Seller with written  reports as to the status
      of leasing  the Vacant  Space,  which  shall  provide a list of  potential
      tenants for each suite,  the terms and conditions of each potential lease,
      the status of any  negotiations  and the anticipated date of signing a New
      Lease.  If any funds remain  undisbursed  on the first  anniversary of the
      Closing Date,  and if Seller is not entitled to receive all or any portion
      of such funds as a result of the  execution  of New  Leases in  accordance
      with the  foregoing,  then the balance held in the escrow account shall be
      disbursed to Buyer.  Notwithstanding the foregoing, if active negotiations
      are pending  with any  prospective  tenants as of such first  anniversary,
      then  Seller  shall  have the  right  to  extend  the  term of the  escrow
      agreement,  and  adjourn the date for  disbursement  of the balance of the
      escrowed funds, for one additional  ninety (90) day period. If a New Lease
      is executed  during such time,  the  provisions of Section 6.3 (c) and (d)
      shall apply.

             (f) Notwithstanding  the foregoing,  if prior to the Closing Seller
      leases all or a portion of the Vacant Space in accordance with the Leasing
      Parameters,  the amount of the Purchase  Price withheld in escrow (if any)
      shall  be  $150,000  minus  the  Earn Out  Amount  applicable  to such New
      Lease(s).


      7.  Representations and Warranties of Seller.

      Seller  hereby  represents  and  warrants  to Buyer as  follows,  it being
expressly  understood  and agreed that all such  representations  and warranties
shall be true and  correct at the date of this  Agreement  and as of the Closing
and shall,  except as otherwise  expressly provided herein,  survive for six (6)
months following the Closing.  The foregoing period of survival shall not affect
or limit any warranties contained in any of the closing documents:

            (a) Seller has good and  marketable  title to the  Project  free and
      clear of all liens, covenants,  conditions,  restrictions,  rights of way,
      easements and encumbrances of any kind or character whatsoever, except the
      Permitted Exceptions and such exceptions as will be removed at or prior to
      Closing. This provision shall not survive the Closing.

            (b) There is no pending litigation or, to Seller's actual knowledge,
      threatened litigation which does or will affect the Project.

            (c) Seller has not received  notice that the Project is in violation
      of any laws,  ordinances,  rules and  regulations of any government or any
      agency,  body or subdivision  thereof  bearing on the  construction of the
      Improvements  and  on the  operation,  ownership  or  use  of the  Project
      ("Applicable   Laws"),  and  (subject  to  the  environmental   conditions
      described in Section 8 below) to Seller's actual  knowledge the Project is
      not in  violation of  Applicable  Laws.  Seller has received  notices from
      Wellington  Management,  Inc.,  copies  of which  are  attached  hereto as
      Exhibit L, which have not been cured.

            (d)  Except as set forth in the  Schedule  of  Leases,  there are no
      leases  affecting  all or any portion of the Project,  and no person other
      than the Tenants  thereunder has any right of possession to the Project or
      any part  thereof;  no rent has been paid in  advance  by any  Tenant;  no
      Tenant  has any claim  against  Seller for any  security  deposit or other
      deposits; no Tenant has any defense of off-sets to rent accruing after the
      Closing Date; Seller has received no notice and has no actual knowledge of
      any  defaults  by Seller as landlord  or any Tenant  thereunder,  nor does
      Seller have actual knowledge of any actions or omissions  which,  with the
      giving of notice or  passage of time,  or both,  would give rise to such a
      default.  This representation  shall survive, as to each Tenant, until the
      earlier of (i) six (6) months  following the Closing or (ii) delivery of a
      Tenant  Estoppel from such Tenant,  but only to the extent that the Tenant
      Estoppel is consistent in scope and substance with the  representations of
      Seller herein.

            (e) Seller has not (i) made a general  assignment for the benefit of
      creditors; (ii) filed any voluntary petition in bankruptcy or suffered the
      filing of an involuntary  petition by Seller's  creditors;  (iii) suffered
      the appointment of a receiver to take  possession of all or  substantially
      all of the Seller's assets; (iv) suffered the attachment or other judicial
      seizure of all, or substantially  all, of Seller's assets; (v) admitted in
      writing its  inability  to pay its debts as they come due; or (vi) made an
      offer of settlement, extension or composition to its creditors generally.

            (f) Seller is duly organized and existing and in good standing under
      the laws of the state of its incorporation;  Seller has the full right and
      authority to enter into this Agreement, consummate the sale, transfers and
      assignments  contemplated  herein;  and each of the persons  signing  this
      Agreement on behalf of Seller is authorized to do so.

            (g)  There  are no  contracts  or  other  agreements  for  services,
      supplies or materials,  affecting the use,  operation or management of the
      Project other than the Service Contracts.

      Except as expressly  set forth  herein,  Seller has not, does not and will
not make any warranties or representations,  and Seller  specifically  disclaims
any  other  implied  warranties  or  warranties  arising  by  operation  of law,
including,  without  limitation,  any  warranty of  condition,  merchantability,
habitability or fitness for a particular purpose or use. Furthermore, Seller has
not,  does not and will not,  except as  expressly  set forth  herein,  make any
representation  or warranty  with regard to  compliance  with any  environmental
laws. Buyer  acknowledges  that it is a sophisticated  purchaser who is familiar
with this type of property,  that prior to executing this Agreement it has made,
or will have made,  such  inspections  and  investigations  of the Project as it
deemed necessary including, without limitation,  review of all documents on file
with federal,  state and/or local government  agencies  relating to the Project,
the physical and  environmental  features of the Project,  review of the Project
Documents  set forth on Exhibit J and  analysis of the  economic  and  financial
aspects of this transaction and that, subject only to the express warranties set
forth above or that are contained in the closing  documents,  Buyer is acquiring
the Project "AS IS AND WHERE IS" in its current  state and  physical  condition,
subject to normal wear and tear between the effective date of this Agreement and
the Closing.

      The term "Seller's actual  knowledge" as used herein shall mean the actual
knowledge of Seller,  based solely upon inquiry of Christopher J. Carbone and/or
Joseph B. Dobronyi,  who are officers of UBS Asset Management (New York),  Inc.,
and of Seller's property manager, Southeast Centers Management Service Corp.


      8.  Environmental Conditions.

             (a) Without limiting the generality of the foregoing  provisions of
Section  7, Buyer is aware that the  Project's  soil and ground  water have been
impacted by dry cleaning solvents and other related Hazardous  Material and that
such  contamination  (the  "Contamination")  has been  reported  to the  Florida
Department of  Environmental  Protection.  Seller has delivered to Buyer certain
environmental  reports  prepared  by  Seller's  engineers  with  respect  to the
Contamination,  and Buyer has  reviewed  such  reports  and has  caused  its own
engineers to perform such  investigations  of the Project as Buyer determined to
be  appropriate.  Buyer,  on behalf of itself and its  successors,  assigns  and
others claiming by, through and under it, hereby  releases,  acquits and forever
discharges  Seller,  its predecessors,  successors,  assigns,  heirs,  officers,
partners, attorneys, accountants, advisors, insurers and representatives, of and
from any and all manner of federal  state or local  action or actions,  cause or
causes  of  action  in  law  or  in  equity,  suits,  debts,  liens,  contracts,
agreements,  promises, liabilities,  claims, demands, damages, losses, interest,
costs  or  expenses,  of any  nature  whatsoever,  known  or  unknown,  fixed or
contingent, which Buyer may now or at any time have against Seller in connection
with or relating to any obligation to remediate the Contamination.  Seller shall
at no time have any  obligation  to  remediate,  abate or otherwise  address the
Contamination,  or to provide to State and/or Federal environmental  agencies or
authorities any further site  assessments or other  information  with respect to
the  Contamination,  whether  during  the  Contract  Period  or on or after  the
Closing.  Buyer hereby indemnifies and agrees to hold harmless and defend Seller
from and against any and all loss, cost, liability,  expense,  claims,  response
costs,  damages,  interest or fees (including,  without  limitation,  reasonable
attorneys fees) which Seller may incur as a result of any claim,  demand,  suit,
proceeding or action  brought by any person,  entity or  governmental  agency or
authority in connection  with or arising out of any  obligation to remediate the
Contamination.  Buyer  shall  perform  all  investigations,   characterizations,
removal or clean-up of the contamination which is demanded, requested or ordered
by any federal,  state or local  governmental  agency with oversight  authority.
Buyer is not  releasing or  indemnifying  Seller for any claims of third parties
for personal  injury or property  damage arising out of any discharge or release
of Hazardous Material that occurred prior to the Closing.

             (b) Seller reserves to itself the exclusive right to file,  pursue,
prosecute,  settle, release or otherwise deal with any and all claims, causes of
action,   rights  or  remedies  that  may  exist  against  Dry  Clean  USA,  its
predecessors,  successors,  assigns,  parent  companies,  affiliates,  officers,
employees,  consultants  or  advisors  or any other  tenant or  occupant  of the
Project who may be responsible for the environmental conditions described above,
whether  under the  covenants  set forth in the Dry  Clean USA  Lease,  or under
applicable Federal,  State or local law (the "Responsible Party").  Buyer shall,
at Seller's  request,  cooperate  with Seller in pursuing  any such legal action
against the  Responsible  Party,  all at Seller's  sole cost and expense,  which
cooperation  shall  include,  without  limitation,  giving  Seller access to the
Project in order to perform any further environmental  investigations or studies
thereon,  giving  Seller  access to the books and  records  with  respect to the
Project, and making available for interview, declaration, affidavit, deposition,
trial,  arbitration  or mediation,  any witnesses  Seller may call in connection
with any such legal action. Access to the Project and the books and records with
respect to the  Project  shall be at  reasonable  times and upon  prior  written
notice,  and  Seller  shall be  obligated  to restore  any damage  caused by the
activities of Seller or its agents or  consultants,  and shall  indemnify  Buyer
against any loss, cost, damage,  liability or expense arising from Seller's such
activities.  At Seller's request,  Buyer shall execute a specific  assignment of
Seller's rights against such Responsible  Party in respect of the  environmental
contamination at the Project,  including,  without limitation,  any rights under
any operational or maintenance covenants or indemnifications  provided under the
Dry Clean USA  Lease.  Seller  shall  have no right,  nor shall  Buyer  have any
obligation,  to  terminate,  or seek  termination  of,  the Dry Clean USA Lease.
Seller shall have no liability  whatsoever  to Buyer in the event that Dry Clean
USA  shall,  during  the  Contract  Period  or on or after  the  Closing,  cease
operations  at the Project,  abandon its  premises or  terminate  its Lease as a
result of any such legal action taken by Seller or for any other reason.


      9.  Representations and Warranties of Buyer.

      Buyer hereby represents and warrants to Seller (such  representations  and
warranties  to be true and correct at the date of this  Agreement  and as of the
Closing) that (i) Buyer is duly organized and in good standing under the laws of
the  jurisdiction  of its  formation,  (ii) Buyer has the full right,  power and
authority to enter into and fully perform its obligations  under this Agreement,
and (iii) each person signing this Agreement on behalf of Buyer is authorized to
do so.


      |10.  Damage or Destruction.

      The risk of loss of or damage to the  Project by reason of any  insured or
uninsured  casualty  shall be borne by Seller.  In the event of any damage to or
destruction  of the  Project or any  portion  thereof  (notice of which shall be
given to Buyer by Seller  promptly  following its  occurrence),  which damage or
destruction  can  reasonably  be repaired  or  replaced  by Seller  prior to the
Closing  Date,  Seller  shall do so. If the cost of such  repair or  replacement
exceeds  $500,000,  Buyer may, at its option,  by notice to Seller  given within
thirty (30) days after Buyer is  notified  of such  damage or  destruction,  (a)
unilaterally  terminate this Agreement,  or (b) elect to continue this Agreement
and purchase the Project. In the event of (b) above, or if the cost of repair or
replacement is $500,000 or less, Seller shall assign to Buyer at the Closing any
insurance  proceeds  payable  in  respect of such  casualty  and Buyer  shall be
entitled to a credit  against the Purchase Price in the amount of any deductible
that is applicable under Seller's casualty insurance policy to such casualty.


      11.  Eminent Domain.

      In the event of any  threatened,  contemplated,  commenced or  consummated
proceedings in eminent domain (notice of which shall be given to Buyer by Seller
promptly)  respecting all or any material portion of the Project,  Buyer may, at
its option,  by notice to Seller  given thirty (30) days after Buyer is notified
of  such  actual  or  possible  proceedings,  (a)  unilaterally  terminate  this
Agreement,  in which event the Deposit  together with accrued  interest  thereon
shall be returned to Buyer and  neither  party shall have any further  rights or
obligations hereunder,  or (b) elect to continue this Agreement,  in which event
Seller  shall,  at the  Closing,  assign to Buyer its  entire  right,  title and
interest  in and to any  condemnation  award and Buyer shall have the sole right
during the Contract  Period to negotiate and otherwise  deal with the condemning
authority in respect of such matter.


      |12.  Conditions to Closing.



            12.1.  Buyer's Conditions.

            Buyer's obligation to purchase the Project is expressly  conditioned
      upon the following  (unless waived by Buyer),  and absent  satisfaction of
      same at the Closing Date Buyer may  unilaterally  and forthwith  terminate
      this Agreement:

             (a) At the Closing Date, no suit, action or other proceedings shall
      be pending or threatened  which seeks,  nor shall there exist any judgment
      the effect of which is, to restrain  the purchase and sale of the Project;
      and

             (b)   Seller's representations and warranties set forth herein
      shall be true and correct in all material respects at the Closing Date;
      and

             (c) As the Closing Date,  the Leases with Publix,  Eckerd Drugs and
      Great Western  shall be in full force and effect,  and at least 75% of the
      remaining gross leasable area of the Project shall be leased in accordance
      with  the  Schedule  of  Leases  or  otherwise  in  accordance  with  this
      Agreement. Except as expressly provided in this subparagraph,  Buyer shall
      have no right to terminate this Agreement,  nor shall Buyer be entitled to
      any credits  against the Purchase Price, as a result of any changes in the
      Leases and/or the Tenants of the Project as of the Closing Date.

            12.2.  Seller's Conditions.

            Seller's  obligation  to sell the Project is  expressly  conditioned
      upon the following  (unless waived by Seller) and, absent  satisfaction of
      same at the Closing Date, Seller may unilaterally and forthwith  terminate
      this  Agreement:  (a) Buyer's  representations  and  warranties  set forth
      herein shall be true and correct at the Closing Date;  and (b) Buyer shall
      be ready, willing and able to deliver the Purchase Price at the Closing.


      13.  Brokerage.

      Each  party  represents  and  warrants  to the other  that it has  neither
engaged nor employed any broker or finder in  connection  with the  transactions
contemplated  by this Agreement,  other than  Sonnenblick-Goldman  Company,  One
Biscayne Tower, 2 South Biscayne Boulevard, Miami, Florida 33131 Attn: Manuel De
Zarraga,  for whose  compensation  Seller  shall be  responsible  pursuant  to a
separate  agreement,  and each party hereby  indemnifies  and agrees to hold the
other  harmless from and against any loss,  cost,  damage or expense  (including
reasonable   attorneys'   fees)  by   reason  of  the   incorrectness   of  such
representation and warranty. This provision shall survive the Closing.


      |14.  Notices.

      All   notices,   demands,   requests,   consents,   approvals   or   other
communications (for the purposes of this Section  collectively called "Notices")
required or permitted  to be given  hereunder or which are given with respect to
this Agreement shall be in writing and shall be delivered  personally or sent by
either registered or certified mail, return receipt  requested,  postage prepaid
or  Federal  Express or  another  nationally  recognized  air  courier  service,
addressed as follows:

                  TO SELLER:

                  Chamanreal Inc., N.V.
                  c/o UBS Asset Management (New York), Inc.
                  1345 Avenue of the Americas
                  New York, NY 10105
                  Attn: Real Estate Asset Management Department

                  with a copy to:

                  Gibson, Dunn & Crutcher, LLP
                  200 Park Avenue
                  New York, NY 10166
                  Attn: Joanne Franzel, Esq.


                  TO BUYER:

                  RRC Acquisitions, Inc.
                  c/o Regency Realty Corporation
                  121 West Forsyth Street
                  Suite 200
                  Jacksonville, FL 32202
                  Attn:  Richard E. Cook

                  with a copy to:

                  Ulmer, Murchison, Ashby & Taylor
                  200 West Forsyth Street
                  Suite 1600
                  Jacksonville, FL 32201
                  Attn:  William E. Scheu, Esq.


      or such other address as such party shall have  specified most recently by
like  Notice.  Notices  mailed as provided  herein  shall be deemed given on the
third New York business day following the date so mailed.


      15.  Counterparts.

      This  Agreement  may be executed in  counterparts,  each of which shall be
deemed an original, but all of which taken together shall constitute but one and
the same instrument.


      |16.  Governing Law.

      This Agreement shall be governed by,  interpreted under, and construed and
enforced in  accordance  with,  the laws of the State of Florida  applicable  to
agreements made and to be performed wholly within the State of Florida.


      17.  Entire Agreement.

      This Agreement  (including the Exhibits attached here) contains the entire
agreement  between the parties  with  respect to the subject  matter  hereof and
supersedes  all  prior  understandings,  if  any,  with  respect  thereto.  This
Agreement may not be modified, changed or supplemented,  nor may any obligations
hereunder  be  waived,  except by written  instrument  signed by the party to be
charged or by its agent duly  authorized  in writing or as  otherwise  expressly
permitted  herein.  The parties do not intend to confer any benefit hereunder on
any person,  firm or corporation  other than the parties hereto.  This provision
shall survive the Closing.


      18.  Attorneys' Fees.

      Should  either party  institute  any action or  proceeding to enforce this
Agreement  or any  provision  hereof,  or for  damages by reason of any  alleged
breach of this  Agreement or of any provision  hereof,  or for a declaration  of
rights hereunder, the prevailing party in any such action or proceeding shall be
entitled  to  receive  from the other  party all costs and  expenses,  including
reasonable  attorneys' fees, incurred by the prevailing party in connection with
such action or proceeding.


      19.  Titles and Headings.

      Titles and  headings of Articles and  Sections of this  Agreement  are for
convenience  of  reference  only and shall not  affect the  construction  of any
provision of this Agreement.


      20.  Non-Waiver of Rights.

      No failure or delay of either  party in the exercise of any right given to
such party hereunder shall constitute a waiver thereof unless the time specified
herein for exercise of such right has  expired,  nor shall any single or partial
exercise of any right preclude other or further exercise thereof or of any other
right.  The waiver of any breach hereunder shall not be deemed to be a waiver of
any other or any subsequent breach hereof.


      21.  Exhibits.

      Each of the Exhibits referred to herein and attached hereto is an integral
part of this Agreement and is incorporated herein by this reference.


      22.  Pronouns; Joint and Several Liability.

      All pronouns  and any  variation  thereof  shall be deemed to refer to the
masculine,  feminine  or neuter,  singular  of plural,  as the  identity  of the
parties may require. If the Buyer consists of two or more parties, the liability
of such parties shall be joint and several.


      23.  Further Assurances.

      Seller and Buyer  each  agrees to do such  further  acts and things and to
execute and deliver such additional  agreements and instruments as the other may
reasonably  require to  consummate,  evidence  or confirm  the sale or any other
agreement contained herein in the manner contemplated hereby.


      24.  No Assignment.

      Buyer shall have no right to assign this Agreement or its rights hereunder
without the express written consent of Seller. A sale of a controlling  interest
in the shares or  partnership  interests of Buyer shall be deemed an  assignment
for purposes of this Agreement.  Notwithstanding the foregoing, Buyer shall have
the right to assign this  Agreement to, or to designate as the grantee under the
Deed, an entity  controlled by,  controlling or under common control with Buyer,
where  "control"  means the  capacity to control  the  business  operations  and
policies of the entity, whether by share ownership, contract or otherwise.


      |25.  Time of Essence.

      Time is of the essence of each and every term, condition and particular of
this Agreement.


      26.  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.

      IN WITNESS WHEREOF, the Seller and Buyer have duly executed this Agreement
as of the day and year first above written.

SELLER:                              BUYER:

C. M. WELLINGTON TOWN SQUARE         RRC ACQUISITIONS, INC.,
LIMITED PARTNERSHIP,                 a Florida corporation
an Illinois limited partnership

By:  C. M. General, Inc.,            By:_____________________________
       a Delaware corporation, its        Name:
general                                   Title:
       partner

By:_____________________________
     Name:
     Title:

By:_____________________________
     Name:
     Title:




<PAGE>



                                    EXHIBIT K


                               LEASING PARAMETERS

       1.    Fixed minimum or base rent:  No less than $14 per square foot of
         net rentable area

       2.Common Area Maintenance  (which shall include  reasonable and customary
         management fees), Insurance and Real Estate Taxes to be paid prorata by
         tenant.

       3.    Term:  No less than 3 years

       4.    Free Rent: No more than 3 months following substantial completion

       5.    Tenant Improvement Allowance: No more than $3.00 per square foot

       6.    The lease shall be on Buyer's standard form for the Project.

       7.The tenant  shall not have  received  any  inducements  to execute  the
         lease  other  than  free  rent  and/or  tenant  improvement   allowance
         consistent with these Leasing  Parameters,  and other concessions which
         are customarily given by prudent landlords in leasing space in shopping
         centers comparable to and within the vicinity of the Project.

NA962760.012/20+



                       AGREEMENT TO PURCHASE REAL ESTATE



            THIS AGREEMENT made this 27th day of December, 1996, by and between:



SELLER:           PUBLIX SUPER MARKETS, INC.
                  Post Office Box 407
                  Lakeland  FL  33802-0407



BUYER:            RRC ACQUISITIONS, INC.
                  Attention:  Robert L. Miller
                        Suite 200, 121 W. Forsyth Street
                           Jacksonville, Florida 32202


ESCROW AGENT:     James P. Hahn
                  HAHN, McCLURG, WATSON GRIFFITH & BUSH, P.A.
                  Post Office Box 38
                  Lakeland, FL  33802-0038



                              W I T N E S S E T H



            WHEREAS,  Seller  has  title to  certain  real  property  as is more
particularly  described  in Exhibit "A"  attached  hereto and made a part hereof
(hereinafter the "Real Property"); and

            WHEREAS,  Seller  desires to sell and Buyer  desires to buy the Real
Property under terms and conditions contained herein.

            NOW, THEREFORE,  in consideration of the mutual recitals, the mutual
covenants and agreements  set forth herein and good and valuable  consideration,
the receipt and  sufficiency of which is hereby  acknowledged,  Seller agrees to
sell and Buyer agrees to buy the following  described  subject property upon the
following terms and conditions:





                                                                        10/29/96
                                      1


<PAGE>



                                       I
                                  DEFINITIONS



            l.  As used in this Agreement, the following terms shall
have the following meanings:

                  l.0l "Agreement"  means this Agreement to Purchase Real Estate
as it
 may be amended from time to time.

                  l.02 "Buyer's  Intended Use" means the operation upon the Real
Property of the existing shopping center.

                  l.03  "Closing"  means the  execution  and  delivery  of those
documents  and funds  necessary  to  transfer  fee simple  title to the  Subject
Property to the Buyer in accordance with the terms of the Agreement.

                  l.04 "Effective  Date" means the last date on which Seller and
Buyer have both executed this Agreement.

                         1.05 "Subject Property" means:

                        (a)  The Real Property, including but not
limited to, all buildings, tenements,  hereditaments,  easements, rights-of-way,
appurtenances,  passages,  water rights,  drainage rights, and any and all other
rights,  liberties  and  privileges  thereon  or in any  way  now  or  hereafter
appertaining,  and including all right, title, and interest of the Seller in and
to all rights-of-way,  easements,  public and private streets,  roads,  avenues,
alleys,  passageways  and water rights  (including any of the foregoing lying in
any road  beds),  in front of or  abutting  the  Real  Property  or any  portion
thereof; and

                        (b)  All of Seller's right, title and interest
in, to and under any and all site plans,  surveys,  engineering soil reports and
studies, licenses,  permits, approvals, sewer permits, utility permits, drainage
permits,   rights  and  agreements   and  similar  or  equivalent   private  and
governmental  documents of every kind and character  whatsoever  pertaining  to,
applicable to or in any way connected with the Real Property,  all to the extent
transferable; and

                        (c)  Buyer shall notify Seller within thirty
(30) days  following  the  Effective  Date of which  contracts  described  Buyer
desires to have assigned, which shall then be deemed to constitute the "Assigned
Contracts." Buyer  acknowledges that Seller's  assignment of any of the Assigned
Contracts  may require the consent of the third party  thereto over which Seller
has no control.  Seller  shall use  reasonable  efforts to obtain such  consent;
provided, however, Seller's inability to obtain such

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                                      2


<PAGE>



consent shall not  constitute a default  hereunder,  and shall not  constitute a
condition  to closing.  However,  in any event,  the Seller  shall assign to the
Buyer all warranties  under the  construction  contracts and equipment  purchase
agreements. Seller shall furnish to Buyer within fifteen days from the Effective
Date a  list  of  contracts,  leases,  construction,  warranties  and  equipment
purchase warranties, if they have not already been heretofore furnished prior to
the Effective Date.

                  l.06 "Title  Insurance"  means  preliminary  reports of title,
title  insurance  commitments  and policies  issued by Chicago  Title  Insurance
Company, (the "Title Insurance Company").



                                      II
                           PURCHASE PRICE AND TERMS



                  2.0l  Purchase Price.  Buyer agrees to pay a total
purchase price consisting of Six Million Two Hundred Thousand and
NO/100 Dollars ($6,200,000.00) cash at Closing.

                  2.02 Earnest  Money  Deposit.  Within three (3) days after the
Effective  Date,  Buyer shall  deposit with the Escrow Agent the amount of Fifty
Thousand and NO/100 Dollars  ($50,000.00),  which Earnest Money Deposit shall be
held  in  an  interest   bearing  account  in  accordance  with  the  provisions
hereinafter  stated.  "Earnest Money  Deposit" as used in this  Agreement  shall
include all interest earned on the Earnest Money Deposit.  At the Closing as set
forth in this Agreement Buyer shall receive a credit against the cash payable at
Closing for the total amount of the Earnest Money Deposit  including any and all
interest that has accrued thereon.



                                      III
                                TITLE INSURANCE



                  3.0l  Title Insurance.

                        (a)  Within fifteen (15) days after the
Effective  Date,  Buyer shall furnish  Buyer,  at Buyer's sole cost and expense,
with a title  insurance  commitment  (the  "Commitment")  committing  the  Title
Insurance  Company to insure Buyer's title to the Real  Property,  together with
copies of all  documents  listed in the  Commitment  as  exceptions  or  matters
required to be corrected  prior to Closing.  The Commitment and resulting  title
insurance policy (the "Policy") shall be in the amount of the purchase price.

                                                                        10/29/96
                                      3


<PAGE>



All costs of the Commitment  and Policy shall be paid by Seller.  The Commitment
and resulting Policy shall be an ALTA standard form as currently  authorized and
approved by the Insurance  Commissioner of the State of Florida.  There shall be
no exceptions  to the  Commitment or Policy except ad valorem taxes for the year
of Closing and  subsequent  years,  the lease set forth in XVII hereof,  and the
matters of record  relating  to the Real  Property  listed on  Attorneys'  Title
Insurance Policy  #OPM-1073331  dated 5/25/96 as amended by Endorsement #1 dated
10/2/95,  all in Exhibit "B"  attached  hereto to which Buyer waives any and all
objections unless objections are made within thirty (30) days from the Effective
Date (which items shall be the "Permitted  Exceptions"  unless objection is made
as aforesaid).  If any future title commitment  prior to Closing  (including one
which Seller will cause to be delivered to Buyer's  attorney within two (2) days
prior to the date of Closing) reveals other  restrictions or easements which are
not caused by Buyer and which would prohibit or materially and adversely  affect
Buyer's  Intended Use of the Real  Property,  Seller  shall make all  reasonable
efforts as set forth herein to cure any such objections provided such objections
are made to Seller by Buyer in writing  within  fifteen (15) days of delivery to
Buyer of such title commitment revealing such objections, otherwise, Buyer shall
be deemed to have waived its right to so object,  in which event such objections
shall constitute Permitted Exceptions. The Policy shall insure marketable title.
The  Commitment  shall be delivered to Buyer's  attorney,  unless Buyer  directs
otherwise.  Buyer or Buyer's attorney shall give written notice to the Seller of
any  objections  by the Buyer to the title.  The Buyer  shall not be required to
make objection to the existence of any mortgage lien,  materialmen or mechanic's
lien,  assessment lien or any other lien encumbering all or any part of the Real
Property,  all of which  are  hereby  deemed to be title  objections.  After due
notice,  Seller shall have a reasonable  time, not to exceed sixty (60) days, to
(i) cure any title defect,  or (ii) have the exception  waived or bonded over by
the Title Insurance  Company,  or (iii) have the Title Insurance Company provide
affirmative  coverage  regarding  such  exception,  or (iv) have such  exception
otherwise deleted from the Commitment and Policy, none of which (i) through (iv)
shall cause the title to be unmarketable,  and, if necessary,  the Closing shall
be delayed for that period.  If Seller  fails to cure or otherwise  eliminate as
provided  herein any title  defect as to which due notice has been given  within
said time  period,  Buyer shall have the option to terminate  this  Agreement by
providing  notice  thereof to Seller within five (5) days  following  said sixty
(60) day period  whereupon this Agreement shall terminate and the Buyer shall be
paid all Earnest Money Deposits.  In the event Buyer  terminates this Agreement,
Seller shall bear all title insurance charges.  In the alternative,  Buyer shall
have the right to accept the title in its then existing condition and proceed to
Closing as  otherwise  provided  herein by  providing  notice  thereof to Seller
within five (5) days  following said sixty (60) day period.  Buyer's  failure to
provide either the notice of termination or acceptance shall be

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                                      4


<PAGE>



deemed to  constitute an  acceptance  of title and the  transaction  shall close
subject to the terms of this Agreement.  Seller agrees to use reasonable efforts
to cure all title defects.

                        (b)  Seller shall cause the Title Insurance
Company  to issue such  endorsements  to the  Commitment  and Policy as shall be
required by Buyer subject to the terms of this Agreement.


                  3.02  Affidavits.  At Closing,  Seller shall provide the Title
Insurance Company with an Affidavit of No Lien and such additional documentation
as is  required  in such  form as is  necessary  to enable  the Title  Insurance
Company  issuing said  Commitment to remove the  mechanic's  lien and parties in
possession exceptions from the Commitment and the Policy.



                                      IV
                                    CLOSING



                  4.0l  Closing.  The Closing  shall take place on or before ten
(10) days after the  completion  of the  Property  Inspection  and Buyer has not
cancelled and terminated this agreement,  as provided in paragraph 10.01 hereof,
at the offices of Seller's attorneys in Lakeland,  Florida. The parties mutually
agree that time is of the essence and that each party shall pursue in good faith
preparation for closing.

                  4.02  Closing Costs.

                        (a)  Seller:  Seller will pay all costs of (i)
preparation  and  recordation  of any  instruments  necessary  to correct  title
subject to the terms of this agreement; and (ii) Seller's attorney's fees.

                        (b)  Buyer:  Buyer will pay all costs of (i)
the Title  Insurance  Commitment  and Policy  premium  plus  endorsements;  (ii)
documentary  stamps to be affixed to the Deed;  (iii)  recording the deed;  (iv)
Buyer's attorney's fees; and (v) for any additional survey desired by the Buyer.

                  4.03  Documents to be  Delivered by Seller at Closing.  At the
time of Closing, the Seller and Buyer, as appropriate, shall execute and deliver
or cause to be delivered executed originals of the following documents:


                        (a)  Customary Special Warranty Deed (the
"Deed") conveying good and marketable title of the Real Property to

                                                                        10/29/96
                                      5


<PAGE>



Buyer subject to the Permitted Exceptions.

                        (b)  Affidavit of No Lien as required by
Article 3.02 above.

                        (c)  Affidavit in compliance with the Foreign
Investment  in Real  Property Tax Act of 1980,  as amended,  affirming  that the
Seller is not a "foreign person" as defined by the Internal Revenue Code.

                        (d)  The Assignment and Assumption Agreement
assigning the Assigned Contracts and transferring the matters covered by Article
1.05(b) to the extent transferable.


                        (e)  Such other documents as the Parties may
reasonably require to be executed and delivered to complete the
transaction contemplated hereunder.

                        (f)  Mechanic's lien, possession and gap
affidavits, and any other such affidavits or documents as may be
required by the Title Insurance Company.

                             (g) Closing Statement.

                        (h) Restrictions described in XVI hereof.

                        (i) Lease described in XVII hereof.

Seller  shall  deliver  copies of all  documents  to be  delivered at Closing to
Buyer's attorney not less than three (3) days prior to Closing.

                  4.04  Prorations.  The following adjustments to the
Purchase Price shall be made at the Closing by proration of the
amounts as specified below as of 11:59 p.m. of the date preceeding
the closing:

                        (a)  Ad valorem real estate and personal
property taxes  applicable to the Properties for 1996, such  apportionment to be
made on the basis of the  previous  year's  taxes  unless the bill  therefor  is
available.  Once the  taxes for 1996 are  established,  upon  written  demand by
either party, the parties shall promptly  recompute such proration in accordance
with the current tax  figures,  and any excess  payment or credit  received by a
party shall  promptly be reimbursed  by it to the other party.  Buyer shall have
the right to  contest  the 1996 taxes and Seller  shall  provide  Buyer with any
information  in Seller's  possession to assist such contest.  The provisions for
readjustment  of taxes are  intended  to and shall  survive  the Closing of this
transaction.

                        (b)  Water and sewer rentals, charges for the

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                                      6


<PAGE>



supply of electricity, gas, trash collection and other utility and
service charges.

                        (c)  Charges and receipts under service,
maintenance, and other like contracts affecting the Subject Property. The amount
of charges  paid by Seller  prior to the  Closing and  attributable  to a period
after the Closing shall be credited to Seller.  The amount of receipts  received
prior to the Closing and  attributable  to a period  after the Closing  shall be
credited to Buyer.

                        (d)  All other proratable items with respect to
the Subject Property,  including,  but not limited to, rents.  Security deposits
shall be  transferred  as an escrow  item which  shall not  adjust the  Purchase
Price. Rents and reimbursements for periods prior to Closing which have not been
collected  as  of  Closing,   shall  be  applied  first  to  post-Closing   date
delinquencies, and then to pre-Closing date delinquencies.

                        (e)  All items to be adjusted for which figures
are not available at the Closing, including real estate taxes for the year 1996,
will be  adjusted,  and payment  therefor  will be made by Seller to Buyer or by
Buyer to Seller,  as  appropriate,  as soon as figures are  available  after the
Closing and, in the case of revenues, if any, when they are collected.



                                       V
                        WARRANTIES AND REPRESENTATIONS



                  5.0l  Seller's Warranties.  Seller hereby warrants,
represents and covenants (which warranties, representations and
covenants shall be effective as of the date of Closing) the
following:

                        (a)  The Seller has neither assigned nor
pledged,  nor will assign or pledge this Agreement to any other person, and that
Seller has full power and authority to execute this Agreement.

                        (b)  That Seller has not entered into any
outstanding  agreements  of sale,  options or other  rights of third  parties to
acquire an interest in the Subject  Property,  except for leases in existence on
the date of this Agreement.

                        (c)  That Seller has not entered into any
agreements which are not of record with any state,  county or local governmental
authority  or agency  other  than (i) those  approved  in  writing by Buyer with
respect to the Subject Property, or (ii)

                                                                        10/29/96
                                      7


<PAGE>



those that will not have a material adverse effect on Buyer's Intended Use.

                        (d)  That Seller has full power to sell,
convey, transfer and assign the Subject Property on behalf of all parties having
an interest  therein.  That Seller is a Florida  corporation  duly organized and
validly  existing in good standing under the laws of the State of Florida;  this
Agreement  and all  documents  executed by Seller  which are to be  delivered to
Buyer at Closing  are, or at the time of Closing  will be, (i) duly  authorized,
executed and delivered by Seller,  (ii) the legal,  valid and binding obligation
of Seller,  and (iii)  sufficient to convey title as required by this Agreement.
Buyer will give a warranty,  representation  and  covenant  like this 5.0l(d) to
Seller.

                        (e)  That except as may be set forth in any
existing  Environmental  Audits of the Real  Property  which will be provided by
Seller to Buyer within five (5) working  days from the  Effective  Date,  Seller
will inform Buyer within the  inspection  period in Article  l0.0l hereof of any
violations of any federal or state  environmental law or regulation,  including,
but not limited to, 42 U.S.C.,  Section  59601 et. seq.  (CERCLA) and 42 U.S.C.,
Section 6901 et. seq.  (RCRA) that affect the Real  Property of which the Seller
has knowledge.

                        (f)  That to the best of Seller's knowledge,
there are no pending  condemnation  or similar  proceedings  affecting  the Real
Property,  and Seller will inform Buyer within the inspection  period in Article
l0.0l hereof of any threatened condemnation of which the Seller has knowledge.

                        (g)  That to the best of Seller's knowledge,
there are no violations of any law,  statute,  regulation,  governmental code or
ordinance  with  respect to the Real  Property,  other than those that would not
have a material affect on the Real Property.

                        (h)  That to the best of Seller's knowledge,
there is no litigation or  administrative  proceeding  pending which affects the
Real  Property,  and Seller will inform  Buyer within the  inspection  period in
Article l0.0l hereof of any such matters that are threatened of which the Seller
has knowledge.

                        (i)   There are no leases affecting the Real
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

                                                                        10/29/96
                                      8


<PAGE>



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.

                        (j)   Each of the seller financial statements
for the Property ("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, 1995. Buyer and its independent  certified  accountants shall
be given  access to Seller's  books and records at any time prior to and for six
(6) months 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.

                        (k)  On the date of Closing, Seller will
recertify  to  Buyer,  in  writing,  that all of  Seller's  representations  and
warranties,  as contained in this  Agreement,  remain true and correct except in
such  respects  as are not likely to have a material  adverse  effect on Buyer's
Intended Use, but the same shall not survive closing.





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                                      9


<PAGE>



                                      VI
                                    SURVEY



                  6.0l Seller,  at Seller's sole cost and expense,  will furnish
to Buyer an existing  previous  ALTA/ACSM Land Title Survey of the Real Property
(the "Survey") within ten (10) working days after the Effective Date. The Survey
will be dated and  signed by a  registered  and/or  licensed  land  surveyor  in
Florida.  The Buyer may obtain  such  additional  surveys as Buyer  desires,  at
Buyer's expense.



                                      VII
                SELLER'S COOPERATION:  PLANS AND TECHNICAL DATA



                  7.0l Access to Information. Within ten (10) working days after
the Effective Date Seller shall provide Buyer and its  representatives  full and
free access to all  documents  of Seller  pertaining  to the  Subject  Property,
including  but not  limited  to  maintenance,  improvement,  repair,  and  other
records,  utility  agreements,  plans  and  specifications,   studies,  reports,
correspondence  and  files,  if  any,  all  architectural  and  building  plans,
engineering  plans and  technical  data  including but not limited to all sewer,
water,   grading,   drainage  and  paving   plans,   surveys  and  all  letters,
applications, permits or licenses from applicable governmental agencies prepared
which are in the  possession of Seller,  and all other  records  relating to the
Subject  Property.  All  information  gained  by the  Buyer  hereunder  shall be
maintained in confidence, shall not be disclosed to any third party and shall be
used only for  purposes of carrying  out the  transaction  contemplated  by this
Agreement,  except that said information may be shown to lenders,  attorneys and
prospective purchasers.



                                     VIII
                                EMINENT DOMAIN



8.0l  If,  prior  to the  Closing,  any or all of the  Real  Property  shall  be
condemned or taken by any governmental or quasigovernmental  authority under its
power of eminent domain, or if proceedings for such condemnation or taking shall
be commenced,  the Buyer, at Buyer's  option,  to be exercised by written notice
within ten (10) days of Buyer receiving written notice of such condemnation, may
cancel this Agreement, or at

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                                      10


<PAGE>



Buyer's  option,  the Buyer may agree to close this  transaction  and the Seller
shall assign all awards from the eminent domain proceedings to the Buyer.



                                      IX
                              ACCESS TO PROPERTY




                  9.0l  Possession.  Seller shall  deliver to Buyer the sole and
exclusive  possession of the Real Property as of the date of Closing  subject to
the Permitted Exceptions.



                                       X
                              PROPERTY INSPECTION



                  l0.0l Property Inspection. For and in consideration of the sum
of Ten Dollars ($10.00) and other good and valuable  consideration,  the receipt
and adequacy of which are hereby  acknowledged,  Seller  agrees that Buyer shall
have until thirty (30) days after the  "Effective  Date" of this  Agreement (the
"Inspection  Period") to conduct such  inspections,  tests,  surveys or studies,
subject to Seller's right to be present at or during any such  activities and to
be provided with any samples or test results relating thereto. 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 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 not be  refundable
except upon the terms otherwise set forth herein.  The Inspection  Period may be
extended  by Buyer for three  successive  periods of thirty  (30) days each,  by
written notice to Seller given within the Inspection Period, as

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                                      11


<PAGE>



extended,  as the case may be. 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, 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
borings,  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
and 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. 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.

l0.02  Property  Condition  And Release.  Buyer hereby  acknowledges  that it is
responsible  for  inspecting  the Subject  Property,  all  fixtures and attached
equipment  and articles of personal  property and the Buyer  accepts the Subject
Property,  the fixtures and attached equipment and articles of personal property
in their AS IS,  WHERE IS  condition  as of the date of  Buyer's  completion  of
inspection  without  cancellation  and  termination as per Article l0.0l hereof,
subject to the provisions of Article 5.01 hereof. Further, Buyer hereby releases
Seller as hereafter set forth.
                        (a)  Each of the following terms used in this
paragraph shall have the meaning set forth below:

(i) "Released Parties" means Seller and its officers,  directors,  shareholders,
employees,  agents,  any  entity  controlling,  controlled  by, or under  common
control with Seller,  and the  successors,  and assigns of any of the  foregoing
persons or entities.

                              (ii)  "Environmental Laws" means any and
      all applicable (a) federal, state and local environmental laws, rules, and
      regulations;  (b) rules,  regulations,  guidelines  or policy  statements,
      orders,  or requests  promulgated  under or issued in connection with such
      laws, rules, or regulations; and (c) amendments to any of the foregoing.

                              (iii)  "Hazardous Substances" means,
      collectively and without regard to quantity, concentration,

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                                      12


<PAGE>



      location,   physical  state,  or  other  reporting,   clean-up,  or  other
      regulatory   threshold,   (a)  any   "hazardous   substance"   under   the
      Comprehensive, Environmental Response, Compensation, and Liability Act, 42
      U.S.C.  9601 et.  seq.,  (b) any  hazardous  substances  under  applicable
      Florida environmental laws, (c) petroleum or petroleum-based  products (or
      any derivative or hazardous  constituents  thereof or additives  thereto),
      including  without  limitation,  fuel and  lubricating  oils,  and (d) any
      asbestos  containing  materials,   any  "hazardous  chemicals"  or  "toxic
      chemicals" under the Occupational  Safety and Health Act, 29 U.S.C. ss.ss.
      651 et.  seq.  References  to  particular  acts or  modifications  in this
      definition  include  all past and future  amendments  thereto,  as well as
      applicable   rules  and  regulations  as  now  or  hereafter   promulgated
      thereunder.

                              (iv)  "Presence" means the presence on the
      Subject  Property of any  Hazardous  Substances  and the use,  possession,
      storage,  disposal,  burial, or deposit of any Hazardous Substances on the
      Subject Property.

                              (v)  "Release" means the threatened or
      actual  release,  discharge,  spillage,   uncontrolled  loss,  seepage  or
      filtration of Hazardous Substances onto the Subject Property,  or from the
      Subject Property onto any adjacent or contiguous property.

                        (b)  As material consideration for the purchase
of the Subject Property, Buyer hereby knowingly, intentionally, unconditionally,
irrevocably,  and permanently waives,  releases,  discharges,  and agrees not to
assert or seek damages or other  relief from any of the Released  Parties for or
on account of, any claim,  demand,  cause of action, or other right or remedy of
any kind or character  that Buyer or any of its employees,  agents,  successors,
and assigns may now or  hereafter  have or acquire  against any of the  Released
Parties,  whether  known or  unknown  to Buyer or any of the  Released  Parties,
disclosed or not disclosed to Buyer by any of the Released  Parties,  liquidated
or  unliquidated,  contingent  or  matured,  relating  in whole  or in part,  or
directly or indirectly to, or in any way arising out of (i) the violation of any
Environmental  Law on the  Subject  Property  by any  Released  Party,  (ii) the
Presence  of any  Hazardous  Substances  on the Subject  Property,  or (iii) the
Release of any  Hazardous  Substances  onto the  Subject  Property,  or from the
Subject Property onto any adjacent or contiguous property. The foregoing release
is specifically intended to include (but not be limited to) any claims, demands,
causes of action, or other rights and remedies of Buyer under the Comprehensive,
Environmental Response,  Compensation,  and Liability Act, as amended, 42 U.S.C.
9601 et. seq., including claims for response costs or contribution.



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<PAGE>



                                      XI
                        CONDITIONS PRECEDENT TO CLOSING



                  ll.0l This Agreement and the obligation of Buyer to close this
transaction  and to  pay  any  portion  of  the  Purchase  Price  to  Seller  is
exclusively  conditioned upon  satisfaction of each of the following  Conditions
Precedent (any of which may be waived by Buyer in writing) prior to Closing.

                  ll.02  Agreement  To Remain  in  Effect.  That this  Agreement
remain in full force and  effect  and that there  shall not exist a right on the
part of the Seller to either terminate the rights of Buyer under this Agreement,
or seek the recovery of damages  against  Buyer  provided  Buyer's  right not to
close shall not be in derogation  of Seller's  right to retain the earnest money
deposit as provided in 13.01(3) below.

                  ll.03 Performance of Seller. That Seller shall comply fully in
all material  respects  with all of Seller's  obligations  and duties under this
Agreement.

                  ll.04 Representations. That all representations, covenants and
warranties of Seller contained in this Agreement including,  but not limited to,
those set forth in Paragraph V hereof,  shall be true,  satisfied and documented
in all material respects as of the date of Closing.


In the event any of the foregoing  conditions  precedent have not been satisfied
prior to closing as required herein, which will cause a material adverse effect,
and the Buyer has not waived such  condition  in writing,  then Buyer shall have
the option to (i)  cancel and  terminate  this  Agreement  and have the right to
immediate return of the Earnest Money Deposit described in Paragraph 2.02 above,
whereupon this Agreement  shall be terminated;  or (ii) waive said condition and
close on the transaction in accordance with the terms hereof.


                  11.05 That reasonably acceptable Tenant Estoppel Letters shall
be obtained,  that there shall be no material adverse change in the condition of
the  Subject  Property  nor as to the  tenant's  leasing  space  in the  Subject
Property and that Publix and the other two tenants in the Subject Property shall
have opened  business in the  shopping  center and shall have  commenced  paying
rent, all as of Closing Date.



                                      XII

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<PAGE>



                                 RISK OF LOSS



                  l2.0l Damage or Destruction. In the event of loss or damage to
the Subject  Property  prior to Closing  either by fire or other  casualty,  the
Buyer,  at Buyer's  option,  may rescind  Buyer's  obligations  to close on this
Agreement and receive an immediate refund of the Earnest Money Deposit, or Buyer
may elect to close on this  Agreement  and take  title to the  Subject  Property
together  with  whatever  insurance  proceeds  accrue  by virtue of said loss or
damage,  plus a credit at Closing in the amount of any deductible  payable under
any insurance policy.



                                     XIII
                                   REMEDIES



                  l3.0l  Default.  In the event of a default by the
Seller, the Buyer shall have the following options:

                        1.  Sue Seller for specific performance
including recovery of court costs and attorney's fees with respect
thereto.

                        2.  Rescind Buyer's obligations to close on
this  agreement and demand refund of the Escrow  Deposit  together with interest
thereon.

                        3.  In the event that all conditions precedent
have been fulfilled and Buyer fails to close this transaction,  the Seller shall
have, as Seller's sole and exclusive  remedies,  the right to retain the Earnest
Money Deposit as liquidated damages or to sue for specific performance including
court  costs and  attorney's  fees with  respect  thereto.  The Buyer and Seller
hereby  acknowledge that it is impossible to more precisely estimate the damages
to be  suffered  by  Seller  upon  Buyer's  default  and the  parties  expressly
acknowledge  that  retention of the Earnest  Money  Deposit is intended not as a
penalty but as fully liquidated  damages. In the event of a default hereunder by
Buyer and if Seller retains the Earnest Money Deposit,  Seller hereby waives and
releases  any right,  and hereby  covenants  that it shall not sue Buyer (a) for
specific  performance  of this  Agreement or (b) to prove that  Seller's  actual
damages exceed the Earnest Money Deposit.

                  13.02  Interest on Escrow Funds.  In the event that
the Closing shall take place, then any interest earned on the
Earnest Money Deposit shall be credited to the Buyer as a portion

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                                      15


<PAGE>



of the cash required to be paid at Closing.  In the event that the Closing fails
to take place through  default of the Seller and the Buyer shall demand a refund
of the  Earnest  Money  Deposit  in  accordance  with  any of the  terms of this
Agreement,  then said interest shall be paid to the Buyer. In the event that the
Closing  fails to take place  through a default of the  Buyer,  Seller  shall be
entitled to the Earnest Money Deposit paid hereunder, together with all interest
earned on the Earnest  Money  Deposit if the Seller  accepts same as  liquidated
damages.



                                      XIV
                              BROKER'S COMMISSION



                  l4.0l Seller  warrants and represents that no broker or finder
has been engaged by or represents  Seller as to this  Agreement.  Buyer warrants
and represents that no broker or finder has been engaged by or represents  Buyer
as to this Agreement.  Seller and Buyer each agree to indemnify, defend and hold
the other harmless from and against any claim by any other real estate broker or
finder engaged by the respective indemnitor.



                                      XV
                                 ESCROW AGENT



                  l5.0l Duties. It is agreed that the duties of any Escrow Agent
appointed under this Agreement are only such as are specifically provided herein
being purely  ministerial  in nature,  and that such Escrow Agent shall incur no
liability  whatsoever except for willful misconduct or negligence so long as the
Escrow  Agent has acted in good faith.  The Seller and Buyer  release any Escrow
Agent from any act done or omitted to be done by the Escrow  Agent in good faith
in the performance of such Escrow Agent's duties hereunder.

                  l5.02  Responsibilities.  The Escrow  Agent  shall be under no
responsibility  in respect to the Earnest Money Deposit other than faithfully to
follow the  instructions  herein  contained.  The Escrow  Agent may advise  with
counsel  and shall be fully  protected  in any actions  taken in good faith,  in
accordance  with such  advice.  The Escrow Agent shall not be required to defend
any legal  proceedings  which may be  instituted  against  such Escrow  Agent in
respect to the subject matter of these instructions unless requested to do so by
Seller and Buyer and is  indemnified  to the  satisfaction  of such Escrow Agent
against the cost and expense of

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                                      16


<PAGE>



such  defense.  The  Escrow  Agent  shall not be  required  to  institute  legal
proceedings of any kind; such Escrow Agent shall have no responsibility  for the
genuineness or validity of any document or other item deposited with such Escrow
Agent,  and shall be fully  protected in acting in  accordance  with any written
instructions  given to such Escrow Agent  hereunder  and believed by such Escrow
Agent to have been signed by the proper parties.

                  l5.03 Sole  Liability.  The Escrow Agent  assumes no liability
under this Agreement  except that of a stake holder.  If there is any dispute as
to whether the Escrow Agent is obligated to deliver the Earnest Money Deposit or
as to whom such Earnest Money Deposit is to be delivered,  the Escrow Agent will
not be obligated to make any  delivery  thereof,  but in such event may hold the
Earnest Money Deposit until receipt by such Escrow Agent of any authorization in
writing  signed  by all of the  persons  having  an  interest  in such  dispute,
directing the disposition thereof, or in the absence of such authorization,  the
Escrow Agent may hold the Earnest Money Deposit until the final determination of
the  rights  of the  parties  in an  appropriate  proceeding.  If  such  written
authorization is not given, or proceedings for such determinations are not begun
and diligently  continued,  the Escrow Agent may, but is not required,  bring an
appropriate  action or proceeding for leave to deposit the Earnest Money Deposit
into the Registry of the Court pending such determination. In making delivery of
the Earnest  Money  Deposit in the manner  provided for in this  Agreement,  the
Escrow Agent shall have no further liability in the matter.

                  l5.04  Confirmation  of  Deposit.  The  Escrow  Agent  for the
Earnest  Money  Deposit has  executed  this  Agreement  at the bottom  hereof to
confirm  that such Escrow  Agent is holding  and/or will hold the Earnest  Money
Deposit in Escrow  pursuant to the  provisions  of this  Agreement.  The Earnest
Money Deposit shall be deposited in an interest bearing account.

                  l5.05 Successor  Escrow Agent.  The foregoing  requirements of
the  Escrow  Agent  shall be  applicable  to the  initial  Escrow  Agent and all
subsequent  Escrow  Agents  following  the  transfer of the Escrow  Deposit upon
completion of the Property  Inspection  Period. It is understood and agreed that
all times  prior to the closing  and  transfer  of title that the Earnest  Money
Deposits  shall be the subject of an Escrow and governed  according to the terms
set forth  herein.  Any and all Escrow Agents as set forth herein and at various
times herein shall at the request of either party provide written acknowledgment
of the  continued  escrow of the Escrow  Deposit and the amount of interest that
has accrued thereon.



                                      XVI
                                 RESTRICTIONS

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                                      17


<PAGE>



      Parcel B on Exhibit "C"  attached  hereto,  Martin  Downs  Village  Center
(former Publix location) as shown on Exhibit "D" attached hereto, and Ocean East
Shopping  Center in which  Stuart  Fine Foods is located as shown on Exhibit "E"
attached hereto,  shall all be restricted  against use as a grocery  supermarket
(except for the existing  Stuart Fine  Foods),  and an  appropriate  restriction
thereon shall be recorded at closing,  all of which shall be in accordance  with
the  Restrictions  as to defined in the form of lease attached hereto as Exhibit
"F."



                                     XVII


      Seller as Tenant and Buyer as Landlord  agree at closing to enter into the
form of lease attached hereto as Exhibit "F," with an amount of rental set forth
in a separate memorandum.



                                     XVIII
                                 MISCELLANEOUS



                  l8.0l  Notices.  Any notice  required or permitted to be given
hereunder  shall be  sufficient  in writing and sent by  registered or certified
mail,  postage prepaid,  or sent by expedited courier service to the party being
given  such  notice at the  address  heretofore  given  herein or at such  other
address  as to which  notice is to be given in  accordance  with the  provisions
herein.  A copy of any notice  shall  also be given to James P.  Hahn,  Esquire,
HAHN,  McCLURG,  WATSON GRIFFITH & BUSH,  P.A., 101 South Florida  Avenue,  Post
Office Box 38,  Lakeland,  Florida,  33802,  attorney for Seller,  and to ULMER,
MURCHISON,  ASHBY & TAYLORD,  Attn: William E. Scheu,  Esquire,  Post Office Box
479, Suite 1600, 200 West Forsyth Street,  Jacksonville,  Florida,  32201 (32202
for courier), attorney for Buyer.

                  l8.02  Entire Agreement.  This Agreement is the
entire Agreement of the parties with regard to the transaction
dealt with herein.

                  l8.03 Assignment. Buyer shall not have the right to assign any
part or all of this Agreement  without the written consent of the Seller,  which
consent  shall not be  unreasonably  withheld.  However,  the Seller does hereby
consent to the assignment of this agreement and the lease  attached  hereto,  to
RRC FL THREE.

                  l8.04  Survival of Agreement.  The terms and

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                                      18


<PAGE>



conditions of this  Agreement  shall survive the Closing hereof and the delivery
of all related  documents  subject to any applicable  period of survivability as
provided herein including warranties and representations not surviving closing.

                  l8.05 Time is of the  Essence.  The parties  acknowledge  that
time is of the  essence  for each time and date  specifically  set forth in this
Agreement.

                  l8.06   Modification.   The  parties   acknowledge  that  this
Agreement is the entire  agreement  between the parties and that this  Agreement
may be modified only by a written instrument signed by all parties.

                  l8.07 Attorney's Fees. In the event of any litigation  between
the parties arising out of this Agreement or the collection of any funds due the
Buyer or the Seller  pursuant to this Agreement,  the prevailing  party shall be
entitled to recover all costs incurred, such costs to include without limitation
reasonable  attorney's fees, also including attorney's fees on appeal and in any
bankruptcy proceedings, and this provision shall survive the termination of this
Agreement.

                  l8.08 Waiver.  No waiver  hereunder of any condition or breach
shall be  deemed to be a  continuing  waiver of any  subsequent  breach  and all
waivers shall be in writing.

                  l8.09  Headings.  Headings used herein are for
convenience only and do not constitute a substantive part of this
agreement.

                  l8.l0  Choice of Law.  This Agreement shall be
governed by the laws of the State of Florida.


                  l8.ll  Extension of Time  Periods.  In the event that the last
day of any period of time specified in this Agreement shall fall on a weekend or
legal holiday, such period of time shall be extended through the end of the next
work day.

                  l8.l2 Time for Acceptance. In order for this Agreement to have
any legal force and effect, this Agreement shall be accepted and executed by the
Seller and delivered to the Buyer within seven (7) business days after execution
hereof by the Buyer and delivery thereof to Seller.  In the event this Agreement
is not  accepted,  executed  and  delivered  by  Seller as  stated  herein,  the
Agreement shall be considered null and void and of no legal force and effect.

                  l8.l3  Radon Gas Notification.  Radon is a naturally
occurring radioactive gas that, when it has accumulated in a
building in sufficient quantities, may present health risks to

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                                      19


<PAGE>



persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding  radon and radon  testing may be obtained  some from your local county
public health unit.


            IN WITNESS  WHEREOF,  the parties have  hereunto set their hands and
seals the day and year first above written.



                                    AS TO SELLER:
                                    PUBLIX SUPER MARKETS, INC.
                                    A Florida corporation
WITNESSES:
                              By:
                                       CHARLES H. JENKINS, JR.

                                    As Chairman of the Executive
                                      Committee

                               DATED:      day of           , 1996


                                    AS TO BUYER:

                                    RRC ACQUISITIONS, INC.
WITNESSES:
                                       By:




                               DATED:      day of           , 1996




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                                      20


<PAGE>



STATE OF FLORIDA
COUNTY OF POLK

      Before me the undersigned authority, this day appeared CHARLES H. JENKINS,
JR.,  known to me and  known  to me to be the  individual  described  in and who
executed the  foregoing  instrument  as Chairman of the  Executive  Committee of
PUBLIX  SUPER  MARKETS,  INC.,  a  Florida  corporation  named in the  foregoing
instrument,  and  he  acknowledged  to and  before  me  that  he  executed  said
instrument  on  behalf  of and in the  name of  said  Florida  corporation  with
authority to execute said  instrument  and that said  instrument is the free act
and deed of said corporation.

      IN WITNESS  WHEREOF,  I have  hereunto set my hand and affixed my official
seal this day of , 1996.


                                    NOTARY PUBLIC
                                    Print Notary Name:
            (SEAL)                  STATE OF FLORIDA AT LARGE

My Commission Expires:
Commission Number:


STATE OF
COUNTY OF
     Before    me    the    undersigned    authority,    this    day    appeared
_____________________________,  known to me and known to me to be the individual
described   in  and  who   executed  the   foregoing   instrument   as  of  ,  a
____________________________   named  in  the  foregoing   instrument,   and  he
acknowledged  to and before me that he executed said instrument on behalf of and
in the name of said  _____________ with authority to execute said instrument and
that said instrument is the free act and deed of said corporation.
      IN WITNESS  WHEREOF,  I have  hereunto set my hand and affixed my official
seal this day of , 1996.


                                    NOTARY PUBLIC
                                    Print Notary Name:
            (SEAL)                  STATE OF                   AT LARGE

My Commission Expires:
Commission Number:






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                                      21


<PAGE>



                                    RECEIPT


            Receipt of the Earnest Money Deposit is herewith acknowledged in the
amount and in accordance with the foregoing Agreement.

          This       day of              , 1996.



                                  ESCROW AGENT:
                              HAHN, McCLURG, WATSON, GRIFFITH & BUSH

                         BY:
                                 JAMES P. HAHN, President


C:\WP\MARTINDO.2ND

                                                                        10/29/96
                                      22


<PAGE>






                                  Description


All of Village Shoppes at the Downs according to the plat thereof as recorded in
Plat Book 10, Page 65,  Public  Records of martin  County,  Florida.  Said lands
lying in Martin County, Florida.











































                                                                        10/29/96


<PAGE>




                                  EXHIBIT "E"




                                                                        10/29/96


<PAGE>



                                  EXHIBIT "F"

                                                                        10/29/96


<PAGE>



                          AUDIT REPRESENTATION LETTER

                                                                        10/29/96

                                                                   



                                                                    EXHIBIT 21
                          REGENCY REALTY CORPORATION

                                 Subsidiaries


Regency Realty Corporation (the "Company") has the following direct and indirect
subsidiaries  (unless otherwise noted, the immediate parent company's  ownership
interest is 100%)

      RRC General SPC,  Inc.,  a Florida  corporation  RRC Limited SPC,  Inc., a
      Florida corporation

      RRC General  SPC,  Inc.  and RRC Limited  SPC,  Inc. are the general and
      limited partners, respectively, of the following Florida limited
      partnerships:

            RSP Criterion IV, Ltd.
            Treasure Coast Investors, Ltd.
            Regency Rosewood Temple Terrace, Ltd.
            Landcom Regency Mandarin, Ltd.

      RRC FL SPC,  Inc.,  a  Florida  corporation  RRC GA SPC,  Inc.,  a Georgia
      corporation  RRC AL SPC, Inc., an Alabama  corporation RRC MS SPC, Inc., a
      Mississippi corporation

      RRC FL One,  Inc.,  a  Florida  corporation  RRC FL Two,  Inc.,  a Florida
      corporation

            RRC FL One,  Inc.  and RRC FL  Two,  Inc.  are  the  general  and  
            limited partners, respectively, of the following Delaware limited
            partnership:

                  Regency Office Partnership, L.P.

      Regency Centers, Inc., a Florida corporation

            Regency  Centers,  Inc. is the general  partner of the  following
            Georgia limited partnership:

                  RRC Operating Partnership of Georgia, L.P.

      RRC FL Five,  Inc., a Florida  corporation  RRC FL Seven,  Inc., a Florida
      corporation
  RRC  Acquisitions,  Inc., a Florida  corporation  RRC JV One,
      Inc., a Florida corporation

            RRC JV One, Inc. is the general  partner of the following  Florida
            limited partnership:

                  Regency Ocean East Partnership Limited




<PAGE>



Subsidiaries - continued




      Regency Atlanta, Inc., a Georgia corporation

            Regency  Atlanta,  Inc. is the general  partner of the following
            Delaware limited partnership:

                  Regency Retail Partnership, L.P.
                  Regency Realty Group, II, Inc., a Florida corporation

                 (Regency  Retail  Partnership,  L.P.  owns  5% of  the  voting
                 common  stock and 100% of the  non-voting  preferred  stock of
                 this  corporation.)  Regency Retail  Partnership,  L.P. is the
                 general    partner   of   the   following    Georgia   limited
                 partnerships:

                              Equiport Associates, L.P.
                              Branch/HOP Associates, L.P.
                              Old Fort Associates, L.P.
                              Fieldstone Associates, L.P.

     Regency Realty Group,  Inc., a Florida  corporation (the Company owns 5% of
the  voting  common  stock and 100% of the  non-voting  preferred  stock of this
subsidiary).  Regency  Realty  Group,  Inc. owns all of the capital stock of the
following:

      RRC Lender, Inc., a Florida corporation
      Regency Realty Group GA, Inc., a Georgia corporation





                                                                  Exhibit 23






                          Independent Auditors' Consent



The Board of Directors
Regency Realty Corporation:

We consent to  incorporation  by reference in the  registration  statements (No.
33-86886,  No.  333-930  and  No.  333-2546)  on  Form  S-3  of  Regency  Realty
Corporation  of our reports  dated  January 27,  1997,  except for Note 11 as to
which the date is March 7, 1997, relating to the consolidated  balance sheets of
Regency  Realty  Corporation  as of December 31, 1996 and 1995,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the years in the three year period ended  December 31, 1996, and related
schedule,  which  reports  appear in the December 31, 1996 annual report of Form
10-K of Regency Realty Corporation.






                                         /s/ KPMG Peat Marwick LLP   
                                         ----------------------------
                                         KPMG Peat Marwick LLP
                                         Certified Public Accountants



Jacksonville, Florida
March 24, 1997



WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.


<TABLE> <S> <C>
                                                 
<ARTICLE>                                                                5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGENCY
REALTY CORPORATION'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31,1996
</LEGEND>
<NAME>                                                REGENCY REALTY CORPORATION
<MULTIPLIER>                                                             1
                                                       
<S>                                                            <C>
<PERIOD-TYPE>                                                  12-MOS
<FISCAL-YEAR-END>                                              DEC-31-1996
<PERIOD-END>                                                   DEC-31-1996
<CASH>                                                           8,293,229
<SECURITIES>                                                             0
<RECEIVABLES>                                                    6,113,510
<ALLOWANCES>                                                       832,091
<INVENTORY>                                                              0
<CURRENT-ASSETS>                                                         0
<PP&E>                                                         393,402,794
<DEPRECIATION>                                                  26,213,225
<TOTAL-ASSETS>                                                 386,524,049
<CURRENT-LIABILITIES>                                                    0
<BONDS>                                                                  0
<PREFERRED-MANDATORY>                                                    0
<PREFERRED>                                                              0
<COMMON>                                                           106,149
<OTHER-SE>                                                     206,619,628
<TOTAL-LIABILITY-AND-EQUITY>                                   386,524,049
<SALES>                                                                  0
<TOTAL-REVENUES>                                                46,947,567
<CGS>                                                                    0
<TOTAL-COSTS>                                                   12,065,394
<OTHER-EXPENSES>                                                 8,758,067
<LOSS-PROVISION>                                                         0
<INTEREST-EXPENSE>                                              10,777,131
<INCOME-PRETAX>                                                  9,907,145
<INCOME-TAX>                                                             0
<INCOME-CONTINUING>                                              9,907,145
<DISCONTINUED>                                                           0
<EXTRAORDINARY>                                                          0
<CHANGES>                                                                0
<NET-INCOME>                                                     9,907,145
<EPS-PRIMARY>                                                         0.96
<EPS-DILUTED>                                                         0.96
        
 

</TABLE>