SECURITIES AND EXCHANGE COMMISSION
UNITED STATES
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 7, 1998
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
Florida 1-12298 59-3191743
(State or other jurisdiction Commission (IRS Employer
of incorporation) File Number) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (904)-356-7000
Not Applicable
(Former name or former address, if changed since last report)
ITEM 5. OTHER INFORMATION
The factors considered by the Company in determining the price to be paid for
the shopping center included its historical and expected cash flow, nature of
the tenancies and terms of the leases in place, occupancy rates, opportunities
for alternative and new tenancies, current operating costs, physical condition
and location, and the anticipated impact on the Company's financial results. The
Company took into consideration capitalization rates at which it believes other
shopping centers have recently sold, but determined the purchase price on the
factors discussed above. No separate independent appraisals were obtained for
the property acquired.
The following summarizes the property acquired:
Property Acquisition Acquisition Occupancy at
Name Costs Date GLA City/State Acquisition
Pike Creek $22,897,676 8-04-98 234,580 Wilmington, DE 97%
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
A. Financial Statements and Pro Forma Financial Information
A) Financial Statements:
Pike Creek
Independent Auditors' Report
Statement of Revenues and Certain Expenses
for the year ended December 31, 1997
B) Pro Forma Financial Information:
Regency Realty Corporation
Pro Forma Condensed Consolidated Balance Sheet,
June 30, 1998 (unaudited)
Pro Forma Condensed Statement of Operations
for the six month period ended June 30, 1998 and the year
ended December 31, 1997 (unaudited)
C. Exhibits:
10. Material Contracts
(a) Purchase and Sale Agreement dated May 1, 1998, by and between
BIG VALLEY ASSOCIATES, LIMITED PARTNERSHIP, a Delaware limited
partnership ("Seller") and RRC ACQUISITIONS TWO, INC., A
Florida corporation ("Purchaser").
23. Consent of KPMG Peat Marwick LLP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REGENCY REALTY CORPORATION
(registrant)
October 7, 1998 By: /s/ J. Christian Leavitt
--------------------------------
J. Christian Leavitt
Vice President and Treasurer
Independent Auditors' Report
The Board of Directors
Regency Realty Corporation:
We have audited the accompanying statement of revenues and certain expenses of
Pike Creek Shopping Center for the year ended December 31, 1997. This financial
statement is the responsibility of management. Our responsibility is to express
an opinion on this statement of revenues and certain expenses based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and certain expenses is free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of revenues and certain
expenses. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
presentation of the statement of revenues and certain expenses. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses of Pike Creek
Shopping Center was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and for inclusion in a
Form 8-K of Regency Realty Corporation and excludes material amounts, described
in note 1, that would not be comparable to those resulting from the proposed
future operation of the property. The presentation is not intended to be a
complete presentation of Pike Creek Shopping Center revenues and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses,
described in note 1, of Pike Creek Shopping Center for the year ended December
31, 1997, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Jacksonville, Florida
September 9, 1998
PIKE CREEK SHOPPING CENTER
Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
Revenues:
Minimum rent $ 1,979,571
Recoveries from tenants 182,438
Percentage rent 195,536
-------------
Total revenues 2,357,545
-------------
Certain operating expenses:
Operating and maintenance 134,303
Real estate taxes 140,003
Management fees 93,408
General and administrative 79,978
-------------
Total expenses 447,692
-------------
Revenues in excess of certain expenses $ 1,909,853
=============
See accompanying notes to statement of revenues and certain expenses.
PIKE CREEK SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
For the year ended December 31, 1997
1. Basis of Presentation
The statement of revenues and certain expenses relates to the operation
of a 234,580 square foot shopping center (the "Property") located in
Wilmington, Delaware.
The Property's financial statement is prepared on the accrual basis of
accounting in conformity with generally accepted accounting principles.
Subsequent to December 31, 1997, the Property was acquired by Regency
Realty Corporation (RRC) in a transaction accounted for as a purchase.
All operations of the Property will be included in the consolidated
financial statements of RRC beginning at the acquisition date.
The accompanying financial statement is not representative of the actual
operations for the period presented as certain expenses, which may not be
comparable to the expenses expected to be incurred by RRC in the proposed
future operation of the Property, have been excluded. RRC is not aware of
any material factors relating to the Property that would cause the
reported financial information not to be necessarily indicative of future
operating results. Costs not directly related to the operation of the
Property have been excluded, and consist of interest, depreciation,
professional fees, and certain other non operating expenses.
2. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
PIKE CREEK SHOPPING CENTER
Notes to Statement of Revenues and Certain Expenses
3. Operating Leases
For the year ended December 31, 1997, the following tenants paid minimum
rent which exceeded 10% of the total minimum rent earned by the Property:
Minimum
Tenant Rent Paid
ACME Markets $ 440,000
Kmart Corporation 370,745
The Property is leased to tenants under operating leases with expiration
dates extending to the year 2011. Future minimum rent under noncancelable
operating leases as of December 31, 1997, excluding tenant reimbursements
of operating expenses and excluding additional contingent rentals based
on tenants' sales volume, are as follows:
Year ending December 31, Amount
1998 $ 1,904,402
1999 1,746,945
2000 1,566,526
2001 722,183
2002 483,116
Thereafter 3,619,066
Regency Realty Corporation
Pro Forma Condensed Consolidated Financial Statements
The following unaudited pro forma condensed consolidated balance sheet is based
upon the historical consolidated balance sheet of Regency Realty Corporation
(the Company) as of June 30, 1998 as if the Company had completed the
acquisition of two additional shopping centers and completed the issuance of
$100 million senior term notes subsequent to period end. The following
unaudited pro forma consolidated statements of operations of the Company are
based upon the historical consolidated statements of operations for the
six-month period ended June 30, 1998 and the year ended December 31, 1997.
These statements are presented as if the Company had acquired all of its
properties as of January 1, 1997. These unaudited pro forma condensed
consolidated financial statements should be read in conjunction with the
Company's Form 10-K as of and for the three years ended December 31, 1997 and
Form 10-Q filed for the period ended June 30, 1998.
The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of what the actual financial position or results of
operations of the Company would have been at June 30, 1998 or December 31, 1997
assuming the transactions had been completed as set forth above, nor does it
purport to represent the financial position or results of operations of the
Company in future periods.
Regency Realty Corporation
Pro Forma Condensed Consolidated Balance Sheet
June 30, 1998
(Unaudited)
(in thousands)
Historical Adjustments Pro Forma
Assets
Real estate investments, at cost $ 1,050,352 36,243 (a) 1,086,595
Construction in progress 31,133 - 31,133
Less: accumulated depreciation 46,160 - 46,160
-------------- -------------- --------------
Real estate rental property, net 1,035,325 36,243 1,071,568
-------------- -------------- --------------
Investments in real estate partnerships 22,401 - 22,401
-------------- -------------- --------------
Net real estate investments 1,057,726 36,243 1,093,969
-------------- -------------- --------------
Cash and cash equivalents 12,733 - 12,733
Tenant receivables, net of allowance for
uncollectible accounts 10,684 - 10,684
Deferred costs, less accumulated amortization 4,497 - 4,497
Other assets 7,458 1,250 (b) 8,708
-------------- -------------- --------------
Total Assets $ 1,093,098 37,493 1,130,591
============== ============== ==============
Liabilities and Stockholders' Equity
Mortgage loans payable $ 317,796 - 317,796
Acquisition and development line of credit 89,731 (62,507) (a)(b) 27,224
Notes payable - 100,000 (b) 100,000
-------------- -------------- --------------
Total debt 407,527 37,493 445,020
Accounts payable and other liabilities 17,064 - 17,064
Tenant's security and escrow deposits 2,763 - 2,763
-------------- -------------- --------------
Total liabilities 427,354 37,493 464,847
-------------- -------------- --------------
Exchangeable preferred units 78,800 - 78,800
Exchangeable operating partnership units 26,912 - 26,912
Limited partners' interest in consolidated partnerships 7,520 - 7,520
-------------- -------------- --------------
113,232 - 113,232
Common stock and additional paid in capital 567,014 - 567,014
Distributions in excess of net income (14,502) - (14,502)
-------------- -------------- --------------
Total stockholders' equity 552,512 - 552,512
-------------- -------------- --------------
Total liabilities and stockholders' equity $ 1,093,098 37,493 1,130,591
============== ============== ==============
See accompanying notes to pro forma condensed consolidated balance sheet.
Regency Realty Corporation
Notes to Pro Forma Condensed Consolidated Balance Sheet
June 30, 1998
(Unaudited)
(in thousands)
(a) Acquisitions of Shopping Centers:
In January 1998, the Company entered into an agreement to acquire shopping
centers from various entities comprising the Midland Group consisting of
21 shopping centers plus 11 shopping centers under development. The
Company had acquired 20 of the 21 Midland shopping centers prior to June
30, 1998 containing 2.0 million square feet for approximately $167.1
million. Those shopping centers are included in the Company's June 30,
1998 balance sheet. The one remaining shopping center, Windmiller Farms,
was acquired on July 15, 1998 using funds drawn on the Line. The center
was acquired for an aggregate purchase price of $13.3 million which is
reflected in the pro forma balance sheet.
Subsequent to June 30, 1998, the Company expects to acquire an additional
three properties under development for $41.3 million. In addition, during
1998, the Company expects to pay $4.6 million in additional costs related
to joint venture investments and other transaction costs related to
acquiring the various shopping centers from Midland, and during 1999 and
2000 expects to pay contingent consideration of $23.0 million. The
following table represents the properties under development which the
Company expects to acquire from Midland upon completion of construction
during 1998. These properties are not included in these pro forma
condensed consolidated financial statements.
Expected
Acquisition Purchase
Date Price
--------------- ---------------
Garner Festival October-98 $ 20,571
Nashboro October-98 7,260
Crooked Creek October-98 13,471
---------------
$ 41,302
===============
In addition, the Company acquired one other shopping center for an
aggregate purchase price of $22.9 million which is reflected in the pro
forma balance sheet. The shopping center, Pike Creek Shopping Center, was
acquired on August 4, 1998 using funds drawn on the Line.
(b) Represents the proceeds from a $100 million debt offering completed July
15, 1998, less offering costs of 1.25%. At closing, the Company used the
net proceeds from the Offering ($98.8 million) for the repayment of the
balance outstanding on the Line and the remainder was used to offset the
$36.2 million borrowed on the Line for the acquisitions of Pike Creek and
Windmiller Farms. The Company has recorded $1.2 million of financing costs
as an "Other Asset" to be amortized over the term of the Notes.
Regency Realty Corporation
Pro Forma Consolidated Statements of Operations
For the Six Month Period Ended June 30, 1998
and the Year Ended December 31, 1997
(Unaudited)
(In thousands, except share and per share data)
For the Six Month Period Ended June 30, 1998
Midland Acquisition Other
Historical Properties Properties Adjustments Pro Forma
(d) (e)
Revenues:
Minimum rent $ 47,661 3,913 3,074 (697) (i) 53,951
Percentage rent 1,662 - 154 (8) (i) 1,808
Recoveries from tenants 10,639 542 716 (67) (i) 11,830
Management, leasing and brokerage fees 5,406 - - - 5,406
Equity in income of investments
in real estate partnerships 146 - - - 146
-------------- -------------- -------------- ----------- --------------
65,514 4,455 3,944 (772) 73,141
-------------- -------------- -------------- ----------- --------------
Operating expenses:
Depreciation and amortization 11,385 817 (f) 902 (f) (453) (i) 12,651
Operating and maintenance 8,472 283 333 (122) (i) 8,966
General and administrative 7,262 231 205 (25) (i) 7,673
Real estate taxes 5,788 488 484 (81) (i) 6,679
-------------- -------------- -------------- ----------- --------------
32,907 1,819 1,924 (681) 35,969
-------------- -------------- -------------- ----------- --------------
Interest expense (income):
Interest expense 12,873 2,646 (g) 2,168 (h) (3,220) (j) 14,467
Interest income (966) - - - (966)
-------------- -------------- -------------- ----------- --------------
11,907 2,646 2,168 (3,220) 13,501
-------------- -------------- -------------- ----------- --------------
Income before minority interest
and gain on sale of real
estate investments 20,700 (10) (148) 3,129 23,671
Gain on sale of real estate investments 10,746 - - (9,336) (i) 1,410
Minority interest (1,092) - (3) 202 (893)
-------------- -------------- -------------- ----------- --------------
Net income 30,354 (10) (151) (6,005) 24,188
Preferred distributions - - - (3,250) (k) (3,250)
-------------- -------------- -------------- ----------- --------------
Net income for shareholders $ 30,354 (10) (151) (9,255) 20,938
============== ============== ============== =========== ==============
Net income per share (note (l)):
Basic $ 1.11 $ 0.73
============== ==============
Diluted $ 1.06 $ 0.72
============== ==============
See accompanying notes to pro forma consolidated statements of operations.
Regency Realty Corporation
Pro Forma Consolidated Statements of Operations
For the Six Month Period Ended June 30, 1998
and the Year Ended December 31, 1997
(Unaudited)
(In thousands, except share and per share data)
For the Year Ended December 31, 1997
Branch Midland Acquisition Other
Historical Properties Properties Properties Adjustments Pro Forma
(c) (d) (e)
Revenues:
Minimum rent $ 70,103 3,596 16,482 17,130 (4,136) (i) 103,175
Percentage rent 2,151 167 - 495 - 2,813
Recoveries from tenants 17,052 751 2,240 3,899 (548) (i) 23,394
Management, leasing and brokerage fees 7,997 1,060 - - - 9,057
Equity in income of investments
in real estate partnerships 33 - - - - 33
------------- --------- ----------- ---------- ------------ -----------
97,336 5,574 18,722 21,524 (4,684) 138,472
------------- --------- ----------- ---------- ------------ -----------
Operating expenses:
Depreciation & amortization 16,303 972 2,994 (f) 4,340 (f) (855) (i) 23,754
Operating and maintenance 14,212 595 1,194 2,306 (1,260) (i) 17,047
General and administrative 9,964 683 1,042 1,083 (49) (i) 12,723
Real estate taxes 8,692 404 1,635 2,450 (447) (i) 12,734
------------- --------- ----------- ---------- ------------ -----------
49,171 2,654 6,865 10,179 (2,611) 66,258
------------- --------- ----------- ---------- ------------ -----------
Interest expense (income):
Interest expense 19,667 1,517 10,353 (g) 11,778 (h) (6,439) (j) 36,876
Interest income (1,000) (33) - - - (1,033)
------------- --------- ----------- ---------- ------------ -----------
18,667 1,484 10,353 11,778 (6,439) 35,843
------------- --------- ----------- ---------- ------------ -----------
Income before minority interest
and gain on sale of real
estate investments 29,498 1,436 1,504 (433) 4,366 36,371
Gain on sale of real estate investments 451 - - - (451) (i) -
Minority interest (2,547) 1,010 (38) (2) (142) (1,719)
------------- --------- ----------- ---------- ------------ -----------
Net income 27,402 2,446 1,466 (435) 3,773 34,652
Preferred distributions - - - - (6,500) (k) (6,500)
------------- --------- ----------- ---------- ------------ -----------
Net income for shareholders $ 27,402 2,446 1,466 (435) (2,727) 28,152
============= ========= =========== ========== ============ ===========
Net income per share (note (l)):
Basic $ 1.28 $ 1.32
============= ===========
Diluted $ 1.23 $ 1.23
============= ===========
See accompanying notes to pro forma consolidated statements of operations.
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Six Month Period
Ended June 30, 1998 and
the Year ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
(c) Reflects pro forma results of operations for the Branch Properties for
the period from January 1, 1997 to March 7, 1997 (acquisition
date).
(d) Reflects revenues and certain expenses for the Midland Properties for the
period from January 1, 1998 to the earlier of the respective acquisition
date of the property or June 30, 1998, and for the year ended December 31,
1997.
For the period ended June 30, 1998
Property Acquisition Minimum Recoveries Operating and Real General and
Name Date Rent from Tenants Maintenance Estate Taxes Administrative
------------ ------------- -------------- -------------- -------------- --------------
Windmiller Farms 7/15/98 $ 574 $ 90 $ 34 $ 71 $ 32
Franklin Square 4/29/98 414 56 52 31 32
St. Ann Square 4/17/98 217 44 18 35 12
East Point Crossing 4/29/98 268 52 16 35 17
North Gate Plaza 4/29/98 234 33 18 27 10
Worthington Park 4/29/98 281 68 22 40 19
Beckett Commons 3/1/98 113 7 6 14 4
Cherry Grove Plaza 3/1/98 239 11 13 22 21
Bent Tree Plaza 3/1/98 137 11 7 59 8
West Chester Plaza 3/1/98 130 12 13 42 7
Brookville Plaza 3/1/98 95 5 5 8 4
Lake Shores Plaza 3/1/98 123 10 5 16 6
Evans Crossing 3/1/98 116 4 5 8 6
Statler Square 3/1/98 164 15 13 1 8
Kernersville Plaza 3/1/98 120 4 8 8 8
Maynard Crossing 3/1/98 272 38 13 15 15
Shoppes at Mason 3/1/98 116 27 15 33 6
Lake Pine Plaza 3/1/98 152 13 10 8 9
Hamilton Meadows 3/1/98 148 42 10 15 7
------------- -------------- -------------- --------------- -----------
$ 3,913 $ 542 $ 283 $ 488 $ 231
============= ============== ============== ================ ===========
For the year ended December 31, 1997
Property Acquisition Minimum Recoveries Operating and Real General and
Name Date Rent from Tenants Maintenance Estate Taxes Administrative
------------ ---------- ------------ -------------- ---------------- -------------
Windmiller Farms 7/15/98 $ 1,157 $ 181 $ 69 $ 143 $ 64
Franklin Square 4/29/98 1,270 171 158 94 98
St. Ann Square 4/17/98 741 149 60 119 42
East Point Crossing 4/29/98 821 159 50 107 51
North Gate Plaza 4/29/98 718 100 56 84 32
Worthington Park 4/29/98 862 208 67 124 59
Beckett Commons 3/1/98 687 140 38 83 47
Cherry Grove Plaza 3/1/98 1,445 175 85 131 105
Bent Tree Plaza 3/1/98 786 130 64 59 48
West Chester Plaza 3/1/98 807 70 72 84 45
Brookville Plaza 3/1/98 571 42 34 50 30
Lake Shores Plaza 3/1/98 759 156 55 96 32
Evans Crossing 3/1/98 613 84 34 50 33
Statler Square 3/1/98 913 76 43 54 60
Kernersville Plaza 3/1/98 605 58 29 51 33
Maynard Crossing 3/1/98 1,367 133 78 95 104
Shoppes at Mason 3/1/98 644 56 61 65 38
Lake Pine Plaza 3/1/98 827 93 54 51 46
Hamilton Meadows 3/1/98 889 59 87 95 75
---------- ------------ -------------- ---------------- -------------
$ 16,482 $ 2,240 $ 1,194 $ 1,635 $ 1,042
========== ============ ============== ================ =============
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Six Month Period
Ended June 30, 1998 and
the Year ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
(e) Reflects revenues and certain expenses for the Acquisition Properties for
the period from January 1, 1998 to the earlier of the respective
acquisition date of the property or June 30, 1998, and for the year ended
December 31, 1997.
For the period ended June 30, 1998
Property Acquisition Minimum Percentage Recoveries Operating and Real General and
Name Date Rent Rent from Tenants Maintenance Estate Taxes Administrative
------------ ------------ ----------- -------------- ------------ ------------ ---------
Delk Spectrum 1/14/98 $ 48 $ - $ 5 $ 2 $ 3 $ 2
Bloomingdale Square 2/11/98 214 6 53 25 24 21
Silverlake 6/3/98 346 - 60 36 36 18
Highland Square 6/17/98 516 51 86 46 79 60
Shoppes @104 6/19/98 620 - 133 72 79 28
Fleming Island 6/30/98 348 - 289 39 194 36
Pike Creek 8/4/98 982 97 90 113 69 40
------------ ----------- -------------- ------------ ------------ ---------
$ 3,074 $ 154 $ 716 $ 333 $ 484 $ 205
============ ============ ============== ============ ============ =========
For the year ended December 31, 1997
Property Acquisition Minimum Percentage Recoveries Operating and Real General and
Name Date Rent Rent from Tenants Maintenance Estate Taxes Administrative
------------ ------------ ----------- ------------ ------------ ------------- -------------
Oakley Plaza 3/14/97 $ 142 - $ 14 $ 13 $ 13 $ 8
Mariner's Village 3/25/97 185 6 37 45 33 7
Carmel Commons 3/28/97 297 11 63 38 35 22
Mainstreet Square 4/15/97 193 - 34 42 30 15
East Port Plaza 4/25/97 543 - 107 96 65 33
Hyde Park Plaza 6/6/97 1,702 118 339 144 265 84
Rivermont Station 6/30/97 642 - 124 65 56 34
Lovejoy Station 6/30/97 306 - 63 36 29 9
Tamiami Trails 7/10/97 508 - 163 124 66 30
Garden Square 9/19/97 671 - 232 144 99 50
Kingsdale 10/10/97 1,334 - 300 325 221 75
Boynton Lakes Plaza 12/1/97 1,159 - 391 267 250 80
Pinetree Plaza 12/23/97 279 - 51 50 37 21
Delk Spectrum 1/14/98 1,355 10 145 57 88 46
Bloomingdale Square 2/11/98 1,863 43 459 215 209 184
Silverlake 6/3/98 819 - 142 85 85 43
Highland Square 6/17/98 1,122 111 187 99 171 130
Shoppes @104 6/19/98 1,332 - 285 154 170 60
Fleming Island 6/30/98 698 - 581 79 388 72
Pike Creek 8/4/98 1,980 196 182 228 140 80
------------ ----------- ------------ --------- ------------- ---------------
$ 17,130 $ 495 $ 3,899 $ 2,306 $ 2,450 $ 1,083
============ =========== ============ ========= ============= ===============
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Six Month Period
Ended June 30, 1998 and
the Year ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
(f) Depreciation expense is based on the estimated useful life of the
properties acquired. For properties under construction, depreciation
expense is calculated from the date the property is placed in service
through the end of the period. In addition, the six month period ended
June 30, 1998 and year ended December 31, 1997 calculations reflect
depreciation expense on the properties from January 1, 1997 to the earlier
of the respective acquisition date of the property or June 30, 1998.
For the period ended June 30, 1998
Property Building and Year Building Depreciation
Name Improvements Built/Renovated Useful Life Adjustment
-------------- ----------------- ----------- -------------
Delk Spectrum $ 10,417 1991 34 $ 11
Bloomingdale Square 13,189 1987 30 51
Silverlake Shopping Center 7,584 1988 31 103
Highland Square 9,049 1960 20 208
Shoppes @104 6,439 1990 33 91
Fleming Island 4,773 1994 37 64
Pike Creek 18,082 1981 24 374
----------------
Acquisition Properties pro
forma depreciation adjustment $ 902
================
Midland Properties $ 131,065 Ranging from Ranging from
1986 to 1996 29 to 40 $ 817
================
For the year ended December 31, 1997
Property Building and Year Building Depreciation
Name Improvements Built/Renovated Useful Life Adjustment
-------------- ------------------ --------------- ----------------
Oakley Plaza $ 6,428 1988 31 $ 41
Mariner's Village 5,979 1986 29 47
Carmel Commons 9,335 1979 22 101
Mainstreet Square 4,581 1988 31 43
Hyde Park Plaza 33,734 1995 38 382
East Port Plaza 8,179 1991 34 76
Rivermont Station 9,548 1996 39 121
Lovejoy Station 5,560 1995 38 73
Tamiami Trails 7,598 1987 30 133
Garden Square 7,151 1991 34 151
Kingsdale 10,023 1997 27 288
Boynton Lakes Plaza 9,618 1993 36 244
Pinetree Plaza 3,057 1982 25 120
Delk Spectrum 10,417 1991 34 306
Bloomingdale Square 13,189 1987 30 440
Silverlake Shopping Center 7,584 1988 31 245
Highlands Square 9,049 1960 20 452
Shoppes @104 6,439 1990 33 195
Fleming Island 4,773 1994 37 129
Pike Creek 18,082 1981 24 753
Acquisition Properties pro ----------------
forma depreciation adjustment $ 4,340
================
Midland Properties 131,065 Ranging from Ranging from
1986 to 1996 29 to 40 $ 2,994
================
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Six Month Period
Ended June 30, 1998 and
the Year ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
(g) To reflect interest expense on the Line required to complete the
acquisition of the Midland Properties at the average interest rate
afforded the Company (6.525%) and the assumption of $97.0 million of debt.
For properties under construction, interest expense is calculated from the
date the property is placed in service through the end of the period.
Pro forma interest adjustment for
the six month period ended June 30, 1998 $ 2,646
===============
Pro forma interest adjustment for
the year ended December 31, 1997 $ 10,353
===============
(h) To reflect interest expense on the Line required to complete the
acquisition of the Acquisition Properties at the average interest rate
afforded the Company (6.525%). The six month period ended June 30, 1998
and year ended December 31, 1997 calculation reflects interest expense on
the properties from January 1, 1997 to the respective acquisition date of
the property.
Pro forma interest adjustment for
the six-month period ended June 30, 1998 $ 2,168
================
Pro forma interest adjustment for
the year ended December 31, 1997 $ 11,778
================
(i) In December, 1997, the Company sold one office building for $2.6 million
and recognized a gain on the sale of $451,000. During the first quarter of
1998, the Company sold three office buildings and a parcel of land for
$26.7 million, and recognized a gain on the sale of $9.3 million. The
adjustments to the pro forma statements of operations reflect the reversal
of the revenues and expenses from the office buildings generated during
1997 and 1998, including the gains on the sale of the office buildings as
if the sales had been completed on January 1, 1997. The Company believes
that excluding the results of operations and gains related to the office
buildings sold is necessary for an understanding of the continuing
operations of the Company.
(j) To reflect (i) interest expense and loan cost amortization on the $100
million debt offering offset by (ii) the reduction of interest expense on
the Line and mortgage loans from the proceeds of the debt offering, the
issuance of the preferred units and the proceeds from the sale of the
office buildings referred to in note (i).
Pro forma interest adjustment for
the six-month period ended June 30, 1998 $ (3,220)
==================
Pro forma interest adjustment for
the year ended December 31, 1997 $ (6,439)
==================
(k) To reflect the distribution on the offering of preferred units at an
assumed annual rate of 8.125% for the six-month period ended June
30, 1998 and year ended December 31, 1997.
Regency Realty Corporation
Notes to Pro Forma Consolidated Statements of Operations
For the Six Month Period
Ended June 30, 1998 and
the Year ended December 31, 1997
(Unaudited)
(In thousands, except unit and per unit data)
(l) The following summarizes the calculation of basic and diluted earnings
per unit for the six-month period ended June 30, 1998 and the
year ended December 31, 1997:
For the Six For the year
Months Ended Ended
June 30, 1998 December 31, 1997
---------------- -------------------
Basic Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding 24,837 17,424
================ ===================
Net income for common stockholders $ 20,938 $ 28,152
Less: dividends paid on Class B common stock 2,689 5,140
---------------- -------------------
Net income for Basic EPS $ 18,249 23,012
================ ===================
Basic EPS $ 0.73 1.32
================ ===================
Net income for Basic EPS $ 18,249 23,012
Add: minority interest of exchangeable partnership units 693 1,214
---------------- ------------------
Net income for Diluted EPS $ 18,942 24,226
================ ==================
Diluted Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding for Basic EPS 24,837 17,424
Exchangeable operating partnership units 1,135 1,243
Incremental units to be issued under common
stock options using the Treasury method 27 80
Contingent units or shares for the acquisition
of real estate 428 955
---------------- -------------------
Total Diluted Shares 26,427 19,702
================ ===================
Diluted EPS $ 0.72 $ 1.23
================ ===================
AGREEMENT OF SALE AND PURCHASE
BY AND BETWEEN
BIG VALLEY ASSOCIATES LIMITED PARTNERSHIP,
AS SELLER
AND
RRC ACQUISITIONS TWO, INC.,
AS PURCHASER
DATED AS OF MAY 1, 1998
1
0144/14611-001 NYLIB1/811114 05/06/98 04:26 PM (10540)
AGREEMENT OF SALE AND PURCHASE
This Agreement of Sale and Purchase (this "Agreement") is made
and entered into as of this 1st day of May, 1998, by and between BIG VALLEY
ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership ("Seller"), and
RRC ACQUISITIONS TWO, INC., a Florida corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller desires to sell, convey and assign fee simple
title to that certain real property (the "Land") located in New Castle County,
Delaware and more particularly described on Schedule A attached hereto together
with all right, title and interest of Seller in and to (i) the buildings,
structures, installations, fixtures and improvements (collectively, the
"Improvements") located on the Land, (ii) any machinery, apparatus, appliances,
equipment, furnishings, fittings and other tangible or intangible personal
property (collectively, the "Personalty") now or hereafter attached or
appurtenant to or forming a part of the Improvements or used in connection with
the maintenance and operation of the Improvements (excluding all personal
property belonging to any of the tenants of the Property (as hereinafter
defined)), and (iii) the Related Rights (as hereinafter defined) (the Land, the
Improvements, the Related Rights and the Personalty hereinafter sometimes
collectively referred to as, the "Property").
WHEREAS, Purchaser desires to purchase the Property from
Seller for the consideration and on the terms and conditions set forth herein,
and Seller has accepted such offer.
WHEREAS, Seller and Purchaser desire to enter into this
Agreement to evidence the agreements of Seller and Purchaser relative to the
terms and conditions on which the Property will be sold and conveyed by Seller
to Purchaser, or its Permitted Designee.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the receipt and adequacy of which are
hereby acknowledged and intending to be legally bound, Seller and Purchaser
hereby make and enter into this Agreement on the following terms and conditions:
ARTICLE I
Definitions
For the purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Actual Knowledge of Seller"1. Actual Knowledge of Seller shall mean the actual
knowledge of (i) the President of the general partner of the general partner
of Seller, and (ii) the account executive for the Property at Odin Management
Company, L.P. ("Odin"); in either case without imputing to Seller any
knowledge of any other party, including without limitation, any other
agents, managing agents or other representatives of Seller.
2 "Adjustment Date". Adjustment Date shall have the meaning set forth in
Paragraph 7 of Article III of this Agreement.
"Annual Rents". Annual Rents shall mean all Rents payable on an annual basis
by tenants pursuant to the Leases.
"Books and Records" Books and Recordsshall mean all records, books of account
and papers of Seller relating to the construction, ownership and
operations of the Property, including without limitation, architect's
drawings, blue prints and as-built plans, maintenance logs, copies of
warranties and guaranties, licenses and permits, records and correspondence
relating to insurance claims, financial statements, operating budgets,
paper and electronic media copies of data and other information relating to
the Property available from personal computers, structural, mechanical,
geotechnical or other engineering studies, soil test reports, environmental
reports, underground storage tank reports, ADA surveys or reports, OSHA
asbestos surveys, lease summaries and originals and/or copies of the Leases and
the Contracts and correspondence related thereto.
"Closing". Closing shall mean the consummation by Seller and Purchaser of the
sale and purchase of the Property on the Date of Closing as contemplated by this
Agreement.
"Contract". Contracts shall mean the service, maintenance and other contracts
and concessions that are currently in effect and to which Seller is a
party respecting the use, maintenance, development, sale or operation of the
Property or any portion thereof (but excluding this Agreement and the Leases)
which are listed on Schedule B together with any additions thereto,
modifications thereof or substitutions therefor hereafter entered into in
accordance with the provisions of this Agreement.
"Closing Date" or "Date of Closing". Closing Date or Date of Closing shall mean
that date on which the Closing shall occur, asprovided in Paragraph 1 of Article
III of this Agreement.
"Deposit". Deposit has the meaning given such term in Paragraph 2 of Article II
below.
"Due Dilligence Period". Due Dilligence Period has the meaning given such term
in Paragraph 1(b) of Article II below.
10. "Effective Date of thi Agreement".
Effective Date of this Agreement shall mean the date on which Seller and
Purchaser execute this Agreement, or if Seller and Purchaser do not execute
this Agreement on the same day, the later of the dates on which Seller and
Purchaser execute this Agreement.
11."Environmental Reports". Environmental Reports shall mean the Phase I and
Phase II environmental reports delivered to Purchaser by Seller prior to the
date hereof.
12 "Escrow Agent". Escrow Agent means Proskauer Rose LLP, as escrow agent
pursuant to Article IV hereof.
13. "Estoppel Letter" shall having the meaning ascribed thereto in Paragraph
4(i) of Article III of this Agreement.
14. "Excluded Leasing Commissions". Excluded Leasing Commissions shall mean
Leasing Commissions, if any, which may be due in connection with any
extension or renewal of existing Leases or any new or
expansion Leases which are entered into after the date hereof which are
approved by Purchaser as provided herein.
15. "Existing Documents". Existing Documents shall mean, with respect to
the Property, all of the Contracts and the Leases.
16. "Existing Indebtedness". Existing Indebtedness shall mean the indebtedness
evidenced by that certain Promissory Note in the original principal amount
of $12,800,000, dated November 20,1996, from the Partnership to GECC
(the "Surviving Note"), as further evidenced by that certain Loan Agreement,
dated as of November 20, 1996, between the Partnership and GECC and secured by
that certain Mortgage, Security Agreement and Fixture Filing, dated as of
November 20, 1996, between the Partnership and GECC (the "Surviving Mortgage").
17. "Exisiting Obligations". Existing Obligations shall mean the current
covenants, agreements and obligations binding on Seller or the Property under
the terms of the Existing Documents.
18. "Final Adjustment Date". Final Adjustnent Date shall have the meaning set
forth in Paragraph 7 of Article III of this Agreement.
19. "GECC" GECC shall mean General Electric Capital Corporation, a New York
corporation.
20. "Improvements". Improvements has the meaning given such term in the first
recital to this Agreement.
21. "Land". Land has the meaning given such term in the first recital to this
Agreement.
22."Lease Rights". Lease Rights means the rights of Seller as landlord or
lessor under the Leases.
23. "Leases". Leases means the leases, licenses or other tenancy or
occupancy agreements described in Schedule C attached hereto together with any
modifications thereto or any new or expansion leases entered into after the date
hereof, in each case which are approved by Purchaser as provided herein.
24. "Leasing Commissions". Leasing Commissions shall mean all leasing and other
real estate commissions,fees or other compensation payable by Seller to any
real estate broker, sales person or finder who is entitled to receive such
commission, fee or other compensation as a result of the leasing of space in the
Improvements owned by Seller to tenants (including, without limitation,
the extension, renewal or expansion of any lease pursuant to an exercise of an
option or otherwise).
25."Limited Partner Consent". Limited Parter Consent has the meaning given such
term in Paragraph 6(b) of Article II below.
26."Major Tenants". Major Tanants has the meaning given such term in Paragraph
4(i) of Article III below.
27. "Monthly Rents". Monthly Rents shall mean all Rents which are payable on a
monthly basis pursuant to the terms of the Leases.
28. "Mortgage Deposits". Mortgage Deposits shall have the meaning set forth in
Paragraph 6(m) of Article II of this Agreement.
29. "Past Due Rents". Past Due Rents has the meaning given such term in
Paragraph 7(a) of Article III below.
30. "Permitted Designee". Permitted Designee shall mean Regency Centers L.P.,
a Delaware limited partnership, or other affiliate of Purchaser approved
by Seller.
31. "Pemitted Exceptions". Permitted Exceptions shall mean, with respect to the
Property, the Title Exceptions described on Schedule D attached hereto and
any other Title Exceptions acceptable to Purchaser, only to the extent
applicable to the Property.
32."Person". Person shall mean an individual, partnership, corporation, limited
liability company, trust, estate, unincorporated association, syndicate, joint
venture or organization, or other entity, or a government or any department or
agency thereof.
33. "Personalty" Pesonalty has the meaning given such term in the first
recital to this Agreement.
34. "Property". Property has the meaning given such term in the first recital
to this Agreement.
35. "Real Property Taxes". Real Property Taxes shall mean any and all real
estate taxes, payments in lieu of real estate taxes, ad valorem and personal
property taxes, and other state, county and municipal taxes, charges and
assessments (special or otherwise).
36. "Realted Rights'. Related Rights shall mean:
(a) all easements, rights-of-way licenses, interests, rights
and appurtenances of any kind owned by the Seller appertaining to the Land,
including, but not limited to, any right, title and interest in and to any
adjacent vaults or alleys;
(b) all right, title and interest, if any, of Seller in and to
any land lying in the bed of any highway, street, road, avenue, access way or
easement opened or proposed, in front of, at a side of or adjoining the Land and
to the center line thereof; and all rights, titles and interests of Seller in
and to any awards made, or to be made in lieu thereof, and in and to any unpaid
awards for damage thereto by reason of a change of grade of any such highway,
street, road or avenue;
(c) Seller's right, title and interest in all security
deposits, if any, held in connection with the Leases, excluding any interest
earned thereon;
(d) Seller's right, title and interest in the Contracts and in
all the warranties, guaranties, bonds, building permits, utility reservations or
allocations (but not deposits), and certificates of compliance and occupancy,
relating to the Land, the Improvements or the Personalty;
(e) the Books and Records and all site plans, surveys, soil
and substrata studies, architectural drawings, plans and specifications,
engineering plans and studies, floor plans, landscape plans and other plans or
studies of any kind owned by Seller and in Seller's possession or in the
possession of Seller's members, employees, agents, or in the possession of Odin,
that relate to the Land, the Improvements or the Personalty;
(f) any condemnation award made or to be made in lieu thereof
relative to any damage to or any condemnation or other taking of the Land, the
Improvements or the Related Rights;
(g) any insurance proceeds relating to any casualty loss due
and owing to Seller as a result of damage or destruction of all or any portion
of the Property to the extent not applied by Seller to restore the Property; and
(h) Seller's right, title and interest in the Leases.
37. "Rents" Rents shall mean all rents, percentage rents, additional rents,
common area maintenance charges, escalation payments and other charges payable
by the tenants under the Leases, excluding Real Property Taxes that are payable
by tenants under the Leases.
38.. "Survey". Survey shall mean, with respect to the Property, a plat of a then
current (not more than ninety (90) days old or such lesser time as may be
required by Title Insurer to issue the Title Policy) "as-built" ALTA survey of
the Land and Improvements. The survey shall (A) be in accordance with the
applicable Delaware law and custom; (B) show the location of all buildings,
structures and easements on each of the parcels, all encroachments, if any, and
such other matters as reasonably requested by Purchaser or Title Insurer in
order to issue the Title Policy, and (C) be certified to each of Purchaser and
Title Insurer.
39. "Title Commitment". Title Commitment shall mean, with respect to the
Property, an ALTA form of Commitment for Title Insurance issued by the Title
Insurer, updated as of the Closing Date, setting forth the terms and
conditions on which, and the Title Exceptions subject to which, the Title
Insurer will issue the Title Policy, and legible copies of all instruments
therein referred to as evidencing Title Exceptions.
40. "Title Exceptions" Title Exceptions shall mean, with respect to the
Property, the defects in, exceptions to, or conditions or liens or other
encumbrances on the title to the Land, the Improvements or such of the Related
Rights as are related to the Property whether evidenced by written instrument
or otherwise evidenced; any overlapping upon the Land by improvements situated
on other lands; anyencroachments upon or by the Land or Improvements; any
boundary disputes regarding the boundaries of the Land; and the terms,
provisions and conditions contained in any instruments evidencing or referring
to any such defects, exceptions, conditions, liens or other encumbrances,
overlaps, encroachments or boundary disputes.
41."Title Insurer" Title Insurer shall mean First American Title
Insurance Company.
42. "Title Policy". Title Policy shall mean, with respect to the Property, an
ALTA 1992 (10-17-92) Owners Policy of Title Insurance with Comprehensive
Endorsement 100, issued to Purchaser, or its Permitted Designee, by the Title
Insurer as contemplated in Article III below, and subject only to the
Permitted Exceptions.
43. "UCC Searches". UCC Searches shall mean reports of searches made of the
Property and Uniform Commercial Code Records of the county and city in which
the Land is located and of the Uniform Commercial Code Records maintained in
the office of the Secretary of State of Louisiana, with regard to Uniform
Commercial Code Financing Statements in which Seller is named as the debtor,
by both the respective Recorder of Deeds and the Secretary of State of
Delaware,respectively, or by the Title Insurer or other reputable concern
regularly engaged in the search of such records and the issuance of such
reports.
44. "Update". Update has the meaning given such term in Paragraph 3 of
Article II below.
The terms used in this Agreement which are defined in (a) the
introductory paragraphs of this Agreement, (b) in the further Articles of this
Agreement, and (c) in the Schedules and Exhibits attached to this Agreement,
shall have the respective definitions there ascribed to them.
ARTICLE II
Agreement to Sell and Purchase;
Terms of Sale and Purchase
. (a) Subject to the terms, covenants and conditions of this
Agreement, Seller agrees to sell and convey the Property to Purchaser, and
Purchaser agrees to purchase and accept the Property from Seller, for the
consideration and subject to the terms, covenants, conditions and provisions
herein set forth.
(b)Purchaser shall have from the date hereof through and including the later of
(i) June 7, 1998, or (ii) the day which is ten (10) days after the later of the
dates on which Purchaser receives (w) the Title Commitment, (x) the Survey and
(y) the forms of the consent to the transaction by the holder of the Surviving
Mortgage and (z) any assignment and assumption or other documents required by
the holder of the Surviving Mortgage to consummate the transactions contemplated
hereby, but in no event later than June 15, 1998, (the "Due Diligence Period")
to conduct at Purchaser's sole cost and expense, (i) non-invasive due diligence
investigations and analysis of the Property and all information pertaining to
the Property, including, without limitation, reviewing environmental and
engineering reports, surveys, title reports (including the Permitted
Exceptions), the Leases and any other matters deemed necessary or desirable in
Purchaser's judgment and (ii) subject to the conditions and terms of the
immediately following sentence and subject to the prior approval of Seller,
which approval shall not be unreasonably withheld or delayed, conduct such
invasive due diligence inspections of the Property as may be reasonably required
in order to investigate any environmental conditions disclosed by the
Environmental Reports. Subject to the rights of the tenants under the Leases,
Seller shall permit Purchaser, at reasonable times and upon prior written notice
to Seller, access to the Property to Purchaser for the purpose of conducting
such reasonable inspections as Purchaser shall deem necessary and Purchaser does
hereby agree to indemnify and hold Seller harmless from and against any and all
loss, damage, cost and expense which may be suffered or incurred by Seller as a
result of any inspections performed by Purchaser on the Property. In addition,
Seller shall permit Purchaser to interview any tenants under the Leases who are
willing to be interviewed by Purchaser, provided that (i) Purchaser gives Seller
reasonable notice of Purchaser's intent to interview a tenant, (ii) Seller
and/or its representative may be present at the interview and (iii) a time
mutually agreeable to Seller, Tenant and Purchaser is scheduled for such
interview.
If Purchaser, in its sole discretion, determines that it is
not satisfied with the results of its due diligence investigation and that it
does not desire to consummate the transactions contemplated hereby, and notifies
Seller by 5:00 p.m. - Eastern Daylight Time on the last day of the Due Diligence
Period of its election to terminate this Agreement, then the Deposit (and any
interest earned thereon) shall be returned to Purchaser and this Agreement shall
thereupon become null and void and there shall be no further obligations or
liability of the parties hereto except such obligations as are expressly stated
to survive a termination of this Agreement.
.. Deposit and Purchase Price
(a) Purchaser shall deposit with Escrow Agent (the
"Deposit") the sum of One Hundred
Thousand and No/100 Dollars ($100,000.00) upon the execution and delivery of
this Agreement, by wire transfer of Federal funds to an account designated by
Escrow Agent (the "Escrow Account"). Provided Purchaser has not exercised its
right to terminate this Agreement during the Due Diligence Period as provided
for in Section 1(b) of this Agreement, Purchaser shall deposit with the Escrow
Agent the sum of Four Hundred Thousand and No/100 Dollars ($400,000.00) no later
than the next business day after the day of the expiration of the Due Diligence
Period, by wire transfer of Federal funds to the Escrow Account, such amount
being considered for purposes of this Agreement as part of the Deposit upon its
receipt by Escrow Agent.
(b) Escrow Agent shall hold and apply the Deposit (and any interest earned
thereon) in accordance with the terms of Article IV herein.
The consideration for the conveyance of title to the Property (the "Purchase
Price") shall be the sum of Twenty-Two Million Five Hundred Thousand and No/100
Dollars ($22,500,000.00), payable as follows:
(a) At Closing, Purchaser shall pay to Seller the sum of Twenty-Two Million Five
Hundred Thousand and No/100 Dollars ($22,500,000.00) (subject to the adjustments
hereinafter set forth), less the amounts set forth in clauses (b) and (c) of
this Section 2.2, by wire transfer of immediately available Federal funds to an
account or accounts as may be designated by Seller in writing not less than two
business days prior to the Date of Closing; and
(b) The amount of the Deposit held by Escrow Agent
shall be paid to Seller by Escrow Agent; and
(c) Purchaser shall acquire title to the Property subject to the outstanding
principal balance of the Existing Indebtedness as of the Date of Closing.
(a) Within three (3) days after the Effective Date of this Agreement,
Purchaser shall order from the Title Insurer, with respect to the Property,
at Purchaser's expense: (i) a Title Commitment covering Seller's
interest in the Land, the Improvements and the Related Rights and (ii) the UCC
Searches with respect to the Property.
(b)Purchaser shall notify the attorneys for Seller in writing of any of
Purchaser's objections to title disclosed in the Title Commitment within the
later of (x) ten (10) days of Purchaser's receipt of the Title Commitment, or
(y) ten (10) days after the date hereof. Seller shall have no obligation to
remove any exception to title which is a Permitted Exception and, except as
expressly provided in this Agreement, Seller shall have no obligation to remove
any exception to title which is not a Permitted Exception. If exceptions to
title appear on the Title Commitment, or any update of the Title Commitment
issued on or prior to the Date of Closing (an "Update"), which Seller is not
obligated to remove, and if Seller is unable, or elects not, to eliminate such
exceptions to title and, accordingly, is unable to convey title to the Property
in accordance with the provisions of this Agreement, Seller shall so notify
Purchaser and Purchaser, within ten (10) days following Purchaser's receipt of
said notice, shall either (i) elect to terminate this Agreement by notice given
to Seller, in which event the Escrow Agent shall refund the Deposit together
with any interest accrued thereon to Purchaser and no party shall thereafter
have any further rights, duties or obligations hereunder, or (ii) elect to
accept title to the Property subject to such exceptions, without any abatement
of the Purchase Price. If Purchaser shall not make such election within such ten
(10) day period, Purchaser shall be deemed to have elected clause (ii) above
with the same force and effect as if Purchaser had elected clause (ii) within
such ten (10) day period. Notwithstanding the foregoing, in the event that as of
the Date of Closing the Property shall be subject to any monetary liens (i.e.,
judgment liens, mechanics liens, mortgages or deeds of trust) voluntarily placed
against the Property by Seller other than any Permitted Exceptions
(collectively, "Liens"), then Seller shall be required to cause such Liens to be
removed and discharged of record on or before the Date of Closing; provided,
however, that if the amount required to cause such Liens to be discharged shall
exceed the sum of $125,000, then Seller, at its option, shall be entitled to
terminate this Agreement upon written notice to Purchaser in which event the
Deposit together with any interest earned thereon shall be returned to Purchaser
and neither Purchaser nor Seller shall have any further rights, duties or
obligations hereunder. Notwithstanding the foregoing, Seller shall remove and
discharge of record any mortgages or deeds of trust voluntarily placed against
the Property by Seller other than Permitted Exceptions and, subject to the
prorations hereinafter provided, Seller shall be entitled to receive any escrows
on deposit with the holders of any such mortgages or deeds of trust.
(c) Notwithstanding anything to the contrary contained in Paragraph 3(b) hereof,
if the Title Commitment or any Update discloses judgments, bankruptcies or other
returns against other persons or entities having names the same as or similar to
that of Seller, Seller, on request, shall deliver to Purchaser or the Title
Insurer affidavits to the effect that such judgments, bankruptcies or other
returns are not against Seller. If the Title Commitment or any Update discloses
exceptions (other than the Permitted Exceptions) which may be removed solely by
delivery of an affidavit, reasonably requested by the Title Insurer, which can
be delivered by Seller or by reference to Seller's existing title policy, Seller
shall deliver such affidavit and remove such exceptions. If the Title Commitment
or any Update discloses exceptions (other than the Permitted Exceptions)
including, without limitation, mortgages, judgments, mechanics liens arising
from work performed at the direction of Seller, or federal, state or local tax
liens against Seller, and, except as otherwise provided in the last sentence of
subsection 3(b) above, Seller, in its sole discretion, chooses not to remove
such exceptions, Purchaser is entitled to elect to terminate this Agreement and
to receive the Deposit and all interest earned thereon. If Seller is required or
chooses, in its sole and absolute discretion, to remove such exceptions, Seller
shall be entitled to one or more adjournments of the Closing (not in excess of
90 days in the aggregate) to remove such exceptions. Notwithstanding the
foregoing, Seller, at its option in lieu of satisfying such liens or
encumbrances and provided that the amount required to satisfy such liens and
encumbrances does not exceed $50,000, may deposit with the Title Insurer such
amount of money as may be determined by the Title Insurer as being sufficient to
induce it to affirmatively insure Purchaser against such liens and/or
encumbrances, including interest and penalties, out of or against the Property
(and to omit such exceptions from any mortgagee policy in favor of Purchaser's
lender), in which event such liens and encumbrances shall not be objections to
title.
. Within three (3) days after the Effective Date of this
Agreement, Purchaser shall order, at Purchaser's expense, a Survey with respect
to the Property, prepared and certified as to all matters shown thereon by a
registered, public surveyor acceptable to Purchaser and the Title Insurer.
Purchaser shall notify the attorneys for Seller in writing of any Title
Exceptions disclosed by the Survey (including any matters disclosed by the
Survey which affect or relate to any of the Permitted Exceptions in a material
adverse manner and renders such Permitted Exceptions unacceptable to Purchaser,
in the exercise of Purchaser's reasonable judgment) within the later of (x) ten
(10) days of Purchaser's receipt of same, or (y) ten (10) days after the date
hereof. Except as expressly provided in this Agreement, Seller shall have no
obligation to remove any such Title Exceptions disclosed by the Survey. If any
such Title Exceptions disclosed by the Survey exist which Seller is not
obligated to remove, and if Seller is unable, or elects not, to eliminate such
Title Exceptions, Seller shall so notify Purchaser and Purchaser, within ten
(10) days following Purchaser's receipt of said notice, shall either (i) elect
to terminate this Agreement by notice given to Seller, in which event the Escrow
Agent shall refund the Deposit together with any interest earned thereon to
Purchaser and no party shall thereafter have any further rights, duties or
obligations hereunder, or (ii) elect to accept title to the Property subject to
such Title Exceptions as shown on the Survey, without any abatement of the
Purchase Price. If Purchaser shall not make such election within such ten (10)
day period, Purchaser shall be deemed to have elected clause (ii) above with the
same force and effect as if Purchaser had elected clause (ii) within such ten
(10) day periodPurchaser hereby acknowledges that Purchaser has received and
approved the copies of the Leases relating to the Property.
Seller hereby represents and warrants to Purchaser as of the date hereof that:
(a) Seller is a limited partnership duly organized, validly existing and in good
standing existing under the laws of the State of Delaware.
(b) Seller, and the general partner of Seller executing this Agreement (the
"General Partner"), each have all requisite power and authority to enter into
and perform and carry out this Agreement and the transactions contemplated
hereby, subject, however, to Seller obtaining the written consent of limited
partners of Seller whose Capital Contributions (as such term is defined in
Seller's Third Amended and Restated Limited Partnership Agreement, dated as of
February 1, 1986) are at least 66 2/3 percent of the Capital Contributions of
all of the limited partners admitted as limited partners of the Seller ("Limited
Partner Consent"), and this Agreement and the transactions contemplated hereby
are in all respects subject to and conditioned upon Seller's obtaining such
consent, as provided in Paragraph 24 of Article V of this Agreement. Subject to
obtaining the consent of Seller's limited partners as provided above, (i) this
Agreement has been duly executed and delivered by Seller by its General Partner
and constitutes the valid, binding and enforceable obligation of Seller, subject
to applicable bankruptcy and insolvency laws and affecting the rights of
creditors generally, and (ii) all documents to be executed and delivered by
Seller by its General Partner in connection herewith, upon execution and
delivery thereof, shall constitute the valid, binding and enforceable
obligations of Seller in accordance with their respective terms, subject to
applicable bankruptcy and insolvency laws and affecting the rights of creditors
generally. Seller agrees to endeavor in good faith to obtain the Limited Partner
Consent by June 10, 1998.
(c) Neither the execution and delivery of this Agreement nor the consummation of
the purchase contemplated hereby in accordance with the terms hereof conflicts
with, results in a breach of the terms, conditions or provisions of, or
constitutes a default or grants a right to termination or acceleration under (a)
Seller's organizational papers or any amendment thereof, or (b) any lien, lease,
agreement, franchise, license, permit, instrument or other undertaking, or any
order, writ, injunction, decree or award or any court or governmental authority
or body, to which Seller is a party or by which it is or may be bound, or
results in a violation of any applicable law, statute, ordinance, rule or
regulation; provided, however, the parties hereto acknowledge that the Closing
is subject to (i) the consent of GECC to the assignment of the Existing
Indebtedness from Seller to Purchaser and (ii) the receipt by the Seller of the
Limited Partner Consent and that the representation in this Paragraph 6(c) with
respect to the consummation of the transactions contemplated hereby assumes that
such consent of GECC and the Limited Partner Consent are received.
(d) The execution and delivery of, and consummation of the transactions
contemplated by, this Agreement is not prohibited by, and will not conflict
with, constitute grounds for termination of, or result in the breach of the
Leases, the Existing Documents or any other agreement or instrument to which
Seller is now a party or otherwise subject, subject, however, to Seller
obtaining the written consent of GECC to the assignment of the Existing
Indebtedness to Purchaser.
(e)Seller(without imputing to Seller any knowledge of the receipt of any written
notices by any managing agent, agent for service of process or any other third
party) has not received any written notice, and has no Actual Knowledge of the
issuance of any written notice, issued by the departments of building, fire,
labor, health or other departments and governmental agencies having jurisdiction
against or affecting the Property that the Property is in violation of
applicable local, state or federal laws, statutes, rules, regulations and
ordinances (including, without limitation, zoning and environmental regulations
and ordinances). Notwithstanding the foregoing, Purchaser acknowledges that it
has been notified of the exceptions to the foregoing representation which are
listed on Schedule E attached hereto.
(f) To the Actual Knowledge of Seller, there is no action, suit, proceeding or
claim (including any pending or threatened condemnation proceedings), affecting
Seller or the Property, or any portion thereof, relating to or arising out of
the ownership, management, operation, use or occupancy of the Property pending
or being prosecuted in any court or by or before any federal, state, county or
municipal departments, commission, board, bureau or agency or other governmental
instrumentality nor, to the Actual Knowledge of Seller, is any such action,
suit, proceeding or claim threatened or being asserted.
(g) Except for the Excluded Leasing Commissions (which shall be the
responsibility of Purchaser), all Leasing Commissions due in connection with
the Leases shall be paid by Seller on or before the Date of Closing.
(h) To the Actual Knowledge of Seller, there is no (1) pending or contemplated
annexation or condemnation proceedings affecting, or which may affect, all or
any portion of the Property, (2) proposed or pending proceeding to change or
redefine the zoning classification of all or any portion of the Property or (3)
proposed change in road patterns or grades which may adversely affect access to
the roads providing a means of ingress to or egress from the Property.
(i) Annexed hereto as Schedule C, is a true and complete list of all Leases of
space at the Property in effect as of the date hereof, which schedule sets forth
(i) the monthly rentals reserved thereunder, (ii) the amount of any security
deposits held thereunder (subject to possible future application thereof in
accordance with the terms and conditions of the applicable Lease), and (iii) the
expiration date of such Leases. True, complete and correct copies of the Leases
and all amendments, modifications and supplements have been delivered to
Purchaser prior to the date hereof and Purchaser hereby acknowledges receipt of
the same, and upon Closing Purchaser shall be deemed to have approved such
Leases and all amendments, modifications and supplements and the tenants
thereunder. Except for the Leases described in Schedule C hereto, Seller has not
entered into any leases, licenses or occupancy agreements affecting the
Property.
(j) Annexed hereto as Schedule G is a true, complete and correct copy of the
certificate of insurance covering the Property and which reflects the coverages
applicable thereto. All such insurance (or replacements or renewals thereof)
shall be maintained in full force and effect until the Closing Date.
(k) Seller is not a foreign person as defined in Section 1445 of the Internal
Revenue Code. Seller shall deliver to Purchaser at the Closing a non-foreign
person affidavit ("Firpta Affidavit") containing such information as shall be
required by said Section 1445.
(l) Except for the Permitted Exceptions and as otherwise provided in Schedule H
attached hereto, on the Date of Closing there will not be any Contracts, or
other agreements which will be binding on Purchaser subsequent to the Date of
Closing with respect to any Property which cannot be canceled, at Purchaser's
option upon the giving of prior written notice.
(m) To Seller's knowledge, without investigation or inquiry and based solely on
the review of the records of Odin, (i) the Surviving Mortgage is presently held
by GECC and is in good standing with no default thereunder, (ii) the principal
balance of the Surviving Note outstanding as of April 16, 1998, was
$12,568,773.46 and the monthly payment of principal and interest, including a
payment on account of the tax and insurance escrow in the amount of $11,667.00,
due May 1, 1998 under the Surviving Note is $121,759.51, (iii) the Existing
Indebtedness presently bears interest as the rate of nine and four
one-hundredths percent (9.04%) per annum, as provided in the Surviving Note; and
(iv) as of April 16, 1998, Seller had escrow deposits with the holder of the
Surviving Mortgage totaling $79,825.45 for taxes and insurance and $35,000 for
capital improvements and otherwise ("Mortgage Deposits"). Purchaser and Seller
agree that in connection with the Closing the Purchaser shall acquire Seller's
interest in the Mortgage Deposits, subject to the rights of the holder of the
Surviving Mortgage and the provisions of the Surviving Mortgage, and that at
Closing Purchaser shall pay to Seller in cash the amount of the Mortgage
Deposits at the time of Closing. Seller shall use reasonable efforts to cause
the holder of the Surviving Mortgage to execute and deliver to Purchaser prior
to the expiration of the Due Diligence Period (i) an estoppel in form and
substance reasonably acceptable to Purchaser (provided, however, obtaining such
estoppel is not a condition to Closing) and (ii) the holder's written consent to
the transactions contemplated hereby.
Purchaser hereby represents and warrants to Seller as of the date hereof that:
(a) Purchaser is a corporation duly organized, validly existing, and in good
standing under the laws of State of Florida, and has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as now conducted and to consummate the transactions contemplated hereby.
(b) Purchaser has full right, power and authority to enter into this Agreement
and all documents and agreements described herein to be executed by Purchaser
and to consummate the transactions contemplated hereby, and this Agreement and
such other documents and agreements constitute (or will constitute when
executed and delivered) the valid, binding and enforceable obligation of
Purchaser in accordance with their respective terms, subject to applicable
bankruptcy and insolvency laws and affecting the rights of creditors generally.
(c) Neither the execution and delivery of this Agreement nor the consummation of
the purchase contemplated hereby in accordance with the terms hereof conflicts
with, results in a breach of the terms, conditions or provisions of, or
constitutes a default or grants a right to termination or acceleration under (a)
Purchaser's organizational papers or any amendment thereof, or (b) any
indenture, mortgage, deed of trust, lien, lease, agreement, franchise, license,
permit, instrument or other undertaking, or any order, writ, injunction, decree
or award or any court or governmental authority or body, to which Purchaser is a
party or by which it is or may be bound, or results in a violation of any
applicable law, statute, ordinance, rule or regulation.
(d)To the actual knowledge of Purchaser, there is no action, suit or proceeding
pending or, threatened against Purchaser in any court or by or before any other
governmental agency or instrumentality which would materially and adversely
affect the ability of Purchaser to carry out the transactions contemplated by
this Agreement.
(e)There are no actions, voluntary or involuntary, pending against Purchaser
under any bankruptcy, reorganization, arrangement, insolvency or similar United
States federal or state statute.
Prior to the Closing, Seller shall keep and maintain the Property in the manner
presently maintained and operated by Seller (ordinary wear and tear excepted),
including without limitation using reasonable efforts to maintain the Surviving
Mortgage in good standing, without default. Prior to Closing, unless required by
law or to effect or comply with the request or direction of a branch, department
or agency of the United States government, Seller shall not, without the prior
written consent of Purchaser, which consent shall be not be unreasonably
withheld or delayed:
(a) amend, renew, extend or modify any Lease in any material respect; except as
a result of a default by the tenant under any Lease, terminate or accept the
surrender of any Lease; or enter into any new lease of any portion of the
Property or approve any sublease or assignment of Lease;
(b) except as otherwise required under the Leases, permit any structural
modification or additions to the Improvements or the Land except for
insubstantial and immaterial changes which do not adversely affect the
Improvements or the Land or the value thereof;
(c) sell or otherwise dispose of any item or groups of items constituting the
Personalty except for insubstantial and immaterial changes which do not
adversely affect the Improvements or the Land or the value thereof;
(d) offer or sell (or agree to offer or sell) or encumber (or agree to encumber)
any part of the Property, or create (or agree to create) any exception to or
covenant, restriction, easement or other servitude on the Property; or
(e) cancel or lower the limits of any existing insurance coverage on the
Property.
Seller shall bear the risk of all loss or damage to the Property from all causes
through the Closing. In the event, on or prior to the Date of Closing, any of
the Improvements, the Land or any of the items constituting the Personalty
should be damaged or destroyed as a result of fire or other casualty or any
other cause whatsoever, Seller shall promptly give Purchaser written notice of
such destruction or damage. The rights and obligations of Seller and Purchaser
by reason of such destruction or damage shall be as follows:
(a) If the cost of repair and restoration (as such term is defined below) of
such destruction or damage shall be $250,000 or less with respect to the
Property, the obligations of Purchaser with respect to the Property shall not be
affected by such destruction or damage and Purchaser shall accept title to the
Property in its destroyed or damaged condition; but (i) at the Closing,
Seller shall assign to Purchaser all of Seller's rights, title and interests in
and to the proceeds of any insurance carried by Seller and payable with respect
to such destruction or damage (other than as have been used for repairs); (ii)
Seller shall pay any deductible on the applicable insurance policy with respect
to such destruction or damage or credit the amount of such deductible against
the Purchase Price; and (iii) there shall be no other reduction in the Purchase
Price.
(b) If the cost of repair and restoration of such destruction or damage shall
exceed $250,000 with respect to the Property, Purchaser shall have the option
either to: (i) accept title to the Property in its destroyed or damaged
condition in accordance with and subject to the provisions of subparagraph (a)
above; or (ii) terminate this Agreement by giving notice to such effect to
Seller not later than ten (10) days after the cost of repair and restoration is
determined (as provided below); upon the giving of such notice by Purchaser, the
Deposit together with any interest earned thereon shall be returned to Purchaser
and neither Seller nor Purchaser shall have any further obligation hereunder.
The term "cost of repair and restoration" shall mean an estimate of actual cost
of repair and restoration obtained by Purchaser, within ten (10) days of receipt
of notice from Seller from a reputable contractor regularly doing business in
the county where the Property is located provided that if such Seller does not
agree with such estimate, such Seller may obtain, within ten (10) days of
receipt of notice of the estimate obtained by Purchaser, an estimate from a
reputable contractor regularly doing business in such county, and if such
contractor shall not agree to the estimate obtained by Purchaser, then, said
contractors shall obtain an estimate from a third reputable contractor regularly
doing business in such county and the "cost of repair and restoration" shall
mean the estimate of such third contractor.
If, after the date hereof and prior to the Closing, all or any material portion
of the Property is condemned or taken by eminent domain (or is the subject of a
pending or contemplated condemnation proceeding or taking by eminent domain
which has not been completed), or if any variance or similar law affecting any
significant portion of the Property is changed, the Seller shall promptly give
the Purchaser reasonably detailed written notice of such condemnation,
taking or change, and the Purchaser shall have the option to terminate this
Agreement by giving notice to Seller within twenty (20) days after the receipt
of Seller's notice, whereupon this Agreement shall be terminated, the Deposit
together with any interest earned thereon shall be returned to Purchaser and
thereafter neither Seller nor Purchaser shall have any further obligations
hereunder. If the Purchaser does not exercise its option to terminate this
Agreement as hereinabove set forth, then this Agreement shall remain in
full force and effect without a reduction in the Purchase Price and the
Purchaser shall be entitled to any and all claims that Seller may have to
condemnation awards and/or any and all causes of action with respect to such
condemnation or taking of, or such change relating to, the Property and Seller
shall pay to the Purchaser, by certified or official bank check, an amount equal
to all payments theretofore made with respect to such condemnation, taking or
change. For purposes of this paragraph, a taking by condemnation or by eminent
domain of the Property shall be deemed to affect a "material portion" of such
Property if (i) the estimated value of the portion of the Property taken exceeds
$250,000 or (ii) it results in any Major Tenant having the right to terminate
its Lease as a result of such taking by condemnation or by eminent domain or
(iii) it results in a reduction of rent payable by the Major Tenants in
excess of five percent (5%) of the rent payable by the Major Tenants prior to
such taking. ARTICLE III
Closing Conditions and Other Closing Matters
. The Closing shall be on or about June 15, 1998, or such
other date as the parties hereto shall agree, but in no event earlier than five
(5) days after the expiration of the Due Diligence Period or later than June 22,
1998, time being of the essence as of such date. The Closing shall take place on
the Closing Date at 10:00 a.m. at the offices of Proskauer Rose LLP, 1585
Broadway, New York, New York or at such other place as may be mutually agreed
upon by Seller and Purchaser. At Seller's option, the Closing shall be conducted
as an escrow closing pursuant to an escrow closing agreement to be entered into
by Seller and Purchaser with First American Title Insurance Company on terms
mutually satisfactory to Seller and Purchaser.
. The obligation of Purchaser to consummate the transactions
provided for herein is subject to and contingent on the satisfaction of the
following conditions or the waiver of the same by Purchaser:
(a) All of the representations and warranties of Seller set forth in this
Agreement shall be true and correct in all material respects as of the Date of
Closing.
(b) Seller shall have performed, satisfied and complied with, in all material
respects, all covenants, agreements and conditions required by this Agreement to
be performed or complied with by Seller on or before the Date of Closing.
(c) Purchaser or its Permitted Designee shall have received the Title Policy.
(d) Purchaser or its Permitted Designee shall have received the Estoppel Letters
from (i) all Major Tenants in accordance with Paragraph 4 of this Article III
and (ii) at least eighty percent (80%) of all other tenants in accordance with
Paragraph 4 of this Article III.
(e) Seller shall have obtained the Limited Partner Consent as set forth in
Paragraph 24 of Article V.
The conveyance of the Property to Purchaser, or its Permitted Designee, by
Seller shall have been approved by GECC, and Purchaser, or its Permitted
Designee, shall have been approved, in writing, by GECC to assume the Existing
Indebtedness, including, without limitation, the Surviving Mortgage, loan
agreement and Surviving Note evidencing the Existing Indebtedness and the
documentation necessary to effectuate such assignment and assumption shall be
fully executed and delivered prior to Closing.
In the event that any of the foregoing conditions shall not be
satisfied or waived by Purchaser on or before the Date of Closing, this
Agreement shall be deemed terminated and of no further force, the Deposit
together with any interest earned thereon shall be returned to Purchaser and
neither Purchaser nor Seller shall have any further rights, duties or
obligations hereunder.
. The obligation of Seller to consummate the transactions
provided for herein is subject to and contingent on the satisfaction of the
following conditions or the waiver of the same by Seller:
(a) All of the representations and warranties of Purchaser set forth in this
Agreement shall be true and correct in all material respects as of the Date of
Closing.
(b) Purchaser shall have performed, satisfied and complied, in all material
respects, with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by Purchaser on or before the Date of
Closing.
(c) Seller shall have obtained the Limited Partner Consent as set forth in
Paragraph 6(b) of Article II of this Agreement.
d) The conveyance of the Property to Purchaser, or its Permitted Designee, by
Seller shall have been approved by GECC, and Purchaser, or its Permitted
Designee, shall have been approved, in writing, by GECC to assume the Existing
Indebtedness, including, without limitation, the mortgage, loan agreement and
note evidencing the Existing Indebtedness and the documentation necessary to
effectuate such assignment and assumption shall be fully executed and delivered
prior to Closing.
In the event that any of the foregoing conditions shall not be
satisfied or waived by Seller on or before the Date of Closing, this Agreement
shall be deemed terminated and of no further force, the Deposit together with
any interest earned thereon shall be returned to Purchaser and neither Purchaser
nor Seller shall have any further rights, duties or obligations hereunder.
. At Closing, Seller shall deliver and furnish to Purchaser,
or its Permitted Designee (either directly or under the terms of the closing
escrow agreement), duly executed, notarized originals of the following documents
(the"Seller Closing Documents"):
(a) Special warranty deed (the "Deed") in the form attached hereto as
Exhibit A so as to convey to Purchaser, or its Permitted Designee, all of
Seller's title to the Property, free of all liens and encumbrances to the extent
expressly provided herein other than the Permitted Exceptions and the Leases,
which Deed will be in recordable form, duly executed;
(b) An original counterpart of an Assignment and Assumption of Leases in
the form attached hereto as Exhibit B for the Leases (the "Assignment and
Assumption of Leases"), assigning to Purchaser, or its Permitted Designee, all
of Seller's right, title and interest as landlord under such Leases.
(c) An original counterpart of a General Assignment and Assumption of
Existing Documents in the form attached hereto as Exhibit C (the "General
Assignment and Assumption of Existing Documents"), assigning to Purchaser, or
its Permitted Designee, all of Seller's right, title and interest under the
Existing Documents.
(d) A Bill of Sale and Assignment for the Personalty owned by Seller and
such of the Related Rights which are not conveyed by the Deed, duly executed by
Seller, subject only to the Permitted Exceptions.
(e) A letter addressed to each tenant under the each
of the Leases, advising such
tenant that the Property has been sold to Purchaser, or its Permitted Designee,
the name of the person who will act as Purchaser's, or its Permitted Designee's,
management agent for Property, and that all rent is payable to such person, as
the agent for the Purchaser, or its Permitted Designee.
(f) Such instruments as are necessary or reasonably required by Purchaser
or the Title Insurer to evidence the authority of Seller executing the
instruments to be executed in connection with the transaction contemplated
herein, and evidence that the execution of such instruments is the official act
and deed of Seller.
(g) To the extent in Seller's possession or in the possession of Odin or
any other agent; (i) title to and possession of all licenses and permits
relating to the Property and architectural plans and drawings, engineering
plans, drawings and specifications, and all other plans and drawings for the
Improvements; and (ii) the original copies of certificates of occupancy,
certificates or reservations, if any, allocating utility capacity to the
Property, and (iii) the Books and Records.
(h) Possession of the Property, subject only to the
Leases.
(i) Estoppel letters (the "Estoppel Letters") from
the "Major Tenants" listed on
Schedule F hereto in the form required by each such tenant's Lease. In addition,
Seller shall deliver Estoppel Letters from such of the non-"Major Tenants" in
the form required by each such tenant's Lease who shall have returned such
Estoppel Letters to Seller. Notwithstanding the foregoing, if after Seller's
reasonable efforts to obtain an Estoppel Letter from each of the Major Tenants
and the non-Major Tenants, Seller is unable to obtain Estoppel Letters from each
of the Major Tenants and at least eighty percent (80%) of the non-Major Tenants,
Purchaser shall be entitled, as Purchaser's sole remedy, to elect either to (x)
terminate this Agreement in which event the Deposit together with any interest
earned thereon shall be returned to Purchaser and neither Seller nor Purchaser
shall have any further rights, duties or obligations hereunder, or (y) waive the
requirement that Seller deliver the same and to purchase the Property without
any adjustment or abatement of the Purchase Price. For the purposes of this
Agreement, the term "Major Tenant" shall mean those tenants listed on Schedule F
attached hereto.
(j) Intentionally omitted.
(k) A certificate of Seller certifying that (a) it is
duly organized, validly
existing and in good standing under the laws of, and is qualified to do business
in, the State of Delaware, (b) it is fully authorized to consummate the
transactions contemplated in this Agreement, (c) the signatures on all documents
to be delivered by it hereunder are sufficient to bind it and (d) all documents
and instruments required to effectuate the transactions contemplated by this
Agreement with respect to Seller have been validly authorized, duly executed and
delivered by Seller.
(l) A letter (x) from Seller to Odin terminating the existing management
agreement and the existing leasing agreement relating to the Property, and (y) a
letter from Odin to Metro Commercial Real Estate, Inc. ("Metro"), terminating
its management and leasing agreement relating to the Property.
(m) The Firpta Affidavit.
(n) State of Delaware and New Castle County realty transfer tax returns and
affidavit of value with computation of the realty transfer taxes payable when
recording the Deed.
(o) Evidence of the Limited Partner Consent.
(p) The consent of the holder of the Surviving Mortgage to the consummation
of the transactions contemplated hereby and any assignment and assumption
documents and other documents as may be required by the holder of the Surviving
Mortgage in order to transfer the Existing Indebtedness to Purchaser at Closing.
Purchaser agrees to cooperate with and use its reasonable efforts to assist
Seller in obtaining the consent, assignment and assumption and other documents
referenced in this clause (p).
(q) All other agreements or instruments required
under the terms of this Agreement
to be executed and delivered by Seller.
. At Closing, Purchaser or its Permitted Designee, as
applicable, shall deliver and furnish to Seller (either directly or under the
terms of the closing escrow agreement):
(a) The Purchase Price;
(b) An original counterpart of the Assignment and Assumption of Leases in
the form attached hereto as Exhibit B, assuming all of the landlords obligations
under the Leases arising on and after the Date of Closing, including, without
limitation, the obligation to pay the Excluded Leasing Commissions.
(c) An original counterpart of the General Assignment and Assumption of
Existing Documents in the form attached hereto as Exhibit C, assuming Seller's
obligations under the Existing Documents arising on and after the Date of
Closing.
(d) Such instruments as are necessary or reasonably required by the Title
Insurer to evidence the authority of Purchaser or its Permitted Designee, as
applicable, and the persons executing the instruments and that the execution of
such instruments is the official act and deed of Purchaser or its Permitted
Designee, as applicable.
(e) A certificate of the Purchaser or its Permitted Designee, as
applicable, certifying that (a) it is duly organized, validly existing and in
good standing under the laws of the State of Florida (or in the case of a
certificate of the Purchaser's Permitted Designee, certifying as to the state of
such Permitted Designee's formation) and is qualified to do business in, the
State of Delaware, (b) it is fully authorized to consummate the transactions
contemplated in this Agreement, (c) the signatures on all documents to be
delivered by it hereunder are sufficient to bind it and (d) all documents and
instruments required to effectuate the transactions contemplated by this
Agreement with respect to the Purchaser have been validly authorized, duly
executed and delivered by the Purchaser.
(f) All other agreements or instruments required
under the terms of this Agreement
to be executed and delivered by Purchaser.
. Upon Closing, Escrow Agent shall deliver the Deposit
(together with any interest earned thereon) to Seller.
. All income and expenses of the Property, including, without
limitation the following, shall be adjusted between Seller and Purchaser on the
basis of the respective periods for which such income and expenses are assessed
and shall be prorated as of 11:59 p.m., the day before the Date of the Closing
(the "Adjustment Date") as follows:
(a) Amounts actually collected on or prior to the Date of Closing in
respect of Monthly Rents. With respect to each tenant, any Monthly Rents
collected from such tenant at any time subsequent to the Closing shall be deemed
to be in payment of and shall be applied in the following order:
(i) first, to Monthly Rent accrued, due and payable for the month in which
the Closing occurs;
(ii) second, to Monthly Rent accrued, due
and payable for periods which
commence subsequent to the date of Closing; and
(iii) third, to Monthly Rent which is past
due as of the Closing and which
accrued for the first or second month preceding the month during which the
Closing occurs ("Past Due Rents"). Purchaser and its Permitted Designee, as
applicable, shall make reasonable efforts to collect Past Due Rents, if any, for
the account of Seller but neither Purchaser nor its Permitted Designee shall
have any obligation to Seller to commence any actions or proceedings to collect
any Past Due Rents. However, Seller shall have the right to commence any actions
or proceedings against a tenant to collect any Past Due Rents as long as Seller
shall not seek to terminate such tenant's Lease.
Purchaser or its Permitted Designee, as applicable, shall
cause any Monthly Rents and Past Due Rents received by Purchaser or its
Permitted Designee, as the case may be (less the reasonable expenses of
collection actually incurred), which are payable to Seller in accordance with
the foregoing provisions of this subparagraph (a) to be promptly remitted to
Seller.
With respect to any Monthly Rents that are subject to
adjustment annually pursuant to the terms of the applicable Leases, if such
Monthly Rents are adjusted for the calendar year 1998 pursuant to the terms of
the applicable Leases, then Seller and Purchaser shall prorate such adjustments
as of the Adjustment Date promptly after such adjustments are calculated
pursuant to the Leases. Any proration made pursuant to the immediately preceding
sentence shall be payable on the Final Adjustment Date (as hereinafter defined)
as follows: (i) if Purchaser owes Seller, Purchaser shall deliver the amount due
Seller on the Final Adjustment Date, but only to the extent Purchaser has
collected the same, or (ii) if Seller owes Purchaser, Purchaser shall collect
the amount owed by Seller solely (x) first, by deducting such amount from the
amount, if any, payable to Seller by Purchaser pursuant to the provisions of
subparagraph (b) of this Paragraph 7 and (y) then, to the extent any amount
remains payable to Purchaser after the deduction made pursuant to clause (x) of
this paragraph, by seeking reimbursement for such amount from the Post-Closing
Fund in accordance with the Post-Closing Escrow Agreement. Purchaser and its
Permitted Designee, as applicable, shall make reasonable efforts to collect
adjustments payable by tenants under the Leases on the account of Seller but
neither Purchaser nor its Permitted Designee shall have any obligation to Seller
to commence any actions or proceedings to collect such adjustments. However,
Seller shall have the right to commence any actions or proceedings against a
tenant to collect such adjustments as long as Seller shall not seek to terminate
such tenant's Lease
(b) All Annual Rents shall be prorated for the
calendar year 1998 between Seller
and Purchaser promptly after the calculation of such Annual Rents is made
pursuant to the Leases. Purchaser shall deliver the amount due Seller based on
such proration of the Annual Rents, to the extent the same has been collected by
Purchaser, on the date (the "Final Adjustment Date") which is the later of (i)
the date which is three (3) business days after all adjustments provided for in
subparagraph (a) of this Paragraph 7 have been collected from the tenants under
the Leases, as applicable, (ii) the date which is three (3) business days after
the date all Annual Rents for the calendar years 1998 have been collected or
(iii) April 30, 1999. Purchaser and its Permitted Designee, as applicable, shall
make reasonable efforts to collect Annual Rents on the account of Seller but
neither Purchaser nor its Permitted Designee shall have any obligation to Seller
to commence any actions or proceedings to collect the Annual Rents. However,
Seller shall have the right to commence any actions or proceedings against a
tenant to collect Annual Rents as long as Seller shall not seek to terminate
such tenant's Lease.
(c) Real Property Taxes, except that Seller and
Purchaser agree that there shall
be no proration or adjustment at Closing on account of any Real Property Taxes
to the extent that tenants pursuant to the Leases are required to reimburse the
landlord under the Leases for the same. At Closing, Purchaser shall receive a
credit in an amount equal to the amounts collected by Seller in respect of Real
Property Taxes from tenants under the Leases which amounts have not been paid to
the applicable taxing authority or authorities, as the case may be. If the rate
of any Real Property Taxes is not fixed prior to the Closing, the adjustment at
the Closing of Real Property Taxes that are not payable by tenants under the
Leases shall be upon the basis of the rate for the preceding calendar year
applied to the latest assessed valuation (or other basis of valuation) and the
same shall be further adjusted (with such proration still to be as of the
Adjustment Date) when the rate for the current calendar year is fixed. Any
adjustment made pursuant to the immediately preceding sentence shall be payable
on the Final Adjustment Date as follows: (i) if Purchaser owes Seller, Purchaser
shall deliver the amount due Seller on the Final Adjustment Date or (ii) if
Seller owes Purchaser, Purchaser shall collect the amount owed by Seller solely
(x) first, by deducting such amount from the amount, if any, payable to Seller
by Purchaser pursuant to the provisions of subparagraph (b) of this Paragraph 7
and (y) then, to the extent any amount remains payable to Purchaser after the
deduction made pursuant to clause (x) of this paragraph, by seeking
reimbursement for such amount from the Post-Closing Fund in accordance with the
Post-Closing Escrow Agreement.
(d) Charges for water, electricity, gas and other utilities. Seller represents
that the consumption of all water, electricity, gas and other utilities is
measured by meter, and Seller shall furnish a current reading of each meter at
the Closing, which readings shall have been made not earlier than one business
day prior to Closing, and Seller shall pay the charges therefor to such date. At
the Closing, Seller shall advise Purchaser whether any provider of a public
utility to the Property is then holding a deposit in connection therewith.
Seller shall retain the right to receive the return of such deposit(s).
(e) Accounts, charges and fees paid or payable under the service contracts,
on the basis of the annual, seasonal or periodic charges and fees payable
thereunder.
(f) Fuel, if any, including taxes and surcharges thereon, on the basis of
meter readings and bills or statements from the fuel supplier. Seller shall
furnish Purchaser with bills or statements, which shall be dated not more than
thirty (30) days prior to the Closing.
(g) All other expenses relating to the Property which
have been accrued but not
paid by Closing shall also be apportioned as of the Closing.
(h) Deposits held by utility companies and fees for governmental permits
and licenses shall not be apportioned.
(i) Security deposits held by or on behalf of Seller in respect of the
Leases and interest, if any, accrued thereon and inuring to the benefit of
tenants, shall not be apportioned. At the Closing, Seller shall advise Purchaser
of the existence, if applicable, of any such security deposits and deposited by
tenants pursuant to any of the related Leases and such amounts (excluding
interest accrued thereon, if any) shall be credited to Purchaser at Closing, and
Purchaser shall assume and agree to pay such security deposits, to the extent
credited to Purchaser by Seller, to such tenants upon and subject to the terms
of the applicable Leases. At the Closing, Seller agrees to execute with
Purchaser such notice as may be required by applicable law to be given tenants
under the related Leases regarding transfer of such security deposits.
(j Any errors or omissions in computing adjustments and apportionments at
the Closing shall be corrected promptly thereafter.
(k If there are any service contracts which, pursuant to their terms, may
be terminated at will or upon notice by Seller, upon request of Purchaser given
to Seller at least thirty (30) days prior to the Closing, requested that Seller
terminate any or all of same effective as of the Closing or thereafter, Seller
shall cause the appropriate party to do so.
(l Seller and Purchaser shall each maintain and make available to the other
such books and records as are necessary to ascertain, bill and collect Rents as
aforesaid. Seller agrees to direct Metro to allow Purchaser to review all books
and records relating to the Property which Metro keeps (or if Metro delivers
such books to Odin at Closing, Seller agrees to direct Odin to do the same) for
up to thirty (30) days after the Date of Closing; provided, however, such review
shall be solely for the purpose of allowing Purchaser to comply with the
requirements of the Securities and Exchange Commission governing the operation
of Purchaser's business and for no other purpose. Seller agrees to direct Metro
to deliver an audit letter in the form attached hereto as Exhibit D, duly
authorized and executed by Metro, in its own capacity and not as agent of the
Seller; provided, however, Purchaser shall have no recourse against Seller if
Metro fails to execute such and audit letter for any reason whatsoever.
(m Seller shall be entitled to receive all Mortgage Deposits (subject to
(i) prorations, as provided in this Paragraph 7, and (ii) the provisions of
paragraph 6(m) of Article II of this Agreement). Seller shall be responsible for
all management fees under the management agreements with Odin and Metro, through
the date of termination of such management agreements.
. At Closing the parties shall pay the following:
(a) Purchaser's Costs. Purchaser shall pay for (i) title insurance premiums
and all fees and expenses incurred in connection with title, (ii) all fees and
expenses incurred in connection with obtaining the UCC Searches and Survey,
(iii) Purchaser's attorney's fees, (iv) one-half of the escrow fees payable to
Title Insurer, if applicable, (v) one-half of all realty transfer tax, recording
and other similar taxes, (vi) the cost of recording the Deed, (vii) one-half of
the costs and expenses payable to GECC in connection with obtaining its consent
to the transactions contemplated hereby and in connection with the assignment
and assumption and other documents required by GECC (except for the assumption
fee of GECC, which Purchaser agrees to pay GECC in connection with the
assumption of the Existing Indebtedness and which assumption fee shall be the
sole responsibility of Purchaser), and (viii) any commission payable to Metro by
Purchaser pursuant to a separate agreement between Purchaser and Metro; and
(b) Seller's Costs. Seller shall pay for (i) one-half of all realty
transfer tax, recording and other similar taxes, (ii) brokerage fee commission
to Odin in connection with the sale of the Property, which fee and commission
shall be paid by Seller pursuant to separate agreement, (iii) Seller's
attorney's fees, (iv) one-half of the escrow fees payable to Title Insurer, if
applicable, and (v) one-half of the costs and expenses payable to GECC in
connection with obtaining its consent to the transactions contemplated hereby
and in connection with the assignment and assumption and other documents
required by GECC (except for the assumption fee of GECC, which Purchaser agrees
to pay GECC in connection with the assumption of the Existing Indebtedness and
which assumption fee shall be the sole responsibility of Purchaser). At or prior
to the Closing, Seller shall pay or cause to be paid all Leasing Commissions
payable in connection with the Leases as contemplated by Article II,
Subparagraph 6(g) hereof.
(c) Anything in this Agreement to the contrary notwithstanding, in the
event that either party shall bring an action to enforce any of the remedies
provided hereunder or otherwise available to such party, the prevailing party
shall be entitled to reimbursement by the non-prevailing party for reasonable
attorneys' fees, costs and expenses in connection with such action.
ARTICLE IV
Escrow Provision
1. The Deposit shall be held by Escrow Agent, in trust, on the
terms and conditions hereinafter set forth:
(a The Escrow Agent will deliver the Deposit together with any and all
interest accrued thereon to the Seller or the Purchaser, as the case may be,
upon the following conditions:
(i0 At the Closing, upon the consummation of the Closing contemplated
herein, Escrow Agent will deliver the Deposit together with any and all interest
accrued thereon, if any, to Seller.
(ii0 At any time prior to the expiration of the Due Diligence Period, upon
receipt by Escrow Agent of a copy of the written notice of Purchaser to Seller
exercising Purchaser's right to terminate this Agreement prior to the expiration
of the Due Diligence Period and a written notice from Purchaser to Escrow Agent
stating that Purchaser is terminating this Agreement prior to the expiration of
the Due Diligence Period in accordance with its rights provided hereunder and
requesting the Deposit be returned to Purchaser, Escrow Agent will deliver the
Deposit together with any and all interest accrued thereon, if any, to
Purchaser.
(iii0 Upon receipt of a written notice from Seller stating that the Seller
is entitled under this Agreement to the Deposit together with any and all
interest accrued thereon, and demanding payment of the same, the Escrow Agent
will deliver such amount to Seller; provided, however, that the Escrow Agent
will not honor such demand until not less than ten (10) days after the date on
which the Escrow Agent shall have delivered (by personal delivery or by a
nationally recognized overnight courier) a copy of such notice and demand to the
Purchaser, nor thereafter, if during such ten (10) day period, the Escrow Agent
shall have received written notice of objection from the Purchaser in accordance
with the provisions of part (c) of this Article.
(iv0 Upon receipt of a written notice from the Purchaser stating that the
Purchaser is entitled under this Agreement to the return of the Deposit together
with any and all interest accrued thereon and demanding payment of the same, the
Escrow Agent will deliver such amount to the Purchaser; provided, however, that
the Escrow Agent will not honor such demand until not less than ten (10) days
after the date on which the Escrow Agent shall have delivered (by personal
delivery or by a nationally recognized overnight courier) a copy of such notice
and demand to Seller, nor thereafter, if during such ten (10) day period, the
Escrow Agent shall have received written notice of objection from Seller in
accordance with the provisions of part (c) of this Article.
(b Any notice to the Escrow Agent shall be sufficient only if received by
the Escrow Agent within the applicable time periods set forth herein. All
mailings and notices from the Escrow Agent to Seller or Purchaser, or from
Seller or Purchaser to the Escrow Agent shall be addressed to the party to
receive such notice at the address set forth in Article V of this Agreement, but
those provisions of Article V relating to the manner of giving notices and the
effective dates thereof shall have no application to the provisions of this
Article.
(c Upon receipt of a written demand for the Deposit together with any and
all interest accrued thereon made by Seller or the Purchaser pursuant to the
provisions of sections (ii) or (iii) of part (a) of this Article, the Escrow
Agent shall promptly deliver a copy thereof (by personal delivery or by a
nationally recognized overnight courier) to the other party. The other party
shall have the right to object to the delivery of such amount or accrued
interest thereon by delivery to and receipt by the Escrow Agent of written
notice of objection within ten (10) days after the receipt of such copy from the
Escrow Agent, but not thereafter. Upon receipt of such notice of objection, the
Escrow Agent shall promptly deliver a copy thereof (by personal delivery or by a
nationally recognized overnight courier) to the party who made the written
demand.
(d If the Escrow Agent shall have received a notice of objection as
provided for in part (c) of this Article within the time therein prescribed or
any disagreement or dispute shall arise between or among any of the parties
hereto and/or any other persons resulting in adverse claims and demands being
made for the Deposit, whether or not litigation has been instituted, then, (1)
the Escrow Agent shall continue to hold the Deposit subject to such adverse
claims and the Escrow Agent shall not be or become liable in any way or to any
person for its refusal to comply with such claims or demand, and in the event of
any joint direction from Seller and Purchaser, the Escrow Agent shall then
disburse the Deposit in accordance with said direction, (2) in the event the
Escrow Agent shall receive a written notice advising that litigation over
entitlement to the Deposit has been commenced, the Escrow Agent may deposit the
Deposit with the clerk of the court in which said litigation is pending or (3)
the Escrow Agent may (but shall not be required to) take such affirmative steps
as it may, at its option, elect in order to substitute another impartial party
to hold the Deposit subject to such adverse claims in a court of competent
jurisdiction and the commencement of an action for interpleader, the cost
thereof to be borne by whichever of Seller and Purchaser is the losing party,
and thereupon the Escrow Agent shall be released of and from all liability
thereunder. Seller and Purchaser jointly and severally agree to reimburse the
Escrow Agent for any and all expenses incurred in the discharge of its duties
under this Article, including, without limitation, attorneys' fees. Nothing
herein, however, shall affect the liability of a defaulting party to another
party for reimbursement of any amount paid to the Escrow Agent under this
Paragraph (d).
(e It is expressly understood that the Escrow Agent acts hereunder as an
accommodation to Seller and Purchaser and as a depository only and is not
responsible or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of any instrument deposited with it, or for the form of
execution of such instruments or for the identity, authority or right of any
person executing or depositing the same, or for the terms and conditions of any
instrument pursuant to which the Escrow Agent or the parties may act.
(f The Escrow Agent shall not have any duties or responsibilities except
those set forth in this Article and shall not incur any liability in acting upon
any signature, notice, request, waiver, consent, receipt or other paper or
document believed by the Escrow Agent to be genuine, and the Escrow Agent may
assume that any person purporting to give it any notice on behalf of any party
in accordance with the provisions hereof has been duly authorized to do so.
(g In the event of the death of any person who may be a party in interest
hereunder, the Escrow Agent shall deem and treat the legal representatives of
such person's estate as the successor in interest of said deceased person for
all purposes of this Article.
(h The Escrow Agent may act or refrain from acting in respect of any matter
referred to herein in full reliance upon and by and with the advice of counsel
which may be selected by it and shall be fully protected in so acting or
refraining from acting upon the advice of such counsel.
(i The Escrow Agent shall not be responsible for any act or failure to act
on its part except in the case of its own willful default or gross negligence.
The Escrow Agent shall be automatically released from all responsibility and
liability under this Agreement upon the Escrow Agent's delivery or deposit of
the Deposit in accordance with the provisions of this Article.
(j Seller and Purchaser agree that if either shall, pursuant to section
(iii) or section (iv) of part (a) of this Article, deliver to the Escrow Agent a
written demand for the Deposit, the party making such demand shall, promptly
after delivering such demand to the Escrow Agent, deliver a copy of such demand
to the other party, together with a statement of the facts and circumstances
underlying the demand; provided, however, that nothing in this part shall have
any effect whatsoever upon the Escrow Agent's rights, duties and obligations
under the preceding parts of this Article.
ARTICLE V
General Matters
. If any action or proceeding is commenced by either party to
enforce their rights under this Agreement, or to collect damages as a result of
the breach of any of the provisions of this Agreement, the prevailing party in
such action or proceeding, including any bankruptcy, insolvency or appellate
proceedings, shall be entitled to recover all reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees and court costs, in
addition to any other relief awarded. The determination of who is the prevailing
party shall be decided by the court or courts, including any appellate court, in
which such matter is tried, heard or decided.
. Purchaser acknowledges and agrees that, except as otherwise
set forth herein, the Property is being sold to Purchaser on an "As-Is,
Where-Is" basis, "With All Faults" and that, except for express representations
and warranties of Seller set forth in this Agreement or any other document
executed and delivered by Seller to Purchaser pursuant to this Agreement, Seller
has made no representations or warranties to Purchaser, express or implied, of
the Property, the ability to develop or use the Property, the structural
integrity of the quality or condition of the soil underlying the subject
improvements, the environmental condition of the Property, the merchantability
of the Property or the fitness of the Property for any particular purpose.
Purchaser agrees that, except as expressly set forth herein, Seller shall not be
liable for any latent or patent defects in the Property or bound in any manner
whatsoever by any guarantees, promises, projections, operating expenses, set-ups
or other information pertaining to the Property made, furnished or claimed to
have been made or furnished by Seller or any other person or entity, or any
partner, employee, agent, attorney or other person representing or purporting to
represent Seller whether verbally or in writing. Purchaser acknowledges that
neither Seller nor any of the employees, agents or attorneys of Seller have made
and do not make any verbal or written representations or warranties whatsoever
to Purchaser, whether express or implied, except as expressly set forth in this
Agreement. Purchaser has made such examination of the operation, income and
expenses of the Property and all other matters and documents affecting or
relating to this transaction or the Property as Purchaser deemed necessary. In
entering into this Agreement and acquiring the Property, Purchaser has not been
induced by and has not relied upon (and Seller is not liable for or bound by)
any representations, warranties, guarantees, promises, statements, real estate
broker "set ups" or other information, whether express or implied, made or
furnished by Seller or by any agent, employee or other representative of Seller
or by any broker or any other person representing or purporting to represent
Seller, which are not expressly set forth in this Agreement, whether or not any
such representations, warranties, guarantees, promises or statements were made
in writing or orally.
All notices and any other communications permitted or
required under this Agreement must be in writing and will be effective (i)
immediately upon delivery in person or by facsimile, provided delivery is made
during regular business hours and the sender receives confirmation from the
sending machine that the facsimile has been properly sent; or (ii) 24 hours
after deposit with a commercial courier or delivery service for overnight
delivery, provided delivery is made during regular business hours or receipt is
acknowledged by a person reasonably believed by the delivering party to be
employed by the recipient; or (iii) three days after deposit with the United
States Postal Service, certified mail, return receipt requested, postage
prepaid. All notices must be properly addressed and delivered to the parties at
the addresses set forth below, or at such other addresses as either party may
subsequently designate by written notice given in the manner provided herein:
If to any Seller:
Big Valley Associates Limited Partnership
c/o Odin Management Company, L.P.
500 West Putnam Avenue
Greenwich, CT 06830
Attention: Robert J. Rosen
Tel: 203-629-3600
Fax: 203-629-3421
With a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attention: Perry A. Cacace, Esq.
Tel: 212-969-3725
Fax: 212-969-2900
If to Purchaser:
Regency Realty Corporation
200 Forsyth Street, Suite 121
Jacksonville, FL 30222
Attention: Mr. Robert L. Miller
Tel: 904-356-7000
Fax: 904-354-1832
With a copy to:
Rogers, Towers, Bailey, Jones & Gay
1301 Riverplace Boulevard, Suite 1500
Jacksonville, FL 32207
Attention: William E. Scheu, Esq.
Tel: 904-398-3911
Fax: 904-396-0663
However, the parties hereto and their respective successors
and assigns shall have the right from time to time and at any time to change
their respective addresses and each shall have the right to specify as its
address any other address within the United States by at least ten (10) days'
written notice to the other party.
. No waiver or waivers by any party of any breach, default,
liability or performance by the other party shall be deemed or construed a
waiver of any other term, condition or liability or the breach or default
thereof. Failure on the part of any party to complain of any action or inaction
on the part of the other party or to declare the other party in default, no
matter how long such failure may continue, shall not be deemed to be a waiver by
such party of any of its rights hereunder.
. If any provision of this Agreement, or the application
thereof to any particular party or circumstance, shall to any extent be invalid
or unenforceable, the remainder of this Agreement, or the application of such
provision to any other particular party or circumstance, shall not be affected
thereby and each remaining provision of this Agreement, or the application of
such provision to any other particular party or circumstance, shall be valid and
enforceable.
. This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware.
. All pronouns used in this Agreement shall include the other
genders, and the singular shall include the plural, and the plural shall include
the singular, whenever and as often as may be appropriate.
. (a) Seller and Purchaser represent to each other that the only brokers
dealt with by either of them in connection with this transaction is Odin and
Metro.
(b Purchaser hereby agrees to indemnify and hold harmless Seller from all
claims for brokerage, agency, finder's and similar fees claimed in connection
with this transaction by any broker, agent, finder or other similar party with
whom Purchaser dealt in connection with this transaction, except Odin. Purchaser
further represents and warrants to Seller that Purchaser shall solely be
responsible for paying any fees, commissions or other charges which may be
payable to Metro by reason of or in connection with the transaction contemplated
herein (other than fees payable by Seller pursuant to the management agreement
between Seller and Metro).
(c Seller hereby agrees to indemnify and hold harmless Purchaser from all
claims for brokerage, agency, finder's and similar fees claimed in connection
with this transaction by any broker, agent, finder or other similar party with
whom Seller dealt in connection with this transaction, except Metro. Seller
further represents and warrants to Purchaser that Seller shall solely be
responsible for paying any fees, commissions or other charges which may be
payable to Odin by reason of or in connection with the transaction contemplated
herein.
. The captions under the Article numbers and beside the
Paragraph numbers of this Agreement are for convenience and reference only and
in no way define, limit or describe the scope or intent of this Agreement and in
no way affect or constitute a part of this Agreement.
. All Schedules and Exhibits attached hereto are hereby
incorporated herein by this reference and made a part hereof for all purposes.
. This Agreement and all of its terms and provisions shall be
binding upon and inure to the benefit of Seller and its successors and assigns,
and Purchaser and its successors and assigns.
. Except as otherwise expressly provided in any documents
delivered by Seller to Purchaser or its Permitted Designee, as the case may be,
on the Date of Closing, the delivery of the Deed by Seller and the acceptance
thereof by Purchaser or its Permitted Designee, as the case may be, shall be
deemed a full performance and discharge of every agreement, obligation and
provision required to be performed by Seller under this Agreement, except that
Seller's representations and warranties made in Paragraphs 6(e), 6(f), 6(g) and
8 of Article II of this Agreement shall survive for a period of six (6) months
following the Closing Date.
. The parties hereto each agree to execute and deliver such
other documents or agreements as may be necessary or desirable for the
consummation of the transactions contemplated by this Agreement. In addition,
from time to time after the Closing Date, at the Purchaser's request, Seller
will execute and deliver or cause to be executed and delivered such other
instruments of transfer, sale, conveyance, assignment and confirmation and take
such action as Purchaser may reasonably deem necessary or desirable in order to
effectively transfer, sell, convey and assign to Purchaser or its Permitted
Designee, as the case may be, and to otherwise effectuate the transactions
contemplated by this Agreement. In addition, at reasonable times and upon
reasonable prior written notice to Seller, Purchaser shall be entitled to review
and copy, at Purchaser's sole cost and expense, income and expense and other
similar financial information relating to the operation or leasing of the
Property which is in the possession or control of Seller (excluding any
information which relates to Seller as opposed to the Property or which is of a
confidential nature); provided, however: (i) Seller's sole obligation relating
to such information shall be to make such information available to Purchaser as
provided above, (ii) Seller shall not be required to make any representation or
warranty with respect to any such information nor verify the accuracy thereof,
and (iii) Purchaser's obligations hereunder shall in no way be conditioned upon
Purchaser's approval of such financial information or Purchaser's being
satisfied with any matters disclosed by Purchaser's review of such financial
information.
. This Agreement may not be modified or amended orally or in
any other manner than by an agreement in writing, signed by Seller and
Purchaser. This Agreement, and the documents and agreements to be delivered
pursuant hereto, contain the entire agreement and understanding between
Purchaser and Seller concerning the subject matter of this Agreement and
supersede all prior agreements, terms, understandings, conditions,
representations and warranties, whether written or oral, made by Purchaser or
Seller concerning the Property or the other matters which are the subject of
this Agreement. This Agreement has been drafted through a joint effort of the
parties and their counsel and, therefore, shall not be construed in favor of or
against either of the parties.
. Seller and Purchaser acknowledge and agree that, by
execution of this Agreement, Seller and Purchaser have materially altered their
respective legal positions; that Seller and Purchaser will incur material
expense during the period prior to the Closing Date; and that the covenants and
agreements of Seller and Purchaser in this Agreement are supported by sufficient
consideration at all times during the term of this Agreement.
. IF PURCHASER DEFAULTS IN ITS OBLIGATION TO PURCHASE THE
PROPERTY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, SELLER SHALL BE
ENTITLED TO TERMINATE THIS AGREEMENT AND RETAIN THE DEPOSIT AS SELLER'S
LIQUIDATED DAMAGES AS ITS SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT AND FOR THE
LOSS SUFFERED BY SELLER. THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE AND
EXTREMELY DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY SELLER AS A
RESULT OF PURCHASER'S BREACH OF ITS OBLIGATIONS 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 REPRESENTS A REASONABLE ESTIMATE OF THE DAMAGES AND LOSS WHICH SELLER
WILL INCUR AS A RESULT OF SUCH BREACH. THE PARTIES ACKNOWLEDGE THAT THE PAYMENT
OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY, BUT IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER IN ORDER TO COMPENSATE
SELLER FOR THE LOSS RESULTING FROM PURCHASER'S DEFAULT.
. (a) Anything contained in this Agreement to the contrary
notwithstanding, no recourse shall be had for the payment of any sum due under
this Agreement, or for any claim based hereon or otherwise in respect hereof
against Seller or any partner of Seller, or any legal representative, heir,
estate, successor or assignee or any thereof. It is understood that all of the
obligations of Seller under or with respect to this Agreement may not be
enforced against any person or entity; provided, that the foregoing provisions
of this Paragraph shall not prevent Purchaser from (i) seeking recourse against
the Post-Closing Fund subsequent to the Date of Closing as contemplated by
Paragraph 25 of this Article V or (ii) commencing a proceeding for specific
performance without any abatement of the Purchase Price or allowance of any kind
and in which proceeding no monetary claim is made, or monetary judgment or other
relief obtained, against Seller; and provided, further, that the foregoing
provisions of this paragraph shall not limit the right of any person to name
Seller as a party defendant in any action or suit seeking specific performance
so long as not judgment seeking personal liability be asked for or (if obtained)
enforced against Seller or any partner of Seller, or any legal representative,
heir, estate, successor or assignee of any thereof.
(b) If Seller shall fail or be unable to deliver the Deed and the other
documents required to be delivered by Seller to Purchaser or its Permitted
Designee, as the case may be, on the Date of Closing, or otherwise fail to
perform any of Seller's obligations hereunder as of the Date of Closing (other
than by reason of Seller's willful failure to deliver the same or to perform
Seller's obligations hereunder), Purchaser shall be entitled, as Purchaser's
sole remedy, to (i) commence a proceeding against Seller for specific
performance without any abatement of the Purchase Price or allowance of any kind
in which proceeding no monetary claim is made, or monetary judgment of other
relief obtained against Seller or any partner of Seller, or any legal
representative, heir estate, successor or assignee of any thereof, or (ii)
terminate this Agreement; in which event the Deposit (together with any interest
earned thereon) shall be paid to and retained by Purchaser and Seller and
Purchaser shall be relieved of all obligations and liability under this
Agreement (except for any obligations expressly stated to survive a termination
of this Agreement).
. Any reference herein to a mortgage shall include a deed of
trust, and any reference herein to a deed of trust shall include a mortgage and
any reference herein to a mortgagee shall include the beneficiary under a deed
of trust and any reference to a beneficiary under a deed of trust shall include
a mortgagee.
. This Agreement may be executed in two or more counterparts
and shall be deemed to have become effective when and only when one or more of
such counterparts shall have been signed by or on behalf of each of the parties
hereto (although it shall not be necessary that any single counterpart be signed
by or on behalf of each of the parties hereto, and all such counterparts shall
be deemed to constitute but one and the same instrument), and shall have been
delivered by each of the parties to each other.
. This Agreement is entered into for the sole benefit of
Purchaser and Seller and their respective permitted successors and assigns. No
party other than Purchaser and Seller and such permitted successors and assigns
shall have any right of action under or rights or remedies by reason of this
Agreement.
. Purchaser and Seller each acknowledge that: (a) they have
been represented by independent counsel in connection with this Agreement; (b)
they have executed this Agreement with the advice of such counsel; and (c) this
Agreement is the result of negotiations between the parties hereto and the
advice and assistance of their respective counsel.
. Neither Purchaser nor Seller may assign any rights or
obligations under this Agreement without the prior written consent of the other
party hereto except that (i) Purchaser shall be entitled to assign its rights
and obligations hereunder to any affiliate of Purchaser provided such assignee
shall deliver a written agreement to Seller pursuant to which such assignee
shall assume and agree to be bound by the terms and conditions of this
Agreement, and (ii) Purchaser may, upon the giving of written notice to Seller
not less than three business days prior to the Date of Closing, designate a
third party to accept title to the Property; provided, however, in the event of
any such designation or assignment, Purchaser shall not be relieved of any
obligations or liability hereunder, including, without limitation, any
obligations of Purchaser which survive the closing of the transactions
contemplated hereby.
. Subject to Paragraph 22 above, this Agreement shall be
binding upon and inure to the benefits of the heirs, successors and permitted
assigns of the parties hereto.
. Seller's and Purchaser's obligations under this Agreement
are in all respects subject to and conditioned upon Seller's obtaining the
Limited Partner Consent. Seller shall give written notice to Purchaser when such
condition has been satisfied. Seller shall exercise reasonable good faith
efforts to obtain such Limited Partner Consent. If Seller shall not have given
notice that the foregoing conditions have been satisfied on or before June 10,
1998 (the "Satisfaction Date"), Seller shall provide evidence that Seller has
not obtained the required Limited Partner Consent and Seller and Purchaser shall
each have the option to terminate this Agreement upon the giving of written
notice to the other within ten (10) days following the Satisfaction Date. In the
event Seller or Purchaser shall exercise such option to terminate this
Agreement, (i) this Agreement shall terminate and be of no further force and
effect, and neither party hereto shall have any further rights or obligations
hereunder, except with respect to any obligations of Seller or Purchaser
hereunder expressly stated to survive a termination of this Agreement and (ii)
the Deposit together with any and all interest accrued thereon, if any, shall be
returned to Purchaser by Escrow Agent.
. At Closing, Seller shall cause funds in an amount equal to
$250,000 (the "Post-Closing Fund") of the Purchase Price to be held in escrow
pursuant to an Escrow Agreement in the form of Exhibit E attached hereto (the
"Post-Closing Escrow Agreement"). It is understood and agreed between Purchaser
and Seller that in the event Purchaser or its Permitted Designee, as applicable,
shall assert any claims against Seller in respect of any surviving
representations, warranties or other surviving obligations of Seller as
expressly provided herein (including, without limitation, with respect to
Paragraph 12 of this Article V and with respect to the Assignment and Assumption
of Leases and the General Assignment and Assumption of Existing Documents),
Purchaser's and its Permitted Designee's sole remedy in respect of any and all
such claims shall be to seek recourse and reimbursement therefor from the
Post-Closing Fund in accordance with the terms and conditions of the
Post-Closing Escrow Agreement. All such claims, together with all claims made by
Purchaser for reimbursement from the Post-Closing Fund in accordance with
Paragraphs 7(a) and 7(c) of Article III of this Agreement, shall be limited in
the aggregate by the amount of the Post-Closing Fund and no recourse shall be
had for any amount in excess of the Post-Closing Fund.
[The remainder of this page is intentionally left blank.]
EXECUTED under seal by the parties hereto on the respective
dates shown below.
SELLER:
BIG VALLEY ASSOCIATES LIMITED PARTNERSHIP
By: Fivzar Associates, general partner
By: Fivzar I Limited Partnership, a partner
By: Fivzar Corp., general partner
By:___________________________
Name:
Title:
PURCHASER:
RRC ACQUISITIONS TWO, INC.
By:_____________________________
Name:
Title:
ESCROW AGENT:
PROSKAUER ROSE LLP
By:________________________
a partner
0144/14611-001 NYLIB1/811114 05/06/98 04:26 PM (10540)
EXHIBIT A
[Form of Deed]
-- see attached --
EXHIBIT B
[Form of Assignment and Assumption of Leases]
-- see attached --
EXHIBIT C
[Form of Assignment and Assumption of Existing Documents]
-- see attached --
EXHIBIT D
[Form of Audit Letter]
-- see attached --
EXHIBIT E
[Form of Post-Closing Escrow Agreement]
-- see attached --
[The attached form may be revised to incorporate Escrow Agent's reasonable
comments, which comments shall be incorporated if mutually agreed upon by both
Seller and Purchaser]
SCHEDULE A
[Legal Description]
-- see attached --
SCHEDULE B
[Contracts]
-- see attached --
SCHEDULE C
[Leases]
-- see attached --
SCHEDULE D
[Permitted Exceptions]
1. All exceptions to title set forth on Schedule B to that certain loan policy
of title insurance dated November 21, 1996, issued by First American Title
Insurance Company as policy number 210343.
2. That certain Mortgage, Security Agreement and Fixture Filing, executed as of
November 20, 1996, by Big Valley Associates Limited Partnership for the benefit
of General Electric Capital Corporation, together with any documents relating to
the loan secured thereby, including, without limitation, the Assignment of Rents
and Leases, executed as of November 20, 1996, by Big Valley Associates Limited
Partnership to General Electric Capital Corporation and UCC financing
statements.
SCHEDULE E
[Exception to Representations]
-- None --
SCHEDULE F
[Major Tenants]
1. K Mart
2. Eckerd Drugs
3. Acme Markets
4. Valley Liquors
5. Wilmington Savings Fund
6. The Roadhouse
7. Wilmington Trust Company
8. Prudential Preferred Properties
9. Weichert Realtors
SCHEDULE G
[Insurance Certificate]
-- see attached--
SCHEDULE H
[Surviving Agreements]
-- None --
vi
0144/14611-001 NYLIB1/811114 05/06/98 04:26 PM (10540)
TABLE OF CONTENTS
ARTICLE IDefinitions..........................................................2
1. "Actual Knowledge of Seller"................................2
2. "Adjustment Date"...........................................2
3. "Annual Rents"..............................................2
4. "Books and Records".........................................3
5. "Closing"...................................................3
6. "Contracts".................................................3
7. "Closing Date" or "Date of Closing"........................3
8. "Deposit"...................................................3
9. "Due Diligence Period"......................................4
10. "Effective Date of this Agreement"..........................4
11. "Environmental Reports".....................................4
12. "Escrow Agent"..............................................4
14. "Excluded Leasing Commissions"..............................4
15. "Existing Documents"........................................4
16. "Existing Indebtedness".....................................4
17. "Existing Obligations"......................................5
18. "Final Adjustment Date".....................................5
19. "GECC"......................................................5
20. "Improvements"..............................................5
21. "Land"......................................................5
22. "Lease Rights"..............................................5
23. "Leases"....................................................5
24. "Leasing Commissions".......................................6
25. "Limited Partner Consent"...................................6
26. "Major Tenants".............................................6
27. "Monthly Rents".............................................6
28. "Mortgage Deposits".........................................6
29. "Past Due Rents"............................................6
30. "Permitted Designee"........................................6
31. "Permitted Exceptions"......................................7
32. "Person"....................................................7
33. "Personalty"................................................7
34. "Property"..................................................7
35. "Real Property Taxes".......................................7
36. "Related Rights"............................................7
37. "Rents".....................................................9
38. "Survey"....................................................9
39. "Title Commitment"..........................................9
40. "Title Exceptions"..........................................9
41. "Title Insurer"............................................10
42. "Title Policy".............................................10
43. "UCC Searches".............................................10
44. "Update"...................................................10
ARTICLE II Agreement to Sell and Purchase;Terms of Sale and Purchase.........11
1. Agreement to Sell and Purchase/Due Diligence Period........11
2. Deposit and Purchase Price.................................12
2.1 Deposit. ..................................................12
2.2 Purchase Price.............................................13
3. Title Commitment; UCC Searches.............................13
4. Survey.....................................................16
5. Copies of Leases...........................................17
6. Seller's Representations and Warranties....................17
7. Purchaser's Representations and Warranties.................22
8. Seller's Operating Covenants...............................23
9. Damage or Destruction Prior to Closing.....................24
10. Condemnation Prior to Closing..............................26
ARTICLE IIIClosing Conditions and Other Closing Matters......................27
1. Date of Closing............................................27
2. Purchaser's Conditions to Closing..........................27
3. Seller's Conditions to Closing.............................29
4. Closing Deliveries by Seller...............................30
5. Closing Deliveries by Purchaser............................33
6. Delivery of Deposit by Escrow Agent........................34
7. Prorations and Adjustments.................................35
8. Responsibility for Costs...................................40
ARTICLE IVEscrow Provision...................................................42
ARTICLE VGeneral Matters.....................................................46
1. Attorney's Fees............................................46
2. "AS-IS" Sale..............................................47
3. Notices....................................................48
4. Non-Waiver.................................................49
5. Partial Invalidity.........................................50
6. Applicable Law.............................................50
7. Gender and Number..........................................50
8. Broker Indemnity...........................................50
9. Captions...................................................51
10. Incorporation of Schedules and Exhibits....................51
11. Binding Effect.............................................51
12. Survival...................................................51
13. Further Assurances.........................................52
14. Amendment of Agreement; Complete Agreement.................52
15. Consideration Prior to Closing Date........................53
16. Purchaser's Default; Liquidated Damages and Deposit........53
17. Agreement Non-Recourse to Seller, Seller's Default.........54
18. References to Mortgages and Deeds of Trust.................55
19. Counterparts...............................................55
20. Third Parties..............................................56
21. Independent Counsel........................................56
22. Assignment.................................................56
23. Successors and Assigns.....................................56
24. Limited Partner Consent....................................57
25. Post-Closing Fund..........................................57
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Deed
Exhibit B Form of Assignment and Assumption of Leases
Exhibit C Form of Assignment and Assumption of Existing Documents
Exhibit D Form of Audit Letter
Exhibit E Form of Post-Closing Escrow Agreement
Schedule A Legal Description
Schedule B Contracts
Schedule C Leases
Schedule D Permitted Exceptions
Schedule E Exceptions to Representations
Schedule F Major Tenants
Schedule G Insurance Certificate
Schedule H Surviving Agreements
The Board of Directors
Regency Realty Corporation:
We consent to the incorporation by reference in the registration
statements, (No. 33-86886, No. 333-930, No. 333-2546, No. 333-31077 No.
333-37911, No. 333-52089) on Form S-3 and (No. 333-24971) on Form S-8, of
Regency Realty Corporation of our report dated September 9, 1998 with respect to
the Statement of Revenues and Certain Expenses of Pike Creek Shopping Center for
the year ended December 31, 1997 which report appears in the Form 8-K of Regency
Realty Corporation dated October 7, 1998.
KPMG PEAT MARWICK LLP
October 7, 1998
Jacksonville, Florida
