View:
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) August 1, 1996
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 2. ACQUISITION OF ASSETS
Regency Realty Corporation, through its wholly-owned subsidiaries (together the
"Company") acquired four shopping centers (the "Acquisition Properties") during
the months of May, July, and August, 1996. The combined purchase price of these
acquisitions, as provided below, exceeds 10% of the Company's total assets. The
acquisitions were made pursuant to separate purchase agreements, the sellers of
which are unrelated to the Company. All of the properties currently operate as
neighborhood or community retail shopping centers, and will continue as such.
The purchase price of each shopping center was funded from the Company's
revolving line of credit with Wells Fargo Realty Advisors Funding, Inc.
The factors considered by the Company in determining the price to be paid for
the shopping center included historical and expected cash flow, nature of the
tenancies and terms of the leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs, physical condition and
location, and the anticipated impact on the Company's financial results. The
Company also took into consideration capitalization rates at which it believes
other shopping centers have recently sold. No separate independent appraisals
were obtained for the Acquisition Properties.
The following summarizes the Acquisition Properties:
Property Acquisition Acquisition Occupancy at
Name Costs Date GLA City/State Acquisition
---- ----- ---- --- ---------- -----------
Welleby Plaza $7,251,320 5-31-96 109,949 Sunrise, FL 95.2%
Union Square $7,189,358 7-16-96 97,191 Monroe, NC 94.7%
City View $5,569,614 7-16-96 77,550 Charlotte, NC 98.5%
Palm Harbor $12,967,307 8-1-96 159,369 Palm Coast, FL 100.0%
----------- -------
Total $32,977,599 440,059
=========== =======
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
A. Financial Statements and Pro Forma Financial Information
Audited Financial Statements of the Acquisition Properties are
currently unavailable; however, they will be filed together with the Pro Forma
Financial Statements of the Company as soon as they are available, but in no
event beyond 60 days of the required filing date of this report.
B. Exhibits:
10. Material Contracts
(a) Purchase and Sale Agreement dated April 16, 1996, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as purchaser, and Connecticut General Life Insurance Company,
on Behalf of its Separate Account R as seller, relating to the
acquisition of Welleby Plaza.
(b) Purchase and Sale Agreement dated June 19, 1996, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as buyer, and Norcom Development, Inc. as seller, relating to
the acquisition of City View Shopping Center and Union Square
Shopping Center.
(c) Purchase and Sale Agreement dated March 29, 1996, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as buyer, and Palm Harbour Centers Associates as seller,
relating to the acquisition of Palm Harbour Shopping Village.
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)
August 6 , 1996 By: /s/ J. Christian Leavitt
----------------------------
J. Christian Leavitt
Vice President and Treasurer
EXHIBIT INDEX
10. Material Contracts
(a) Purchase and Sale Agreement dated April 16, 1996, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as purchaser, and Connecticut General Life Insurance Company,
on Behalf of its Separate Account R as seller, relating to the
acquisition of Welleby Plaza.
(b) Purchase and Sale Agreement dated June 19, 1996, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as buyer, and Norcom Development, Inc. as seller, relating to
the acquisition of City View Shopping Center and Union Square
Shopping Center.
(c) Purchase and Sale Agreement dated March 29, 1996, between RRC
Acquisitions, Inc., a wholly-owned subsidiary of the Company
as buyer, and Palm Harbour Centers Associates as seller,
relating to the acquisition of Palm Harbour Shopping Village.
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE is made by and between CONNECTICUT
GENERAL LIFE INSURANCE COMPANY, a Connecticut corporation, on behalf of its
Separate Account R ("Seller"), and RRC ACQUISITIONS, INC., a Florida corporation
("Purchaser"), as of the "Effective Date" (as defined below).
Article I.
Property
Seller hereby agrees to sell, and Purchaser hereby agrees to buy, all of
the following property: (a) a parcel of real property (the "Land"), located in
the County of Broward, State of Florida, more particularly described on Exhibit
A attached to this Agreement; (b) the buildings and other improvements located
on the Land, being a shopping center generally known as Welleby Plaza (the
"Improvements"); (c) all tenant leases relating to the Improvements, being the
leases referred to on the Rent Roll attached hereto as Exhibit B (the Land,
Improvements, and tenant leases are referred to herein, collectively, as the
"Real Property"); and (d) all fixtures, equipment, and other personal property
(both tangible and intangible, including, without limitation, any service and
maintenance agreements applicable thereto, other than the property management
agreement, which shall be terminated) owned by Seller and contained in or
related to the Improvements, to the extent assignable (the "Personal Property")
(collectively, the Real Property and the Personal Property are sometimes
referred to herein as the "Property").
Article II.
Purchase Price and Deposits
The purchase price which the Purchaser agrees to pay and the Seller agrees
to accept for the Property shall be the sum of Six Million Eight Hundred
Thousand Dollars ($6,800,000.00) (hereinafter referred to as the
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 1
"Purchase Price"), subject to adjustment as provided in Article V hereof,
payable as follows:
(a) An earnest money deposit ("Deposit") of One Hundred Thousand
Dollars ($100,000.00), in cash, to be deposited with Chicago Title
Insurance Company, Suite 1000, Sun Trust Building, 200 West Forsythe
Street, Jacksonville, Florida 32202 (the "Title Company") within one (1)
business day after execution hereof by both parties, such amount to be
held in escrow and deposited in an interest-bearing account; and
(b) The balance of the Purchase Price shall be paid at time of
Closing by Federal wire transfer, with the transfer of funds to Seller
to be completed by 2:00 p.m. on the day of the Closing.
The Deposit shall be paid to Seller at the Closing as a credit against the
Purchase Price. Purchaser shall provide the Title Company with its tax
identification number, and all interest shall be for Purchaser's account for tax
purposes and shall be considered to be a part of the Deposit for all purposes.
Notwithstanding the prior sentence, if Seller retains the Deposit in accordance
with Section 3.1 hereof, such interest shall be for Seller's account for tax
purposes.
In addition to the Deposit, Purchaser shall deposit three fully executed
copies of this Agreement with the Title Company immediately after both parties
have executed it. The date of such deposit shall be acknowledged by the Title
Company on all copies, and such date shall be the "Effective Date" of this
Agreement. The Title Company shall retain one copy of this Agreement and deliver
one copy hereof to each of Purchaser and Seller.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 2
Article III.
Failure to Close
3.1 Purchaser's Default. If Seller has complied with all of the covenants
and conditions contained herein and is ready, willing and able to convey the
Property in accordance with this Agreement and Purchaser fails to consummate
this Agreement and take title, then the parties hereto recognize and agree that
the damages that Seller will sustain as a result thereof will be substantial,
but difficult if not impossible to ascertain. Therefore, the parties agree that,
in the event of Purchaser's default, Seller shall, as its sole remedy, be
entitled to retain the Deposit as liquidated damages, and neither party shall
have any further rights or obligations with respect to the other under this
Agreement, except for the Surviving Covenants (hereinafter defined).
3.2 Seller's Default. In the event that Purchaser has complied with all of
the covenants and conditions contained herein and is ready, willing and able to
take title to the Property in accordance with this Agreement, and Seller fails
to consummate this Agreement and convey title as set forth herein, then
Purchaser may, as its sole remedy, either (a) terminate this contract and
recover the Deposit and all expenses incurred by it in connection with this
Agreement; or (b) seek specific performance by Seller of Seller's obligations in
accordance with principles of Florida law, and, if successful in obtaining
specific performance, seek reimbursement of its actual attorneys' fees
reasonably incurred, provided, however, that Seller's liability for such
attorneys fees shall not exceed $100,000.00.
Article IV.
Closing and Transfer of Title
4.1 Closing. The parties hereto agree to conduct a closing of this
sale (the "Closing") on or before 10:00 a.m. on May 31, 1996 ("Closing Date")
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 3
in the office of the Title Company identified in Section 3.1 above, or at such
other place as may be agreed upon by the parties hereto. This Agreement shall
terminate if transfer of title is not completed by the Closing Date (unless such
failure to close is due to Seller's default, the date for Closing is extended
pursuant to any provision hereof, including, without limitation, the matters
described in Sections 6.3, 6.4, 6.5 and Article VII hereof, or the date for
Closing is extended by agreement of the parties, which agreement shall be
confirmed in writing).
4.2 Closing Procedure. At Closing, Seller shall execute and deliver or
cause to be delivered (a) a Special Warranty Deed, in the form attached hereto
as Exhibit C, proper for recording, conveying Seller's interest in the Real
Property to Purchaser, subject, however, to (i) any and all easements, rights of
way, encumbrances, liens, covenants, restrictions and other matters of record
and any and all matters shown (A) on any survey of the Real Property obtained by
Purchaser (including any survey obtained pursuant to Section 6.1) or otherwise
disclosed to Purchaser (except monetary liens of record shown in the Title
Commitment or appearing of record between the date of the Title Commitment and
the Closing Date other than liens for taxes not yet due), (B) in the Title
Commitment (defined in Section 6.5) or (C) shown on the Survey (as defined in
Section 6.4) (or which an accurate survey of the Property would show) and either
approved by Purchaser or as to which objection has been waived by Purchaser,
(ii) taxes not yet due and payable, (iii) the rights of lessees, ground lessees
and licensees of space in the Improvements at the time of Closing (to the extent
shown on the Rent Roll), and (iv) any encumbrances created or permitted by the
terms of this Agreement; (b) a Bill of Sale in the form attached hereto as
Exhibit D, dated as of the date of Closing conveying to Purchaser any and all
Personal Property; (c) an Assignment of Leases in the form attached hereto as
Exhibit E, dated the date of Closing, assigning all of the landlord's right,
title and interest in and to any tenant and other leases covering all or any
portion of the Real Property with such modifications as may be necessary to
implement the provisions regarding Seller's rights with
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 4
respect to the lease to The Magic Touch pursuant to the provisions of the
Environmental Agreement (hereinafter defined); (d) Tenant Notification
Agreements (the "Tenant Notices"), dated the date of the Closing, executed by
Seller, and complying with applicable statutes in order to relieve Seller of
liability for tenant security deposits (provided the security deposits are paid
to Purchaser), notifying the tenants of the Real Property that the Property has
been sold to Purchaser and directing the tenants to pay rentals to Purchaser (or
Purchaser's designated agent); (e) the originals of all leases and, to the
extent in Seller's possession or under Seller's control, as-built plans and
specifications and maintenance and service contracts that are to be assumed; (f)
tenant estoppel certificates substantially in the form attached as Exhibit I
executed by Publix, Walgreens, Pizza Hut and First Union and at least sixty
percent (60%) of the remainder of the tenants (as measured by the number of
tenants of space in the Improvements); (g) an indemnification agreement (the
"Indemnification Agreement") in the form attached as Exhibit F, dated the date
of Closing; (h) an updated Rent Roll, in the form of the Rent Roll attached
hereto as Exhibit B, dated within 15 days of the date of the Closing; (i) an
affidavit that Seller is not a "foreign person" in the form attached as Exhibit
G; (j) a master key or duplicate key for all locks in the Improvements; (k) an
environmental agreement in the form attached as Exhibit J (the "Environmental
Agreement") pursuant to which Seller shall indemnify and hold the Buyer harmless
from all cost and expense of rehabilitation, as provided therein; and (l) to the
extent in the possession of Seller or Seller's property management company, all
maintenance records.
Purchaser acknowledges and agrees that Seller is under no obligation to
clear from the title any easements, rights of way, encumbrances, liens (except
mechanics' liens for work done for Seller, mortgage liens or judgment liens),
covenants, restrictions, or any other matters of record, or to cure any survey
objections of Purchaser, or to create any encumbrances on, or for the benefit
of, the Property. If Seller does not deliver title at Closing in form consistent
with the Title Commitment in accordance with and subject to
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 5
Purchaser's rights and obligations pursuant to the terms of this Agreement, but
Seller has otherwise satisfied its obligations under this Agreement, such
failure shall not constitute a default or breach by Seller hereunder, and
notwithstanding any other provision of this Agreement Purchaser's sole and
exclusive remedy shall be to terminate this Agreement and receive a return of
the Deposit, or to accept conveyance by Seller of such title as it delivers
without reduction of the Purchase Price.
Purchaser acknowledges that Seller's obligation to obtain the tenant
estoppel certificates as provided in Section 4.2(f) above shall constitute a
condition of closing, the failure of which shall not constitute a default and,
notwithstanding any other provision of this Agreement, Purchaser's sole and
exclusive remedy for such failure shall be to terminate this Agreement and
receive a return of the Deposit.
4.3 Purchaser's Performance. At the Closing, Purchaser will cause the
Purchase Price to be delivered to the Title Company, will execute and deliver
the Tenant Notices, the Indemnification Agreement, the Assignment of Leases, and
the Bill of Sale. Purchaser's obligation shall be contingent upon its obtaining
an Owner's Title Insurance Policy (the "Owner's Title Policy") dated no earlier
than the date of the recording of the Deed, in the full amount of the Purchase
Price, insuring that good and indefeasible fee simple title to the Property is
vested in Purchaser, containing no exceptions to such title other than the
standard printed exceptions (provided, however, that (i) the printed survey
exception must be deleted, except for matters shown on the Survey, (ii) the
exception as to ad valorem taxes shall be limited to taxes for the current and
subsequent years, (iii) the exception for tenants and parties in possession
shall be limited to those tenants, licensees, and occupants shown on the Rent
Roll delivered at Closing), those items listed on Schedule "B" of the Title
Commitment, and encumbrances created or permitted by the terms of this Agreement
and (iv) the exception for mechanics' liens must
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 6
be deleted. Purchaser shall use all reasonable efforts to obtain the Owner's
Title Policy.
4.4 Evidence of Authority; Miscellaneous. Both parties will deliver to the
Title Company and each other such evidence or documents as may reasonably be
required by the Title Company or either party hereto evidencing the power and
authority of Seller and Purchaser and the due authority of, and execution and
delivery by, any person or persons who are executing any of the documents
required hereunder in connection with the sale of the Property. Both parties
will execute and deliver such other documents as are reasonably required to
effect the intent of this Agreement.
Article V.
Prorations of Rents, Taxes, Etc.
Real estate taxes for the year of closing shall be prorated as of the date
of Closing either using actual tax figures or, if actual figures are not
available, then using as a basis for said proration the most recent assessed
value of the Real Estate multiplied by the current tax rate, with a subsequent
cash adjustment to be made between Purchaser and Seller when actual tax figures
are available. Personal property taxes, annual permit or inspection fees, sewer
charges and other expenses normal to the operation and maintenance of the
Property shall also be prorated as of the date of Closing. Rents that have been
collected for the month of the Closing will be prorated at the Closing,
effective as of the date of the Closing. With regard to rents that are
delinquent as of the date of the Closing, (i) no proration will be made at the
Closing, (ii) Purchaser will make a good faith effort after the Closing to
collect the rents in the usual course of Purchaser's operation of the Property,
(iii) Purchaser will apply all rents collected first to current rents and,
unless specifically designated otherwise by the tenant, post-closing delinquent
rents and the excess amount, if any, shall be applied to the delinquent rent
owed to Seller, and (iv) Purchaser will provide Seller
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 7
with a copy of any correspondence received from or mailed to tenants in
connection with rents due Seller under the terms of this Agreement. It is
agreed, however, that Purchaser will not be obligated to institute any lawsuit
or other collection procedures to collect delinquent rents. Rents collected by
Purchaser after the Closing Date, to which Seller is entitled, shall be promptly
paid to Seller. Seller shall retain the right to take legal action, if
necessary, to collect any delinquent rents not collected by Purchaser and
Purchaser shall not interfere with and shall cooperate with such legal action.
Percentage Rents and tenant reimbursements shall also be prorated, based
on the number of days in the applicable period. Percentage Rents and tenant
reimbursements not yet due and payable at Closing but allocable to the period
Seller owned the Property shall be collected by Purchaser when due and paid to
Seller upon receipt. Purchaser shall use commercially reasonable efforts to
collect such amounts and shall provide Seller with a copy of any correspondence
received from or sent to tenants in connection with percentage rents and tenant
reimbursements allocable to Seller. Notwithstanding the foregoing, Seller shall
retain the right to take legal action if necessary to collect any percentage
rents and tenant reimbursements not collected by Purchaser within three (3)
months of its due date and Purchaser shall not interfere with and shall
cooperate with any such legal action.
As of the Closing Date, Purchaser shall be entitled to a credit for any
tenant deposits under the leases, and for any prepaid rent covering periods
after the Closing.
Final readings on all gas, water and electric meters shall be made as of
the date of closing, if possible. If final readings are not possible, gas, water
and electricity charges will be prorated based on the most recent period for
which costs are available. Any deposits made by Seller with utility companies
shall be returned to Seller. Purchaser shall be responsible for making all
arrangements for the continuation of utility services. After the
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 8
Closing, Purchaser will assume full responsibility for all security deposits and
advance rental deposits of current tenants of the Real Property currently held
by Seller, which items will be itemized by Seller and transferred and paid over
to Purchaser at the Closing.
All items (including taxes, but excluding tenant reimbursements and
percentage rent which is not due on or prior to Closing) that are not subject to
an exact determination shall be estimated by the parties. When any item so
estimated is, within one (1) year after the Closing capable of exact
determination, the party in possession of the facts necessary to make the
determination shall send the other party a detailed report on the exact
determination so made and the parties shall adjust the prior estimate within
thirty (30) days after both parties have received said reports.
ARTICLE VI.
Purchaser Inspections and Contingencies
6.1 Document Inspection. Seller has made or will make available within two
(2) days from the Effective Date of this Agreement the following items relating
to the Real Property for review by Purchaser to the extent in Seller's or
Seller's property manager's possession:
(1) a copy of Seller's policy of title insurance;
(2) all plans, drawings, and specifications and "as built" plans or
drawings related to the Property and any third-party soil reports,
environmental reports, engineering and architectural studies,
grading plans, topographical maps, and similar data relating to the
Property;
(3) a list and copies of all licenses, permits and approvals regarding
the Property;
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 9
(4) service contracts and similar agreements related to the Property;
(5) Seller's existing survey of the Property; and
(6) copies of any leases and other occupancy agreements applicable to
the Property.
(7) income and expense statements and balance sheets for 1993 and 1994
and monthly income and expense statements for each full month
through March, 1996.
Purchaser agrees that if for any reason the Closing is not consummated,
Purchaser will immediately return to Seller all materials furnished to Purchaser
pursuant to this Agreement.
6.2 Physical Inspection. In addition to the items set forth in Section
6.1, Seller will make the Property available for inspection by Purchaser and
Purchaser may, at Purchaser's costs and risk, conduct such engineering and/or
market and economic feasibility studies of the Property and undertake such
physical inspection of the Property and conduct such interviews of the tenants
of the Property as Purchaser deems appropriate as soon as possible after the
Effective Date of this Agreement. Such inspections and interviews shall be
conducted at reasonable times upon reasonable oral or written notice to Seller's
property manager. Seller shall have the right to designate a representative to
accompany Purchaser's employees, agents, and independent contractors on any such
inspections and interviews.
Purchaser and Regency Realty Corporation ("Regency") hereby agree jointly
and severally, to pay, protect, defend, indemnify and save Seller and the
Property free and harmless against all liabilities, obligations, claims
(including mechanic's lien claims), damages, penalties, causes of action,
judgments, costs and expenses (including, without limitation, attorneys' fees
and expenses) (whether involving bodily injury or property damage) imposed
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 10
upon, incurred by or asserted against Seller in connection with or arising out
of the entry upon the Real Property by Purchaser's employees, agents or
independent contractors and the actions of such persons on the Real Property (or
involving mechanic's liens as a result thereof). In the event any part of the
Property is damaged or excavated by Purchaser, its employees, agents or
independent contractors, or Regency, its employees, agents or independent
contractors, Purchaser and Regency agree in the event its purchase hereunder is
not consummated, to make such additional payments to Seller as may be reasonably
required to return the Property to its condition immediately prior to such
damage or excavation or, at Seller's option, to cause such work to be done.
Notwithstanding any provision to the contrary herein, Purchaser's and Regency's
obligations under this subparagraph shall be joint and several and shall survive
the expiration or termination of this Agreement, and shall survive Closing.
6.3. Feasibility Period. Purchaser shall have a period ending May 15, 1996
to conduct its inspection of the documents delivered in accordance with Section
6.1 and to conduct physical inspections of the Property as set forth in Section
6.2 (the "Feasibility Period"). On or before the last day of the Feasibility
Period, Purchaser may, in its sole discretion without obligation to specify
which aspect of its inspection was unsatisfactory, terminate this Agreement by
providing a written notice to Seller so providing. Upon receipt of such notice,
this Agreement shall terminate and the Title Company shall return the Deposit to
Purchaser, and neither party shall have any obligation to the other, except for
the Surviving Covenants. If Purchaser fails to provide such notice of
termination on or before the last day of the Feasibility Period, Purchaser shall
be deemed to have approved such inspections and this contract shall remain in
full force and effect.
6.4. Survey Contingency. Purchaser's obligation to purchase the
Property is subject to its obtaining, within the Feasibility Period, an ALTA
survey of the Real Property by a registered surveyor (the "Survey"). The
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 11
Survey shall show the location of all improvements, structures, driveways,
parking areas, easements, rights of way, and any encroachments. Purchaser
shall use its best efforts to obtain the Survey.
Purchaser shall have until the earlier to occur of the last day of the
Feasibility Period to object in writing to the Survey, including any objection
to the boundaries set forth in the Survey and to the legal description. This
contingency shall be deemed satisfied or waived if Seller has not received
written notice of Purchaser's objection before such date. Any such written
notice shall state all of Purchaser's objections with specificity. Upon receipt
of such notice, Seller may, but shall not be obligated to, cure such objections.
If Seller cures such objections within 15 days, or, if such objections are such
that they cannot be cured within 15 days and Seller has commenced curing such
objections and thereafter diligently proceeds to perfect such cure (but in no
event beyond 45 days unless agreed to by Purchaser), then this Agreement shall
continue in force and effect, and the Closing Date shall be adjusted
accordingly. If Seller is unable to, or chooses not to, cure such objections
within the time permitted, this Agreement shall terminate, Seller shall instruct
the Title Company to return the Deposit to Purchaser, and neither party shall
have any further obligations hereunder except for the Surviving Covenants.
Notwithstanding the foregoing, however, Purchaser may waive such objections that
Seller is unable to or chooses not to cure, and upon receipt by Seller of such
waiver in full from Purchaser within 10 days of notice from Seller that it is
unable or chooses not to cure such objections, this Agreement shall remain in
full force and effect with no reduction in the Purchase Price.
If requested by Seller, Purchaser will confirm in writing whether this
survey contingency has been satisfied and, if so, the date on which it was
satisfied. Seller shall provide a copy of the Survey to Purchaser at or prior to
Closing.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 12
6.5. Title Contingency. Purchaser's obligation to purchase the Property is
subject to its obtaining during the Feasibility Period a commitment for an
Owner's Title Insurance Policy (the "Title Commitment"), dated not earlier than
the Effective Date of this Agreement, issued by the Title Company, together with
such copies of all items and documents referred to in the Title Commitment. The
Title Commitment will commit the Title Company to issue the Owner's Title Policy
to Purchaser at the Closing in the amount of the Purchase Price. Purchaser shall
use its best efforts to obtain the Title Commitment.
Purchaser shall have until the last day of the Feasibility Period to state
any objections in writing. This contingency shall be deemed satisfied or waived
if such written notice of objection is not received by Seller on or before the
expiration of the Feasibility Period. Such written notice of objection shall
state all of Purchaser's objections with specificity. Upon receipt of such
notice, Seller may, but shall not be obligated to, cure such objection. If
Seller cures such objections within 15 days, or, if such objections are such
that they cannot be cured within 15 days and Seller has commenced curing such
objections and thereafter diligently proceeds to perfect such cure, then this
Agreement shall continue in full force and effect and the Closing Date shall be
adjusted accordingly. If Seller is unable or chooses not to cure such objections
within the time permitted, then this Agreement shall terminate, and Seller shall
instruct the Title Company to return the Deposit to Purchaser, and neither party
shall have any further obligations hereunder except for the Surviving Covenants.
Notwithstanding the foregoing, however, Purchaser may waive such objections that
Seller is unable or chooses not to cure within 10 days after receipt of a notice
that Seller is unable or chooses not to cure such objections, and upon receipt
by Seller of such waiver in full from Purchaser, this Agreement shall remain in
full force and effect with no reduction in the Purchase Price.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 13
If requested by Seller, Purchaser will confirm in writing whether this
title contingency has been satisfied and, if so, the date on which it was
satisfied. Seller assumes no obligations to Purchaser with respect to matters
disclosed in the Title Commitment. Purchaser shall promptly deliver copies of
all title commitments it receives prior to Closing with regard to the Property.
Article VII.
Loss due to Casualty or Condemnation
7.1 Loss due to Condemnation. In the event of a condemnation of all or a
Substantial Portion of the Real Property which condemnation shall or would
render a Substantial Portion of the Real Property untenantable, or if any
portion of the building or parking area is taken, either party may, upon written
notice to the other party given within 10 days of receipt of notice of such
event, cancel this Agreement, in which event Seller shall instruct the Title
Company to return the Deposit to Purchaser, this Agreement shall terminate and
neither party shall have any rights or obligations hereunder except for the
Surviving Covenants. In the event that neither party elects to terminate, or if
the condemnation affects less than a Substantial Portion or does not affect the
building or parking area, then this Agreement shall remain in full force and
effect, and Seller shall be entitled to all monies received or collected by
reason of such condemnation prior to closing. In such event, the transaction
hereby contemplated shall close in accordance with the terms and conditions of
this Agreement except that there will be an abatement of the Purchase Price
equal to the amount of the net proceeds, less costs and attorney's fees, which
are received by Seller by reason of such condemnation prior to closing. If the
condemnation proceeding shall not have been concluded prior to the Closing, then
there shall be no abatement of the Purchase Price and Seller shall assign any
interest it has in the pending award to Purchaser. For purposes of this Section
7.1, a Substantial Portion
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 14
shall mean a condemnation of in excess of $200,000.00 in value of the Real
Property.
7.2 Loss due to Casualty. In the event of Substantial Loss or Damage to
the Real Property by fire or other casualty (not resulting from acts of
Purchaser), either party may, upon written notice to the other party given
within 10 days of receipt of notice of such event, cancel this Agreement in
which event Seller shall instruct the Title Company to return the Deposit to
Purchaser and this Agreement shall terminate and neither party shall have any
rights or obligations hereunder except for the Surviving Covenants. In the event
that neither party elects to terminate, or if the casualty results in less than
Substantial Loss or Damage, then this Agreement shall remain in full force and
effect and Seller shall be entitled to all insurance proceeds received or
collected by reason of such damage or loss, whereupon the transaction hereby
contemplated shall close in accordance with the terms and conditions of this
Agreement except that there will be abatement of the Purchase Price equal to the
amount of the net proceeds, less costs and attorney's fees, which are received
by Seller as a result of such damage or loss, provided that such abatement will
be reduced by the amount expended by Seller in accordance with Article VIII
hereof for restoration or preservation of the Property following the casualty.
Alternatively, Purchaser may, in its discretion, have Seller repair or replace
the damaged Property, and there shall be no abatement of the Purchase Price in
such case. However, Purchaser shall not be entitled to require Seller to effect
repair or replacement unless the loss is entirely covered by insurance (except
for any applicable deductible) and the repair or replacement will take no more
than three (3) months to complete. For purposes of this Section 7.2,
"Substantial Loss or Damage" shall mean loss or damage, the cost for repair of
which exceeds $200,000.00.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 15
Article VIII.
Maintenance of the Property
Between the time of execution of this Agreement and the Closing, Seller
shall use its best efforts to maintain the Property in at least as good repair
as of the date of this Agreement, reasonable wear and tear excepted; except that
in the event of a fire or other casualty, damage or loss, Seller shall have no
duty to repair said damage except as provided in Section 7.2 hereof. However,
Seller may repair any such damage with Purchaser's prior, written approval and
may, without Purchaser's approval, repair damage where such repair is necessary
in Seller's reasonable opinion to preserve and protect the health and safety of
tenants of the Property or to preserve the Property from imminent risk of
further damage or if required to do so by Seller's insurance carrier or any
lease. Any such emergency repairs shall be reported to Purchaser within 48 hours
of their completion. During the period after the date hereof and prior to the
Closing, Seller shall not lease any portion of the Real Property unless such
lease has been approved in writing by Purchaser. Any such proposed lease shall
be on Seller's standard form of lease and shall be reviewed and approved or
rejected within five (5) business days after receipt thereof by Purchaser.
Failure to approve or reject such proposed lease within such period shall be
deemed approval. If the proposed lease is rejected, then Seller shall not enter
into such lease. With respect to any leases entered into between the Effective
Date hereof and the Closing Date, Purchaser shall pay the unamortized cost
(based on the number of months in the entire term of the lease for which rent is
paid and the number of such months that shall have occurred as of the date of
the Closing) of all tenant improvements and leasing commissions with respect
thereto.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 16
Article IX.
Broker
Purchaser and Seller represent to each other that they have dealt with no
agent or broker who in any way has participated as a procuring cause of the sale
of the Property, except CSC Cypress Real Estate Services, Inc. ("Authorized
Broker"). Seller shall pay a commission of three percent (3%) of the Purchase
Price to the Authorized Broker at and if the Closing occurs to the extent due
pursuant to a separate written agreement between Seller and Authorized Broker.
The Authorized Broker shall be responsible for paying any applicable co-broker
under terms of any separate agreement between them. Purchaser and Seller each
agree to defend, indemnify and hold harmless the other for any and all
judgments, costs of suit, attorneys' fees, and other reasonable expenses which
the other may incur by reason of any action or claim against the other by any
broker, agent, or finder with whom the indemnifying party has dealt arising out
of this Agreement or any subsequent sale of the Property to Purchaser, except
for the above-described commissions, which shall be paid by Seller. The
provisions of this Article IX shall survive the Closing and any termination of
this Agreement.
Article X.
Representations and Warranties
10.1 Limitations on Representations and Warranties. Purchaser hereby
agrees and acknowledges that, except as set forth in Section 10.2 below, neither
Seller nor any agent, attorney, employee or representative of Seller has made
any representation whatsoever regarding the subject matter of this sale, or any
part thereof, including (without limiting the generality of the foregoing)
representations as to the physical nature or condition of the Property or the
capabilities thereof, and that Purchaser, in executing, delivering and/or
performing this Agreement, does not rely upon any statement and/or information
to whomever made or given, directly or indirectly, orally
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 17
or in writing, by any individual, firm or corporation. Purchaser agrees to take
the Real Property and the Personal Property "as is," as of the date hereof,
reasonable wear and tear, and minor damage caused by the removal of any personal
property or fixtures not included in this sale, excepted. SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL CONDITION OF THE PROPERTY OR
THE SUITABILITY THEREOF FOR ANY PURPOSE FOR WHICH PURCHASER MAY DESIRE TO USE
IT. SELLER HEREBY EXPRESSLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY AND/OR
FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER WARRANTIES OR REPRESENTATIONS AS
TO THE PHYSICAL CONDITION OF THE PROPERTY. PURCHASER, BY ACCEPTANCE OF THE DEED,
AGREES THAT IT HAS INSPECTED THE PROPERTY AND ACCEPTS SAME "AS IS" AND "WITH ALL
FAULTS".
Purchaser understands that any financial statements and data, including,
without limitation, gross rental income, operating expenses and cash flow
statements, to be made available by Seller to Purchaser, will be unaudited
financial statements and data not prepared or reviewed by independent public
accountants, and that Seller makes no representation as to the accuracy or
completeness thereof. Seller agrees to make the books and records of the
Property for 1994 and 1995 available to Seller for a period of sixty (60) days
after the Closing to permit Purchaser's accountants to conduct an audit;
provided, however, Seller shall have no liability or responsibility for anything
shown in such audit. Purchaser shall indemnify and hold harmless the Seller from
any claim, damage, loss or liability to which Seller is at any time subjected by
any person as a result of its compliance with the previous sentence. The
provisions of this paragraph shall survive Closing.
10.2 Representations and Warranties. Seller makes the following
representations and warranties and agrees that Purchaser's obligations under
this Agreement are conditioned upon the truth and accuracy of such
representations and warranties, both as of this date and as of the date of the
Closing:
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 18
(a) Seller has the corporate power and authority to enter into this
Agreement and convey the Property to Purchaser.
(b) To the best of Seller's knowledge, Seller has received no notice of
any material existing, pending or threatened litigation, administrative
proceeding or condemnation or sale in lieu thereof, with respect to any portion
of the Real Property, except as noted on Exhibit H attached hereto.
(c) Except for those tenants and licensees in possession of the Real
Property under written leases or license agreements for space in the Real
Property, as shown in the Rent Roll, to the best of Seller's knowledge there are
no parties in possession of, or claiming any possession to, any portion of the
Real Property as lessees, tenants at sufferance, licensees, trespassers or
otherwise.
(d) The updated Rent Roll for the Real Property, which shall be delivered
at the Closing, will be true, correct and complete as of the date set forth
thereon; no tenant will be entitled to any rebates, rent concessions, or free
rent (other than as reflected in said Rent Roll) and no rents due under any of
the tenant or other leases will have been assigned, hypothecated, or encumbered,
to any party except pursuant to documents to be released at Closing.
(e) There are no attachments or executions affecting the Property, general
assignments for the benefit of creditors, or voluntary or involuntary
proceedings in bankruptcy, pending or, to the best of Seller's knowledge,
threatened against Seller.
10.3 Seller's Knowledge. Whenever the term "to the best of Seller's
knowledge" is used in this Agreement or in any representations and warranties
given to Purchaser at Closing, such knowledge shall be the actual knowledge of
Ivy Freedman and Mark Korinek (the "Key Personnel"), the personnel assigned to
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 19
the Real Property by CIGNA Investments, Inc., authorized agent for Seller, after
review of the files of CIGNA Investments, Inc. and inquiry of Seller's property
manager. Seller shall have no duty to conduct any further inquiry in making any
such representations and warranties, and no knowledge of any other person shall
be imputed to the Key Personnel.
10.4 Survival. All representations and warranties contained in Section
10.2 will survive the Closing of this transaction (but only as to the status of
facts as they exist as of the Closing, it being understood that Seller makes no
representations or warranties which would apply to changes or other matters
occurring after the Closing), but shall expire on the date one year from the
date of Closing, and no action on such representations and warranties may be
commenced after such expiration.
Article XI.
Liability of Seller
Neither Seller nor any independent property manager which Seller has hired
to manage the Property shall, by entering into this Agreement, become liable for
any costs or expenses incurred by Purchaser subsequent to the date of Closing,
including any labor performed on, or materials furnished to, the Real Property,
or for any leasing commissions or other fees or commissions due for renewals or
extensions of existing leases or otherwise, or for compliance with any laws,
requirements or regulations of, or taxes, assessments or other charges
thereafter due to any governmental authority, or for any other charges or
expenses whatsoever pertaining to the Property or to the ownership, title,
possession, use, or occupancy of the Property, whether or not such costs and
expenses were incurred pursuant to obligations of Purchaser under this Agreement
(including, without limitation, any costs of compliance with presently-existing
and future environmental laws, any environmental remediation costs, and any
costs of, or awards of damages for, damage to the environment, to natural
resources, or to any third party, it being the intent
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 20
of this Agreement, as between Purchaser and Seller, to shift all such liability
to Purchaser, except for any liability of Seller under the provisions of Article
X hereof or under the Environmental Agreement), and Purchaser hereby agrees to
defend, indemnify and hold Seller and any independent property manager hired by
Seller, harmless from any such liability for such costs and expenses. Nothing
herein shall negate any liability of Seller, if any, which arises under the
provisions of the Assignment and Assumption of Leases and Security Deposits. The
provisions of this Article XI shall survive closing.
Article XII.
Assignment
This Agreement may not be assigned or transferred by Purchaser without
prior written consent of Seller. No assignment shall relieve Purchaser of any of
its obligations under this Agreement.
Article XIII.
Notices
All notices hereunder or required by law shall be sent via United States
Mail, postage prepaid, certified mail, return receipt requested, or via any
nationally recognized commercial overnight carrier with provisions for receipt,
addressed to the parties hereto at their respective addresses set forth below or
as they have theretofore specified by written notice delivered in accordance
herewith:
PURCHASER: RRC Acquisitions, Inc.
121 West Forsyth Street
Suite 200
Jacksonville, FL 32202
with a copy to: Ulmer, Murchison, Ashby & Taylor
200 West Forsyth Street
Suite 1600
Jacksonville, FL 32202
Attn: William E. Scheu, Esq.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 21
SELLER: Connecticut General Life Insurance Company, on behalf
of its Separate Account R
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Hartford, CT 06152-2313
Attn: Ivy Freedman, S-313
with a copy to: CIGNA Corporation
Investment Law Department
900 Cottage Grove Road
Hartford, CT 06152-2215
Attn: Mortgage and Real Estate Group, S-215A
Delivery will be deemed complete upon actual receipt or refusal to accept
delivery.
Article XIV.
Expenses
Seller shall pay its own attorney's fees and any transfer tax. Purchaser
shall pay all of Purchaser's attorneys' fees and expenses, recording charges,
sales taxes, the Title Company's escrow fee, any Title Policy premium and the
cost of the Survey, notwithstanding any local practice to the contrary.
Article XV.
Miscellaneous
15.1 Successors and Assigns. All the terms and conditions of this
Agreement are hereby made binding upon the executors, heirs, administrators,
successors and permitted assigns of both parties hereto.
15.2 Gender. Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires
otherwise.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 22
15.3 Captions. The captions in this Agreement are inserted only for the
purpose of convenient reference and in no way define, limit or prescribe the
scope or intent of this Agreement or any part hereof.
15.4 Construction. No provision of this Agreement shall be construed by
any Court or other judicial authority against any party hereto by reason of such
party's being deemed to have drafted or structured such provisions.
15.5 Entire Agreement. This Agreement constitutes the entire contract
between the parties hereto and there are no other oral or written promises,
conditions, representations, understandings or terms of any kind as conditions
or inducements to the execution hereof and none have been relied upon by either
party.
15.6 Recording. The parties agree that this Agreement shall not be
recorded. If Purchaser causes this Agreement or any notice or memorandum thereof
to be recorded, this Agreement shall be null and void at the option of the
Seller.
15.7 No Continuance. Purchaser acknowledges that there shall be no
assignment, transfer or continuance of any of Seller's insurance coverage or
of the property management contract.
15.8 Time of Essence. Time is of the essence in this transaction.
15.9 Original Document. This Agreement may be executed by both parties
in counterparts in which event each shall be deemed an original.
15.10 Governing Law. This Agreement shall be construed, and the rights
and obligations of Seller and Purchaser hereunder, shall be determined in
accordance with the laws of the State of Florida.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 23
15.11 Acceptance of Offer. This Agreement constitutes Seller's offer to
sell to Purchaser on the terms set forth herein and must be accepted by
Purchaser by signing three copies hereof and returning them to Seller no later
than April 15, 1996. If Purchaser has not accepted this Agreement by such date,
then this Agreement and the offer represented hereby shall automatically be
revoked and shall be of no further force or effect.
15.12 Confidentiality. Purchaser and Seller agree that all documents and
information concerning the Property delivered to Purchaser, the subject matter
of this Agreement, and all negotiations will remain confidential. Purchaser and
Seller will disclose such information only to those parties required to know it,
including, without limitation, employees of either of the parties, consultants
and attorneys engaged by either of the parties, and prospective or existing
investors and lenders.
15.13 Surviving Covenants. Notwithstanding any provisions hereof to the
contrary, the provisions of the second paragraph of Section 6.2 hereof and the
provisions of Article IX and Section 15.15 hereof (collectively, the "Surviving
Covenants") shall survive the Closing and any termination of this Agreement.
15.14 Approval. Seller's obligation to perform its duties hereunder is
contingent upon approval of the transaction by all required boards and
committees in accordance with the standard policies and procedures of CIGNA
Investments, Inc. Seller will seek such approvals during the period commencing
on the Effective Date hereof to and including April 15, 1996, and will notify
Purchaser promptly of the decision of such boards and committees. If the
transaction is not approved, then Seller may terminate this Agreement by giving
notice thereof to Purchaser, whereupon the Deposit shall be returned to
Purchaser and neither party shall have any further rights or duties hereunder
except for the Surviving Covenants.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 24
15.15 ERISA. Connecticut General Life Insurance Company will enter into
this transaction of behalf of its Separate Account R. "Separate Account R" is a
separate account as defined in Section 3(17) of the Employee Retirement Income
Security Act of 1974. Under ERISA and under United States Department of Labor
Prohibited Transaction Class Exemption 90-1, CGLIC is prohibited from entering
into transactions with certain classes of parties ("parties in interest") with
respect to any participant in Separate Account R holding an interest in excess
of 10%. As of the date hereof, the only applicable participants in Separate
Account R are the U.S. Pension Plan of CIGNA Corporation and Affiliated
Companies, and the Trustee of the United Nations Joint Staff Pension Fund (the
"10% Plans"). In order to assist Seller in determining that Seller is not
engaging in a prohibited transaction under ERISA by entering into this
Agreement, Purchaser hereby represents to Seller that Purchaser is not a
"party-in-interest" to the 10% Plans, as defined in Section 3(14) of ERISA.
Notwithstanding that the deed will be conveyed in the name "Connecticut General
Life Insurance Company", only the assets of Separate Account R shall be bound
for the obligations of Seller hereunder and thereunder and no resort shall be
had to any other assets of Connecticut General Life Insurance Company. The
provisions of this Section 15.15 shall survive the Closing and any termination
of this Agreement.
15.16 Radon Gas. Radon is a naturally occurring radioactive gas that, when
it has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of radon that exceed
federal and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from your county
public health unit.
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 25
EXECUTED BY PURCHASER this _____ day of __________________, 1996.
WITNESSES: PURCHASER:
RRC ACQUISITIONS, INC., a Florida
corporation
- ---------------------------
___________________________ By: _____________________________________
Name:
Title:
[signatures continued on next page]
EXECUTED BY SELLER this _____ day of _________________, 1996.
WITNESSES: SELLER:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, a Connecticut corporation, on
behalf of its Separate Account R
___________________________ By: CIGNA Investments, Inc.
___________________________ By: ________________________________
Name:
Title:
Receipt of original copies of this Agreement executed by Seller and Purchaser is
acknowledged this ____ day of ________________, 1996.
TITLE COMPANY:
CHICAGO TITLE INSURANCE COMPANY
By: ____________________________________
Name:
Title
Executed for purposes of being bound by Section 6.2 hereof.
REGENCY REALTY CORPORATION, WITNESSES:
a Florida corporation
By:_________________________ _______________________________________
Name:
Title: _______________________________________
RE\CBH\WELLEBY\AGRP&S.008 (04-11-96) Page 26
AGREEMENT OF PURCHASE AND SALE
BETWEEN
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
ON BEHALF OF ITS SEPARATE ACCOUNT R, SELLER
AND
RRC ACQUISITIONS, INC., PURCHASER
TABLE OF CONTENTS
PAGE
Article 1 Property............................................ 1
Article 2 Purchase Price and Deposits......................... 1
Article 3 Failure to Close.................................... 3
3.1 Purchaser's Default................................. 3
3.2 Seller's Default.................................... 3
Article 4 Closing and Transfer of Title....................... 3
4.1 Closing............................................. 3
4.2 Closing Procedure................................... 4
4.3 Purchaser's Performance............................. 6
4.4 Evidence of Authority; Miscellaneous................ 7
Article 5 Prorations of Rents, Taxes, Etc..................... 7
Article 6 Purchaser Inspections and Contingencies............. 9
6.1 Document Inspection................................. 9
6.2 Physical Inspection................................. 10
6.3 Feasibility Period.................................. 11
6.4 Survey Contingency.................................. 11
6.5 Title Contingency................................... 13
Article 7 Loss due to Casualty or Condemnation................ 14
7.1 Loss due to Condemnation............................ 14
7.2 Loss due to Casualty................................ 15
Article 8 Maintenance of the Property......................... 16
Article 9 Broker.............................................. 17
Article 10 Representations and Warranties...................... 17
10.1 Limitations on Representations and Warranties....... 17
10.2 Representations and Warranties...................... 18
10.3 Seller's Knowledge.................................. 19
10.4 Survival............................................ 20
Article 11 Liability of Seller................................. 20
Article 12 Assignment.......................................... 21
Article 13 Notices............................................. 21
Article 14 Expenses............................................ 22
TABLE OF CONTENTS (Continued)
PAGE
Article 15 Miscellaneous....................................... 22
15.1 Successors and Assigns.............................. 22
15.2 Gender.............................................. 22
15.3 Captions............................................ 23
15.4 Construction........................................ 23
15.5 Entire Agreement.................................... 23
15.6 Recording........................................... 23
15.7 No Continuance...................................... 23
15.8 Time of Essence..................................... 23
15.9 Original Document................................... 23
15.10 Governing Law....................................... 23
15.11 Acceptance of Offer................................. 24
15.12 Confidentiality..................................... 24
15.13 Surviving Covenants................................. 24
15.14 Approval............................................ 24
15.15 ERISA............................................... 25
15.16 Radon Gas........................................... 25
Exhibit A - Description of Land Exhibit B - Rent Roll
Exhibit C - Special Warranty Deed Exhibit D - Bill of Sale
Exhibit E - Assignment of Leases Exhibit F - Indemnification
Agreement Exhibit G - Form of Seller's Affidavit of
Non-Foreign Status
Exhibit H - Pending Material Litigation
Exhibit I - Form of Estoppel
Exhibit J - Form of Environmental Agreement
EXHIBIT A
TO
AGREEMENT OF PURCHASE AND SALE
Description of Land
All of WELLEBY PLAZA, a plat according to the plat thereof, as recorded in
Plat Book 109, at Page 47, of the Public Records of Broward County,
Florida.
EXHIBIT B
TO
AGREEMENT OF PURCHASE AND SALE
Rent Roll
[The Rent Roll follows this page.]
EXHIBIT C
TO
AGREEMENT OF PURCHASE AND SALE
Special Warranty Deed
[The form of Special Warranty Deed follows this page.]
SPECIAL WARRANTY DEED
STATE OF FLORIDA )
)
COUNTY OF ____________)
Connecticut General Life Insurance Company, a Connecticut corporation (herein
referred to as "Grantor"), for and in consideration of the sum of Ten Dollars
($10.00) in hand paid to Grantor by RRC Acquisitions, Inc., a Florida
corporation (herein referred to as "Grantee"), whose mailing address is
__________________________________, ____________________________, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, has GRANTED, SOLD and CONVEYED, and by these presents does GRANT,
SELL and CONVEY unto Grantee that certain tract of real property located in the
county referenced above, as more particularly described on Exhibit A attached
hereto, incorporated herein and made a part hereof for all purposes, together
with (a) all buildings and other improvements owned by Grantor affixed thereto
and (b) all and singular any rights and appurtenances of Grantor pertaining
thereto, including, without limitation, any right, title and interest of Grantor
(but without warranty whether statutory, express or implied) in and to (i) any
and all rights-of-way within, across, adjoining, adjacent, abutting or
contiguous to said real property and/or any part thereof, (ii) any and all
licenses, utilities, sewage treatment and/or water capacity or reservations,
condemnation awards and/or awards made in lieu thereof and/or any damages
related thereto, reservations, reversionary interests and reminders related to
and/or arising out of said real property and/or any part thereof and (iii) each
and every other right, privilege, hereditament and appurtenance in any way or
manner incident and/or appertaining to said real property and/or any part
thereof (said real property together with any and all of such related
improvements, rights and appurtenances being herein collectively referred to as
the "Property").
TO HAVE AND TO HOLD the Property, together with all and singular the rights
and appurtenances thereto in anywise belonging, unto Grantee, and Grantee's
successors and assigns forever, subject to the matters herein stated; and
Grantor does hereby bind itself and its successors and assigns to WARRANT AND
FOREVER DEFEND all and singular the Property unto Grantee, and Grantee's
successors and assigns, against every person whomsoever lawfully claiming or to
claim the same or any part thereof by, through or under Grantor but not
otherwise; provided that this conveyance and the warranty of Grantor herein
contained are subject to (a) any and all the matters of record, (b) any and all
matters which an accurate survey of the Property would reveal, and (c) any and
all leases, ground leases or licenses of space covering or affecting all or any
portion of the Property and the rights of tenants and licensees thereunder.
EXECUTED this ______ day of _______________________, 1996.
GRANTOR:
[To be executed with formalities required for recording in the state where the
Property is located].
EXHIBIT D
TO
AGREEMENT OF PURCHASE AND SALE
Bill of Sale
[The form of Bill of Sale follows this page.]
BILL OF SALE AND GENERAL ASSIGNMENT
STATE OF ____________________) )
COUNTY OF ____________________)
Concurrently with the execution and delivery hereof, Connecticut General
Life Insurance Company, a Connecticut corporation ("Assignor"), is conveying to
RRC Acquisitions, Inc., a Florida corporation ("Assignee"), by Special Warranty
Deed (the "Deed"), that certain tract of land together with the improvements
thereon (the "Property") lying and being situated in Broward County, Florida and
being more particularly described in Exhibit A, attached hereto and made a part
hereof.
It is the desire of Assignor to hereby assign, transfer, set over and
deliver to Assignee all furnishings, fixtures, fittings, appliances, apparatus,
equipment, machinery and other items of personal property, if any, affixed or
attached to, or placed or situated upon, the Property, except those not owned by
Assignor and any and all other incidental rights and appurtenances relating
thereto, all as more fully described below (such properties being collectively
called the "Assigned Properties").
NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged and confessed by
Assignor, Assignor does hereby ASSIGN, TRANSFER, SET OVER and DELIVER to
Assignee, its successors and assigns, all of the Assigned Properties, without
warranty (whether statutory, express or implied), including, without limitation
the following:
1. All furnishings, fittings, equipment, appliances, apparatus, machinery
fixtures and all other personal property of every kind and character (both
tangible and intangible), if any, owned by Assignor and located in or on the
Property;
2. All of Assignor's interest in and to all use, occupancy, building
and operating permits, licenses and approvals, if any, issued from time to
time with respect to the Property or the Assigned Properties;
3. All of Assignor's interest in and to all maintenance, service and
supply contracts, if any, relating to the Property or the Assigned Properties
(to the full extent same are assignable);
4. All of Assignor's interest in and to all existing and assignable
guaranties and warranties (express or implied), if any, issued in connection
with the construction, alteration and repair of the Property and/or the
purchase, installation and the repair of the Assigned Properties;
5. All rights which Assignor may have to use any names commonly used
in connection with the Property, if any; and
6. All rights, which Assignor may have, if any, in and to any tenant data,
telephone numbers and listings, all master keys and keys to common areas, all
good will, if any, and any and all other rights, privileges and appurtenances
owned by Assignor and related to or used in connection with the existing
business operation of the Property.
TO HAVE AND TO HOLD the Assigned Properties, subject as aforesaid, unto
Assignee, its successors and assigns, to WARRANT AND FOREVER DEFEND, all and
singular, title to the Assigned Properties unto Assignee, its successors and
assigns, against every person whomsoever lawfully claiming or to claim the same,
or any part thereof, by, through or under Assignor, but not otherwise, subject
to all terms and provisions hereof and subject to the same permitted
encumbrances in that certain Special Warranty Deed of even date herewith from
Assignor to Assignee.
BILL OF SALE AND GENERAL ASSIGNMENT
(Continued)
ASSIGNOR MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL
CONDITION OF THE PROPERTY OR THE ASSIGNED PROPERTIES OR THE SUITABILITY THEREOF
FOR ANY PURPOSE THAT ASSIGNEE MAY DESIRE TO USE IT. ASSIGNOR HEREBY EXPRESSLY
DISCLAIMS ANY WARRANTIES AS TO MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR
PURPOSE AND ANY OTHER WARRANTIES OR REPRESENTATIONS AS TO THE PHYSICAL CONDITION
OF THE ASSIGNED PROPERTIES. ASSIGNEE ACKNOWLEDGES AND AGREES THAT IT HAS
INSPECTED THE ASSIGNED PROPERTIES AND ACCEPTS SAME IN THEIR PRESENT CONDITION,
"AS IS" AND "WITH ALL FAULTS."
Assignor on behalf of itself and its successors and assigns does hereby
agree to indemnify and hold Assignee, its successors and assigns, harmless from
all obligations accruing under the maintenance, service and supply contract
assigned hereby and any liabilities arising thereunder, prior to the date hereof
but not thereafter. Notwithstanding the foregoing and that the Deed and this
Bill of Sale are being conveyed by "Connecticut General Life Insurance Company",
Assignee acknowledges and agrees that only the assets of "Separate Account R", a
separate account as defined in Section 3(17) of the Employee Retirement Income
Security Act of 1974, shall be bound for the obligations of Assignor thereunder
and hereunder and no resort shall be had to any other assets of Connecticut
General Life Insurance Company.
Assignee on behalf of itself, its successors and assigns, hereby agrees to
assume and perform all obligations accruing under the maintenance, service and
supply contracts from and after the date hereof, and Assignee on behalf of
itself, its successors and assigns does hereby agree to indemnify and hold
Assignor, its successors and assigns, harmless from all such obligations and any
liabilities arising thereunder from and after the date hereof.
This document may be executed in any number of counterparts, each of which
may be executed by any one or more of the parties hereto, but all of which shall
constitute one instrument, and shall be binding and effective when all parties
hereto have executed at least one counterpart.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed as of the _____ day of _______________________, 1996.
ASSIGNOR:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, a Connecticut corporation
By: CIGNA Investments, Inc.
By: ______________________________
Name:
Title:
ASSIGNEE:
RRC ACQUISITIONS, INC., a Florida
corporation
By: ________________________________
Name:
Title:
EXHIBIT E
TO
AGREEMENT OF PURCHASE AND SALE
Assignment of Leases
[The form of Assignment of Leases follows this page.]
ASSIGNMENT AND ASSUMPTION OF
LEASES AND SECURITY DEPOSITS
STATE OF ____________________) )
COUNTY OF ____________________)
This agreement is executed as of the _____ day of ________________, 1996,
by Connecticut General Life Insurance Company, a Connecticut corporation
("Seller"), and RRC Acquisitions, Inc., a Florida corporation ("Purchaser").
Purchaser is this day purchasing from Seller and Seller is conveying to
Purchaser the real property described on Exhibit A attached hereto and made a
part hereof together with all improvements thereon and appurtenances thereto
(herein called the "Property"). The Property is occupied by various tenants
(herein called the "Tenants") claiming under written space leases listed and
described on Exhibit B attached hereto and made a part hereof (the "Lease").
Seller has required certain of the Tenants to pay and has collected from such
Tenants a security or other deposit, a list of which deposits and the Tenants
from whom the deposits were collected being set forth on Exhibit B attached
hereto and made a part hereof (herein the total of all such deposits are
referred to as the "Security Deposits"). Seller desires to transfer and assign
all of Seller's right, title and interest in and to (i) the Leases and (ii) the
Security Deposits not heretofore forfeited, credited or returned to the Tenants.
NOW, THEREFORE in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller hereby transfers and assigns to Purchaser all right, title
and interest of Seller in and to (i) the Leases and (ii) the Security Deposits
paid to and held by Seller which have not been heretofore forfeited, credited or
returned to the Tenants, which Security Deposits hereby assigned are in the
amounts as set forth on Exhibit B attached hereto.
Seller on behalf of itself, its successors and assigns does hereby agree to
indemnify and hold Purchaser, its successors and assigns, harmless from and
against all liabilities arising under the Leases prior to the date hereof but
not thereafter, provided, however, that the foregoing indemnity shall not imply
any warranty or indemnity with respect to compliance with environmental and land
use laws or the use, generation or disposal of hazardous materials, such matters
being governed solely by the terms of that certain Agreement of Purchase and
Sale between Seller and Purchaser having an Effective Date (as defined therein)
of _________________________, 1996. Notwithstanding that this Agreement is being
conveyed by "Connecticut General Life Insurance Company", Purchaser acknowledges
and agrees that only the assets of "Separate Account R", a separate account as
defined in Section 3(17) of the Employee Retirement Income Security Act of 1974,
shall be bound for the obligations of Seller hereunder and no resort shall be
had to any other assets of Connecticut General Life Insurance Company.
Purchaser on behalf of itself, its successors and assigns does hereby agree
to indemnify and hold Seller, its successors and assigns harmless from all
liabilities arising under the Leases from and after the date hereof; provided,
however, Purchaser shall not be liable under this indemnity for or with respect
to any inaccuracies set forth in Exhibit B.
Purchaser hereby assumes all obligations (i) of the landlord under the
Leases arising from and after the date hereof and (ii) under the Leases to pay
or account for the Security Deposits hereby transferred to Purchaser.
It is specifically agreed that Seller does not hereby transfer or assign to
Purchaser and Purchaser does not hereby assume liability for, any deposits other
than as set forth on Exhibit B.
ASSIGNMENT AND ASSUMPTION OF
LEASES AND SECURITY DEPOSITS (Continued)
This document may be executed in any number of counterparts, each of which
may be executed by any one or more of the parties hereto, but all of which shall
constitute one instrument, and shall be binding and effective when all parties
hereto have executed at least one counterpart.
The terms and provisions of this agreement shall be binding upon and inure
to the benefit of the respective parties hereto and their respective successors
and assigns.
EXECUTED as of the day and year first written above.
WITNESSES: PURCHASER:
RRC ACQUISITIONS, INC., a Florida
corporation
- ---------------------------
___________________________ By: _____________________________________
Name:
Title:
EXECUTED BY SELLER this _____ day of _____________, 1996.
WITNESSES: SELLER:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, a Connecticut corporation
___________________________ By: CIGNA Investments, Inc.
___________________________ By: ________________________________
Name:
Title:
EXHIBIT F
TO
AGREEMENT OF PURCHASE AND SALE
Indemnification Agreement
[The form of Indemnification Agreement follows this page.]
INDEMNIFICATION AGREEMENT
STATE OF ____________________) )
COUNTY OF ____________________)
Concurrently with the execution and delivery hereof, Connecticut General
Life Insurance Company, a Connecticut corporation, on behalf of its Separate
Account R ("Seller"), is conveying to RRC Acquisitions, Inc., a Florida
corporation ("Purchaser"), by Special Warranty Deed, that certain tract of land
together with the improvements thereon (the "Property"), lying and being
situated in Broward County, Florida and being more particularly described on
Exhibit A attached hereto and made a part hereof. It is the desire of Seller and
Purchaser to deliver a mutual cross-indemnification pertaining to the expenses
relating to the ownership, management and operation of the Property.
NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10.00) and
other good and valuable consideration in hand paid, the receipt and sufficiency
of which are hereby acknowledged, Purchaser and Seller hereby agree as follows:
1. Seller on behalf of itself and its successors and assigns does hereby
agree to indemnify and hold Purchaser, its successors and assigns, harmless from
and against all costs, charges and expenses related to the ownership, management
and operation of the Property prior to the date hereof but not thereafter.
2. Purchaser on behalf of itself, its successors and assigns does hereby
agree to indemnify and hold Seller, its successors and assigns, harmless from
and against all costs, charges and expenses relating to the ownership,
management and operation of the Property from and after the date hereof.
The foregoing indemnities shall not imply any warranties or indemnities
with respect to compliance with environmental and land use laws or disposal of
hazardous materials, such matters being governed solely by the terms of that
certain Agreement of Purchase and Sale between Seller and Purchaser having an
Effective Date (as defined therein) of __________________, 1996.
This document may be executed in any number of counterparts, each of which
may be executed by and one or more of the parties hereto, but all of which shall
constitute one instrument, and shall be binding and effective when all parties
hereto have executed at least one counterpart.
INDEMNIFICATION AGREEMENT (Continued)
IN WITNESS WHEREOF, Purchaser and Seller have caused this Agreement to be
executed as of the ______ day of ____________________, 1996.
WITNESSES: PURCHASER:
RRC ACQUISITIONS, INC., a Florida
corporation
- ---------------------------
___________________________ By: _____________________________________
Name:
Title:
EXECUTED BY SELLER this _____ day of __________, 1996.
WITNESSES: SELLER:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, a Connecticut corporation, on
behalf of its Separate Account R
___________________________ By: CIGNA Investments, Inc.
___________________________ By: ________________________________
Name:
Title:
EXHIBIT G
TO
AGREEMENT OF PURCHASE AND SALE
Form of Seller's Affidavit of Non-Foreign Status
STATE OF CONNECTICUT)
) (insert date)
COUNTY OF HARTFORD )
I, ____________________________, as _______________________ of CIGNA
Investments, Inc., authorized agent of Connecticut General Life Insurance
Company ("Connecticut General"), being duly authorized to make this affidavit on
behalf of Connecticut General and being duly sworn, do depose and say,
that:
1. Connecticut General's taxpayer identification number is
- --------------------.
2. Connecticut General is not a "foreign person" within the meaning of
Section 1445(f)(3), of the Internal Revenue Code of 1954 (the "Code"), as
amended; and RRC Acquisitions, Inc.("Buyer") is not required, pursuant to
Section 1445 of the Code, to withhold ten percent (10%) of the amount realized
by Connecticut General, on behalf of its Separate Account R, on the disposition
of the Property to Buyer.
3. I understand that I am making this Affidavit under penalty or perjury
pursuant to the requirements of Section 1445 of the Code.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: _____________________________
Name:
Title:
SWORN TO and subscribed before me this ______ day of _______________, 1996.
------------------------------------------
Notary Public
My Commission Expires:
EXHIBIT H
TO
AGREEMENT OF PURCHASE AND SALE
Pending Material Litigation
None.
EXHIBIT I
TO
AGREEMENT OF PURCHASE AND SALE
Form of Estoppel
EXHIBIT J
TO
AGREEMENT OF PURCHASE AND SALE
Form of Environmental Agreement
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 19th day of June 1996, between NORCOM
DEVELOPMENT, INC., a North Carolina corporation ("Seller"), on behalf of itself
and the entities who have executed the Consent and Joinder attached hereto (the
"Owning Entities"), and RRC ACQUISITIONS, INC., a Florida corporation ("Buyer").
Background
Buyer wishes to purchase two (2) shopping centers known respectively as
"City View Shopping Center", in Charlotte, North Carolina, and "Union Square
Shopping Center", in Monroe, North Carolina, both of which are owned by Seller;
and Seller wishes to sell the shopping centers to Buyer.
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Seller
agrees to sell and Buyer agrees to purchase the Shopping Centers (as hereinafter
defined), subject to the following terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to
time.
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Anchor Tenants and Credit Tenants are the tenants identified as such
for each Shopping Center as set forth on Exhibit 1.3 attached hereto.
1.4 Approved Lease means a Lease listed on each Rent Roll, as approved
by Seller and Buyer in the case of each Shopping Center, which Rent Roll for
Union Square Shopping Center includes without limitation leases which cover the
Expansion Space; and any additional lease written on a Buyer-approved standard
form without material modification (or other form approved by Buyer) having an
initial term of no less than five (5) years in the case of the Anchor Tenants
and Credit Tenants listed on each Rent Roll, and other so-called "credit
tenants," recognized as such in the industry, and of three (3) years with other
in place third party tenants, each of whom must be unaffiliated with Seller and
creditworthy in Buyer's reasonable judgment and experienced in Buyer's
reasonable judgment in the operation of the type of business proposed to be
conducted at the leased premises. A Lease shall not be considered an Approved
Lease unless it provides for rents, cost sharing and concessions which are
comparable to that which Buyer considers to be "market" for the Shopping
Center's trade area.
1.5 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit 1.5.
1.6 Buyer means RRC Acquisitions, Inc., a Florida corporation (which is
a subsidiary of Regency Realty Corporation, a Florida corporation ["Regency"]),
or any other wholly-owned subsidiary of Regency designated to acquire one or
more of the Shopping Centers.
1.7 Capitalization Rate means ten and thirty-five one hundredths
percent (10.35%).
1.8 Closing means generally the execution and delivery of those
documents and funds necessary to effect the sale of the Shopping Centers by
Seller to Buyer.
1.9 Closing Date means the date on which the Closing occurs.
1.10 Contracts means all service contracts, agreements or other
instruments to be assigned by Seller to Buyer at Closing.
1.11 Day means a calendar day.
1.12 Earnest Money Deposit means the deposits delivered to Escrow Agent
pursuant to Sections 2.1(c) and 3.1(c) of this Agreement, together with the
earnings thereon, if any, which earnings shall be considered part of the Earnest
Money Deposit for all purposes.
1.13 Escrow Agent means Chicago Title Insurance Company, 1465 Charlotte
Plaza, Charlotte, North Carolina 28244, Attention: John Noblitt, (704) 332-7509
Facsimile.
1.14 Effective Gross Income means twelve (12) months "base" or "minimum"
rent plus expense reimbursement recoveries under a particular Approved Lease,
less (i) all free rent, cash payments and allowances and other concessions, (ii)
a credit charge of five percent (5.0%) of such rent and recoveries unless the
Approved Lease is a Lease with an Anchor or Credit Tenant, (iii) a management
fee charge of four percent (4.0%) of such rent and recoveries, and (iv) a charge
for variable operating expenses in an amount to be agreed upon by Seller and
Buyer during the Inspection Period.
1.15 Environmental Claim means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material or actual or alleged Hazardous Material Activity, (c) from
any abatement, removal, remedial, corrective, or other response action in
connection with a Hazardous Material, Environmental Law or other order of a
governmental authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
-2-
1.16 Environmental Law means any current legal requirement in effect at
the Closing Date pertaining to (a) the protection of health, safety, and the
indoor or outdoor environment, (b) the conservation, management, protection or
use of natural resources and wildlife, (c) the protection or use of source water
and groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq.,
Solid Waste Disposal Act, as amended by the Resource Conservation Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et seq., Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC
1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic
Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials
Transportation Act, 49 USC App. 1801, Occupational Safety and Health Act of
1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et
seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC App.
11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended by 42 USC 300(f) et seq., and any
similar, implementing or successor law, any amendment, rule, regulation, order
or directive, issued thereunder.
1.17 Expansion Approved Leases are those Approved Leases noted on the
Rent Roll as Expansion Approved Leases which cover premises in the Expansion
Space, which are now under construction.
1.18 Expansion Space means the space identified as such on the Union
Square Shopping Center Site Plan, which in the aggregate is approximately 13,353
square feet of store space.
1.19 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
1.20 Hazardous Material means any petroleum, petroleum product,
drycleaning solvent or chemical, biological or medical waste, "sharps" or any
other hazardous or toxic substance as defined in or regulated by any
Environmental Law in effect at the pertinent date or dates.
1.21 Hazardous Material Activity means any activity, event, or
occurrence at or prior to the Closing Date involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling or corrective or response
action to any Hazardous Material.
1.22 Improvements means all buildings, structures and other improvements
situated on the Real Property.
-3-
1.23 In Place Gross Income means twelve (12) months "base" or "minimum"
rent plus expense reimbursement recoveries under a particular Approved Lease
with an enterprise that is open for business in a Shopping Center, as stated in
such Approved Lease and confirmed by a Tenant Estoppel Letter, as projected for
the twelve (12) month period commencing with the Closing Date and ending twelve
(12) months thereafter, such projection to be agreed upon by Seller and Buyer
during the Inspection Period. In order that an Approved Lease may qualify for
inclusion in In Place Gross Income or Effective Gross Income, as the case may
be, a particular Approved Lease must have satisfied each of the following
conditions:
(a) The Approved Lease shall have been executed by each of the
parties;
(b) The tenant shall have accepted the space and be open for
business therein and paying rent beyond any "free rent" period; and
(c) The tenant shall have executed and delivered to Buyer a
Tenant Estoppel Letter regarding its lease and occupancy which confirms the
terms and conditions of the Lease as stated in the Rent Roll and the Lease
furnished to Buyer.
1.24 Inspection Period means the period of time which expires at the end
of business on June 27, 1996.
1.25 Leases means all leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of each Shopping Center.
1.26 Materials means all plans, drawings, specifications, soil test
reports, environmental reports, market studies, surveys, and similar
documentation, if any, owned by or in the possession of Seller with respect to
each Property, and any proposed improvements thereto, which Seller may lawfully
transfer to Buyer except that, as to financial and other records, Materials
shall include only photostatic copies.
1.27 Outlots are those parcels identified as outlots adjoining Union
Square Shopping Center on the Site Plan, and are those parcels to be identified
by Buyer and Seller as outlots in City View Shopping Center during the
Inspection Period.
1.28 Permitted Exceptions means only the following interests, liens
and encumbrances:
(a) Liens for ad valorem taxes not payable on or before Closing;
(b) Rights of tenants under Leases;
-4-
(c) General public utility easements (non-specific) and specific
utility and drainage easements which serves each Property, none of which
materially encroach upon any buildings located thereon; and
(d) Other matters which are not timely specified in Buyer's
notice to Seller of Title Defects pursuant to Section 7.1 hereof.
1.29 Personal Property means all (a) sprinkler, plumbing, heating,
air-conditioning, electric power or lighting, incinerating, ventilating and
cooling systems, with each of their respective appurtenant furnaces, boilers,
engines, motors, dynamos, radiators, pipes, wiring and other apparatus,
equipment and fixtures, elevators, partitions, fire prevention and extinguishing
systems located in or on the Improvements, (b) all Materials, and (c) all other
personal property used in connection with the Improvements, provided the same
are now owned or are acquired by Seller prior to the Closing.
1.30 Property means collectively the Real Property, the Improvements and
the Personal Property constituting each Shopping Center.
1.31 Prorated means the allocation of items of expense or income between
Buyer and Seller based upon that percentage of the time period as to which such
item of expense or income relates which has expired as of the date at which the
proration is to be made.
1.32 Purchase Price means the consideration agreed to be paid by Buyer
to Seller for the purchase of the Shopping Centers as set forth in Article 2
(subject to adjustments as provided herein).
1.33 Real Property means the lands upon which each Shopping Center is
constructed, as depicted on the Site Plan, together with all easements,
licenses, privileges, rights of way and other appurtenances pertaining to or
accruing to the benefit of each.
1.34 Release means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material at or
prior to the Closing Date.
1.35 Rent Roll means a list of Approved Leases, certified by Seller as
accurate, identifying with particularity the space in each Shopping Center
leased by each tenant, the term (including extensions), square footage and
applicable rent, common area maintenance, tax and other reimbursable expenses,
security deposits and similar data. The initial Rent Roll for each Shopping
Center is attached hereto as Exhibit 1.35. A revised Rent Roll shall be prepared
and agreed to by Seller and Buyer during the Inspection Period based on Buyer's
review of the Approved Leases, Tenant Estoppel Letters and other Materials.
-5-
1.36 Seller means the party identified as Seller on the initial page
hereof.
1.37 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions of Seller
for each Shopping Center, as of and for the two (2) calendar years next
preceding the date of this Agreement and all monthly reports of income, expense
and cash flow prepared by Seller for each, which shall be consistent with past
practice for all monthly periods after the latest of such calendar years.
1.38 Shopping Center means each Shopping Center identified on the Site
Plans, and Shopping Centers means both of them.
1.39 Site Plan means the plan of each Shopping Center collectively
attached hereto as Exhibit 1.39, and Site Plans means all of them.
1.40 Start Up Due Diligence Materials means with respect to each
Shopping Center the following items:
(a) Site Plan;
(b) Rent Roll (including requisite information about Pre-
Expansion Approved Leases and Expansion Approved Leases);
(c) Current billings, broken down into categories such as base
rent, CAM, insurance, taxes, etc.
(d) Copies of all Leases;
(e) Lease brief for each Lease;
(f) Historical sales volumes for 1993, 1994 and 1995;
(g) Delinquency report and summary, with explanation of each
balance in excess of $1,000;
(h) Seller Financial Statements for 1993, 1994 and 1995;
(i) Detailed 1995 Supporting Ledgers;
(j) Historical capital expenditures list for 1993, 1994 and
1995;
(k) Real estate and tangible personal property ad valorem tax
bills for 1993, 1994 and 1995;
(l) Detailed operating statements for each of twelve (12)
months commencing March, 1995, and ending February, 1996;
-6-
(m) 1995 Expense Recovery Reconciliation; and
(n) 1996 Operating Budget.
1.41 Survey means a map of a stake survey of the Real Property which
shall comply with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, jointly established and adopted by ALTA and ACSM in 1992, which states
the legal description for all the Real Property, which includes items 1, 2, 3,
4, 6, 7, 8, 9, 10 and 11 of Table "A" thereof, and which meets the accuracy
standards (as currently adopted by ALTA and ACSM) of an urban survey, which is
dated not earlier than the date hereof and which is certified to Buyer, Seller,
the Title Insurance company providing Title Insurance to Buyer.
1.42 Tenant Estoppel Letter means a letter or other certificate from a
tenant certifying as to certain matters regarding such tenant's Lease, in
substantially the same form as attached hereto as Exhibit 1.42, or in the case
of national or regional "credit" tenants identified as such on the Rent Roll,
the form customarily used by such tenant provided the information disclosed is
comparable to that contained in the attached form.
1.43 Title Defect means any exception in a Title Insurance Commitment or
any matter disclosed by a Survey, other than a Permitted Exception.
1.44 Title Insurance means an ALTA Form B Owners Policy of Title
Insurance for each Shopping Center separately issued for each, in an allocated
amount of the Purchase Price, as determined by Seller and Buyer during the
Inspection Period, insuring marketable title to the Shopping Center in Buyer in
fee simple, subject only to the Permitted Exceptions, issued by Chicago Title
Insurance Company.
1.45 Title Insurance Commitment means a binder whereby the title insurer
agrees to issue the Title Insurance to Buyer.
1.46 Transaction Documents means this Agreement, the deed conveying each
Property, the assignment of leases, the bill of sale conveying the Personal
Property and all other documents required or appropriate in connection with the
transactions contemplated hereby.
1.47 Uncertain Leases are those Approved Leases which (i) are in default
or whose tenants have closed their business at the leased premises; or (ii)
considered by Buyer using reasonable credit standards to be delinquency risks;
or (iii) have remaining lease term(s) of less than four (4) months from the
Closing Date; or (iv) are Expansion Approved Leases which are in place but have
not yet qualified for inclusion in In Place Gross Income or Effective Gross
Income, as contemplated by Section 1.23 above, such Uncertain Leases to be
identified by Buyer by notice to Seller given no later than the end of the
Inspection Period.
-7-
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The Purchase Price for the Shopping Centers
(subject to adjustment as provided herein) shall be $13,300,000. The Earnest
Money Deposit shall be applied to the Purchase Price at Closing. The balance of
the Purchase Price shall be payable in cash or by wire transfer at Closing.
(b) Adjustments to the Purchase Price. The Purchase Price shall be adjusted
as of the Closing Date by:
(1) prorating the Closing year's real and tangible personal
property taxes for each Shopping Center as of the Allocation Date (if the
amount of the current year's property taxes are not available, such taxes
will be prorated based upon the prior year's assessment);
(2) prorating as of the Allocation Date cash receipts
and expenditures for each Shopping Center and other items customarily prorated
in transactions of this sort;
(3) subtracting the amount of security deposits, prepaid rents from
tenants under the Leases, and credit balances, if any, of any tenants. Any
rents, percentage rents or tenant reimbursements payable after the
Allocation Date but applicable to periods on or prior to the Allocation
Date shall be remitted to Seller by Buyer within thirty (30) days after
receipt. Buyer shall have no obligation to collect delinquencies, but
should Buyer collect any delinquent rents or other sums which cover periods
prior to the Allocation Date and for which Seller have received no
proration or credit, Buyer shall remit same to Seller within thirty (30)
days after receipt, less any costs of collection. Buyer will not interfere
in Seller's efforts to collect sums due it prior to the Closing. Seller
will remit to Buyer promptly after receipt any rents, percentage rents or
tenant reimbursements received by Seller after Closing which are
attributable to periods occurring after the Allocation Date. Undesignated
receipts after Closing of either Buyer or Seller from tenants in each
Shopping Center shall be applied first to then current rents and
reimbursements for such tenant(s), then to delinquent rents and
reimbursements attributable to post-Allocation Date periods, and
then to pre-Allocation Date periods;
(4) subtracting an amount equal to (A) the sum of (i) the amount by
which In Place Gross Income from Approved Leases in Union Square Shopping Center
is reduced because of vacancies (as determined by the parties during the
Inspection Period) exceeds $21,733 plus (ii) the amount of reductions in In
Place Gross Income from Approved Leases in Union Square Shopping Center and City
View Shopping Center attributable to other causes (as so determined) (B) divided
by the Capitalization Rate; and
(5) if there are Uncertain Leases, by holding back the portion of
Purchase Price attributable to the Uncertain Leases ("Uncertain Lease
Holdback"), which
-8-
Uncertain Lease Holdback shall be an amount equal to the Effective Gross Income
from such Uncertain Leases as shown on the initial Rent Roll divided by the
Capitalization Rate. Portions of the Uncertain Lease Holdback may be "earned" by
Seller during the Earnout Period. Seller may qualify for the payment of all or a
portion of the Uncertain Lease Holdback during the period of time which begins
on the Closing Date and ends ninety (90) days thereafter (the "Earnout Period"),
as follows:
(i) During the Earnout Period Seller may earn portions of the
Uncertain Lease Holdback with respect to the spaces leased under Uncertain
Leases provided and to the extent it obtains during the Earnout Period new
Approved Leases for such spaces (each being a "Replacement Lease") or Expansion
Approved Leases which then would qualify for inclusion in In Place Base Rent,
the payment to be an amount equal to Effective Gross Income from such
Replacement Leases and qualifying Expansion Approved Leases, projected for the
twelve month period beginning with the day following the end of the Earnout
Period, divided by the Capitalization Rate, reduced by an amount equal to the
Effective Gross Income from Approved Leases which have gone into default or
closed their business since the Closing Date ("Post Closing Delinquent Leases"),
divided by the Capitalization Rate (the "Post Closing Delinquency Amount"). The
additional payment for a particular Replacement Lease or Expansion Approved
Lease shall be payable when the tenant thereunder has accepted the leased
premises and opened for business, commenced paying rent beyond all free rent
periods, and delivered to Buyer a Tenant Estoppel Letter acceptable to Buyer all
before the end of the Earnout Period and further provided that the Uncertain
Lease Holdback then exceeds the Post Closing Delinquency Amount, the payment for
the Replacement Leases and Expansion Approved Leases to be no greater than such
excess.
(ii) In addition, during the first three (3) months following the
expiration of the Earnout Period, Seller may earn following the same procedure
additional portions of the Uncertain Lease Holdback, up to the amount of the
Post Closing Delinquency Amount, with respect to Post Closing Delinquent Leases,
such amount to be equal to the Effective Gross Income from Replacement Leases
for the Post Closing Delinquent Leases divided by the Capitalization Rate, but
in no event more than the remaining balance of the Uncertain Lease Holdback.
(iii) Notwithstanding anything herein to the contrary, in no event
shall the aggregate Purchase Price exceed $13,300,000.
(c) Expansion Space Costs. All costs associated with the
construction and leasing of the Expansion Space shall be paid by Seller,
including without limitation hard and soft costs, financing costs, leasing
commissions and concessions. Seller shall and hereby does guarantee the
completion of the Expansion Space in accordance with the plans and
specifications, and Expansion Approved Leases, to be delivered to Buyer during
the Inspection Period.
(d) Earnest Money Deposit. An Earnest Money Deposit in the amount of
$25,000 shall be delivered to Escrow Agent within five (5) business days
after the date of
-9-
execution by the last of Buyer or Seller to execute and transmit a copy of this
Agreement to the other. This Agreement may be terminated by Seller if the
Earnest Money Deposit is not received by Escrow Agent by such deadline. The
Earnest Money Deposit paid by Buyer shall be held as specifically provided in
this Agreement and shall be applied to the Purchase Price at the Closing.
2.2 Outlots. Seller shall grant to Buyer at Closing a right of first
refusal for a period of ten (10) years to purchase each of the Outlots. Seller
shall agree to furnish Buyer a copy of each offer to purchase a particular
Outlot which Seller determines it may be willing to accept, and shall furnish
Buyer a ten (10) day period thereafter within which Buyer may elect to purchase
such Outlot on the same terms and conditions as contained in said offer. If
Buyer elects to purchase within said period, the proposed offer shall be deemed
a contract between Seller and Buyer. If Buyer does not so elect, Seller may sell
such Outlot in accordance with the terms and conditions of such offer, and
without material variance thereto. Should Buyer fail to notify Seller of its
election, Buyer shall be deemed to have declined such offer.
2.3 Closing Costs.
(a) Seller shall pay:
(1) All transfer taxes imposed upon the transactions contemplated
hereby;
(2) Cost of the Surveys, not to exceed normal and customary survey
fees in transactions of this sort meeting the North Carolina Minimum Land Survey
requirements, Buyer to pay any excess Survey costs;
(3) Cost of satisfying any liens and other encumbrances on any of the
Shopping Centers;
(4) The costs, if any, of curing title defects and recording any
curative title documents;
(5) All broker's commissions, finders' fees and similar expenses
incurred by either party in connection with the sale of the Shopping Centers,
subject however to Buyer's indemnity given in Section 5.3 of this Agreement; and
(6) Seller's attorneys' fees relating to the sale of the Shopping
Centers, including the costs of title examinations;
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
-10-
(2) Costs of the Phase 1 environmental site assessments
to be obtained by Buyer;
(3) Excess Survey costs as provided above;
(4) Cost of title insurance premiums (but not attorneys
fees for title examinations);
(5) Cost of recording the deeds; and
(6) Buyer's attorneys' fees.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Shopping Centers, the economic data, underwrite the
tenants and review their leases, and to otherwise conduct its due diligence
review of the physical condition of each Property and all books, records and
accounts of Seller related thereto. Buyer hereby agrees to indemnify and hold
Seller harmless from any damages, liabilities or claims for property damage or
personal injury arising out of such inspection and investigation by Buyer or its
agents or independent contractors. Within the Inspection Period, Buyer may, in
its sole discretion and for any reason or no reason, elect to go forward to the
Closing of this Agreement. If such notice is not timely given, this Agreement
and all rights, duties and obligations of Buyer and Seller hereunder, except any
which expressly survive termination, shall terminate and the Earnest Money
Deposit shall be returned to Buyer forthwith. Within five (5) business days
after Buyer elects to go forward, if such be the case, Buyer shall increase the
Earnest Money Deposit by an additional $50,000, to be deposited within said
period by Buyer with Escrow Agent. Upon such deposit the additional sums shall
be deemed to be part of the Earnest Money Deposit for all purposes. If Buyer so
elects to go forward, the parties shall proceed to Closing, in which event the
parties shall confirm in writing the key dates to Closing, including without
limitation the Closing Date, the Earnout Period, the right of first refusal
period and similar dates.
(b) Buyer, through its officers, employees and other authorized
representatives, shall have the right to reasonable access to each Property and
all records of Seller related thereto, including without limitation all Leases
and Seller Financial Statements, at reasonable times during the Inspection
Period for the purpose of inspecting each Property, taking soil borings,
conducting Hazardous Materials inspections, reviewing the books and records of
Seller concerning each Property and otherwise conducting its due diligence
review. Seller shall cooperate with and assist Buyer in making such inspections
and reviews. Seller shall give Buyer any authorizations which may be required by
Buyer in order to gain access to records or other information pertaining to any
Property or the use thereof maintained by any governmental or quasi-governmental
authority or organization. Buyer, for itself and its agents,
-11-
agrees not to enter into any contract with existing tenants without the written
consent of Seller if such contract would be binding upon Seller should this
transaction fail to close. Buyer shall have the right to have due diligence
interviews with tenants, provided that Buyer shall provide reasonable notice to
Seller of the time and place of each such interview and afford Seller an
opportunity to have a representative present.
(c) Buyer, through its officers or other authorized
representatives, shall have the right to reasonable access to all Materials
(other than privileged or confidential litigation materials) for the purpose of
reviewing and copying the same.
3.2 Hazardous Material. Prior to the end of the Inspection Period Buyer
may order a "Phase 1" assessment of each Property, and a copy of any assessment
report, if made, shall be furnished by Buyer to Seller promptly upon its
completion. If Seller has heretofore had environmental assessments of any
Property performed, it shall furnish a complete copy thereof to Buyer promptly
after execution hereof. If Buyer's assessment reports disclose the existence of
any Hazardous Material or any other matters concerning the environmental
condition of any Property or its environs, Buyer may notify Seller in writing,
within ten (10) business days after receipt of the assessment report that it
elects to terminate this Agreement, whereupon this Agreement shall terminate and
the Earnest Money Deposit shall be returned to Buyer.
3.3 Time and Place of Closing. Unless otherwise agreed by the parties,
the Closing shall take place at the offices of Rayburn, Moon & Smith, P.A., in
Charlotte, North Carolina, at 10:00 A.M. on June 28, 1996.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this
Agreement and as of the Closing and where indicated covenants and agrees as
follows:
4.1 Organization; Authority. Seller and each Owning Entity is duly
organized, validly existing and in good standing under the laws of the state of
its organization and the state in which the Shopping Center is located, and has
full power and authority to enter into and perform this Agreement in accordance
with its terms, and the persons executing this Agreement and other Transaction
Documents have been duly authorized to do so on behalf of Seller. Neither Seller
nor any Owning Entities is a "foreign person" under Sections 1445 or 897 of the
Internal Revenue Code nor is this transaction subject to any withholding under
any state or federal law.
4.2 Authorization; Validity. The execution and delivery of this
Agreement by Seller and of the Consent and Joinder by the Owning Entities, and
their consummation of the transactions contemplated by this Agreement have been
duly and validly authorized. This Agreement constitutes a legal, valid and
binding agreement of Seller and each Owning Entity, enforceable against it in
accordance with its terms.
-12-
4.3 Title. Seller or the respective Owning Entity, as indicated on the
Consent and Joinder, is the owner in fee simple of the particular Property,
subject only to the Permitted Exceptions.
4.4 Commissions. Seller has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or any Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for Prudential Securities and Norcom Development, Inc., whose commissions
shall be paid by Seller at Closing, and Seller agrees to indemnify Buyer from
any such claim arising by, through or under Seller.
4.5 Sale Agreements. No Property is subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller or any Owning Entity
relating to any Property which is not covered by insurance.
4.7 Leases. There are no Leases affecting any Property, oral or written,
except as listed on the Rent Roll. Copies of the Leases, which have been
delivered to Buyer or shall be delivered to Buyer within three (3) days from the
date hereof, are, to the best knowledge of Seller, true, correct and complete
copies thereof, subject to the matters set forth on the Rent Roll. Between the
date hereof and the Closing Date, Seller will not terminate or modify existing
Leases or enter into any new Leases without the consent of Buyer, such consent
not to be unreasonably withheld or delayed. Each Property's tenant leases are in
good standing and to the best of Seller's knowledge no defaults exist thereunder
except as noted on the Rent Roll. No rent or reimbursement has been paid more
than one (1) month in advance and no security deposit has been paid, except as
stated on the Rent Roll. No tenants under the Leases are entitled to interest on
any security deposits.
4.8 Financial Statements. Each of the Seller Financial Statements
delivered or to be delivered to Buyer hereunder has or will have been prepared
in accordance with the books and records of Seller and presents fairly in all
material respects the financial condition, results of operations and cash flows
for the particular Property as of and for the periods to which they relate. All
are in conformity with generally accepted accounting principles applied on a
consistent basis. There has been no material adverse change in the operations of
any Property or its prospects since the date of the most recent Seller Financial
Statements. Seller covenants to furnish promptly to Buyer copies of the Seller
Financial Statements together with unaudited updated monthly reports of cash
flow for interim periods beginning after December 31, 1995. Buyer and its
independent certified accountants shall be given access to Seller's books and
records at any time prior to and for six (6) months following Closing upon
reasonable advance notice in order that they may verify the financial statements
prior to Closing. Seller agrees to execute and deliver to Buyer or its
accountants the Audit Representation Letter should Buyer's accountants audit the
records of each Shopping Center.
-13-
4.9 Contracts. Except for Leases and Permitted Exceptions, there are no
management, service, maintenance, utility or other contracts or agreements
affecting any Property, oral or written, which extend beyond the Closing Date
and which would bind Buyer or encumber such Property more than thirty (30) days
after Closing. All such Contracts are in full force and effect in accordance
with their respective terms, and all obligations of Seller under the Contracts
required to be performed to date have been performed in all material respects;
no party to any Contract has asserted any claim of default or offset against
Seller with respect thereto and no event has occurred or failed to occur, which
would in any way affect the validity or enforceability of any such Contract; and
the copies of the Contracts delivered to Buyer prior to the date hereof are
true, correct and complete copies thereof. Between the date hereof and the
Closing, Seller covenants to fulfill all of its obligations under all Contracts,
and covenants not to terminate or modify any such Contracts or enter into any
new contractual obligations relating to any Property without the consent of
Buyer (not to be unreasonably withheld or delayed) except such obligations as
are freely terminable without penalty by Seller upon not more than thirty (30)
days' written notice.
4.10 Maintenance and Operation of Property. From and after the date
hereof and until the Closing, Seller covenants to keep and maintain and operate
each Property substantially in the manner in which it is currently being
maintained and operated and covenants not to cause or permit any waste nor
undertake any action with respect to the operation thereof outside the ordinary
course of business without Buyer's prior written consent. In connection
therewith, Seller covenants to make all necessary repairs and replacements until
the Closing so that each Property shall be of substantially the same quality and
condition at the time of Closing as on the date hereof. Seller covenants not to
remove from the Improvements or the Real Property any article included in the
Personal Property. Seller covenants to maintain such casualty and liability
insurance on each Property as it is presently being maintained.
4.11 Permits and Zoning. To the best knowledge of Seller, there are no
material permits and licenses (collectively referred to as "Permits") required
to be issued to Seller by any governmental body, agency or department having
jurisdiction over any Property which materially affect the ownership or the use
thereof which have not been issued. Each Property is properly zoned for its
present use and is not subject to any local, regional or state development
order. The use of each Property is consistent with its land use designation
under any land use plan or plans applicable thereto. There are no outstanding
assessments, impact fees or other charges related to any Property.
4.12 Rent Roll; Tenant Estoppel Letters. Each Rent Roll is true and
correct in all respects. Seller agrees to use its best reasonable efforts to
obtain current Tenant Estoppel Letters acceptable to Buyer from all Tenants
under Leases, which Tenant Estoppel Letters shall confirm the matters reflected
by the Rent Roll as to the particular tenant and shall be otherwise acceptable
to Buyer in all respects.
4.13 Condemnation. Neither the whole nor any portion of any Property,
including access thereto or any beneficial easement, is subject to
temporary requisition of use by any governmental authority or has been
condemned, or taken in any proceeding similar to a
-14-
condemnation proceeding, nor is there now pending any condemnation,
expropriation, requisition or similar proceeding against any Property or any
portion thereof. Seller has received no notice nor has any knowledge that any
such proceeding is contemplated.
4.14 Governmental Matters. Seller has not entered into any commitments
or agreements with any governmental authorities or agencies affecting any
Property that have not been disclosed in writing to Buyer and Seller has
received no notices from any such governmental authorities or agencies of
uncured violations at any Property of building, fire, air pollution or zoning
codes, rules, ordinances or regulations, environmental and hazardous substances
laws, or other rules, ordinances or regulations relating to any Property. Seller
shall be responsible for the remittance of all sales tax for periods occurring
prior to the Allocation Date directly to the appropriate state department of
revenue.
4.15 Repairs. Seller has received no notice of any requirements or
recommendations by any lender, insurance companies, or governmental body or
agencies requiring or recommending any repairs or work to be done on any
Property which have not already been completed.
4.16 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will (a) require Seller to file or register
with, notify, or obtain any permit, authorization, consent, or approval of, any
governmental or regulatory authority; (b) conflict with or breach any provision
of the organizational documents of Seller; (c) violate or breach any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Seller is a party, or by which
Seller, any Property or any of Seller's material assets may be bound; or (d)
violate any order, writ, injunction, decree, judgment, statute, law or ruling of
any court or governmental authority applicable to Seller, any Property or any of
Seller's material assets.
4.17 Environmental Matters.
(a) Seller represents and warrants as of the date hereof and
as of the Closing that:
(1) Seller has not, and has no knowledge of any other
person who has, caused any Release, threatened Release, or disposal of any
Hazardous Material at any Property in any material quantity;
(2) No Property now contains and to the best of Seller's knowledge has ever
contained any: (a) underground storage tank, (b) material amounts of
asbestos-containing building material, (c) landfills or dumps, (d) drycleaning
plant or other facility using drycleaning solvents; or (e) hazardous waste
management facility as defined pursuant to the Resource Conservation and
Recovery Act ("RCRA") or any comparable state law. No Property is a site on or
nominated for the National Priority List promulgated pursuant to Comprehensive
-15-
Environmental Response, Compensation and Liability Act ("CERCLA") or any state
remedial priority list promulgated or published pursuant to any comparable state
law; and
(3) There are to the best of Seller's knowledge no conditions or
circumstances at any Property which pose a risk to the environment or the
health or safety of persons.
(b) Seller shall indemnify, hold harmless, and hereby waives any
claim for contribution against Buyer for any damages to the extent they arise
from the inaccuracy or breach of any representation or warranty by Seller in
this section of this Agreement. This indemnity shall survive Closing
indefinitely and shall be in addition to the post-closing indemnities contained
in Section 10.01, provided such indemnities of Seller as to each Shopping Center
shall expire and terminate upon the sale by Buyer of such Shopping Center to an
unaffiliated third party.
4.18 No Untrue Statement. Neither this Agreement nor any exhibit nor any
written statement or Transaction Document furnished or to be furnished by Seller
to Buyer in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of material fact or omits or will
omit any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power
and authority to enter into and perform this Agreement in accordance with its
terms, and the persons executing this Agreement and other Transaction Documents
on behalf of Buyer have been duly authorized to do so.
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except
Prudential Securities and Norcom Development, Inc., whose
-16-
commissions shall be paid by Seller at Closing; and Buyer agrees to indemnify
Seller from any other such claim arising by, through or under Buyer.
6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of all of the Shopping Centers will be
transferred to Buyer at the conclusion of the Closing.
6.2 Risk of Loss. All risk of loss to any Property shall remain upon
Seller until the conclusion of the Closing. If, before Closing, any material
portion of any Property is damaged by fire or other casualty and will not be
restored by the Closing Date or if any material portion of any Property is taken
by eminent domain or there is a material obstruction of access to the
Improvements by virtue of a taking by eminent domain, Seller shall, within ten
(10) days of such damage or taking, notify Buyer thereof and Buyer shall have
the option to:
(a) terminate this Agreement upon notice to Seller given within
ten (10) business days after such notice from Seller (in which event the Earnest
Money Deposit shall be returned to Buyer); or
(b) proceed with the purchase of the Shopping Centers, in which
event Seller shall assign to Buyer all Seller's right, title and interest in all
amounts due or collected by Seller under the insurance policies or as
condemnation awards. In such event, the Purchase Price shall be reduced by the
amount of any insurance deductible to the extent it reduced the insurance
proceeds payable.
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance. Promptly upon full execution hereof Buyer
shall order the Title Insurance Commitments from Chicago Title Insurance Company
and the Surveys from reputable surveyors familiar with each Property (Seller
agreeing to furnish to Buyer copies of any existing surveys and title
information in its possession promptly after execution of this Agreement). Buyer
will have ten (10) days from receipt of each Title Commitment (including legible
copies of all recorded exceptions noted therein) and Survey to notify Seller in
writing of any Title Defects, encroachments or other matters not acceptable to
Buyer which are not permitted by this Agreement. Any Title Defect or other
objection disclosed by any Title Insurance Commitment (other than liens
removable by the payment of money) or any Survey which is not timely specified
in Buyer's written notice to Seller of Title Defects shall be deemed a Permitted
Exception. Seller shall notify Buyer in writing within five (5) days of Buyer's
notice if Seller intends to cure any Title Defect or other objection. If Seller
elects to cure, Seller shall use diligent efforts to cure the Title Defects
and/or objections by the Closing Date (as it may be extended). If Seller elects
not to cure or if such Title Defects and/or objections
-17-
are not cured, Buyer shall have the right, in lieu of any other remedies, to:
(i) terminate this Agreement, in which event the Earnest Money Deposit shall be
returned to Buyer, or (ii) waive such Title Defects and/or objections and close
the purchase of the Shopping Centers subject to them.
(b) Miscellaneous Title Matters. If a search of the title
discloses judgments, bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller shall on request deliver
to Buyer an affidavit stating, if true, that such judgments, bankruptcies or the
returns are not against Seller. Seller further agrees to execute and deliver to
the Title Insurance agent at Closing such documentation, if any, as the Title
Insurance underwriter shall reasonably require to evidence that the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and that there are no mechanics'
liens on any Property or parties in possession thereof other than tenants under
Leases and Seller.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to satisfaction or waiver by Buyer of
each of the following conditions or requirements on or before the Closing Date:
(a) Seller's warranties and representations under this Agreement
shall be true and correct as of the Closing Date, and Seller shall not be in
default hereunder.
(b) All obligations of Seller contained in this Agreement, shall
have been fully performed in all material respects and Seller shall not be in
default under any covenant, restriction, right-of-way or easement affecting any
Property.
(c) There shall have been no material adverse change in any
Property, its operations or future prospects, the Leases or the financial
condition of tenants leasing space in excess of 5,000 square feet or more than
twenty percent (20%) of the other tenants who have signed leases for any portion
of any Property since the date of this Agreement. Each Anchor Tenant and Credit
Tenant for each Shopping Center, and no less than eighty percent (80%) of the
other tenants shall have opened for business in the Shopping Center and have
commenced paying rent.
(d) A Title Insurance Commitment in the full amount of the
Purchase Price shall have been issued and "marked down" through Closing, subject
only to Permitted Exceptions.
(e) The physical and environmental condition of each Property
shall be unchanged from the date of this Agreement, ordinary wear and tear
excepted.
-18-
(f) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
(1) A special or limited warranty deed in proper form for
recording, duly executed and acknowledged so as to convey to Buyer the fee
simple title to each Property, subject only to the Permitted Exceptions;
(2) Originals, if available, or if not, true copies of the
Leases and of the contracts, agreements, permits and licenses, and such
Materials as may be in the possession or control of Seller;
(3) A blanket assignment to Buyer of all Leases and the
contracts, agreements, permits and licenses (to the extent assignable) as they
affect each Property, including an indemnity against breach of such instruments
by Seller prior to the Closing Date;
(4) A bill of sale with respect to all Personal Property
and Materials;
(5) A title certificate, properly endorsed by Seller, as to
any items of Property for which title certificates exist;
(6) Each Survey;
(7) A current rent roll for all Leases in effect showing no
changes from the Rent Roll for each Shopping Center attached to this Agreement
other than those set forth in the Leases or approved in writing by Buyer;
(8) All Tenant Estoppel Letters obtained by Seller, which
must include each Anchor Tenant and Credit Tenant for each Shopping Center, and
eighty percent (80%) of the other tenants who have signed leases for any portion
of any Property, without any material exceptions, covenants, or changes to the
form approved by Buyer and distributed to the tenants by Seller, the substance
of which Tenant Estoppel Letters must be acceptable to Buyer in all respects;
(9) A general assignment of all assignable existing warranties relating to
each Property;
(10) An owner's affidavit, non-foreign affidavits, non-tax
withholding certificates and such other documents as may reasonably be required
by Buyer or its counsel in order to effectuate the provisions of this Agreement
and the transactions contemplated herein;
(11) The originals or copies of any real and tangible
personal property tax bills for each Property for the tax year of Closing and
the previous year, and, if requested, the originals or copies of any current
water, sewer and utility bills which are in Seller's custody or control;
-19-
(12) Resolutions of Seller authorizing the transactions
described herein;
(13) All keys and other means of access to the Improvements
in the possession of Seller or its agents;
(14) Materials;
(15) A Guaranty of Completion by Seller of the Expansion
Space, in form and substance reasonably acceptable to Buyer and Seller; and
(16) Such other documents as Buyer may reasonably request to
effect the transactions contemplated by this Agreement.
In the event that all of the foregoing provisions of this Section
8.1 are not satisfied and Buyer elects in writing to terminate this Agreement,
then upon notice thereof from Buyer to Seller, neither party shall have any
further claim against the other by reasons of this Agreement, except as provided
in Article 9.
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(a) Buyer's warranties and representations under this Agreement
shall be true and correct as of the Closing Date, and Buyer shall not be in
default hereunder.
(b) All of the obligations of Buyer contained in this Agreement
shall have been fully performed by or on the date of Closing in compliance with
the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the
Closing the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the Purchase Price in
accordance with Article 2;
(2) Such other documents as Seller may reasonably request
to effect the transactions contemplated by this Agreement.
In the event that all conditions precedent to Buyer's obligation
to purchase shall have been satisfied but the foregoing provisions of this
Section 8.2 have not, and Seller elects in writing to terminate this Agreement,
then upon notice thereof, neither party shall have any further claim against the
other by reasons of this Agreement, except as provided in Article 9.
-20-
8.3 Best Efforts. Each of the parties hereto agrees to use reasonable
best efforts to take or cause to be taken all actions necessary, proper or
advisable to consummate the transactions contemplated by this Agreement.
9. PRE-CLOSING BREACH; REMEDIES
9.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
provided for Closing, Buyer may, at Buyer's election (i) terminate this
Agreement and receive a return of the Earnest Money Deposit, and the parties
shall have no further rights or obligations under this Agreement (except as
survive termination); (ii) enforce this Agreement by suit for specific
performance; or (iii) waive such breach and close the purchase contemplated
hereby, notwithstanding such breach.
9.2 Breach by Buyer. In the event of a breach of Buyer's covenants or
warranties herein and failure of Buyer to cure such breach within the time
provided for Closing, Seller's sole remedy shall be to terminate this Agreement
and retain Buyer's Earnest Money Deposit as agreed liquidated damages for such
breach, and upon payment in full to Seller of such amounts, the parties shall
have no further rights, claims, liabilities or obligations under this Agreement
(except as survive termination).
10. POST CLOSING INDEMNITIES AND COVENANTS
10.1 Seller's Indemnity. Should this transaction close, Seller, subject
to the limitations set forth herein, shall indemnify, defend and hold harmless
Buyer from all claims, demands, liabilities, damages, penalties, costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, which may be imposed upon, asserted against or incurred or paid
by Buyer by reason of, or on account of, any breach by Seller of Seller's
warranties, representations and covenants. Seller's warranties, representations
and covenants, and the foregoing indemnity, shall survive the Closing for one
(1) year. Buyer's rights and remedies herein against Seller shall be in addition
to, and not in lieu of all other rights and remedies of Buyer at law or in
equity.
10.2 Buyer's Indemnity. Should this transaction close, Buyer shall
indemnify, defend and hold harmless Seller from all claims, demands,
liabilities, damages, penalties, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, which may be imposed
upon, asserted against or incurred or paid by Seller by reason of, or on account
of, any breach by Buyer of Buyer's warranties, representations and covenants.
Buyer's warranties, representations and covenants, and the foregoing indemnity,
shall survive the Closing for one (1) year. Seller's rights and remedies herein
against Buyer shall be in addition to, and not in lieu of all other rights and
remedies of Seller at law or in equity.
-21-
11. MISCELLANEOUS
11.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
to its partners, attorneys, accountants and other consultants, their lenders and
prospective lenders, or where disclosure is required by law.
11.2 Radon Gas. Radon is a naturally occurring radioactive gas which,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon which
exceed federal and state guidelines may have been found in buildings in each
state in which a particular Property is located. Additional information
regarding radon and radon testing may be obtained from the applicable public
health unit.
11.3 Entire Agreement. This Agreement, together with the Exhibits
attached hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may not be modified, amended or
otherwise changed in any manner except by a writing executed by Buyer and
Seller.
11.4 Notices. All written notices and demands of any kind which either
party may be required or may desire to serve upon the other party in connection
with this Agreement shall be served by personal delivery, certified or overnight
mail, reputable overnight courier service or facsimile (followed promptly by
hard copy) at the addresses set forth below:
As to Seller: Norcom Development, Inc.
Attention: Mr. Thomas Norman
Post Office Box 32068
Charlotte, North Carolina 28232
Facsimile: (704) 332-3525
With a copy to: Horack, Talley, Pharr & Lowndes
Attention: Henry N. Pharr, II, Esq.
2600 One First Union Center
301 South College Street
Charlotte, North Carolina 28202
Facsimile: (704) 372-2619
As to Buyer: RRC Acquisitions, Inc.
Attention: Robert L. Miller
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
Facsimile: (904) 634-3428
-22-
With a copy to: Ulmer, Murchison, Ashby & Taylor
Attention: William E. Scheu, Esq.
P. O. Box 479
Suite 1600, 200 W. Forsyth St.
Jacksonville, FL 32201 (32202 for courier)
Facsimile: (904) 354-9100
With a copy to: Rayburn, Moon & Smith, P.A.
Attention: Travis W. Moon, Esq.
227 West Trade Street, Suite 1200
Charlotte, North Carolina 28202
Facsimile: (704) 377-1897
Any notice or demand so served shall constitute proper notice hereunder upon
delivery to the United States Postal Service, to such overnight courier, or upon
confirmation of such facsimile transmission. A party may change its notice
address by notice given in the aforesaid manner.
11.5 Headings. The titles and headings of the various sections hereof
are intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
11.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11.7 Attorneys' Fees. In the event of any litigation between the parties
hereto to enforce any of the provisions of this Agreement or any right of either
party hereto, the unsuccessful party to such litigation agrees to pay to the
successful party all costs and expenses, including reasonable attorneys' fees,
whether or not incurred in trial or on appeal, incurred therein by the
successful party, all of which may be included in and as a part of the judgment
rendered in such litigation. Any indemnity provisions herein shall include
indemnification for reasonable attorneys' fees and costs, whether or not suit be
brought and including fees and costs on appeal.
11.8 Time of Essence. Time is of the essence of this Agreement.
11.9 Governing Law. The parties hereto agree that any litigation between
the parties hereto relating to this Agreement shall take place (unless otherwise
required by law) in a court located in Duval County, State of Florida, which
shall interpret this Agreement in accordance with the laws of North Carolina.
Each party waives its right to jurisdiction or venue in any other location.
-23-
11.10 Successors and Assigns. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No third parties, including any brokers or
creditors, shall be beneficiaries hereof. Neither party may assign its rights
under this agreement to any unaffiliated person without the prior written
consent of the other, not to be unreasonably withheld.
11.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
11.12 Gender; Plural; Singular; Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
11.13 Further Instruments, Etc. Seller and Buyer shall, at or after Closing,
execute any and all documents and perform any and all acts reasonably necessary
to fully implement this Agreement.
11.14 Survival. The obligations of Seller and Buyer intended to be
performed after the Closing shall survive the closing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses:
RRC ACQUISITIONS, INC.,
____________________________ a Florida corporation
[ - - - - - - - - - - - - - - - ]
Name (Please Print)
By:
____________________________ Its:
[ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ] Date: _________________, 1996
Name (Please Print)
Tax Identification No. 59-3210155
"BUYER"
-24-
NORCOM DEVELOPMENT, INC.,
____________________________ a North Carolina corporation
[ - - - - - - - - - - - - - - - ]
Name (Please Print)
By:
____________________________ Its:
[ - - - - - - - - - - - - - - - ]
Name (Please Print) Date: ________________, 1996
Tax Identification No. 56-1642603
"SELLER"
JOINDER OF ESCROW AGENT
1. Duties. Escrow Agent joins herein for the purpose of acknowledging
receipt of the initial Earnest Money Deposit and agrees to comply with the terms
hereof insofar as they apply to Escrow Agent. Escrow Agent shall receive and
hold the Earnest Money Deposit in trust, to be disposed of in accordance with
the provisions of this joinder and Section ____ of the foregoing Agreement.
2. Indemnity. Escrow Agent shall not be liable to either party except
for claims resulting from the gross negligence or willful misconduct of Escrow
Agent. If the escrow is involved in any controversy or litigation, the parties
hereto shall jointly and severally indemnify and hold Escrow Agent free and
harmless from and against any and all loss, cost, damage, liability or expense,
including costs of reasonable attorneys' fees to which Escrow Agent may be put
or which may incur by reason of or in connection with such controversy or
litigation, except to the extent it is finally determined that such controversy
or litigation resulted from Escrow Agent's gross negligence or willful
misconduct. If the indemnity amounts payable hereunder result from the fault of
Buyer or Seller (or their respective agents), the party at fault shall pay, and
hold the other party harmless against, such amounts.
3. Conflicting Demands. If conflicting demands are made upon Escrow
Agent with respect to the escrow, the parties hereto expressly agree that Escrow
Agent shall have the absolute right to do either or both of the following: (i)
withhold and stop all proceedings in performance of this escrow and await
settlement of the controversy by final appropriate legal proceedings or
otherwise as it may require; or (ii) file suit for declaratory relief and/or
inter-pleader and obtain an order from the court requiring the parties to
interplead and litigate in such court their several claims and rights between
themselves. Upon the filing of any such declaratory relief or interpleader suit
and tender of the Earnest Money Deposit to the court, Escrow Agent shall
thereupon be fully released and discharged from any and all obligations to
further
-25-
perform the duties or obligations imposed upon it. Buyer and Seller agree to
respond promptly in writing to any request by Escrow Agent for clarification,
consent or instructions. Any action proposed to be taken by Escrow Agent for
which approval of Buyer and/or Seller is requested shall be considered approved
if Escrow Agent does not receive written notice of disapproval within fourteen
(14) days after a written request for approval is received by the party whose
approval is being requested. Escrow Agent shall not be required to take any
action for which approval of Buyer and/or Seller has been sought unless such
approval has been received. No disbursements shall be made, other than as
provided in Sections 2.1(a) and 3.1(a) of the foregoing Agreement, or to a court
in an interpleader action, unless Escrow Agent shall have given written notice
of the proposed disbursement to Buyer and Seller and neither Buyer nor Seller
shall have delivered any written objection to the disbursement within 14 days
after receipt of Escrow Agent's notice. No notice by Buyer or Seller to Escrow
Agent of disapproval of a proposed action shall affect the right of Escrow Agent
to take any action as to which such approval is not required.
4. Continuing Counsel. Seller acknowledges that Escrow Agent is counsel
to Buyer herein and Seller agrees that in the event of a dispute hereunder or
otherwise between Seller and Buyer, Escrow Agent may continue to represent Buyer
notwithstanding that it is acting and will continue to act as Escrow Agent
hereunder, it being acknowledged by all parties that Escrow Agent's duties
hereunder are ministerial in nature.
5. Tax Identification. Seller and Buyer shall provide to Escrow Agent
appropriate Federal tax identification numbers.
CHICAGO TITLE INSURANCE COMPANY
By:
Its Authorized Agent
Date: ______________, 1996
"ESCROW AGENT"
-26-
CONSENT AND JOINDER OF OWNING ENTITIES
The following Owning Entities, each of which is the owner of the
Shopping Center indicated below as being owned by it, joins herein for the
purpose of consenting to the foregoing Agreement and agreeing to be bound by it
insofar as it applies to the particular Shopping Center owned by it.
Shopping Center Owning Entity
City View Shopping Center ______________________________
Charlotte, Mecklenburg County, NC
By:___________________________
Its:________________________
Union Square Shopping Center ______________________________
Monroe, Union County, NC
By:___________________________
Its:________________________
-27-
EXHIBIT 1.3
List of Anchor and Credit Tenants for Each Shopping Center
Note: If a tenant identified as a Credit Tenant is actually a franchisee or
licensee rather than the named national entity, the tenant shall not be a Credit
Tenant unless such national entity has guaranteed the tenant's obligations
thereunder to Buyer's satisfaction.
1. City View Shopping Center
Charlotte, Mecklenburg County, NC
Anchor Tenants:
Winn-Dixie
Revco
Credit Tenants:
Little Caesars
2. Union Square Shopping Center
Monroe, Union County, NC
Anchor Tenants:
Harris Teeter
Consolidated Theatre
Revco
Credit Tenants:
Blockbuster Entertainment
Subway
EXHIBIT 1.5
Audit Representation Letter
--------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
2700 Independent Square
One Independent Drive
Jacksonville, Florida 32202
RE: ___________________________________
(Acquisition Property Name)
Dear Sirs:
We are writing at your request to confirm our understanding that your
audit of the Statement of Revenue and Certain Expenses of _________________ for
the twelve months ended December 31, 19____, was made for the purpose of
expressing an opinion as to whether the statement presents fairly in all
material respects the results of its operations in conformity with generally
accepted accounting principles. In connection with your audit we confirm, to the
best of our knowledge and belief, the following representations made to you
during your audit:
1. We have made available to you all financial records and related data in
our possession for the period under audit.
2. There have been no undisclosed:
(a) Irregularities involving any member of management or employees who
have significant roles in the system of internal accounting control;
(b) Irregularities involving other persons that could have a material
effect on the statement of revenue and certain expenses;
(c) Violations or possible violations of laws or regulations the
effects of which should be considered for disclosure in the statement
of revenue and certain expenses.
3. There are no:
(a) Unasserted claims or assessments that our lawyers have advised us are
probable of assertion and must be disclosed in accordance with Statement of
Financial Accounting Standards No. 5;
(b) Material gain or loss contingencies that are required to be disclosed
by Statement of Financial Accounting Standards No. 5;
(c) Material transactions that have not been properly recorded in the
accounting records underlying the financial statement; and
(d) Events that have occurred subsequent to the audit period that
should require adjustment to or disclosure in the Statement of Revenue
and Certain Expenses.
4. Provision, when material, has been made for losses to be sustained in
the fulfillment of, or from inability to fulfill, any contract commitments.
5. The shopping center has satisfactory title to all owned assets, and
there are no liens or encumbrances on such assets nor has any asset been
pledged, that has not been disclosed.
6. All contractual agreements that would have a material effect on the
Statement of Revenue and Certain Expenses have been complied with.
7. There have been no:
(a) Material undisclosed related party transactions and related
amounts receivable or payable, including sales, purchases, loans,
transfer, and guarantees;
(b) Agreements to repurchase assets previously sold.
Further, we acknowledge that we are responsible for the fair
presentation of the Statement of Revenue and Certain Expenses prepared in
accordance with generally accepted accounting principles.
Very truly yours,
__________________________(Seller)
By:_________________________________
Its:______________________________
EXHIBIT 1.35
Rent Roll By Shopping Center
EXHIBIT 1.39
Site Plan
EXHIBIT 1.42
Form of Estoppel Letter
_____________________, 199_
RE: ___________________________ (Name of Shopping Center)
Ladies and Gentlemen:
The undersigned (Tenant) has been advised you may purchase the above
Shopping Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of _____________________________________,
Landlord, in the above Shopping Center, and is currently in possession and
paying rent on premises known as Store No. _______________ [or Address:
- ----------------------------------------------------------------], and
containing approximately _____________ square feet, under the terms of the lease
dated ______________________, which has (not) been amended by amendment dated
________________________ (the "Lease"). There are no other written or oral
agreements between Tenant and Landlord. Tenant neither expects nor has been
promised any inducement, concession or consideration for entering into the
Lease, except as stated therein, and there are no side agreements or
understandings between Landlord and Tenant.
2. The term of the Lease commenced on ____________________, expiring on
___________________, with options to extend of ________________ (____) years
each.
3. As of ____________________, monthly minimum rental is $_______________ a
month.
4. Current additional monthly payments for expense reimbursement total
$____________ per month for common area maintenance, property insurance and real
estate taxes.
5. Tenant has given [no security deposit] [a security deposit of
$______________].
6. No payments by Tenant under the Lease have been made for more than one
(1) month in advance, and minimum rents and other charges under the Lease are
current.
7. All matters of an inducement nature and all obligations of the
Landlord under the Lease concerning the construction of the
Tenant's premises and development of the Shopping Center,
including without limitation, parking requirements, have been
performed by Landlord.
8. Tenant knows of no default by either Landlord or Tenant under the
Lease, and knows of no situations which, with notice or the
passage of time, or both, would constitute a default. Tenant has
no rights to off-set or defense against Landlord as of the date
hereof.
Very truly yours,
-------------------------------------------
____________________________________(Tenant)
Mailing Address:
____________________________ By:________________________________________
Its:_________________________________
- ----------------------------
I:\USERS\WES\REG\NORCOM\PSA-F
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 29th day of March, 1996, between PALM
HARBOUR CENTERS ASSOCIATES, a Florida general partnership ("Seller"), RRC
ACQUISITIONS, INC., a Florida corporation, its designees, successors and assigns
("Buyer"), and ULMER, MURCHISON, ASHBY & TAYLOR, a professional association
organized under the laws of Florida ("Escrow Agent").
Background
Buyer wishes to purchase a shopping center in Flagler County, Florida,
owned by Seller, known as the Palm Harbor Shopping Village (the "Shopping
Center");
Seller wishes to sell the Shopping Center to Buyer;
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Seller
agrees to sell and Buyer agrees to purchase the Shopping Center on the following
terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to
time.
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Annualized Net Operating Income means the projected Net Operating
Income from the particular parcel within the Shopping Center for the twelve (12)
months next following the Allocation Date for the payment of Consideration for
the particular parcel. For the initial Purchase Price contemplated by Section
2.1, the Annualized Net Operating Income shall be computed with respect to the
Phase One Parcel. For the Consideration contemplated by Section 8.3 (the Phase
Two Parcel) the Annualized Net Operating Income shall be computed with respect
to the Phase Two Parcel. For the Consideration contemplated by Section 8.5 (the
Bank Parcel) the Annualized Net Operating Income shall be computed with respect
to the Bank Parcel. For the Consideration contemplated by Section 8.7 (the Phase
Three Parcel), the Annualized Net Operating Income shall be computed with
respect to the Phase Three Parcel.
1.4 Approved Lease means a Lease listed on the Rent Roll, as approved by
Seller and Buyer in the case of the Property, and any additional lease written
on a Buyer-approved standard form having an initial term of no less than three
(3) years with an in-place third party tenant unaffiliated with Seller who is
creditworthy in Buyer's reasonable judgment and who is experienced in Buyer's
reasonable judgment in the operation of the type of business proposed to be
conducted at the leased premises. A Lease shall not be considered an Approved
Lease
unless it is written on the Shopping Center's standard form lease used by Buyer,
without material modification (or other form approved by Buyer), and unless it
provides for rents, cost sharing and concessions which are comparable to that
which Buyer considers to be "market" for the Palm Coast area.
1.5 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit 1.5.
1.6 Bank Parcel means the parcel more particularly depicted as such on the
Site Plan.
1.7 Buyer means the party identified as Buyer on the initial page hereof
and its designees, successors and assigns.
1.8 Closing means generally the execution and delivery of those documents
and funds necessary to effect the sale of the Property and in the case of the
other parcels the satisfaction of the conditions to the payment of the
Consideration for the particular parcel.
1.9 Closing Date means the date on which each Closing occurs.
1.10 Consideration means the Purchase Price in the case of the Property
and the equivalent thereof with respect to the amounts payable to Seller for the
other parcels.
1.11 Contracts means all service contracts, agreements or other
instruments to be assigned by Seller to Buyer at Closing, all of which are
terminable by Buyer without penalty or premium upon thirty (30) days notice.
1.12 Deferred Price Computation Date means the date the Consideration is
to be computed with respect to the In-Line Spaces and the Earnout Spaces.
1.13 Earnest Money Deposit means the deposits to be delivered by Buyer to
Escrow Agent prior to the Closing of the Property under Section 2.3 of this
Agreement, together with the earnings thereon, if any.
1.14 Earnout Spaces means the spaces identified as 106 (698 square feet),
122 (950 square feet), 146 (750 square feet), 232B (108 square feet), 266 (2500
square feet) and 272 (475 square feet), all of which are located in the Phase
One Parcel.
1.15 Effective Date means the date upon which this agreement is executed
by the last to execute of Buyer and Seller and the fact of such execution is
communicated to the other.
1.16 Environmental Claim means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection
-2-
with any Hazardous Material or actual or alleged Hazardous Material Activity,
(c) from any abatement, removal, remedial, corrective, or other response action
in connection with a Hazardous Material, Environmental Law or other order of a
governmental authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
1.17 Environmental Law means any current legal requirement in effect from
time to time pertaining to (a) the protection of health, safety, and the indoor
or outdoor environment, (b) the conservation, management, protection or use of
natural resources and wildlife, (c) the protection or use of source water and
groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq.,
Solid Waste Disposal Act, as amended by the Resource Conservation Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et seq., Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC
1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic
Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials
Transportation Act, 49 USC App. 1801, Occupational Safety and Health Act of
1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et
seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC App.
11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended by 42 USC 300(f) et seq., and any
similar, implementing or successor law, any amendment, rule, regulation, order
or directive, issued thereunder.
1.18 Escrow Agent means the party described as such in the introductory
paragraph hereof and any successor escrow agent.
1.19 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
1.20 Hazardous Materials means any "Hazardous Substance" as defined in any
Environmental Law in effect at the pertinent date or dates.
1.21 Hazardous Material Activity means any activity, event, or occurrence
at or prior to each Closing Date involving a Hazardous Material, including,
without limitation, the manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, Release, threatened Release,
abatement, removal, remediation, handling or corrective or response action to
any Hazardous Material.
1.22 Improvements means any buildings, structures or other improvements
now or hereafter situated on each particular parcel within the Shopping Center.
-3-
1.23 In-Line Spaces means those stores identified on the Site Plan as
"In-line 1" and "In-Line 2", consisting of approximately 3400 square feet (ITT
Property Management, which includes space 294) and 400 square feet (Benvenuto
Pizza), respectively, both of which are located in the Phase One Parcel and are
currently being built out by Seller.
1.24 Inspection Period means, with respect to the Property, the period of
time which expires at midnight on the thirtieth (30th) day following the
Effective Date, and with respect to the other parcels, means the period of time
hereinafter specified for each. If such expiration of the Inspection Period
occurs during a weekend or on a national holiday, the Inspection Period shall
expire at the end of business on the next immediately succeeding business day.
1.25 Leases means all leases and other agreements with occupancy tenants
permitting tenants to occupy their respective premises in the Shopping Center as
set forth in the Rent Roll or as otherwise approved by the parties.
1.26 Materials means all plans, drawings, specifications, soil test
reports, environmental reports, market studies, surveys, and similar
documentation, if any, owned by or in the possession of Seller with respect to
the Property, Improvements and any proposed improvements to the Property, which
Seller may lawfully transfer to Buyer except that, as to financial and other
records, Materials shall include only photostatic copies.
1.27 Net Operating Income means twelve-month projected "Effective Gross
Income" under Approved Leases for the particular parcel within the Shopping
Center for which Consideration is to be paid, less expenses for operating such
parcel, including cleaning, utilities, general expenses, repairs and
maintenance, administrative expenses, repairs and maintenance, administrative
charges, management fees (4% of effective gross income), insurance, taxes,
replacement reserves ($0.10 per square foot) and other reasonable reimbursable
expenses including without limitation expenses allocated to such parcel under
the Declaration, hereinafter defined (herein "Reimbursable Expenses"), which Net
Operating Income is the amount which will be "annualized" for the pertinent
period as contemplated by Section 1.3 to become Annualized Net Operating Income,
to which the capitalization rate is to be applied in order to calculate the
Purchase Price. The term "Effective Gross Income" for a particular Lease means
the projected twelve (12) month base rent and expense reimbursement recoveries
and the previous calendar year's percentage rent actually paid under such Lease,
less a credit reserve of five percent (5.0%) of rent and recoveries in the case
of a local tenant (but not a credit tenant). After capitalization of such Net
Operating Income there will be deducted to determine the Consideration for the
particular parcel all free rent, cash payments and allowances and other
concessions to the tenant for post-Closing periods (all of which are and/or
shall be the responsibility of Seller).
1.28 Permitted Exceptions means only the following interests, liens and
encumbrances:
(a) Liens for ad valorem taxes not yet due;
(b) Rights of tenants under Leases; and
-4-
(c) Other matters determined by Buyer to be acceptable.
1.29 Personal Property means all (a) sprinkler, plumbing, heating,
air-conditioning, electric power or lighting, incinerating, ventilating and
cooling systems, with each of their respective appurtenant furnaces, boilers,
engines, motors, dynamos, radiators, pipes, wiring and other apparatus,
equipment and fixtures, elevators, partitions, fire prevention and extinguishing
systems located in or on the Improvements, (b) all Materials, and (c) all other
personal property used in connection with the Improvements, provided the same
are now owned or are acquired by Seller prior to the Closing.
1.30 Phase One Parcel means the currently constructed and operating parcel
within the Shopping Center identified as Phase One on the Site Plan as such,
which includes the space between stores 268 and 280 as so identified on the Site
Plan(containing approximately 1986 square feet, but such space shall not be
taken into account in the Purchase Price for the Phase One Parcel, but shall be
included when determining the Consideration for the Phase Two Parcel. .
1.31 Phase Two Parcel means collectively the multi-tenant parcel and the
small outparcel more particularly identified as Site B and Site C, respectively,
on the Site Plan. In addition, for purposes of determining Consideration for the
Phase Two Parcel, the space between stores 268 and 280, identified on the Site
Plan and containing approximately 1986 square feet of store area when built out
shall be treated as if it were in the Phase Two Parcel.
1.32 Phase Three Parcel means the unimproved parcel more particularly
identified as Phase Three on the Site Plan.
1.33 Property means the Real Property and the Improvements thereon, and
the Personal Property of Seller used in connection therewith.
1.34 Prorated means the allocation of items of expense or income between
Buyer and Seller based upon that percentage of the time period as to which such
item of expense or income relates which has expired as of the date at which the
proration is to be made.
1.35 Purchase Price means the Consideration for the purchase of the
Property as set forth in Section 2.1 (subject to adjustments as provided
herein).
1.36 Real Property means the Phase One Parcel (subject to changes
determined by the Survey), and all easements, privileges, rights of way and all
appurtenances pertaining to or accruing to the benefit of the Real Property,
including without limitation easements for ingress, egress, parking, utilities,
signage and surface water management over, under, across and upon the Phase Two
Parcel, the Bank Parcel and the Phase Three Parcel.
1.37 Release means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums,
-5-
containers, tanks, and other receptacles containing or previously containing any
Hazardous Material at or prior to the Closing Date.
1.38 Rent Roll, as to the Phase One Parcel, means the list of tenants and
related information attached hereto as Exhibit 1.38. Additional Rent Rolls will
be furnished to Buyer by Seller in connection with the development of the other
parcels.
1.39 Seller means the party identified as Seller on the initial page
hereof.
1.40 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions of Seller as
of and for the years ended December 31, 1994 and 1995; and all monthly reports
of income, expense and cash flow prepared by Seller consistent with past
practice for any period beginning after December 31, 1995, and ending prior to
Closing.
1.41 Shopping Center means the commercial enterprise commonly known as
"Palm Harbor Shopping Village", including the Phase One Parcel, the Phase Two
Parcel, the Bank Parcel and the Phase Three Parcel, all of which are identified
on the Site Plan.
1.42 Site Plan means the plan of the Shopping Center attached hereto as
Exhibit 1.42.
1.43 Survey means a map of a stake survey of the Shopping Center,
identifying and establishing the legal description for each of the parcels and
for the entire Shopping Center, which survey shall comply with Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys, jointly established and
adopted by ALTA and ACSM in 1992, and includes items 1, 2, 3, 4, 6, 7, 8, 9, 10
and 11 of Table "A" thereof, which meets the accuracy standards (as adopted by
ALTA and ACSM and in effect on the date of the Survey) of an urban survey, which
is dated not earlier than thirty (30) days prior to each Closing, and which is
certified to Buyer, Seller, the Title Insurance company providing Title
Insurance to Buyer, and Buyer's lender, and dated as of the date the Survey was
made.
1.44 Tenant Estoppel Letter means a letter or other certificate from a
tenant certifying as to certain matters regarding such tenant's Lease, in
substantially the same form as attached hereto as Exhibit 1.44.
1.45 Title Defect means any exception in the Title Insurance Commitment or
any matter disclosed by the Survey, other than a Permitted Exception.
1.46 Title Insurance means an ALTA Form B Owners Policy of Title Insurance
for the full Purchase Price insuring Buyer's marketable fee simple title to the
entire Shopping Center, subject only to the Permitted Exceptions (including,
with respect to the Phase Two Parcel, the Phase Three Parcel and the Bank
Parcel, the ground leases to be executed at Closing as provided in Article 8),
the policy to be issued by Chicago Title Insurance Company. The legal
descriptions for each of the parcels and the exceptions for each shall be
separately stated.
-6-
1.47 Title Insurance Commitment means a binder whereby the title insurer
agrees to issue the Title Insurance to Buyer.
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be determined by
capitalizing the Annualized Net Operating Income of the Property by 0.105. The
Purchase Price for the Property shall be payable in cash or by wire transfer of
federal funds at Closing.
(b) Adjustments to the Purchase Price. The Purchase Price shall be adjusted
as of the Allocation Date by:
(1) subtracting the portion of the Closing year's real and
tangible personal property taxes for the period from January 1, of that year,
through the Allocation Date (if the amount of the Closing year's property taxes
are not available on the Allocation Date, such taxes will be prorated based upon
the prior year's taxes); and
(2) subtracting the amount of security deposits, prepaid
rents from tenants under the Leases and any other items customarily prorated in
a transaction of this nature. Any percentage rents or tenant reimbursements
payable after the Allocation Date but applicable to periods prior to the
Allocation Date shall be remitted to Seller by Buyer within thirty (30) days
after receipt. Buyer shall have no obligation to collect delinquencies, but
should Buyer collect any delinquent rents or other sums which cover periods
prior to the Allocation Date and for which Seller have received no proration or
credit, Buyer shall remit same to Seller within thirty (30) days after receipt,
less any actual out-of-pocket costs of collection. Buyer will not interfere in
Seller's efforts to collect sums due it prior to the Closing. Seller will remit
to Buyer promptly after receipt any rents, percentage rents or tenant
reimbursements received by Seller after Closing which are attributable to
periods occurring after the Allocation Date. Undesignated receipts of either
Buyer or Seller from tenants in the Shopping Center shall be applied first to
then current rents and reimbursements for such tenant(s), then to delinquent
rents and reimbursements attributable first to post-Allocation Date periods, and
then to pre-Allocation Date periods.
2.2 Deferred Portion of Purchase Price. The parties agree that Approved
Leases which have been executed for the In-Line Spaces and which will be
executed for the Earnout Spaces, (all of which Approved Leases for In-Line
Spaces and Earnout Spaces are included in the Rent Roll but under which the
particular tenants have not occupied and opened for business at such premises or
commenced paying rent), will not be included in the computation of Net Operating
Income to determine the Purchase Price payable for the Property at Closing. The
Approved Leases for the In-Line Spaces and the Earnout Spaces, if executed,
shall be assigned to Buyer at Closing. The Purchase Price attributable to the
Approved Leases for the Earnout
-7-
Spaces shall be computed and paid (if not in material default) on the date which
is the earlier of ten (10) days after the particular tenant has been lawfully in
occupancy and paying rent for six (6) months or more, or 300 days following the
initial Closing with respect to the Property. The deferred portion of the
Purchase Price attributable to the In-Line Spaces (if not in material default)
shall be computed and paid within ten (10) days after each of the tenants of the
In-Line Spaces takes occupancy of the particular In-Line Space, opens for
business therein and commences paying rent for such In-Line Space. If the Lease
for a particular In-Line Space is or has been in material default between the
Closing Date for the Property and the Closing Date for the particular In-Line
Space, the Deferred Price Computation shall be deferred and paid at the same
time as the Earnout Spaces, provided all such defaults have been cured by such
date. The Consideration for the In-Line Spaces and the Earnout Spaces shall be
computed by capitalizing at a capitalization rate of 0.105 the Annualized Net
Operating Income attributable to the specific Approved Leases for the In-Line
Spaces and Earnout Spaces, when in the case of the Earnout Spaces, but not the
In-Line Spaces, the tenants have then been in occupancy, open for business and
paying rent without material default for the preceding six (6) months. No other
Leases shall be considered for the deferred payment pursuant to this Section
2.2. Any deferred payment hereunder shall be reduced by an amount equal to the
Annualized Net Operating Income under any Lease for which Seller was given
credit at the Closing Date or later in the case of an In-Line Space or Earnout
Space, but which as of the Deferred Price Computation Date (i) had vacated their
leased premises or (ii) had not paid their rent for the immediately preceding
two (2) months, or (iii) is in material default under any other term of its
lease, capitalized by 0.105, provided that if Seller has replaced the defaulting
tenant with another tenant under an Approved Lease, and the tenant thereunder is
in occupancy, open for business at the premises and has been paying its rent for
six consecutive months as of the Deferred Price Computation Date, such
reduction, as to that space, shall not be made. Buyer agrees that if a
particular tenant for which Seller was given credit at the Closing of the Phase
One Parcel acquisition defaults and Buyer intends to include such tenant in the
foregoing reduction, Buyer shall within twenty (20) days of such default give
written notice thereof to Seller and diligently seek a curing of such default.
Further, Buyer shall keep Seller advised periodically of the status of such
tenant and furnish copies of notices and other correspondence with such tenant
as it relates to such default. With regard to the buildout of the ITT Property
Management Space which is one of the In-Line Spaces, Seller has agreed to make
certain interior improvements, the cost of which will be reimbursed by ITT
Property Management. Such reimbursement shall be paid to Seller as received even
if made after Closing.
2.3 Earnest Money Deposit. An Earnest Money Deposit in the amount of
$25,000.00 shall be delivered to Escrow Agent within three (3) days after
execution and delivery of this Agreement by all parties. Should Buyer elect to
extend the initial Inspection Period or proceed beyond the expiration of the
Inspection Period to Closing, Buyer shall deliver to the Escrow Agent with a
copy of the notice described in the third or penultimate sentence, as the case
may be, of Section 3.1(a) below, an additional deposit of $75,000, which shall
thereupon be deemed part of the Earnest Money Deposit for all purposes. This
Agreement may be terminated by Seller if the Earnest Money Deposit is not
received by Escrow Agent by such deadline. The Earnest Money Deposit paid by
Buyer shall be held as specifically provided in this Agreement and shall be
applied to the Purchase Price at the Closing.
-8-
2.4 Closing Costs.
(a) Seller shall pay:
(1) Seller's attorneys' fees relating to the sale of
the Property;
(2) Documentary stamp taxes imposed by the State of Florida
and/or other governmental entities upon the transactions contemplated hereby;
(3) Cost of the Survey;
(4) Cost of satisfying any liens on the Property;
(5) One-half the cost of title insurance and the entire cost,
if any, of curing title defects and recording any curative title documents; and
(6) All broker's commissions, finders' fees and similar
expenses incurred by either party in connection with the sale of the Property,
subject however to Buyer's indemnity given in Section 5.3 of this Agreement.
(b) Buyer shall pay:
(1) Buyer's attorneys' fees;
(2) Cost of Buyer's due diligence inspection;
(3) Costs of the Phase 1 environmental site assessment to be
obtained by Buyer;
(4) One-half the cost of title insurance; and
(5) Cost of recording the deed.
2.5 Prorations. Matters of income and expense shall be prorated as of
the Allocation Date.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Shopping Center, review the economic data, underwrite the
tenants and review their leases, and to otherwise conduct its due diligence
review of the Shopping Center and all books, records and accounts of Seller
related thereto. Buyer hereby agrees to indemnify and hold Seller
-9-
harmless from any damages, liabilities or claims for property damage or personal
injury arising out of such inspection and investigation by Buyer or its agents
or independent contractors, which indemnity shall survive the termination of
this Agreement. Within the Inspection Period, Buyer may, in its sole discretion
and for any reason or no reason, elect to go forward with this Agreement to
closing, which election shall be made by notice to Seller given within the
Inspection Period. If such notice is not timely given, this Agreement and all
rights, duties and obligations of Buyer and Seller hereunder, except any which
expressly survive termination, shall terminate and Escrow Agent shall forthwith
return to Buyer the Earnest Money Deposit. If Buyer so elects to go forward, the
Earnest Money Deposit shall not be refundable except upon the terms otherwise
set forth herein. The Inspection Period may be extended by Buyer for one
successive period of thirty (30) days , by written notice to Seller given within
the Inspection Period, as extended, as the case may be accompanied by evidence
reflecting the increase of the Earnest Money Deposit by Buyer by $75,000, for a
total Earnest Money Deposit of $100,000. The Earnest Money Deposit will not be
increased further (such that if the Inspection Period is extended and the
Earnest Money Deposit increased, another increase will not be necessary at the
end of the extended Inspection Period). Buyer will promptly after execution of
this Agreement deliver to Seller a copy of Buyer's standard form lease and any
information questionnaires required to be completed with respect to any
prospective tenant.
(b) Buyer, through its officers, employees and other authorized
representatives, shall have the right to reasonable access to the Shopping
Center and all records of Seller related thereto, upon prior notice to Seller,
at reasonable times during the Inspection Period for the purpose of inspecting
the Property, taking soil borings, conducting Hazardous Materials inspections
and reviewing the books and records of Seller concerning the Shopping Center.
Seller shall cooperate with and assist Buyer in making such inspections and
reviews. Seller shall give Buyer any authorizations which may be required by
Buyer in order to gain access to records or other information pertaining to the
Shopping Center or the use thereof maintained by any governmental or
quasi-governmental authority or organization. Buyer, for itself and its agents,
agrees not to enter into any contract with existing tenants without the written
consent of Seller if such contract would be binding upon Seller should this
transaction fail to close. Buyer shall have the right to have due diligence
interviews and other discussions or negotiations with tenants, provided Seller
is given prior notice of the time and place of such interviews and/or
discussions and an opportunity to be present.
(c) Buyer, through its officers or other authorized representatives,
shall have the right to reasonable access to all Materials (other than
privileged or confidential litigation materials) for the purpose of reviewing
and copying the same.
(d) In the event Buyer elects to terminate this Agreement at the end
of the Inspection Period, Buyer shall deliver to Seller prior to the return of
the Deposit, originals or true copies of the following documents, if obtained by
Buyer during the Inspection Period:
(1) Survey;
(2) Environmental Reports;
-10-
(3) Building Condition Report;
(4) Any correspondence with any existing or prospective tenant
for the Shopping Center; and
(5) Financial information and leases delivered to Buyer by
Seller.
Buyer's certification that it has delivered all such documents to the Escrow
Agent for further delivery to Seller shall be conclusive that Buyer has
delivered such documents.
(e) Attached to this Agreement as Exhibit 3.1(e) is a pro forma
income and expense statement for the Property. If Buyer's examination of the
Property and Seller's books and records concerning the Property, or other due
diligence, reflects any material difference from either the income or the
expenses set forth on the pro forma, then in such event Buyer at its option may
terminate this Agreement upon notice to Seller prior to the expiration of the
Inspection Period, whereupon each party shall be relieved of all further
liability hereunder except for those indemnities which by their terms
specifically survive the termination of this Agreement. If such material
differences, if any, would result in the Purchase Price at the initial Closing
being less than $13,000,000.00 computed as required hereunder using the actual
Net Operating Income as established during the Inspection Period, Seller by
notice to Buyer given within ten (10) days after the expiration of the
Inspection Period may terminate this Agreement, whereupon the Earnest Money
Deposit shall be returned to Buyer and each party relieved of all further
liability hereunder except for those indemnities which by their terms expressly
survive the termination of this Agreement.
3.2 Hazardous Material. Buyer may at its sole expense cause a "Phase 1"
environmental assessment of the Shopping Center to be made during the Inspection
Period, and thereafter updated in connection with the payment of Consideration
with respect to the Phase Two Parcel, Phase Three Parcel and the Bank Parcel,
and a copy of any report shall be submitted to Buyer and Seller promptly upon
its completion. If the assessment discloses the existence of any Hazardous
Material on any unpurchased parcel, Buyer may notify Seller in writing, within
five (5) business days after receipt of the Phase 1 assessment report that it
elects to terminate this Agreement as to any or all unpurchased parcels,
whereupon the Agreement shall terminate and Escrow Agent shall return to Buyer
the Earnest Money Deposit, if any.
3.3 Time and Place of Closing. Unless otherwise agreed in writing by the
parties, the Closing for the Property and each subsequent parcel shall take
place at the offices of Escrow Agent in Jacksonville, Florida, at 10:00 A.M. on
a date selected by Buyer which is (A) no later than the thirtieth (30th) day
following the expiration of the Inspection Period and (B) no earlier than the
sixtieth (60th) day following the Effective Date.
-11-
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
4.1 Organization; Authority. Seller is a general partnership organized and
validly existing under the laws of Florida. Seller has full power and authority
to enter into and perform this Agreement in accordance with its terms, and the
persons executing this Agreement and other Transaction Documents have been duly
authorized to do so on behalf of Seller.
4.2 Authorization; Validity. The execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement have
been duly and validly authorized by the Board of Directors of Seller's general
partner. This Agreement has been duly and validly executed and delivered by
Seller and (assuming the valid execution and delivery of this Agreement by
Buyer) constitutes a legal, valid and binding agreement of Seller enforceable
against it in accordance with its terms.
4.3 Title. Seller is the owner in fee simple of all of the Shopping
Center, subject only to the Permitted Exceptions.
4.4 Commissions. Seller has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or the Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for Southern Development Services, whose commission is equal to two
percent (2.0%) of the Purchase Price for the Property, shall be paid by Seller
at Closing. A similar commission will be paid by Seller at the closings of the
transactions contemplated by Article 8 of this Agreement. Seller agrees to
indemnify Buyer from any such claim arising by, through or under Seller.
4.5 Sale Agreements. The Shopping Center is not subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller relating to the Shopping
Center. Seller and Publix Super Markets, Inc. ("Publix") have a dispute
concerning the construction of additional buildings in the Phase Two Parcel,
which dispute Seller may seek to resolve by declaratory action or other action
which will not give rise in Publix of a right to terminate or modify its lease
or withhold, offset or abate rents thereunder. Buyer consents to Seller
instituting and maintaining such declaratory or other action at no cost to
Buyer. Should Publix prevail in the dispute as to either Site B or Site C, Buyer
shall have no further obligation with respect to Site B or Site C of the Phase
Two Parcel, as the case may be, and the lease to Seller of the Phase Two Parcel
shall terminate as to the relevant site as of the entry of a final judgment in
favor of Publix finding that no buildings may be constructed thereon.
-12-
4.7 Leases. There are no Leases affecting the Shopping Center, oral or
written, except as listed on the Rent Roll attached hereto. Copies of the
Leases, all of which shall be delivered to Buyer within ten (10) days from the
date hereof, are, to the best knowledge of Seller, true, correct and complete
copies thereof, subject to the matters set forth on the Rent Roll. Between the
date hereof and the date which is five business days prior to the end of the
Inspection Period as extended, as the case may be, Seller may enter into new
leases for portions of the Property after full disclosure to and consultation
with Buyer. Seller will not thereafter terminate or modify existing Leases for
the Property or enter into any new Leases for the Property without the consent
of Buyer, not to be unreasonably withheld or delayed. Buyer shall advise Seller
as to whether it will give or withhold its consent as to any proposed Lease for
the Property within five (5) business days after the proposed lease and
supporting information as to creditworthiness and operating experience is
received by Buyer from Seller. If there is no answer to a request within said
five (5) day period, the particular Lease shall be deemed approved. If Buyer
objects to a particular proposed lease, it shall with its notice of objection
furnish to Seller the specifics of such objection(s). If Seller corrects such
deficiencies to Buyer's satisfaction within a reasonable period, Buyer shall
approve such lease. All of the Property's tenant leases are in good standing and
to the best of Seller's knowledge no material defaults exist thereunder except
as noted on the Rent Roll. No rent has been paid more than one (1) month in
advance and no security deposit or prepaid rent has been paid, except as stated
on the Rent Roll. No tenants under the Leases are entitled to interest on any
security deposits. No tenant under any Lease has or will be promised any
inducement, concession or consideration by Seller other than as expressly stated
in such Lease, and except as stated therein there are and will be no side
agreements between Seller and any tenant.
4.8 Financial Statements. Each of the Seller Financial Statements
delivered or to be delivered to Buyer hereunder has or will have been prepared
in accordance with the books and records of Seller and presents fairly in all
material respects the financial condition, results of operations and cash flows
as of and for the periods to which they relate, and except for monthly reports
of cash flow for periods after December 31, 1995, all are in conformity with
generally accepted accounting principles applied on a consistent basis. There
has been no material adverse change in the operations of the Property or its
prospects since the date of the most recent Seller Financial Statements. Seller
covenants to furnish Buyer with unaudited updated monthly reports of cash flow
for interim periods beginning after December 31, 1995, promptly after such
statements are first made available to Seller; and Buyer and its independent
certified accountants shall be given access to Seller's books and records at any
time prior to Closing and for six months thereafter, upon reasonable advance
notice, in order that they may verify the Seller Financial Statements. Seller
agrees to execute and deliver to Buyer the Audit Representation Letter should
Buyer's accountants audit the records of all or any portion of the Shopping
Center.
4.9 Contracts. Except for Leases and Permitted Exceptions, there are no
management, service, maintenance, utility or other contracts or agreements
affecting the Shopping Center, oral or written, which extend beyond the Closing
Date and which would bind Buyer or encumber the Shopping Center after the
Closing, except as contemplated hereby. All such Contracts are in full force and
effect in accordance with their respective terms, and all
-13-
obligations of Seller under the Contracts required to be performed to date have
been performed in all material respects; no party to any Contract has asserted
any claim of default or offset against Seller with respect thereto and no event
has occurred or failed to occur, which would in any way affect the validity or
enforceability of any such Contract; and the copies of the Contracts delivered
to Buyer prior to the date hereof are true, correct and complete copies thereof.
Between the date hereof and the Closing, Seller covenants to fulfill all of its
obligations under all Contracts, and covenants not to terminate or modify any
such Contracts or enter into any new contractual obligations without the consent
of Buyer (not to be unreasonably withheld) except such obligations as are freely
terminable without penalty by Seller upon not more than thirty (30) days'
written notice.
4.10 Maintenance and Operation of Property. From and after the date hereof
and until the Closing, Seller covenants to keep and maintain and operate the
Shopping Center substantially in the manner in which it is currently being
maintained and operated and covenants not to cause or permit any waste of the
Shopping Center nor undertake any action with respect to the operation thereof
outside the ordinary course of business without Buyer's prior written consent,
except as contemplated hereby. In connection therewith, Seller covenants with
respect to the Property to be purchased at the initial Closing to make all
necessary repairs and replacements until the Closing so that such Property shall
be of substantially the same quality and condition at the time of Closing as on
the date hereof. Seller covenants not to remove any article included in the
Personal Property. Seller covenants to maintain such casualty and liability
insurance on the Shopping Center as it is presently being maintained.
4.11 Permits and Zoning. To the best knowledge of Seller, there are no
material permits and licenses (collectively referred to as "Permits") required
to be issued to Seller by any governmental body, agency or department having
jurisdiction over the Shopping Center which materially affect the ownership or
the use thereof which have not been issued. The Shopping Center is properly
zoned for its present use and is neither subject to any development of regional
impact ("DRI)" development order under Chapter 380, Florida Statutes, nor is it
subject to aggregation with any other property of Seller or with any property
which heretofore was subject to a DRI development order. The use of the Shopping
Center is consistent with the land use designation for the Shopping Center under
the comprehensive plan or plans applicable thereto, and all concurrency
requirements have been satisfied. There are no outstanding assessments, impact
fees or other charges related to the Shopping Center.
4.12 Rent Roll; Estoppel Letters. The Rent Roll is true and correct in all
respects. Seller agrees to use its best reasonable efforts to obtain current
estoppel letters acceptable to Buyer from all Tenants under Leases.
4.13 Condemnation. Neither the whole nor any portion of the Shopping
Center, including access thereto or any easement benefiting the Shopping Center,
is subject to temporary requisition of use by any governmental authority or has
been condemned, or taken in any proceeding similar to a condemnation proceeding,
nor is there now pending any condemnation, expropriation, requisition or similar
proceeding against the Shopping Center or any portion
-14-
thereof. Seller has received no notice nor has any knowledge that any such
proceeding is contemplated.
4.14 Governmental Matters. Except as set forth on Exhibit 4.14 of this
Agreement, Seller has not entered into any commitments or agreements with any
governmental authorities or agencies affecting the Shopping Center that have not
been disclosed in writing to Buyer and Seller has received no notices from any
such governmental authorities or agencies of uncured violations at the Shopping
Center of building, fire, air pollution or zoning codes, rules, ordinances or
regulations, environmental and hazardous substances laws, or other rules,
ordinances or regulations. Seller shall be responsible for the remittance of all
sales tax for periods occurring prior to the Allocation Date directly to the
appropriate state department of revenue.
4.15 Repairs. Seller has received no notice of any requirements or
recommendations by any lender, insurance companies, or governmental body or
agencies requiring or recommending any repairs or work to be done on the
Property which have not already been completed.
4.16 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will (a) require Seller to file or register
with, notify, or obtain any permit, authorization, consent, or approval of, any
governmental or regulatory authority; (b) conflict with or breach any provision
of the organizational documents of Seller; (c) violate or breach any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Seller is a party, or by which
Seller, the Shopping Center or any of Seller's material assets may be bound; or
(d) violate any order, writ, injunction, decree, judgment, statute, law or
ruling of any court or governmental authority applicable to Seller, the Property
or any of Seller's material assets.
4.17 Environmental Matters.
(a) Seller represents and warrants as of the date hereof and as
of the Closing that:
(1) Seller has not, and has no actual knowledge of any other
person who has, caused any Release, threatened Release, or disposal of any
Hazardous Material at the Shopping Center in any material quantity; the Shopping
Center is not adversely affected by any Release, threatened Release, or disposal
of a Hazardous Material originating or emanating from any other property;
(2) the Shopping Center does not now contain and to the best
of Seller's knowledge (subject to change if hereafter disclosed in the
environmental assessment reports to be obtained by Buyer), has not contained
any: (a) underground storage tank, (b) material amounts of asbestos-containing
building material, (c) landfills or dumps, (d) hazardous
-15-
waste management facility as defined pursuant to the Resource Conservation and
Recovery Act ("RCRA") or any comparable state law, or (e) site on or nominated
for the National Priority List promulgated pursuant to Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or any state
remedial priority list promulgated or published pursuant to any comparable state
law;
and
(3) there are to the best of Seller's knowledge no conditions
or circumstances at the Shopping Center which pose a risk to the environment or
the health or safety of persons, except that Seller has disclosed to Buyer that
one of the tenants of the Property is a drycleaning plant.
(b) Seller shall indemnify, hold harmless, and hereby waives any
claim for contribution against Buyer for any damages to the extent they arise
from
the inaccuracy or breach of any representation or warranty
by Seller in this section of this Agreement.
4.18 Foreign Investment and Real Property Tax Act. Seller is not a
"foreign person" within the meaning of Sections 1445 or 897 of the Code, and has
furnished Buyer with its federal tax identification number, and at closing will
execute and deliver to Buyer an affidavit regarding the same, or if Seller fails
to execute and deliver such affidavit, Buyer may deduct and withhold from the
Purchase Price such amounts as may be required by Buyer in order to satisfy its
tax withholding obligations.
4.19 No Untrue Statement. Neither this Agreement nor any Exhibit nor any
written statement or Transaction Document furnished or to be furnished by Seller
to Buyer in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of material fact or omits or will
omit any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement and
as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power
and authority to enter into and perform this Agreement in accordance with its
terms, and the persons executing this Agreement and other Transaction Documents
on behalf of Buyer have been duly authorized to do so.
-16-
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except
Southern Development Services, whose commission shall be paid by Seller at
Closing and, with respect to the Closings contemplated by Article 8, such other
Closings. Buyer agrees to indemnify Seller from any other such claim arising by,
through or under Buyer.
6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of the Property will be transferred to Buyer
at the conclusion of the Closing.
6.2 Risk of Loss. All risk of loss with respect to a particular parcel
shall remain upon Seller until the conclusion of the Closing of the purchase of
that parcel. If, before the possession of a particular parcel has been
transferred to Buyer, any material portion of the parcel is damaged by fire or
other casualty and will not be restored by the requisite Closing Date or if any
material portion of such parcel is taken by eminent domain or there is a
material obstruction of access to the Improvements by virtue of a taking by
eminent domain, Seller shall, within ten (10) days of such damage or taking,
notify Buyer thereof and Buyer shall have the option to:
(a) terminate this Agreement as to any parcel not purchased upon
notice to Seller given within ten (10) business days after such notice
from Seller, in which case Buyer shall receive a return of its Earnest
Money Deposit; or
(b) proceed with such purchase, in which event Seller shall assign
to Buyer all Seller's right, title and interest in all amounts due or
collected by Seller under the insurance policies or as condemnation
awards. In such event, the Purchase Price shall be reduced by the amount
of any insurance deductible to the extent it reduced the insurance
proceeds payable.
"Material" shall mean twenty-five percent (25%) or more of the Improvements or
parcel.
-17-
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance. Within two (2) days after the Effective Date,
Seller shall order the Title Insurance Commitment covering the Shopping Center
and identifying each parcel, from Chicago Title Insurance Company (acting
through the agency offices of both Tripp, Scott, Conklin & Smith, and Ulmer,
Murchison, Ashby & Taylor), and the Survey from a reputable surveyor familiar
with the Shopping Center (Seller also agreeing to furnish to Buyer copies of any
existing surveys and title information in its possession promptly after
execution of this Agreement). With respect to the Phase Two Parcel, Phase Three
Parcel and the Bank Parcel, the Title Insurance Commitment and Survey shall be
updated to a current date relative to the Closing(s) for such parcel(s). Buyer
will have ten (10) days from receipt of the Title Commitment, and update, as the
case may be (including legible copies of all recorded exceptions noted therein),
and Survey, updated for each parcel, as provided above, to notify Seller in
writing of any Title Defects, encroachments or other matters not acceptable to
Buyer which are not permitted by this Agreement. Any Title Defect or other
objection disclosed by the Title Insurance Commitment (other than liens
removable by the payment of money) or the Survey which is not timely specified
in Buyer's written notice to Seller of Title Defects shall be deemed a Permitted
Exception. Seller shall notify Buyer in writing within five (5) days of Buyer's
notice if Seller intends to cure any Title Defect or other objection. If Seller
elects to cure, Seller shall use diligent efforts to cure the Title Defects
and/or objections by the Closing Date (as it may be extended), for each of the
parcels. If Seller elects not to cure or if such Title Defects and/or objections
are not cured, Buyer shall have the right, in lieu of any other remedies, to:
(i) refuse to purchase the particular parcel, terminate this Agreement and
receive a return of the Earnest Money Deposit, if any; or (ii) waive such Title
Defects and/or objections and close the purchase(s) subject to them.
(b) Miscellaneous Title Matters. If a search of the title discloses
judgments, bankruptcies or other returns against other persons having names the
same as or similar to that of Seller, Seller shall on request deliver to Buyer
an affidavit stating, if true, that such judgments, bankruptcies or the returns
are not against Seller. Seller further agrees to execute and deliver to the
Title Insurance agent at Closing such documentation, if any, as the Title
Insurance underwriter shall reasonably require to evidence that the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and that there are no mechanics'
liens or parties in possession of other than tenants under Leases and Seller.
8. DEVELOPMENT OF CERTAIN PARCELS
8.1 Overall Development. Seller has intended that the Shopping Center be
developed as generally depicted on the Site Plan, but only a portion of such
development has been accomplished. Seller desires to develop the Phase Two
Parcel, the Phase Three Parcel and the Bank Parcel, and receive additional
Consideration therefor as hereinafter provided. In order to
-18-
accomplish such future development it is intended that Seller at the Closing of
the Property will convey the entire Shopping Center to Buyer, immediately
following which Buyer will lease to Seller, and Seller will lease from Buyer,
the Phase Two Parcel, the Phase Three Parcel and the Bank Parcel pursuant to
leases which will permit Seller to develop each parcel in accordance with the
Site Plan and as hereinafter provided. The form of each lease will be negotiated
and agreed to during the Inspection Period, the business terms of which are
enumerated below.
8.2 Ground Lease for Phase Two Parcel. The lease for the Phase Two Parcel
will be a ground lease for a term of two and one-half (2 1/2) years, beginning
on the Closing Date of the purchase of the Property, at a rental of Ten Dollars
($10.00) for the term, plus ad valorem taxes on the land and improvements on the
Phase Two Parcel (or its share of such taxes allocated to the Phase Two Parcel
by the Flagler County Property Appraiser). Taxes and expenses related to the
improvements on the Phase Two Parcel and such parcel's proportionate share of
increases in common area expenses of the Shopping Center (i) over the common
area expenses charged to Seller in the computation of Net Operating Income for
the Phase One Parcel or (ii) caused by the construction of improvements on the
Phase Two Parcel (including, if applicable, increases for such matters as
parking lot maintenance, landscaping, lighting and other ordinary operating
expenses) shall be paid by Seller as the tenant. The lease will permit the
construction of additional retail space in accordance with plans and
specifications heretofore approved by the Buyer as listed on Exhibit 8.2
attached hereto, as landlord, provided they are in compliance with zoning and
building requirements. The construction and use of the additional space will be
subject to use, building and other restrictions imposed on the Shopping Center
by existing covenants and restrictions, existing leases and other reasonable
covenants and restrictions imposed by Buyer (including covenants and
restrictions created under the ground lease or under the Declaration,
hereinafter defined), so as to make the Phase Two Parcel architecturally
compatible with the Shopping Center and limited as to use, size and height so as
to not impair the operation of the Shopping Center or breach the lease of any
tenant of the Shopping Center. The entire cost of the development on the Phase
Two Parcel and for required improvements on the Phase One Parcel necessary for
such development shall be borne by Seller, and the landlord's estate will not be
subordinated or subject to any liens. Subletting will be permitted to third
party occupancy tenants under Approved Leases as provided below. The occupancy
tenants will attorn to the Buyer upon expiration of the ground lease, and the
Buyer will agree to recognize the occupancy lease as a direct lease for periods
beyond the term of the ground lease.
8.3 Consideration for Phase Two Parcel. The Consideration for the Phase
Two Parcel will be an amount equal to (A) the Annualized Net Operating Income
from each Approved Lease for space in the Phase Two Parcel, projected for the
period commencing with the Qualification Date for such Approved Lease, and
ending twelve months thereafter, (B) divided by (i) in the case of credit
tenants whose leases have an initial term of five (5) or more years and no less
than three (3) years remaining on their term(s), the capitalization rate of
0.105 (without the credit reserve adjustment described in Section 1.27 above),
or (ii) in the case of "local tenants" and all credit tenants whose leases have
less than three (3) years remaining on their term(s) as of the commencement of
the twelve month computation period, the capitalization rate of 0.105 (taking
into account the credit reserve adjustment described in
-19-
Section 1.27 above), the result obtained being reduced by (C) the Annualized Net
Operating Income (as defined in Section 1.27 of this Agreement) for the same
twelve (12) month period for any tenant of the Phase One Parcel who relocates to
the Phase Two Parcel, divided by the pertinent aforesaid capitalization rate.
Seller may before the Qualification Date for the payment of Consideration for
the Approved Lease of such relocated Phase One Parcel tenant replace such
relocating Phase One Parcel tenant with another Approved Lease for the Phase One
Parcel space that was vacated, and if the replacement tenant thereunder is in
occupancy, open for business at the premises, and has been paying its rent for
six consecutive months, as of the Qualification Date for such relocated tenant,
such reduction as to that space shall not be made. The Qualification Date for
each Approved Lease of space in the Phase Two Parcel shall be the date upon
which each of the following shall have occurred and be continuing with respect
to such Approved Lease:
(a) The Approved Lease shall have been executed by each of the
parties;
(b) The tenant shall have accepted the space and be lawfully open
for business therein;
(c) The tenant has been paying full rent for at least six (6)
months;
(d) There shall be no material default under such Approved Lease;
(e) All sums payable for the construction of the improvements on the
Phase Two Parcel shall have been paid and releases of liens and final payment
affidavits for such work have been delivered to Seller; and
(f) The tenant shall have executed and delivered to Buyer a Tenant
Estoppel Letter regarding its lease and occupancy.
If the Qualification Date for a particular Approved Lease occurs after the end
of the term of the ground lease, no Consideration with respect to such Approved
Lease shall be paid or payable. With respect to monetary defaults, a tenant
shall not be considered to be in material default so long as no payment under
its lease is more than twenty (20) days overdue. The Seller, as ground tenant,
will be responsible for all leasing commissions, buildout, tenant improvements,
free rent and other concessions made to or for each occupancy subtenant, and if
any extend beyond the term of the ground lease, Seller will pay such amounts to
Buyer on the Qualification Date. To qualify as a Lease for which Buyer is
willing to pay additional Consideration, the tenant must be a tenant who has
been accepted by Buyer as a tenant under an Approved Lease. The Consideration
for a particular Approved Lease in the Phase Two Parcel shall be paid within ten
(10) business days after the Qualification Date for such Approved Lease,
provided that if the Qualification Date for a particular Approved Lease occurs
after the expiration of the term of the ground lease for the Phase Two Parcel,
there shall be no Consideration paid or payable (and Buyer shall have no
obligation) with respect to such Lease.
-20-
8.4 Lease for Bank Parcel. The lease for the Bank Parcel shall be "triple
net" and shall be for a term of ninety-nine (99) years, beginning on the Closing
Date of the purchase of the Property, at a rental of Ten Dollars ($10.00) for
the term, plus ad valorem taxes on the land and improvements on the Bank Parcel
(or its share of such taxes allocated to the Bank Parcel by the Flagler County
Property Appraiser). The lease will prohibit the tenant from modifying the
exterior of the current improvements on the Bank Parcel without the consent of
Buyer, not to be unreasonably withheld or delayed (such prohibition not to
include repainting or reroofing in the same color and materials as now in
place). The lease will permit the construction of any interior modifications
without the requirement for such consent. The construction and use of any
improvements on the Bank Parcel will be subject to use, building and other
restrictions imposed on the Shopping Center by existing covenants and
restrictions, existing leases and other reasonable covenants and restrictions
imposed by Buyer (including covenants and restrictions created under the ground
lease or under the Declaration, hereinafter defined), so as to make the Bank
Parcel architecturally compatible with the Shopping Center and limited as to
use, size and height so as to not impair the operation of the Shopping Center or
breach the lease of any tenant of the Shopping Center. The entire cost of the
development on the Bank Parcel shall be borne by Seller, and the landlord's
estate will not be subordinated or subject to any liens. Subletting will be
permitted to third party occupancy tenants under an Approved Lease or Approved
Leases as provided in Section 8.5. The term of any sublease on the Bank Parcel
shall not extend beyond the term of the lease without the express consent of
Buyer.
8.5 Consideration for Bank Parcel. A building and other improvements now
existing on the Bank Parcel and owned by Seller were formerly used as a bank. A
portion of the Bank Parcel is currently leased to ___________________, the term
of which lease is _______________. Buyer will evaluate such tenant and lease for
consideration as an Approved Lease during the Inspection Period. Seller hopes to
find another third party creditworthy occupancy tenant or tenants for the Bank
Parcel and then to be paid additional Consideration with respect to each
occupancy under an Approved Lease on the Qualification Date for such Approved
Lease. The Qualification Date for each Approved Lease of space in the Bank
Parcel shall be the date upon which each of the following shall have occurred
and be continuing with respect to such Approved Lease:
(a) The Approved Lease shall have been executed by each of the
parties;
(b) The tenant shall have accepted the space and be lawfully open
for business therein;
(c) The tenant has been paying rent for at least six (6) months;
(d) There shall be no material default under such Approved Lease;
(e) All sums payable for the construction of the improvements on the
Bank Parcel shall have been paid and releases of liens and final payment
affidavits for such work have been delivered to Seller; and
-21-
(f) The tenant shall have executed and delivered to Buyer a Tenant
Estoppel Letter regarding its lease and occupancy.
To be considered an Approved Lease for the Bank Parcel, the initial term shall
be no less than five (5) years. Buyer shall have the option to terminate the
ground lease for the Bank Parcel, to be exercised within fifteen (15) days after
such Qualification Date, and if exercised Buyer will pay to Seller a
Consideration equal to the Annualized Net Operating Income (as defined in
Section 1.27 of this Agreement) from such Approved Lease(s) , as projected for
the first twelve (12) months of the Approved Lease term following the "free
rent" period, if any, under such Lease, capitalized by 0.105. The computation of
Annualized Net Income for each such Lease shall be made in accordance with the
definition contained in Section 1.27 above. Seller has indicated that the
building on the Bank Parcel may be divisible into two (2) spaces, each of which
may be leased under an Approved Lease to an occupancy tenant. Should Seller
determine to lease the Bank Parcel to two (2) tenants, it may do so provided the
Consideration shall be payable at the same time and not staggered. Payment of
the Consideration for Approved Leases on the Bank Parcel shall occur within
thirty (30) days after the end of the Inspection Period for such parcel, which
shall commence on the date of exercise by Buyer of its option and terminate
thirty (30) days thereafter, as provided in Section 1.24, and Buyer shall be
afforded the same inspection rights with respect to the Bank Parcel as are
provided in Section 3.1 (but no deposits shall be payable). At closing, Seller
and Buyer will execute a lease termination agreement concerning the applicable
parcel(s) and will obtain an updated Survey at Buyer's expense, and endorsement
to the Title Insurance insuring Buyer's marketable, fee simple title to such
property, subject only to additional matters acceptable to Buyer, and increasing
the policy amount by the Consideration, shall be provided, the costs to be
otherwise apportioned as provided in Section 2.4. At closing, the ground lease
as to the Bank Parcel shall be terminated and the entire Consideration for the
Bank Parcel shall be payable in cash or by wire transfer, subject to ad valorem
taxes of the year of closing and such other matters as are acceptable to Buyer.
Taxes for the year of closing will be prorated as of the closing date, and the
closing costs will be apportioned as provided in Section 2.4 hereof.
Notwithstanding anything herein, if the foregoing conditions with respect to the
leasing of space in the Bank Parcel and the payment of Consideration for
Approved Leases on the Bank Parcel shall not have occurred within five (5) years
after the Closing Date of the purchase of the Property, Buyer shall have no
option with respect to the Bank Parcel, and the ground lease to Seller shall
continue in full force and effect to the end of its term.
8.6 Ground Lease for Phase Three Parcel. The lease for the Phase Three
Parcel will be a ground lease for a term of ninety-nine (99) years, beginning on
the Closing Date of the purchase of the Property, at a rental of Ten Dollars
($10.00) for the term, plus ad valorem taxes on the land and improvements on the
Phase Three Parcel (or its share of such taxes allocated to the Phase Three
Parcel by the Flagler County Property Appraiser). Taxes and expenses related to
the improvements on the Phase Three Parcel, and such parcel's proportionate
share of increases in common area expenses of the Shopping Center (i) over the
common area expenses charged to Seller in the computation of Net Operating
Income for the Phase One Parcel or (ii) otherwise attributable to such
improvements (including, if applicable, increases for such matters as parking
lot maintenance, landscaping, lighting and other ordinary
-22-
operating expenses) shall be paid by Seller as the tenant. The lease will permit
the construction of retail space in accordance with plans and specifications to
be approved by the Buyer, as landlord, provided they are in compliance with
zoning and building requirements. The construction and use of the additional
space will be subject to use, building and other restrictions imposed on the
Shopping Center by existing covenants and restrictions, existing leases and
other reasonable covenants and restrictions imposed by Buyer (including
covenants and restrictions created under the ground lease or under the
Declaration, hereinafter defined), so as to make the Phase Three Parcel
architecturally compatible with the Shopping Center and limited as to use, size
and height so as to not impair the operation of the Shopping Center or breach
the lease of any tenant of the Shopping Center. Until the Phase Three Parcel is
developed, Seller shall not be required to reimburse Buyer for common area
maintenance and similar charges with respect to the Phase Three Parcel. The
entire cost of the development on the Phase Three Parcel shall be borne by
Seller, and the landlord's estate will not be subordinated or subject to any
liens. Subletting will be permitted to third party occupancy tenants under
Approved Leases as provided below. The term of any sublease on the Phase Three
Parcel shall not extend beyond the term of the lease without the express consent
of Buyer.
8.7 Development of and Consideration for Phase Three Parcel. Buyer and
Seller have agreed with respect to the Phase Three Parcel as follows:
(a) Seller grants to Buyer the continuing option to terminate the
ground lease for the Phase Three Parcel as a whole or in two phases, such phases
being identified as "Phase X" and "Phase Y" on the Site Plan. If the ground
lease is terminated as a whole, the Consideration for the termination shall be
$750,000. If terminated in phases, the Consideration for each phase shall be
$375,000. The Consideration shall escalate by five percent (5.0%), compounded
annually on each anniversary of the Closing Date of the initial purchase of the
Property. The option to terminate herein granted shall expire at 5:00 P.M. on
the day following the fifth anniversary of the commencement of the term of the
Ground Lease. Buyer may exercise its option(s) hereunder by notice to Seller
given prior to the expiration of the option period, in which event, as to each
exercise, the termination shall occur not later than thirty (30) days following
the end of the Inspection Period for such parcel. The Inspection Period for such
parcel shall commence on the date of exercise of the option and end thirty (30)
days thereafter, as provided in Section 1.24, and Buyer shall be afforded the
same inspection rights with respect to the parcel to be terminated or released
from the ground lease as are provided in Section 3.1 (but no deposits shall be
payable or extensions granted). At termination, the entire Consideration for the
parcel, or phase, as the case may be, shall be payable in cash or by wire
transfer, subject to ad valorem taxes of the year of termination and such other
matters as are acceptable to Buyer. Taxes for the year of closing will be
prorated as of the closing date, and the closing costs will be apportioned as
provided in Section 2.4 hereof. At closing, Seller and Buyer will execute a
lease termination agreement concerning the applicable parcel(s) and will obtain
an updated Survey at Buyer's expense and endorsement to the Title Insurance
insuring Buyer's marketable, fee simple title to such property, subject only to
additional matters acceptable to Buyer, and increasing the policy amount by the
-23-
Consideration, shall be provided, the costs to be otherwise apportioned as
provided in Section 2.4.
(b) If during the five (5) year termination option period specified
in (a) above, Seller receives a bonafide offer from an unrelated third party
(who is not an "end-user") to purchase all or any portion of the Phase Three
Parcel which Seller intends to accept (such purchase to take the form of an
outright purchase or, if required because of subdivision regulations, an
assignment of the ground lease or subletting of the leasehold estate), Seller
shall furnish a copy thereof to Buyer; whereupon Buyer shall have a period of
ten (10) business days within which to elect to acquire the parcel which is the
subject of the offer, on the same terms and conditions as stated in the offer.
Buyer shall elect such right by giving notice to Seller within said period,
whereupon Seller and Buyer shall be deemed to have agreed to sell and purchase
such parcel in accordance with and subject to the terms and conditions of such
offer. If Buyer does not elect to acquire within said period, the right to
acquire herein granted as to such phase (including the rights granted under (a),
this (b) and (c), shall be deemed to have lapsed as to such parcel upon the
transfer of such parcel to the offeror, provided that no substantial change in
the terms of such offer shall be made without notice to Buyer and an opportunity
afforded to Buyer to acquire the parcel on the modified terms, following the
same procedure as enumerated above. If Buyer does not elect to terminate the
lease under this subparagraph and Seller proceeds to a closing with the third
party, Buyer will execute and deliver to Seller or Seller's designee a special
warranty deed and other standard seller documents as to such parcel, the
expenses with respect thereto to be borne by Seller, including without
limitation documentary stamp taxes.
(c) Should Seller during the five (5) year option period
contemplated by subparagraph (a) above determine to develop Phase X or Phase Y
on the Phase Three Parcel itself, Seller may do so, subject to the Declaration,
and provided no less than fifty percent (50%) of the leasable space in the new
development is preleased under Approved Leases to "credit tenants" or other
tenants approved by Buyer (none of whom without the express consent of Buyer can
be tenants of the Phase One or Phase Two Parcels). Upon Seller's notice to Buyer
given during such five (5) year period that Seller has determined to develop
either or both of Phase X or Phase Y on the Phase Three Parcel itself, which
notice shall be accompanied by (i) copies of the executed Approved Leases for
the preleased space, (ii) copies of executed bonafide construction contract(s)
with third party contractors, and (iii) financing commitments or other
information reasonably satisfactory to Buyer to indicate Seller's ability to
construct, complete and pay for such improvements and related costs, Buyer's
option to terminate as to such Phase under subparagraph (a) shall lapse and
Buyer will have the option to be exercised within ten (10) business days after
the delivery to Buyer of the foregoing notice and supporting documentation to
terminate the ground lease as to the Phase X or Phase Y Parcel on the Phase
Three Parcel, as the case may be, upon completion and occupancy of such
development. The construction shall proceed in accordance with the Declaration
and without material interference with the operation of the Phase One and Phase
Two Parcels. If Buyer exercises its option as provided in this paragraph, upon
completion of the development, Buyer shall have an Inspection Period for such
parcel commencing on the date of issuance of the last certificate of occupancy
for tenants accepted by Seller in and leasing to a level acceptable to
-24-
Seller for the Phase Three development and ending thirty (30) days thereafter,
as provided in Section 1.24, during which Buyer shall be afforded the same
inspection and cancellation rights with respect to the parcel to be acquired as
are provided in Section 3.1 (but no deposits shall be payable or extensions
granted). If not cancelled, the Closing shall occur on the date which is one
hundred ninety (190) days after the date of the expiration of the free rent
period for the tenants occupying their Phase Three Parcel premises as aforesaid.
At closing, the ground lease as to the Phase Three Parcel shall be terminated
and the entire Consideration for the Phase Three Parcel shall be payable in cash
or by wire transfer, subject to ad valorem taxes of the year of closing and such
other matters as are acceptable to Buyer. Taxes for the year of closing will be
prorated as of the closing date, and the closing costs will be apportioned as
provided in Section 2.4 hereof. At closing, Seller and Buyer will execute a
lease termination agreement covering the property to be acquired and will obtain
an updated Survey at Buyer's expense with respect to such parcel and endorsement
to the Title Insurance insuring Buyer's marketable, fee simple title to such
property, subject only to additional matters acceptable to Buyer, the other
costs to be apportioned as provided in Section 2.4. If the development and
leasing to a level acceptable to Seller of the Phase Three Parcel is not
completed within seven (7) years after the commencement of the term of the Phase
Three Parcel ground lease, Buyer may rescind its exercise of the option herein
granted by notice to Seller given on or before 5:00 p.m. on the tenth (10th) day
following such sixth anniversary, in which event the option to terminate as to
the Phase being developed shall terminate. The Consideration to be paid to
Seller by Buyer at Closing Purchase Price for the Phase Three Parcel will be an
amount equal to (A) the Annualized Net Operating Income from Approved Leases in
the Phase Three Parcel (but only considering Approved Leases of the tenants
thereunder which have [i] accepted their premises and opened for business
therein, [ii] been paying rent for at least six [6] months without material
default under their lease; and [iii] executed and delivered to Buyer a Tenant
Estoppel Letter), projected for the period commencing with the date of the
Closing of the option and ending twelve months thereafter, (B) divided by (i) in
the case of credit tenants whose leases have initial terms of five (5) or more
years remaining on their terms, the capitalization rate of 0.105 (without the
credit reserve adjustment described in Section 1.27 above), or (ii) in the case
of "local tenants" whose leases have initial terms of three (3) or more years,
the capitalization rate of 0.12 (taking into account the credit reserve
adjustment described in Section 1.27 above), the result obtained being reduced
by (C) the Annualized Net Operating Income for the same twelve (12) month period
for any tenant of the Phase One or Phase Two Parcels who relocates with Buyer's
permission to the Phase Three Parcel, divided by the pertinent aforesaid
capitalization rate. Seller may replace such relocating tenant with another
Approved Lease, and if the tenant thereunder is in occupancy, open for business
at the premises, and has been paying its rent for six consecutive months, as of
the Closing, such reduction as to that space shall not be made. Seller will be
responsible for the entire cost and expense of lien-free construction of the
development on the Phase Three Parcel, and shall be responsible for all leasing
commissions, buildout, tenant improvements, free rent and other concessions made
to the occupancy tenants, all which shall be paid or credited to Buyer by Seller
as contemplated by Section 1.27.
8.8 Covenants and Restrictions. During the Inspection Period Seller and
Buyer shall negotiate a declaration of covenants, restrictions and easements
(the "Declaration") which will
-25-
be imposed upon the Phase Two Parcel, Phase Three Parcel and the Bank Parcel in
order to insure that any development thereon will be integrated with the
Shopping Center, will be architecturally compatible with the Shopping Center and
will be limited as to use, size and height so as not to impair the operation of
the Shopping Center or breach the lease of any tenant of the Shopping Center.
The declaration will be executed, delivered and recorded at the Closing of the
initial purchase of the Property.
8.9 Construction of Provisions. All provisions of this Agreement shall be
construed in a manner with respect to future development of the Phase Two
Parcel, the Phase Three Parcel and the Bank Parcel (such as, by way of example,
definitions, inspection rights, title, survey, representations, warranties,
estoppels, and price computation), so as to be applicable to the additional
Consideration for the Phase Two Parcel, Phase Three Parcel and the Bank Parcel.
8.10 Platting and Permitting. Buyer agrees, if necessary, to apply for and
cooperate with Seller in connection with any applications, replatting,
permitting, or other governmental approvals required relating to the
construction of any new improvements. The parties acknowledge that in all
likelihood the Shopping Center will have to be replatted before the Phase Three
Parcel can be developed. Buyer and Seller agree to cooperate with each other in
good faith so as to insure that future development, including if necessary any
replatting, shall proceed in as expeditious and efficient manner as possible.
The reasonable costs of replatting incurred from and after January 1, 1996,
shall be shared equally by Seller and Buyer (the aggregate cost to Buyer not to
exceed $7,500), but Seller shall have control over the process, subject to
Buyer's reasonable approval rights with respect thereto. Upon completion of the
replatting Seller may elect, prior to the exercise of any option by Buyer as to
the Phase Three Parcel, to terminate the lease of the Phase Three Parcel and
acquire fee simple title thereto, in which event Buyer upon notice of such
election by Seller shall convey the Phase Three Parcel by special warranty deed
to Seller, subject to current taxes, matters of record as of Buyer's acquisition
of title and the Declaration. All of the costs of such conveyance shall be paid
by Seller. In such event the options herein granted to Buyer with respect to the
Phase Three Parcel shall be incorporated into the Declaration, and construed to
apply as if Buyer were to have an option to acquire Seller's fee rather than
leasehold interest in the Phase Three Parcel on the terms and conditions
provided above.
8.11 Certain Sewer and Water Credits. Buyer and Seller acknowledge that
Seller currently has certain water and sewer credits available from the local
utilities and that such credits will not initially be transferred to Buyer as
part of the purchase, but shall be retained by Seller and used for the
construction of the improvements to be located on the various parcels, as
contemplated hereby. Buyer agrees to cooperate with Seller in allocating these
credits to the various construction projects. If, however, Seller does not
develop a particular parcel, or if there are unused credits, they shall be
transferred to Buyer without additional consideration.
8.12 Approval of Leases for Phase Two and Three and the Bank Parcel. Buyer
shall advise Seller as to whether it will give or withhold its consent as to any
proposed Lease for space in Phase Two, Phase Three or the Bank Parcel within ten
(10) business days after the proposed Lease and supporting information as to
creditworthiness and operating experience is
-26-
received by Buyer from Seller. If there is no answer to a request within said
ten (10) day period, the particular Lease shall be deemed approved. If Buyer
objects to a particular proposed Lease, it shall with its notice of objection
furnish to Seller the specifics of such objection(s). If Seller corrects such
deficiencies to Buyer's satisfaction within a reasonable period, Buyer shall
approve such Lease.
9. CONDITIONS PRECEDENT
9.1 Conditions Precedent to Buyer's Obligations. The obligations of Buyer
under this Agreement are subject to satisfaction (or written waiver by Buyer) of
each of the following conditions or requirements on or before the initial
Closing Date for the purchase of the Property:
(a) Seller's warranties and representations under this Agreement
shall be true and correct, and Seller shall not be in default hereunder.
(b) All obligations of Seller contained in this Agreement, shall
have been fully performed in all material respects and Seller shall not be in
default under any covenant, restriction, right-of-way or easement affecting the
Property.
(c) There shall have been no material adverse change in the Shopping
Center, its operations or future prospects (taking into account those
contemplated hereby), the Leases or the financial condition of tenants leasing
space in excess of 10,000 square feet since the date of this Agreement. Publix
Super Markets, Inc., Eckerds, Inc., Blockbuster Video, Raymond's and Boston
Chicken, and no less than eighty percent (80%) of the other tenants shall be
open for business in the Shopping Center and be current in paying rent and not
otherwise in material default under their respective leases.
(d) A Title Insurance Policy covering the Shopping Center, by
parcel, and all appurtenant easements, shall have been issued, subject only to
Permitted Exceptions.
(e) The physical and environmental condition of the Shopping Center
shall be unchanged from the date of this Agreement, ordinary wear and tear and
the improvements contemplated hereby excepted.
(f) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
(1) Special warranty deed in proper form for recording, duly
executed and acknowledged so as to convey to Buyer the fee simple title to the
Shopping Center, subject only to the Permitted Exceptions, the ground leases and
the Declaration;
(2) The Declaration;
-27-
(3) Leases of the Phase Two Parcel, the Phase Three Parcel
and the Bank Parcel, executed by Seller;
(4) Originals, if available, or if not, true copies of the
Leases and of the contracts, agreements, permits and licenses, and such
Materials as may be in the possession or control of Seller;
(5) A blanket assignment to Buyer of all Leases and the
Contracts, agreements, permits and licenses (to the extent assignable) as they
affect the Property and an indemnity against breach of such instruments by
Seller prior to the Closing Date;
(6) A bill of sale with respect to the Personal Property and
Materials;
(7) A title certificate, properly endorsed by Seller, as to any
items for which title certificates exist;
(8) A current rent roll for all Leases in effect showing no
changes from the rent roll attached to this Agreement other than those set forth
in the Leases or approved in writing by Buyer;
(9) All tenant estoppel letters obtained by Seller, which in the
case of the Phase One Parcel must include Publix Super Markets, Inc., Eckerds,
Inc., Blockbuster Video, Raymond's and Boston Chicken, and eighty percent (80%)
of the other tenants who have signed leases (and which in the case of any other
parcel shall include all credit tenants and eighty percent [80%] of the other
tenants who have signed leases for such parcel), without any material
exceptions, covenants, or changes to the form approved by Buyer and distributed
to the tenants by Seller;
(10) A general assignment of all assignable existing warranties;
(11) An owner's affidavit, non-foreign affidavit and such further
instruments of conveyance, transfer and assignment and other documents as may
reasonably be required by Buyer or its counsel in order to effectuate the
provisions of this Agreement and the transactions contemplated herein;
(12) The originals or copies of any real property tax bills for
the then current fiscal year and the previous year, and, if requested, the
originals or copies of any current water, sewer and utility bills which are in
Seller's custody or control;
(13) Resolutions of Seller authorizing the transactions de-
scribed herein, certified by the general partner of Seller;
(14) All keys and other means of access to the Improvements in
the possession of Seller or its agents;
-28-
(15) Materials; and
(16) Such other documents as Buyer may reasonably request to
effect the transactions contemplated by this Agreement.
In the event that all of the foregoing provisions of this Section
9.1 are not satisfied and Buyer elects in writing to terminate this Agreement,
then the Earnest Money Deposit shall be promptly delivered to Buyer by Escrow
Agent and, upon the making of such delivery, neither party shall have any
further claim against the other by reasons of this Agreement, except as provided
in Article 10.
9.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction (or written waiver by
Seller) of each of the following conditions or requirements on or before the
Closing Date for each parcel:
(a) Buyer's warranties and representations under this Agreement
shall be true and correct, and Buyer shall not be in default hereunder;
(b) All of the obligations of Buyer contained in this Agreement
shall have been fully performed by or on the date of Closing in compliance with
the terms and provisions of this Agreement;
(c) Buyer shall have delivered to Seller at or prior to the Closing
the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the balance of the Purchase
Price for such parcel;
(2) The execution of the Leases of the Phase Two, Phase Three
and the Bank Parcel, executed by Buyer;
(3) The execution of the Declaration as to the Bank Parcel and
Phase Three Parcel; and
(4) Such other documents as Seller may reasonably request to
effect the transactions contemplated by this Agreement.
In the event that all conditions precedent to Buyer's obligation to purchase
shall have been satisfied but the foregoing provisions of this Section 9.2 have
not, and Seller elects in writing to terminate this Agreement, then the Earnest
Money Deposit shall be promptly delivered to Seller by Escrow Agent and, upon
the making of such delivery, neither party shall have any further claim against
the other by reasons of this Agreement, except as provided in Article 10.
9.3 Insurance. Seller and Buyer agree to cooperate with each other such
that insurance coverage for the Shopping Center after each Closing shall be co-
ordinated and obtained
-29-
at economical and reasonable prices. The decision as to joint coverage shall be
made at each Closing and the decision of either Seller or Buyer with respect to
such coverage shall be totally within the discretion of each.
9.4 Best Efforts. Each of the parties hereto agrees to use reasonable best
efforts to take or cause to be taken all actions necessary, proper or advisable
to consummate the transactions contemplated by this Agreement.
10. POST CLOSING INDEMNITIES AND COVENANTS
10.1 Seller's Indemnity. From and after each Closing, Seller, subject to
the limitations set forth herein, shall indemnify, defend and hold harmless
Buyer from all claims, demands, liabilities, damages, penalties, costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, which may be imposed upon, asserted against or incurred or paid
by Buyer by reason of, or on account of, any breach by Seller of Seller's
warranties, representations and covenants. Seller's warranties, representations
and covenants, and the foregoing indemnity, shall survive such Closing for a
period of one (1) year. Buyer's rights and remedies herein against Seller shall
be in addition to, and not in lieu of all other rights and remedies of Buyer at
law or in equity.
10.2 Buyer's Indemnity. From and after each Closing, Buyer shall
indemnify, defend and hold harmless Seller from all claims, demands,
liabilities, damages, penalties, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, which may be imposed
upon, asserted against or incurred or paid by Seller by reason of, or on account
of, any breach by Buyer of Buyer's warranties, representations and covenants.
Buyer's warranties, representations and covenants, and the foregoing indemnity,
shall survive such Closing for a period of one (1) year. Seller's rights and
remedies herein against Buyer shall be in addition to, and not in lieu of all
other rights and remedies of Seller at law or in equity.
11. BREACH; REMEDIES
11.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
provided for each Closing, Buyer may, at Buyer's election (i) terminate this
Agreement with respect to that purchase and receive a return of the Earnest
Money Deposit, if any, and the parties shall have no further rights or
obligations under this Agreement with respect to such purchase (except as
survive termination); (ii) enforce this Agreement by suit for specific
performance; or (iii) waive such breach and close the purchase contemplated
hereby, notwithstanding such breach. Buyer shall have no other remedy except
that with respect to the indemnities given to it hereunder which survive
Closing, Buyer shall have all remedies at law and in equity.
11.2 Breach by Buyer. In the event of a breach of Buyer's covenants or
warranties herein and failure of Buyer to cure such breach within the time pro-
vided for each Closing,
-30-
Seller's sole remedy shall be to terminate this Agreement with respect to such
purchase and retain Buyer's Earnest Money Deposit, if any, as agreed liquidated
damages for such breach, and upon payment in full to Seller of such amounts, the
parties shall have no further rights, claims, liabilities or obligations under
this Agreement with respect to such purchase (except as survive termination),
except that Seller shall have all remedies at law or in equity for indemnities
given to it hereunder which survive Closing.
12. ESCROW AGENT; EARNEST MONEY DEPOSIT
12.1 Duties. By signing a copy of this Agreement, Escrow Agent
acknowledges receipt of the initial Earnest Money Deposit and agrees to comply
with the terms hereof insofar as they apply to Escrow Agent. Escrow Agent shall
receive and hold the Earnest Money Deposit in trust, to be disposed of in
accordance with the provisions of this section and Section 2.3 above.
12.2 Indemnity. Escrow Agent shall not be liable to either party except
for claims resulting from the gross negligence or willful misconduct of Escrow
Agent. If the escrow is involved in any controversy or litigation, the parties
hereto shall jointly and severally indemnify and hold Escrow Agent free and
harmless from and against any and all loss, cost, damage, liability or expense,
including costs of reasonable attorneys' fees to which Escrow Agent may be put
or which may incur by reason of or in connection with such controversy or
litigation, except to the extent it is finally determined that such controversy
or litigation resulted from Escrow Agent's gross negligence or willful
misconduct. If the indemnity amounts payable hereunder result from the fault of
Buyer or Seller (or their respective agents), the party at fault shall pay, and
hold the other party harmless against, such amounts.
12.3 Conflicting Demands. If conflicting demands are made upon Escrow
Agent with respect to the escrow, the parties hereto expressly agree that Escrow
Agent shall have the absolute right to do either or both of the following: (i)
withhold and stop all proceedings in performance of this escrow and await
settlement of the controversy by final appropriate legal proceedings or
otherwise as it may require; or (ii) file suit for declaratory relief and/or
inter-pleader and obtain an order from the court requiring the parties to
interplead and litigate in such court their several claims and rights between
themselves. Upon the filing of any such declaratory relief or interpleader suit
and tender of the Earnest Money Deposit to the court, Escrow Agent shall
thereupon be fully released and discharged from any and all obligations to
further perform the duties or obligations imposed upon it by this Agreement.
Buyer and Seller agree to respond promptly in writing to any request by Escrow
Agent for clarification, consent or instructions. Any action proposed to be
taken by Escrow Agent for which approval of Buyer and/or Seller is requested
shall be considered approved if Escrow Agent does not receive written notice of
disapproval within fourteen (14) days after a written request for approval is
received by the party whose approval is being requested. Escrow Agent shall not
be required to take any action for which approval of Buyer and/or Seller has
been sought unless such approval has been received. No disbursements shall be
made, other than as provided in Section 2.3 or to a court in an interpleader
action, unless Escrow Agent shall have given written
-31-
notice of the proposed disbursement to Buyer and Seller and neither Buyer nor
Seller shall have delivered any written objection to the disbursement within 14
days after receipt of Escrow Agent's notice. No notice by Buyer or Seller to
Escrow Agent of disapproval of a proposed action shall affect the right of
Escrow Agent to take any action as to which such approval is not required.
12.4 Continuing Counsel. Seller acknowledges that Escrow Agent is counsel
to Buyer herein and Seller agrees that in the event of a dispute hereunder or
otherwise between Seller and Buyer, Escrow Agent may continue to represent Buyer
notwithstanding that it is acting and will continue to act as Escrow Agent
hereunder, it being acknowledged by all parties that Escrow Agent's duties
hereunder are ministerial in nature.
12.5 Withdrawal. No party shall have the right to withdraw any monies or
documents deposited by it with Escrow Agent prior to the Closing or termination
of this Agreement except in accordance with the terms of this Agreement.
12.6 Tax Identification. Seller and Buyer shall provide to Escrow Agent
appropriate Federal tax identification numbers.
13. MISCELLANEOUS
13.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
where disclosure is required by law.
13.2 Radon Gas. Radon is a naturally occurring radioactive gas which, when
it has accumulated in a building in sufficient quantities, may present health
risks to persons who are exposed to it over time. Levels of radon which exceed
federal and state guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained from the county
public health unit.
13.3 Entire Agreement. This Agreement, together with the Exhibits attached
hereto, constitutes the entire agreement between the parties hereto with respect
to the subject matter hereof and may not be modified, amended or otherwise
changed in any manner except by a writing executed by Buyer and Seller.
13.4 Notices. All written notices and demands of any kind which either
party may be required or may desire to serve upon the other party in connection
with this Agreement may be served (as an alternative to personal service) by
overnight courier service at the addresses set forth below:
-32-
As to Seller: Palm Harbour Centers Associates
Attention: Jim Zengage
2499 Glades Road, Suite 104
Boca Raton, Florida 33431
With a copy to: Tripp, Scott, Conklin & Smith
Attention: Drake M. Batchelder, Esq.
110 S.E. 6th Street, 28th Floor
Ft. Lauderdale, Florida 33301
As to Buyer: RRC Acquisitions, Inc.
Attention: Robert L. Miller
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
With a copy to: RRC Acquisitions, Inc.
Attention: Randle P. Shoemaker, Esq.
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
With a copy to: Ulmer, Murchison, Ashby & Taylor
Attention: William E. Scheu, Esq.
P. O. Box 479
Suite 1600, 200 W. Forsyth St.
Jacksonville, FL 32201 (32202 for courier)
Any such notice or demand given by reputable overnight courier with charges
thereon fully prepaid and addressed to the party to be served at the addresses
set forth above shall constitute proper notice hereunder upon delivery to such
overnight courier. Seller prefers Federal Express as an overnight courier but
its use is not required.
13.5 Headings. The titles and headings of the various sections hereof are
intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
13.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
13.7 Attorneys' Fees. In the event of any litigation between the parties
hereto to enforce any of the provisions of this Agreement or any right of either
party hereto, the unsuc- cessful party to such litigation agrees to pay to the
successful party all costs and expenses,
-33-
including reasonable attorneys' fees, whether or not incurred in trial or on
appeal, incurred therein by the successful party, all of which may be included
in and as a part of the judgment rendered in such litigation. Any indemnity
provisions herein shall include indemnification for reasonable attorneys' fees
and costs, whether or not suit be brought and including fees and costs on
appeal.
13.8 Time of Essence. Time is of the essence of this Agreement.
13.9 Governing Law. This Agreement shall be governed by the laws of
Florida and the parties hereto agree that any litigation between the parties
hereto relating to this Agreement shall take place in a court located in Flagler
County, State of Florida. Each party waives its right to jurisdiction or venue
in any other location.
13.10 Successors and Assigns. The terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No third parties, including any brokers or
creditors, shall be beneficiaries hereof.
13.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
13.12 Gender; Plural; Singular; Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
13.13 Further Instruments, Etc. Seller and Buyer shall, at or after
Closing, execute any and all documents and perform any and all acts reasonably
necessary to fully implement this Agreement.
13.14 Survival. The obligations of Seller and Buyer intended to be
performed after the Closing shall survive the closing.
13.15 No Recording. Neither this Agreement nor any notice, memorandum or
other notice or document relating hereto shall be recorded.
-34-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Witnesses:
RRC ACQUISITIONS, INC.,
____________________________ a Florida corporation
[ - - - - - - - - - - - - - - - ]
Name (Please Print)
By:
____________________________ Its:
[ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ] Date: ______________________, 1996
Name (Please Print)
Tax Identification No. 59-3210155
"BUYER"
PALM HARBOUR CENTERS ASSOCIATES,
a Florida general partnership
By Its General Partner:
____________________________ P. Coast Corp., a Florida corporation
[ - - - - - - - - - - - - - - - ]
Name (Please Print)
By:_______________________________
____________________________ Jim Zengage [ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ]
President Name (Please Print)
Date: ______________________, 1996
Tax Identification No:
"SELLER"
____________________________ ULMER, MURCHISON, ASHBY & TAYLOR
[ - - - - - - - - - - - - - - - ]
Name (Please Print)
By:
____________________________ Its Authorized Agent
[ - - - - - - - - - - - - - - - ]
Name (Please Print) Date: ______________________, 1996
"ESCROW AGENT"
-35-
EXHIBIT 1.5
Audit Representation Letter
--------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
2700 Independent Square
One Independent Drive
Jacksonville, Florida 32202
RE: ___________________________________
(Acquisition Property Name)
Dear Sirs:
We are writing at your request to confirm our understanding that your
audit of the Statement of Revenue and Certain Expenses of _________________ for
the twelve months ended December 31, 19____, was made for the purpose of
expressing an opinion as to whether the statement presents fairly in all
material respects the results of its operations in conformity with generally
accepted accounting principles. In connection with your audit we confirm, to the
best of our knowledge and belief, the following representations made to you
during your audit:
1. We have made available to you all financial records and related data in
our possession for the period under audit.
2. To the best of our knowledge there have been no undisclosed:
(a) Irregularities involving any member of management or employees who have
significant roles in the system of internal accounting control;
(b) Irregularities involving other persons that could have a material
effect on the statement of revenue and certain expenses;
(c) Violations or possible violations of laws or regulations the
effects of which should be considered for disclosure in the statement of
revenue and certain expenses.
3. There are no:
(a) Unasserted claims or assessments that our lawyers have advised us are
probable of assertion and must be disclosed in accordance with Statement of
Financial Accounting Standards No. 5;
(b) Material gain or loss contingencies that are required to be disclosed
by Statement of Financial Accounting Standards No. 5;
(c) Material transactions that have not been properly recorded in the
accounting records underlying the financial statement; and
(d) Events that have occurred subsequent to the audit period that
should require adjustment to or disclosure in the Statement of Revenue and
Certain Expenses.
4. Provision, when material, has been made for losses to be sustained in
the fulfillment of, or from inability to fulfill, any contract commitments.
5. The shopping center has satisfactory title to all owned assets, and
there are no liens or encumbrances on such assets nor has any asset been
pledged, that has not been disclosed.
6. All contractual agreements that would have a material effect on the
Statement of Revenue and Certain Expenses have been complied with.
7. There have been no:
(a) Material undisclosed related party transactions and related
amounts receivable or payable, including sales, purchases, loans,
transfer, and guarantees;
(b) Agreements to repurchase assets previously sold.
Further, we acknowledge that we are responsible for the fair presentation
of the Statement of Revenue and Certain Expenses prepared in accordance with
generally accepted accounting principles.
Very truly yours,
__________________________(Seller)
By:_________________________________
Its:______________________________
EXHIBIT 1.38
Rent Roll
EXHIBIT 1.42
Site Plan
EXHIBIT 1.44
Form of Estoppel Letter
_____________________, 199_
RE: ___________________________ (Name of Shopping Center)
Ladies and Gentlemen:
The undersigned (Tenant) has been advised you may purchase the above
Shopping Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of
_____________________________________, Landlord, in the above
Shopping Center, and is currently in possession and paying rent
on premises known as Store No. _______________ [or Address:
---------------------------------------------------------------],
and containing approximately _____________ square feet, under the
terms of the lease dated ______________________, which has (not)
been amended by amendment dated ________________________ (the
"Lease"). There are no other written or oral agreements between
Tenant and Landlord. Tenant neither expects nor has been promised
any inducement, concession or consideration for entering into the
Lease, except as stated therein, and there are no side agreements
or understandings between Landlord and Tenant.
2. The term of the Lease commenced on ____________________,
expiring on ___________________, with options to extend of
________________ (____) years each.
3. As of ____________________, monthly minimum rental is
$_______________ a month.
4. Current additional monthly payments for expense reimbursement total
$____________ per month for common area maintenance, property
insurance and real estate taxes.
5. Tenant has given [no security deposit] [a security deposit of
$______________].
6. No payments by Tenant under the Lease have been made for more than
one (1) month in advance, and minimum rents and other charges under
the Lease are current.
7. All matters of an inducement nature and all obligations of the
Landlord under the Lease concerning the construction of the Tenant's
premises and development of the Shopping Center, including without
limitation, parking requirements, have been performed by Landlord.
8. Tenant knows of no default by either Landlord or Tenant under the
Lease, and knows of no situations which, with notice or the passage
of time, or both, would constitute a default. Tenant has no rights
to off-set or defense against Landlord as of the date hereof.
Very truly yours,
-------------------------------------------
____________________________________(Tenant)
Mailing Address:
____________________________ By:________________________________________
Its:_________________________________
- ----------------------------
EXHIBIT 3.1(e)
Pro Forma Income and Expense Statement
for the Shopping Center
EXHIBIT 4.14
Governmental Agreements
EXHIBIT 8.2
Plans and Specifications
for Additional Retail Space
I:\USERS\WES\REG\PALM\PSA