PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the 24th day of February, 1998, between
XXXXXXX XXXXX, individually ("Pine"), PINES HIGHLAND SQUARE ASSOCIATES, LTD., a
Florida limited partnership ("Partnership"), and PINES GROUP, INC., a Florida
corporation ("PGI"), and RRC ACQUISITIONS TWO, INC., a Florida corporation, its
designees, successors and assigns ("Buyer").
Background
Buyer wishes to purchase a shopping center in the City of Jacksonville,
County of Xxxxx, State of Florida, commonly known as Highland Square Shopping
Center (the "Shopping Center"). The Shopping Center is comprised of three
parcels, one of which ("Parcel One") is owned by Pine, another of which ("Parcel
Two") is owned by Highland Square, and the third is owned by Pine and PGI as
Tenants in Common.
Pine, Highland Square and PGI desire to sell the Shopping Center to
Buyer.
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Pine,
Highland Square and PGI agree to sell and Buyer agrees to purchase the Shopping
Center on the following terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to
time.
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit .
1.4 Buyer means the party identified as Buyer on the initial page
hereof.
1.5 Closing means generally the execution and delivery of those
documents and funds necessary to effect the sale of the Property by Seller to
Buyer.
1.6 Closing Date means the date on which the Closing occurs.
1.7 Contracts means all service contracts, agreements or other
instruments to be assigned by Seller to Buyer at Closing.
1.8 Day means a calendar day, whether or not the term is capitalized.
1.9 Xxxxxxx Money Deposit means the deposit delivered by Buyer to
Escrow Agent prior to the Closing under Sections and of this Agreement, together
with the earnings thereon, if any.
1.10 Environmental Claim means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material or actual or alleged Hazardous Material Activity, (c) from
any abatement, removal, remedial, corrective, or other response action in
connection with a Hazardous Material, Environmental Law or other order of a
governmental authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
1.11 Environmental Law means any current legal requirement in effect at
the Closing Date pertaining to (a) the protection of health, safety, and the
indoor or outdoor environment, (b) the conservation, management, protection or
use of natural resources and wildlife, (c) the protection or use of source water
and groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC ss.ss.9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation Act of
1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC ss.ss.6901 et
seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 USC ss.ss.1251 et seq., Clean Air Act of 1966, as amended, 42 USC
ss.ss.7401 et seq., Toxic Substances Control Act of 1976, 15 USC ss.ss.2601 et
seq., Hazardous Materials Transportation Act, 49 USC App. ss.ss.1801,
Occupational Safety and Health Act of 1970, as amended, 29 USC ss.ss.651 et
seq., Oil Pollution Act of 1990, 33 USC ss.ss.2701 et seq., Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC App. ss.ss.11001 et seq.,
National Environmental Policy Act of 1969, 42 USC ss.ss.4321 et seq., Safe
Drinking Water Act of 1974, as amended by 42 USC ss.ss.300(f) et seq., and any
similar, implementing or successor law, any amendment, rule, regulation, order
or directive, issued thereunder.
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1.12 Escrow Agent means Chicago Deferred Exchange Corporation, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (Fax 312/000-0000).
1.13 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
1.14 Hazardous Material means any asbestos, petroleum, petroleum
product, dry cleaning solvent or chemical, biological or medical waste, "sharps"
or any other hazardous or toxic substance as defined in or regulated by any
Environmental Law in effect at the pertinent date or dates.
1.15 Hazardous Material Activity means any activity, event, or
occurrence at or prior to the Closing Date involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling or corrective or response
action to any Hazardous Material.
1.16 Improvements means all buildings, structures or other improvements
situated on the Real Property.
1.17 Inspection Period means the period of time which expires at the
end of business on Wednesday, March 25, 1998. Buyer may extend the Inspection
Period for an additional fifteen days by depositing an additional $50,000 with
Escrow Agent which additional deposit shall become a part of the Xxxxxxx Money
Deposit provided for in Section hereof.
1.18 Lady's Island Publix means the free-standing Publix grocery store
and related facilities on lands located at the intersection of Sea Island
Parkway and Sam's Point Road at Lady's Island Drive, in Beaufort County, South
Carolina, owned by Buyer and leased to Publix Super Markets, Inc. ("Publix"),
commonly known as "Lady's Island Publix".
1.19 Leases means all leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of the Property.
1.20 Materials means all plans, drawings, specifications, soil test
reports, environmental reports, market studies, surveys, and similar
documentation, if any, owned by or in the possession of Seller with respect to
the Property, Improvements and any proposed improvements to the Property, which
Seller may lawfully transfer to Buyer except that, as to financial and other
records, Materials shall include only photostatic copies.
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1.21 Other Centers means the Lady's Island Publix and the Xxxxx Road Xxxx-
Xxxxx.
1.22 Permitted Exceptions means only the following interests, liens and
encumbrances:
(a) Liens for ad valorem taxes not payable on or before Closing;
(b) Rights of tenants under Leases; and
(c) Other matters determined by Buyer to be acceptable.
1.23 Personal Property means all (a) sprinkler, plumbing, heating,
air-conditioning, electric power or lighting, incinerating, ventilating and
cooling systems, with each of their respective appurtenant furnaces, boilers,
engines, motors, dynamos, radiators, pipes, wiring and other apparatus,
equipment and fixtures, elevators, partitions, fire prevention and extinguishing
systems located in or on the Improvements, (b) all Materials, and (c) all other
personal property used in connection with the Improvements, provided the same
are now owned or are acquired by Seller prior to the Closing.
1.24 Property means collectively the Real Property, the Improvements
and the Personal Property.
1.25 Prorated means the allocation of items of expense and income
between Buyer and Seller based upon that percentage of the time period as to
which such item of expense or income relates which has expired as of the date at
which the proration is to be made.
1.26 Purchase Price means the consideration agreed to be paid by Buyer
to Seller for the purchase of the Property as set forth in Section (subject to
adjustments as provided herein).
1.27 Real Property means the lands more particularly described on
Exhibit , together with all easements, licenses, privileges, rights of way and
other appurtenances pertaining to or accruing to the benefit of such lands.
1.28 Release means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material at or
prior to the Closing Date.
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1.29 Rent Roll means the list of Leases attached hereto as Exhibit ,
identifying with particularity the space leased by each tenant, the term
(including extension options), square footage and applicable rent, common area
maintenance, tax and other reimbursements, security deposits and similar data.
1.30 Seller means Pine, Highland Square and PGI, collectively, except
that as to particular representations and warranties, and covenants, as they are
made with respect to any particular parcel included in the Real Property (and
the improvements thereon), or to the selling entities, as the case may be, the
particular representation, warranty or covenant shall be deemed to have been
made only by the entity which owns the particular parcel, or to the particular
entity or person, as applicable.
1.31 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions prepared by
Seller for the Property, as of and for the two (2) calendar years next preceding
the date of this Agreement and all monthly reports of income, expense and cash
flow prepared by Seller for the Property, which shall be consistent with past
practice, for any period beginning after the latest of such calendar years, and
ending prior to Closing.
1.32 Shopping Center means the Shopping Center identified on the
initial page hereof, including the 11.56 acre unimproved parcel included in the
Real Property.
1.33 Survey means a map of a stake survey of the Real Property which
shall comply with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, jointly established and adopted by ALTA and ACSM in 1992, and includes
items 1, 2, 3, 4, 6, 7, 8, 9, 10 and 11 of Table "A" thereof, which meets the
accuracy standards (as adopted by ALTA and ACSM and in effect on the date of the
Survey) of an urban survey, which is dated not earlier than thirty (30) days
prior to the Closing, and which is certified to Buyer, Seller, the Title
Insurance company providing Title Insurance to Buyer, and Buyer's lender, and
dated as of the date the Survey was made.
1.34 Surviving Mortgage means a Mortgage dated January 31, 1996, from
Seller to Allstate Life Insurance Company, with a principal balance of
$4,024,418.58 as of February 1, 1998, bearing interest at eight and forty-five
one-hundredths percent (8.45%) per annum and amortizing over a twenty (20) year
period which commenced February 1, 1996, and which matures on February 1, 2006
(subject to extension for an additional ten (10) years as provided in the loan
documents.
1.35 Tenant Estoppel Letter means a letter or other certificate from a
tenant certifying as to certain matters regarding such tenant's Lease, in
substantially the same form as attached hereto as Exhibit , or in the case of
national or regional "credit"
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tenants identified as such on the Rent Roll, the form customarily used by such
tenant provided the information disclosed is acceptable to Buyer.
1.36 Title Defect means any exception in the Title Insurance Commitment
or any matter disclosed by the Survey, other than a Permitted Exception.
1.37 Title Insurance means an ALTA Form B Owners Policy of Title
Insurance for the full Purchase Price insuring marketable title in Buyer in fee
simple, subject only to the Permitted Exceptions, issued by Chicago Title
Insurance Company.
1.38 Title Insurance Commitment means a binder whereby the title
insurer agrees to issue the Title Insurance to Buyer.
1.39 Transaction Documents means this Agreement, the deed conveying the
Property, the assignment of leases, the xxxx of sale conveying the Personal
Property and all other documents required or appropriate in connection with the
transactions contemplated hereby.
1.40 Xxxxx Road Xxxx-Xxxxx means the free-standing Xxxx-Xxxxx grocery
store and related facilities located at the intersection of Xxxxx Road and U.S.
Highway 90, in Tallahassee, Xxxx County, Florida, owned by Buyer and leased to
Xxxx-Xxxxx Stores, Inc. ("Xxxx-Xxxxx"), commonly known as "Xxxxx Road
Winn-
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be $12,000,000. The
Purchase Price shall be payable by Buyer's assumption of the Surviving Mortgage,
the outstanding principal balance to reduce the Purchase Price and the balance
of the Purchase Price shall be paid in cash at Closing.
(b) Adjustments to the Purchase Price. The Purchase Price
shall be adjusted as of the Closing Date by:
(1) prorating the Closing year's real and tangible personal
property taxes as of the Allocation Date (if the amount of the current year's
property taxes are not available, such taxes will be prorated based upon the
prior year's assessment);
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(2) prorating as of the Allocation Date cash receipts and
expenditures for the Shopping Center and other items customarily prorated in
transactions of this sort; and
(3) subtracting the amount of security deposits, prepaid rents
from tenants under the Leases, and credit balances, if any, of any tenants, and
adding any expenses prepaid by Seller. Any rents, percentage rents or tenant
reimbursements payable by tenants after the Allocation Date but applicable to
periods on or prior to the Allocation Date shall be remitted to Seller by Buyer
within thirty (30) days after receipt, less any expenses of the Property
incurred on or prior to the Allocation Date by Seller but not paid by Seller
prior to Closing and discovered by Buyer after Closing. Buyer shall have no
obligation to collect delinquencies, but should Buyer collect any delinquent
rents or other sums which cover periods prior to the Allocation Date and for
which Seller have received no proration or credit, Buyer shall remit same to
Seller within thirty (30) days after receipt, less any costs of collection.
Buyer will not interfere in Seller's efforts to collect sums due it prior to the
Closing. Seller will remit to Buyer promptly after receipt any rents, percentage
rents or tenant reimbursements received by Seller after Closing which are
attributable to periods occurring after the Allocation Date. Undesignated
receipts after Closing of either Buyer or Seller from tenants in the Shopping
Center shall be applied first to then current rents and reimbursements for such
tenant(s), then to delinquent rents and reimbursements attributable to
post-Allocation Date periods, and then to pre-Allocation Date periods.
2.2 Xxxxxxx Money Deposit. An Xxxxxxx Money Deposit in the amount of
$50,000 shall be delivered to Escrow Agent within three (3) days after the date
of execution by the last of Buyer or Seller to execute and transmit a copy of
this Agreement to the other. This Agreement may be terminated by Seller if the
Xxxxxxx Money Deposit is not received by Escrow Agent by such deadline. The
Xxxxxxx Money Deposit paid by Buyer shall be deposited by Escrow Agent in an
interest bearing account, and shall be held and disbursed by Escrow Agent as
specifically provided in this Agreement. The Xxxxxxx Money Deposit shall be
applied to the Purchase Price at the Closing.
2.3 Closing Costs.
(a) Seller shall pay:
(1) Documentary stamp and other transfer taxes imposed upon
the transactions contemplated hereby;
(2) Cost of satisfying any liens on the Property;
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(3) Cost of title insurance and the costs, if any, of curing title
defects and recording any curative title documents;
(4) All broker's commissions, finders' fees and similar expenses
incurred by either party in connection with the sale of the Property, subject
however to Buyer's indemnity given in Section of this Agreement;
(5) Seller's attorneys' fees relating to the sale of the Property,
if any;
and
(6) One-half of the costs incurred in connection with the
assumption of the Surviving Mortgage, including assumption fees and the fees
of the lender's counsel.
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
(2) Costs of the Phase 1 environmental site assessment to be
obtained by Buyer;
(3) Cost of the Survey;
(4) One-half of the costs incurred in connection with the
assumption of the Surviving Mortgage, including assumption fees and the fees
of the lender's counsel.
(5) Cost of recording the deed; and
(6) Buyer's attorneys' fees.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Property, review the economic data, underwrite the
tenants and review their Leases, and to otherwise conduct its due diligence
review of the Property and all books, records and accounts of Seller related
thereto. Buyer hereby agrees to indemnify and hold Seller harmless from any
damages, liabilities or claims for property damage or personal injury arising
out of such inspection and investigation by Buyer or
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its agents or independent contractors. Within the Inspection Period, Buyer may,
in its sole discretion and for any reason or no reason, elect to go forward with
this Agreement to closing, which election shall be made by notice to Seller
given within the Inspection Period. If such notice is not timely given, this
Agreement and all rights, duties and obligations of Buyer and Seller hereunder,
except any which expressly survive termination, shall terminate and Escrow Agent
shall forthwith return to Buyer the Xxxxxxx Money Deposit. If Buyer so elects to
go forward, the Xxxxxxx Money Deposit shall be increased by an additional
deposit of $100,000 (to be deposited with Escrow Agent no later than three (3)
business days following the end of the Inspection Period), and shall not be
refundable except upon the terms otherwise set forth herein.
(b) Seller will promptly furnish or make available to Buyer
the documents enumerated on Exhibit attached hereto. Buyer, through its
officers, employees and other authorized representatives, shall have the right
to reasonable access to the Property and all records of Seller related thereto
which are in the custody of Seller or Seller's agents, including without
limitation all Leases and Seller Financial Statements, at reasonable times
during the Inspection Period for the purpose of inspecting the Property, taking
soil and ground water samples, conducting Hazardous Materials inspections,
reviewing the books and records of Seller concerning the Property and otherwise
conducting its due diligence review of the Property. Seller shall cooperate with
and assist Buyer in making such inspections and reviews. Seller shall give Buyer
any authorizations which may be required by Buyer in order to gain access to
records or other information pertaining to the Property or the use thereof
maintained by any governmental or quasi-governmental authority or organization.
Buyer, for itself and its agents, agrees not to enter into any contract with
existing tenants without the written consent of Seller if such contract would be
binding upon Seller should this transaction fail to close. Buyer shall have the
right to have due diligence interviews and other discussions or negotiations
with tenants.
(c) Buyer, through its officers or other authorized
representatives, shall have the right to reasonable access to all Materials
(other than privileged or confidential litigation materials) for the purpose of
reviewing and copying the same.
3.2 Hazardous Material. Prior to the end of the Inspection Period Buyer
may order environmental assessments of the Property. A copy of any assessment
report, if made, shall be furnished by Buyer to Seller promptly upon its
completion. If an assessment report discloses the existence of any Hazardous
Material or any other matters concerning the environmental condition of the
Property or its environs, Buyer may notify Seller in writing, within the
Inspection Period that Buyer elects to terminate this Agreement, whereupon this
Agreement shall terminate and Escrow Agent shall return to Buyer its Xxxxxxx
Money Deposit.
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3.3 Time and Place of Closing. Unless otherwise agreed by the parties,
the Closing shall take place at Suite 1500, 0000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, at 10:00 A.M. on the date which is the fifteenth
(15th) day following the expiration of the Inspection Period, provided that
Buyer may designate an earlier date for Closing.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this
Agreement and as of the Closing and where indicated covenants and agrees as
follows:
4.1 Organization; Authority. Pine, Highland Square and PGI are duly
organized, validly existing and in good standing under the laws of the State of
Florida, and each has full power and authority to enter into and perform this
Agreement in accordance with its terms. The persons executing this Agreement and
other Transaction Documents have been duly authorized to do so on behalf of
Seller. Neither Pine, nor Highland Square, nor PGI is a "foreign person" under
Sections 1445 or 897 of the Internal Revenue Code, nor is this transaction
subject to any withholding under any state or federal law.
4.2 Authorization; Validity. The execution and delivery of this
Agreement by Highland Square and PGI and Seller's consummation of the
transactions contemplated by this Agreement have been duly and validly
authorized. This Agreement constitutes a legal, valid and binding agreement of
Pine, Highland Square and PGI enforceable against each in accordance with its
terms.
4.3 Title. Seller is the owner in fee simple of all of the Property,
subject only to the Permitted Exceptions.
4.4 Commissions. Seller has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or the Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for Xxxxx and Company, Inc., and Seller agrees to indemnify Buyer from
any such claim arising by, through or under Seller.
4.5 Sale Agreements. The Property is not subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller relating to the Property,
except a dispute
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with Eckerd Corporation which Seller shall resolve before Closing or Seller
shall indemnify and hold Buyer harmless from any loss or damage therefrom.
4.7 Leases. There are no Leases affecting the Property, oral or
written, except as listed on the Rent Roll, and any Leases or modifications
entered into between the date of this Agreement and the Closing Date with the
consent of Buyer. Copies of the Leases, which have been delivered to Buyer or
shall be delivered to Buyer within five (5) days from the date hereof, are, to
the best knowledge of Seller, true, correct and complete copies thereof, subject
to the matters set forth on the Rent Roll. Between the date hereof and the
Closing Date, Seller will not terminate or modify existing Leases or enter into
any new Leases without the consent of Buyer. All of the Property's tenant leases
are in good standing and to the best of Seller's knowledge no defaults exist
thereunder except as noted on the Rent Roll. No rent or reimbursement has been
paid more than one (1) month in advance and no security deposit has been paid,
except as stated on the Rent Roll. No tenants under the Leases are entitled to
interest on any security deposits. No tenant under any Lease has or will be
promised any inducement, concession or consideration by Seller other than as
expressly stated in such Lease, and except as stated therein there are and will
be no side agreements between Seller and any tenant.
4.8 Financial Statements. Each of the Seller Financial Statements
delivered or to be delivered to Buyer hereunder has or will have been prepared
in accordance with the books and records of Seller and presents fairly in all
material respects the financial condition, results of operations and cash flows
for the Property as of and for the periods to which they relate. All are in
conformity with generally accepted accounting principles applied on a consistent
basis. There has been no material adverse change in the operations of the
Property or its prospects since the date of the most recent Seller Financial
Statements. Seller covenants to furnish promptly to Buyer copies of the Seller
Financial Statements together with unaudited updated monthly reports of cash
flow for interim periods beginning after December 31, 1996. Buyer and its
independent certified accountants shall be given access to Seller's books and
records at any time prior to and for one (1) month following Closing upon
reasonable advance notice in order that they may verify the financial statements
prior to Closing. Seller agrees to execute and deliver to Buyer or its
accountants the Audit Representation Letter should Buyer's accountants audit the
records of the Shopping Center.
4.9 Contracts. Except for Leases and Permitted Exceptions, there are no
management, service, maintenance, utility or other contracts or agreements
affecting the Property, oral or written, which extend beyond the Closing Date
and which would bind Buyer or encumber the Property, at Buyer's option, more
than thirty (30) days after Closing. All such Contracts are in full force and
effect in accordance with their respective terms, and all obligations of Seller
under the Contracts required to be
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performed to date have been performed in all material respects; no party to any
Contract has asserted any claim of default or offset against Seller with respect
thereto and no event has occurred or failed to occur, which would in any way
affect the validity or enforceability of any such Contract; and the copies of
the Contracts delivered to Buyer prior to the date hereof are true, correct and
complete copies thereof. Between the date hereof and the Closing, Seller
covenants to fulfill all of its obligations under all Contracts, and covenants
not to terminate or modify any such Contracts or enter into any new contractual
obligations relating to the Property without the consent of Buyer (not to be
unreasonably withheld) except such obligations as are freely terminable without
penalty by Seller upon not more than thirty (30) days' written notice.
4.10 Maintenance and Operation of Property. From and after the date
hereof and until the Closing, Seller covenants to keep and maintain and operate
the Property substantially in the manner in which it is currently being
maintained and operated and covenants not to cause or permit any waste of the
Property nor undertake any action with respect to the operation thereof outside
the ordinary course of business without Buyer's prior written consent. In
connection therewith, Seller covenants to make all necessary repairs and
replacements until the Closing so that the Property shall be of substantially
the same quality and condition at the time of Closing as on the date hereof.
Seller covenants not to remove from the Improvements or the Real Property any
article included in the Personal Property. Seller covenants to maintain such
casualty and liability insurance on the Property as it is presently being
maintained.
4.11 Permits and Zoning. To the best knowledge of Seller, there are no
material permits and licenses (collectively referred to as "Permits") required
to be issued to Seller by any governmental body, agency or department having
jurisdiction over the Property which materially affect the ownership or the use
thereof which have not been issued. The Property is properly zoned for its
present use and is not subject to any local, regional or state development
order. The use of the Property is consistent with the land use designation for
the Property under the comprehensive plan or plans applicable thereto, and all
concurrency requirements have been satisfied. There are no outstanding
assessments, impact fees or other charges related to the Property.
4.12 Rent Roll; Tenant Estoppel Letters. The Rent Roll is true and
correct in all respects. Seller agrees to use its best reasonable efforts to
obtain current Tenant Estoppel Letters acceptable to Buyer from all Tenants
under Leases, which Tenant Estoppel Letters shall confirm the matters reflected
by the Rent Roll as to the particular tenant and shall be otherwise acceptable
to Buyer in all respects.
4.13 Condemnation. Neither the whole nor any portion of the Property,
including access thereto or any easement benefitting the Property, is subject to
temporary requisition of use by any governmental authority or has been
condemned, or taken in any proceeding similar to a condemnation proceeding, nor
is there now
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pending any condemnation, expropriation, requisition or similar proceeding
against the Property or any portion thereof. Seller has received no notice nor
has any knowledge that any such proceeding is contemplated.
4.14 Governmental Matters. Seller has not entered into any commitments
or agreements with any governmental authorities or agencies affecting the
Property that have not been disclosed in writing to Buyer and Seller has
received no notices from any such governmental authorities or agencies of
uncured violations at the Property of building, fire, air pollution or zoning
codes, rules, ordinances or regulations, environmental and hazardous substances
laws, or other rules, ordinances or regulations relating to the Property. Seller
shall be responsible for the remittance of all sales tax for periods occurring
prior to the Allocation Date directly to the appropriate state department of
revenue.
4.15 Repairs. Seller has received no notice of any requirements or
recommendations by any lender, insurance companies, or governmental body or
agencies requiring or recommending any repairs or work to be done on the
Property which have not already been completed.
4.16 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will (a) require Seller to file or register
with, notify, or obtain any permit, authorization, consent, or approval of, any
governmental or regulatory authority; (b) conflict with or breach any provision
of the organizational documents of Seller; (c) violate or breach any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Seller is a party, or by which
Seller, the Property or any of Seller's material assets may be bound; or (d)
violate any order, writ, injunction, decree, judgment, statute, law or ruling of
any court or governmental authority applicable to Seller, the Property or any of
Seller's material assets.
4.17 To Seller's knowledge, the Surviving Mortgage is presently held by
Allstate Life Insurance Company and is in good standing with no defaults
existing thereunder. The principal balance outstanding as of February 1, 1998,
is $4,024,418.58, and the monthly payment of principal and interest is
$36,315.77. The interest rate is eight and forty-five one-hundredths percent
(8.45%) per annum. Seller is not required to make deposits with the holder of
the Surviving Mortgage for taxes and insurance. The transfer of the Property to
Buyer will require the consent of the holder of the Surviving Mortgage. Prior to
Closing, Seller shall use reasonable efforts to cause the holder of the
Surviving Mortgage to execute and deliver to Buyer an estoppel letter and
consent consenting to this transaction, certifying as to the foregoing
- 13 -
matters and releasing Seller from the Mortgage, in form and substance
satisfactory to Buyer and Seller. Seller will maintain the Surviving Mortgage in
good standing, without default, until Closing.
4.18 Environmental Matters.
(a) Seller represents and warrants as of the date hereof and as of the
Closing that:
(1) Seller has not, and has no knowledge of any other person
who has, caused any Release, threatened Release, or disposal of any Hazardous
Material at the Property in any material quantity;
(2) The Property does not now contain and to the best of
Seller's knowledge has not contained any: (a) underground storage tank, (b)
material amounts of asbestos-containing building material, (c) landfills or
dumps, (d) more than one dry cleaning drop off facility and one coin laundry and
cleaner tenant;; or (e) hazardous waste management facility as defined pursuant
to the Resource Conservation and Recovery Act ("RCRA") or any comparable state
law. The Property is not a site on or nominated for the National Priority List
promulgated pursuant to Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") or any state remedial priority list promulgated or
published pursuant to any comparable state law; and
(3) There are to the best of Seller's knowledge no conditions or
circumstances at the Property which pose a risk to the environment or the health
or safety of persons.
(b) Seller shall indemnify, hold harmless, and hereby waives
any claim for contribution against Buyer for any damages to the extent they
arise from the inaccuracy or breach of any representation or warranty by Seller
in this section of this Agreement. This indemnity shall survive Closing
indefinitely.
4.19 No Untrue Statement. Neither this Agreement nor any exhibit nor
any written statement or Transaction Document furnished or to be furnished by
Seller to Buyer in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of material fact or
omits or will omit any material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
4.20 AS-IS ACQUISITION. BUYER ACKNOWLEDGES THAT, EXCEPT AS
EXPRESSLY REPRESENTED AND WARRANTED BY SELLER IN THIS AGREEMENT,
THERE HAVE BEEN NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
- 14 -
IMPLIED, UPON WHICH BUYER IS RELYING WHICH HAVE BEEN MADE BY SELLER OR UPON
SELLER'S BEHALF RELATING IN ANY WAY TO THE PROPERTY; AND THAT SUBJECT TO ANY AND
ALL CONDITIONS TO BUYER'S OBLIGATIONS DESCRIBED IN THIS AGREEMENT AND TO
SELLER'S REPRESENTATIONS AND WARRANTIES EXPRESSED IN THIS AGREEMENT, BUYER IS
ACQUIRING THE PROPERTY "AS IS". THE PROVISIONS OF THIS SECTION 4.20 SHALL
SURVIVE THE CLOSING OF THE TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power
and authority to enter into and perform this Agreement in accordance with its
terms, and the persons executing this Agreement and other Transaction Documents
on behalf of Buyer have been duly authorized to do so.
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except
Xxxxx and Company, Inc., whose commission shall be paid by Seller; and Buyer
agrees to indemnify Seller from any other such claim arising by, through or
under Buyer.
6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of the Property will be transferred to Buyer
at the conclusion of the Closing.
6.2 Risk of Loss. All risk of loss to the Property shall remain upon
Seller until the conclusion of the Closing. If, before the possession of the
Property has been transferred to Buyer, any material portion of the Property is
damaged by fire or other casualty and will not be restored by the Closing Date
or if any material portion of the Property is taken by eminent domain or there
is a material obstruction of access to the
- 15 -
Improvements by virtue of a taking by eminent domain, Seller shall, within ten
(10) days of such damage or taking, notify Buyer thereof and Buyer shall have
the option to:
(a) terminate this Agreement upon notice to Seller given
within ten (10) business days after such notice from Seller, in which case Buyer
shall receive a return of its Xxxxxxx Money Deposit; or
(b) proceed with the purchase of the Property, in which event
Seller shall assign to Buyer all Seller's right, title and interest in all
amounts due or collected by Seller under the insurance policies or as
condemnation awards. In such event, the Purchase Price shall be reduced by the
amount of any insurance deductible to the extent it reduced the insurance
proceeds payable.
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance and Survey. Prior to the end of the
Inspection Period Buyer's counsel shall order the Title Insurance Commitment and
a Survey (Seller having furnished Buyer copies of existing surveys and other
title information in its possession). Buyer will have ten (10) days from receipt
of the Title Commitment (including legible copies of all recorded exceptions
noted therein) and Survey to notify Seller in writing of any Title Defects,
encroachments or other matters not acceptable to Buyer which are not permitted
by this Agreement. Any Title Defect or other objection disclosed by the Title
Insurance Commitment (other than liens removable by the payment of money) or the
Survey which is not timely specified in Buyer's written notice to Seller of
Title Defects shall be deemed a Permitted Exception. Seller shall notify Buyer
in writing within five (5) days of Buyer's notice if Seller intends to cure any
Title Defect or other objection. If Seller elects to cure, Seller shall use
diligent efforts to cure the Title Defects and/or objections by the Closing Date
(as it may be extended). If Seller elects not to cure or if such Title Defects
and/or objections are not cured, Buyer shall have the right, in lieu of any
other remedies, to: (i) refuse to purchase the Property, terminate this
Agreement and receive a return of the Xxxxxxx Money Deposit; or (ii) waive such
Title Defects and/or objections and close the purchase of the Property subject
to such Title Defects.
(b) Miscellaneous Title Matters. If a search of the title
discloses judgments, bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller shall on request deliver
to Buyer an affidavit stating, if true, that such judgments, bankruptcies or the
returns are not against Seller. Seller further agrees to execute and deliver to
the Title Insurance agent at Closing such documentation, if any, as the Title
Insurance underwriter shall reasonably require to
- 16 -
evidence that the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized and that there
are no mechanics' liens on the Property or parties in possession of the Property
other than tenants under Leases and Seller.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to satisfaction or waiver by Buyer of
each of the following conditions or requirements on or before the Closing Date:
(a) Seller's warranties and representations under this
Agreement shall be true and correct as of the Closing Date, and Seller shall not
be in default hereunder.
(b) All obligations of Seller contained in this Agreement,
shall have been fully performed in all material respects and Seller shall not be
in default under any covenant, restriction, right-of-way or easement affecting
the Property.
(c) There shall have been no material adverse change in the
Property, its operations or future prospects, the Leases or the financial
condition of tenants leasing space in the Shopping Center.
(d) A Title Insurance Commitment in the full amount of the
Purchase Price shall have been issued and "marked down" through Closing, subject
only to Permitted Exceptions.
(e) The physical and environmental condition of the Property
shall be unchanged from the date of this Agreement, ordinary wear and tear
excepted.
(f) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
(1) A warranty deed in proper form for recording, duly executed
and acknowledged so as to convey to Buyer the fee simple title to the Property,
subject only to the Permitted Exceptions:
(2) Originals, if available, or if not, true copies of the Leases and
of the contracts, agreements, permits and licenses, and such Materials as may be
in the possession or control of Seller;
(3) A blanket assignment to Buyer of all Leases and the
contracts, agreements, permits and licenses (to the extent assignable)
as they affect
- 17 -
the Property, including an indemnity against breach of such instruments by
Seller prior to the Closing Date;
(4) A xxxx of sale with respect to the Personal Property and
Materials;
(5) A title certificate, properly endorsed by Seller, as to any
items of Property for which title certificates exist;
(6) The Survey;
(7) A current rent roll for all Leases in effect showing no
changes from the rent roll attached to this Agreement other than those set forth
in the Leases or approved in writing by Buyer;
(8) All Tenant Estoppel Letters obtained by Seller,
which must
include Publix, Xxxx-Xxxxx Stores, Consolidated Stores, Family Dollar Stores and
Eckerd Drug, and eighty percent (80%) of the other tenants who have signed
leases for any portion of the Property, without any material exceptions,
covenants, or changes to the form approved by Buyer and distributed to the
tenants by Seller, the substance of which Tenant Estoppel Letters must be
acceptable to Buyer in all respects (including specifically the Eckerd Drug
Tenant Estoppel Letter, which must reflect that the dispute between Seller and
Eckerd Drug has been resolved, or Seller shall otherwise indemnify Buyer from
any loss or damage attributable thereto);
(9) A general assignment of all assignable existing warranties
relating to the Property;
(10) An owner's affidavit, non-foreign affidavits, non-tax
withholding certificates and such other documents as may reasonably be required
by Buyer or its counsel in order to effectuate the provisions of this Agreement
and the transactions contemplated herein;
(11) The originals or copies of any real and tangible personal
property tax bills for the Property for the tax year of Closing and the previous
year, and, if requested, the originals or copies of any current water, sewer and
utility bills which are in Seller's custody or control;
(12) Resolutions of Seller authorizing the transactions described
herein;
(13) All keys and other means of access to the Improvements in
the possession of Seller or its agents;
- 18 -
(14) Materials; and
(15) Such other documents as Buyer may reasonably request to
effect the transactions contemplated by this Agreement; and
(g) Receipt of the consent of the holder of the Surviving
Mortgage to this transaction, and the release of Seller, imposing such
conditions, if any, as are acceptable to each of Seller and Buyer.
In the event that all of the foregoing provisions of this Section are
not satisfied and Buyer elects in writing to terminate this Agreement, then the
Xxxxxxx Money Deposit shall be promptly delivered to Buyer by Escrow Agent and,
upon the making of such delivery, neither party shall have any further claim
against the other by reasons of this Agreement, except as provided in Article .
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(a) Buyer's warranties and representations under this
Agreement shall be true and correct as of the Closing Date, and Buyer shall not
be in default hereunder.
(b) All of the obligations of Buyer contained in this
Agreement shall have been fully performed by or on the date of Closing in
compliance with the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the
Closing the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the balance of the Purchase
Price in accordance with Section at Closing;
(2) Such other documents as Seller may reasonably request to
effect the transactions contemplated by this Agreement; and
(d) Receipt of the consent of the holder of the Surviving
Mortgage to this transaction, and the release of Seller, imposing such
conditions, if any, as are acceptable to each of Seller and Buyer.
8.3 Section 1031 Exchange. Buyer acknowledges that Seller may endeavor
to effect a like-kind exchange under Section 1031 of the Internal Revenue Code
of 1986, as amended (the "Code"), such that Seller can acquire the Other
Centers, or
- 19 -
other properties, with the proceeds of the sale of the Shopping Center to Buyer.
Seller expressly reserves the right to assign its rights, but not it
obligations, hereunder, to a qualified intermediary including without limitation
Escrow Agent, as provided in the Internal Revenue Code and the regulations
promulgated thereunder, including without limitation Reg. 1.1031(k)-(l)(g)(4),
on or before the Closing Date. Accordingly, Buyer agrees that (i) Buyer will
cooperate with Seller to effect a tax-free exchange or exchanges in accordance
with the provisions of Section 1031 of the Code and the regulations promulgated
with respect thereto; and (ii) it is a condition of this agreement that Buyer
and Seller enter into a mutually agreeable contract pursuant to which Buyer will
agree to sell to Seller, and Seller will agree to purchase from Buyer the Other
Centers. It is not a condition that the transactions contemplated by such other
contract actually close (eg. Seller, as Buyer under said contract, may determine
during the inspection period under such other contract that Seller does not wish
to purchase the Other Centers), but only that a mutually agreeable contract for
the sale and purchase of the Other Centers by entered into by Seller and Buyer.
Seller and Buyer agree to negotiate in good faith such that a contract for the
sale and Seller shall be solely responsible for any additional fees, costs or
expenses incurred in connection with the like-kind exchange contemplated by this
paragraph. In no event shall Seller's ability or inability to effect a like-kind
exchange, as contemplated hereby, in any way relieve Seller from its obligations
and liabilities under this Agreement. Seller hereby agrees to indemnify and hold
harmless Buyer from any liability, losses or damages incurred by Buyer in
connection with or arising out of the Section 1031 like-kind exchange, including
but not limited to any tax liability. It is not Buyer's intention to effect a
Section 1031 exchange with respect to the proceeds of Buyer's sale of the Other
Centers to Seller.
In the event that all conditions precedent to Buyer's obligation to
purchase shall have been satisfied but the foregoing provisions of this Section
have not, and Seller elects in writing to terminate this Agreement, then the
Xxxxxxx Money Deposit shall be promptly delivered to Seller by Escrow Agent and,
upon the making of such delivery, neither party shall have any further claim
against the other by reasons of this Agreement, except as provided in Article .
8.4 Best Efforts. Each of the parties hereto agrees to use reasonable
best efforts to take or cause to be taken all actions necessary, proper or
advisable to consummate the transactions contemplated by this Agreement.
9. PRE-CLOSING BREACH; REMEDIES
9.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
provided for
- 20 -
Closing, Buyer may, at Buyer's election (i) terminate this Agreement and receive
a return of the Xxxxxxx 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 Xxxxxxx Money Deposit as agreed liquidated damages for such
breach, and upon payment in full to Seller of such amounts, the parties shall
have no further rights, claims, liabilities or obligations under this Agreement
(except as survive termination).
10. MISCELLANEOUS
10.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
to its attorneys, accountants and other consultants, their lenders and
prospective lenders, or where disclosure is required by law.
10.2 Radon Gas. Radon is a naturally occurring radioactive gas which,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon which
exceed federal and state guidelines have been found in buildings in the state in
which the Property is located. Additional information regarding radon and radon
testing may be obtained from the county public health unit.
10.3 Entire Agreement. This Agreement, together with the exhibits
attached hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may not be modified, amended or
otherwise changed in any manner except by a writing executed by Buyer and
Seller.
10.4 Notices. All written notices and demands of any kind which either
party may be required or may desire to serve upon the other party in connection
with this Agreement shall be served by personal delivery, certified or overnight
mail, reputable overnight courier service or facsimile (followed promptly by
hard copy) at the addresses set forth below:
- 21 -
As to Seller Xxxxxxx Xxxxx
3301 Xxxxx de Xxxx Xxxxxxxxx, Xxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
As to Buyer: RRC Acquisitions Two, Inc.
Attention: Xxxxxx X. Xxxxxx
Suite 200, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Rogers, Towers, Xxxxxx, Xxxxx & Gay, P.A.
Attention: Xxxxxxx X. Xxxxx, Esquire
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Any notice or demand so served shall constitute proper notice hereunder upon
delivery to the United States Postal Service or to such overnight courier. A
party may change its notice address by notice given in the aforesaid manner.
10.5 Headings. The titles and headings of the various sections hereof
are intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
10.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
10.7 Attorneys' Fees. In the event of any litigation between the
parties hereto to enforce any of the provisions of this Agreement or any right
of either party hereto, the unsuccessful party to such litigation agrees to pay
to the successful party all costs and expenses, including reasonable attorneys'
fees, whether or not incurred in trial or on appeal, incurred therein by the
successful party, all of which may be included in and as a part of the judgment
rendered in such litigation. Any indemnity provisions herein shall include
indemnification for reasonable attorneys' fees and costs, whether or not suit be
brought and including fees and costs on appeal.
10.8 Time of Essence. Time is of the essence of this Agreement.
- 22 -
10.9 Governing Law. This Agreement shall be governed by the laws of the
state in which the Property is located, and the parties hereto agree that any
litigation between the parties hereto relating to this Agreement shall take
place (unless otherwise required by law) in a court located in the county in
which the Property is located. Each party waives its right to jurisdiction or
venue in any other location.
10.10 Successors and Assigns. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. No third parties, including any
brokers or creditors, shall be beneficiaries hereof.
10.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
10.12 Gender; Plural; Singular; Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
10.13 Further Instruments, Etc. This Agreement may be executed in
counterparts and when so executed shall be deemed executed as one agreement.
Seller and Buyer shall execute any and all documents and perform any and all
acts reasonably necessary to fully implement this Agreement.
10.14 Survival. The obligations of Seller and Buyer intended to be
performed after the Closing shall survive the closing.
10.15 No Recording. Neither this Agreement nor any notice, memorandum
or other notice or document relating hereto shall be recorded.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses: RRC ACQUISITIONS TWO, INC.,
a Florida corporation
______________________________ By:___________________________________
- 23 -
Name:____________________________ Name:______________________________
Title:_____________________________
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No: 00-0000000
"BUYER"
PINES GROUP, INC.,
a Florida corporation
___________________________________ By:___________________________________
Name:_____________________________ Name:______________________________
Title:_____________________________
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No:____________________
"PGI"
----------------------------------- --------------------------------------
Name:_____________________________ XXXXXXX XXXXX
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No:____________________
"PINE"
- 24 -
HIGHLAND SQUARE ASSOCIATES, LTD.,
a Florida limited partnership
___________________________________ By: Its General Partner
Name:_____________________________ PINES JACKSONVILLE MANAGEMENT,
INC., a Florida corporation
By: __________________________________
Its: President
___________________________________ Date: __________________________, 1998
Name:_____________________________
Tax Identification No:____________________
"HIGHLAND SQUARE"
- 25 -
EXHIBIT
Audit Representation Letter
--------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
Xxxxx 0000
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
We are writing at your request to confirm our understanding that your
audit of the Statement of Revenue and Certain Expenses for Highland Square
Shopping Center for the twelve months ended ________________, was made for the
purpose of expressing an opinion as to whether the statement presents fairly, in
all material respects, the results of its operations in conformity with
generally accepted accounting principles. In connection with your audit we
confirm, to the best of our knowledge and belief, the following representations
made to you during your audit:
1. We have made available to you all financial records and related data
for the period under audit.
2. There have been no undisclosed:
a. Irregularities involving any member of management or
employees who have significant roles in the internal control structure.
b. Irregularities involving other persons that could have a
material effect on the Statement of Revenue and Certain Expenses.
c. Violations or possible violations of laws or regulations,
the effects of which should be considered for disclosure in the Statement of
Revenue and Certain Expenses.
3. There are no undisclosed:
a. Unasserted claims or assessments that our lawyers have
advised us are probable of assertion and must be disclosed in accordance with
Statement of Financial Accounting Standards No. 5 (SFAS No. 5).
b. Material gain or loss contingencies (including oral and
written guarantees) that are required to be accrued or disclosed by SFAS No. 5.
c. Material transactions that have not been properly recorded
in the accounting records underlying the Statement of Revenue and Certain
Expenses.
d. Material undisclosed related party transactions and related
amounts receivable or payable, including sales, purchases, loans, transfers,
leasing arrangements, and guarantees.
e. Events that have occurred subsequent to the balance sheet
date that would require adjustment to or disclosure in the Statement of Revenue
and Certain Expenses.
4. All aspects of contractual agreements that would have a material
effect on the Statement of Revenue and Certain Expenses have been complied with.
Further, we acknowledge that we are responsible for the fair
presentation of the Statements of Revenue and Certain Expenses prepared in
conformity with generally accepted accounting principles.
Very truly yours,
"Seller/Manager"
---------------------------------------
Name:____________________________
Title:___________________________________
EXHIBIT
Legal Description of Real Property
EXHIBIT
Rent Roll
EXHIBIT
Form of Estoppel Letter
_____________________, 199_
RRC Acquisitions Two, Inc.
Regency Centers, Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
RE: ___________________________ (Name of Shopping Center)
Ladies and Gentlemen:
The undersigned (Tenant) has been advised you may purchase the above
Shopping Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of ___________________________,
Landlord, in the above Shopping Center, and is currently in
possession and paying rent on premises known as Store No.
_______________ [or Address:
----------------------------------------------------------------],
and containing approximately _____________ square feet, under
the terms of the lease dated ______________________, which has
(not) been amended by amendment dated ________________________
(the "Lease"). There are no other written or oral agreements
between Tenant and Landlord. Tenant neither expects nor has
been promised any inducement, concession or consideration for
entering into the Lease, except as stated therein, and there
are no side agreements or understandings between Landlord and
Tenant.
2. The term of the Lease commenced on ____________________,
expiring on ___________________, with options to extend of
________________ (____) years each.
3. As of ____________________, monthly minimum rental is
$_______________ a month.
4. Tenant is required to pay its pro rata share of Common Area
Expenses and its pro rata share of the Center's real property
taxes and insurance cost. Current additional monthly payments
for expense reimbursement total $____________ per month for
common area maintenance, property insurance and real estate
taxes.
5. Tenant has given [no security deposit] [a security deposit of
$--------------].
6. No payments by Tenant under the Lease have been made for more
than one (1) month in advance, and minimum rents and other
charges under the Lease are current.
7. All matters of an inducement nature and all obligations of the
Landlord under the Lease concerning the construction of the
Tenant's premises and development of the Shopping Center,
including without limitation, parking requirements, have been
performed by Landlord.
8. The Lease contains no first right of refusal, option to
expand, option to terminate, or exclusive business rights,
except as follows:
9. Tenant knows of no default by either Landlord or Tenant under
the Lease, and knows of no situations which, with notice or
the passage of time, or both, would constitute a default.
Tenant has no rights to off-set or defense against Landlord as
of the date hereof.
10. The undersigned has not entered into any sublease, assignment
or any other agreement transferring any of its interest in the
Lease or the Premises except as follows:
11.Tenant has not generated, used, stored, spilled, disposed of, or released
any hazardous substances at, on or in the Premises. "Hazardous
Substances" means any flammable, explosive, toxic, carcinogenic,
mutagenic, or corrosive substance or waste, including volatile petroleum
products and derivatives and dry cleaning solvents. To the best of
Tenant's knowledge, no asbestos or polychlorinated biphenyl ("PCB") is
located at, on or in the Premises. The term "Hazardous Substances"
does not include those materials which are technically within the definition
set forth above but which are contained in pre-packaged office supplies,
cleaning materials or personal grooming items or other items which are
sold for consumer or commercial use and typically used in other similar
buildings or space.
The undersigned makes this statement for your benefit and protection with the
understanding that you intend to rely upon this statement in connection with
your intended purchase of the above described Premises from Landlord. The
undersigned agrees that it will, upon receipt of written notice from Landlord,
commence to pay all rents to you or to any Agent acting on your behalf.
Very truly yours,
-------------------------------------------
____________________________________(Tenant)
Mailing Address:
____________________________ By:________________________________________
Its:_________________________________
----------------------------
Exhibit
Document Request List
Items Required from the Seller:
1) Property Specifications (Zoning)
2) As Built Plans & Specs (arch. and engineering)
3) Site Plan (including suite numbers)
4) Location maps
5) Aerial photographs
6) Demographics (including traffic counts)
7) Legal Description
8) Parking Information - Space count
9) Copy of All Leases (and amendments) & Lease Briefs
10) Certificates of Occupancy - All current tenants
11) Schedule of Security Deposits
12) Most recent Rent Roll (with suite #'s, rent escalations, and
option period info)
13) Sales Reports (most recent 3 Years) for tenants reporting 14)
Current Rent Xxxxxxxx (by category, base, CAM, etc.) 15) Current
Delinquency Report (with explanations for balances > $1,000) 16) Tenant
Activity Register for all Current Tenants (xxxxxxxx & payments) 17)
Tenant Estoppels 18) Property Operating Results - Most recent 3 Years
19) Property Capital Expenditures - Most recent 3 Years 20) Audited
Financial Statements - 3 Years 21) Real Estate and other tax bills - 3
Years 22) Year to Date Financials & YTD detail general Ledger 23)
Existing Service Agreements and Warranties 24) Three years loss history
- reported claims 25) Most Recent Year Expense Recovery Reconciliation
26) Breakdown of CAM Pools 27) Proof Sales Tax Payments are Current 28)
Appraisal (last available) 29) Seller's Budget for up-coming/current
year 30) Utility Bills for last 12 months/deposits 31) Personal
Property Inventory 32) Existing Title Insurance Policy 33) Available
Inspection Reports (environmental, roof, structural, etc.) 34) Summary
of Tenant Contacts (with address and telephone numbers)
With local (include store#) & national addresses
35) Survey
36) Tax plat map
xxx\reg\highland\psa.4
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
(Highland Square)
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT, dated as of the
_____ day of April, 1998, by and among XXXXXXX XXXXX, individually ("Pines"),
PINES HIGHLAND SQUARE ASSOCIATES, LTD., a Florida limited partnership (the
"Partnership") and PINES GROUP, INC., a Florida corporation (the "Corporation")
(collectively, Pine, Partnership and Corporation are referred to herein as
"Seller"), and RRC ACQUISITIONS TWO, INC., a Florida corporation ("Buyer").
Background
(i) Buyer and Seller have previously entered into that certain Purchase
and Sale Agreement dated as of February 24, 1998 (the "Agreement"), concerning
the purchase of a shopping center commonly known as "Highland Square", in
Jacksonville, Xxxxx County, Florida, owned by Seller.
(ii) Seller and Buyer wish to amend the Agreement as hereinafter
provided.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, receipt of which is hereby acknowledged, Buyer and
Seller hereby agree as follows:
1. Definitions. All terms defined in the Agreement shall, when capitalized
in this First Amendment, have the same meanings attributed to them herein.
2. Reduction of Purchase Price. The Purchase Price shall be reduced by
the sum of $400,000.00. Accordingly, Section 2.1(a) of the Agreement is hereby
amended to read, in its entirety, as follows:
"(a) Purchase Price and Terms. The total Purchase Price for
the Property (subject to adjustment as provided herein) shall be
$11,600,000.00. The Purchase Price shall be payable by Buyer's
assumption of the Surviving Mortgage, the outstanding principal balance
thereof to reduce the Purchase Price, and the balance of the Purchase
Price shall be paid in cash at Closing.
3. Closing Date Extended. The Closing shall occur on May 31, 1998, or
on such earlier date as Buyer shall notify Seller, and Section 3.3 is amended
accordingly.
4. Environmental Escrow Agreement. Buyer's inspection of the Property
has revealed certain environmental contamination caused by a drycleaning
operation at the Property. At closing Buyer and Seller shall enter into an
environmental escrow agreement pursuant to which up to $400,000.00 shall be
deposited with Escrow Agent pending remediation of such contamination by Seller
in a manner acceptable to Buyer, to be reduced to one hundred twenty-five
percent (125%) of the cost to remediate as agreed upon by Buyer and Seller prior
to Closing. The form and substance of the escrow agreement shall be mutually
acceptable to Seller, Buyer and the holder of the Surviving Mortgage. If by the
Closing Date Seller and Buyer have not agreed to the form and substance of the
environmental escrow agreement, either may terminate this Agreement, in which
event the Xxxxxxx Money Deposit shall be returned to Buyer.
5. Other Properties. It is acknowledged that Seller is acquiring from
affiliates of Buyer two properties commonly known as the "Lady's Island Publix"
and the "Xxxxx Road Xxxx-Xxxxx" pursuant to an Agreement dated February 24,
1998, and an Eckerd Drug Store pursuant to an agreement currently being
negotiated. The sale of the Property to Buyer is conditioned upon Seller and
Buyer, and Buyer's affiliates reaching a satisfactory agreement concerning those
other properties.
6. As amended hereby, the Agreement shall remain unchanged and in full
force and effect.
IN WITNESS WHEREOF, the Buyer and Seller have executed this Agreement
as of the day and year first above written.
Witnesses:
RRC ACQUISITIONS TWO, INC.,
Name: a Florida corporation
By:
Name: Name:
Title:
Date: , 1998
Tax Identification No. 00-0000000
"BUYER"
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PINES GROUP, INC.,
Name: a Florida corporation
By:
Name: Name:
Title:
Date: , 1998
Tax Identification No.:
Name: XXXXXXX XXXXX
Date: , 1998
Name:
Tax Identification No.:
HIGHLAND SQUARE ASSOCIATES, LTD.,
a Florida limited partnership
By Its General Partner:
Pines Jacksonville Management, Inc.,
Name: a Florida corporation
By:
Name: President
Date: , 1998
Tax Identification No.:
(collectively, "SELLER")
xxx\reg\highland\psa-amd.3
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