PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the ____ day of July, 1996, between VF SANDY
PLAINS ASSOCIATES, L.P., a Georgia limited partnership ("Seller"), and RRC
ACQUISITIONS, INC., a Florida corporation, its designees, successors and assigns
Buyer wishes to purchase a shopping center located in Cobb County,
Georgia, owned by Seller, known as Sandy Plains 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 Property (as hereinafter
defined) on the following terms and conditions:
As used in this Agreement, the following terms shall have the following
1.1 Agreement means this instrument as it may be amended from time to
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Approved Lease means a written Lease approved by Buyer, the terms of
which comport with the Leasing Requirements for the Earnout Space attached
hereto as Exhibit 1.3.
1.4 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit 1.4, or substantially similar thereto as
approved by Buyer and Seller during the Inspection Period.
1.5 Buyer means the party identified as Buyer on the initial page
1.6 Capitalization Rate means ten percent (10%).
1.7 Closing means generally the execution and delivery of those documents
and funds necessary to effect the sale of the Property by Seller to Buyer.
1.8 Closing Date means the date on which the Closing occurs.
1.9 Contracts means all service contracts, agreements or other instruments
to be assigned by Seller to Buyer at Closing.
1.10 Day means a business day, whether or not the term is capitalized.
1.11 Earnest Money Deposit means the deposit delivered by Buyer to Escrow
Agent prior to the Closing under Section 2.4 of this Agreement, together with
the earnings thereon, if any.
1.12 Earnout Space means the space identified as Suite 430 (30,979 square
feet), which is located in the Shopping Center.
1.13 Effective Gross Income means twelve (12) months "base" or "minimum"
rent plus expense reimbursement recoveries under a particular Approved Lease,
less (i) a management fee charge of four percent (4.0%) of such rent and
recoveries, and (ii) a charge for any increase in operating expenses, if any,
specifically attributable to the new tenant(s) occupancy.
1.14 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.
1.15 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.
1.16 Escrow Agent means Ulmer, Murchison, Ashby & Taylor, Attorneys, whose
address is Suite 1600, SunTrust Building, 200 West Forsyth Street, Jacksonville,
Florida 32202 (Fax 904/354-9100), or any successor Escrow Agent.
1.17 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
1.18 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.
1.19 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.
1.20 Improvements means any buildings, structures or other improvements
situated on the Real Property.
1.21 Inspection Period means the period of time which expires at the end
of business on Friday, August 2, 1996.
1.22 Leases means all leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of the Property.
1.23 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.
1.24 Permitted Exceptions means only the following interests, liens and
(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.
1.25 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.
1.26 Property means collectively the Real Property, the Improvements and
the Personal Property.
1.27 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.
1.28 Purchase Price means the consideration agreed to be paid by Buyer to
Seller for the purchase of the Property as set forth in Section 2.1 (subject to
adjustments as provided herein).
1.29 Real Property means the lands more particularly described on Exhibit
1.29, together with all easements, licenses, privileges, rights of way and other
appurtenances pertaining to or accruing to the benefit of such lands.
1.30 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.
1.31 Rent Roll means the list of Leases attached hereto as Exhibit 1.31,
identifying with particularity the space leased by each tenant, the term
(including extensions), square footage and applicable rent, common area
maintenance, tax and other reimbursements, security deposits and similar data.
1.32 Seller means the party identified as Seller on the initial page
1.33 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions of 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.
1.34 Shopping Center means the Shopping Center as identified on the
initial page hereof.
1.35 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
1.36 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 1.36, or in the case
of national or regional "credit" tenants identified as such on the Rent Roll,
the form customarily used by such tenant.
1.37 Title Defect means any exception in the Title Insurance Commitment or
any matter disclosed by the Survey, other than a Permitted Exception.
1.38 Title Insurance means an ALTA Form B Owners Policy of Title Insurance
for the full Purchase Price insuring marketable title in Buyer in fee simple,
subject only to the Permitted Exceptions, issued by a title insurer acceptable
1.39 Title Insurance Commitment means a binder whereby the title insurer
agrees to issue the Title Insurance to Buyer.
1.40 Transaction Documents means this Agreement, the deed conveying the
Property, the assignment of leases, the bill of sale conveying the Personal
Property and all other documents required or appropriate in connection with the
transactions contemplated hereby.
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be Fifteen Million Six
Hundred Twelve Thousand and No/100 Dollars ($15,612,000.00). The Purchase Price
shall be payable in cash at Closing.
(b) Adjustments to the Purchase Price. The Purchase Price shall
be adjusted as of the Closing Date by:
(1) prorating the Closing year's real and tangible personal
property taxes as of the Allocation Date (if the amount of the current year's
property taxes are not available, such taxes will be prorated based upon the
prior year's assessment);
(2) prorating as of the Allocation Date cash receipts and
expenditures for the Shopping Center and other items customarily prorated in
transactions of this sort;
(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 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; and
(4) deferring up to $2,400,000 of the Purchase Price until
the Commencement Date (hereinafter defined) has occurred, at which point the
appropriate amount of the "additional consideration" (as hereinafter defined)
shall be placed in Escrow in keeping with Section 2.2 hereof; provided that, if
the Commencement Date has occurred, the appropriate amount of "additional
consideration" shall be placed in Escrow and held in Escrow until the
Qualification Date (as hereinafter defined) occurs. Upon the occurrence of the
Qualification Date, all additional consideration applicable to an Approved Lease
for which the Qualification Date has occurred shall be disbursed from the Escrow
Account in accordance with the provisions of Section 2.2 hereof.
2.2 Earnout Space; Additional Consideration. The Earnout Space is not
currently leased. Seller shall have until December 31, 1998, inclusive (the
"Earnout Period"), within which to lease the Earnout Space to an unaffiliated
creditworthy tenant and receive additional consideration therefor. Any such
lease must be an Approved Lease and must demise the entire Earnout Space,
provided Buyer will consider the subdivision of the Earnout Space into no more
than two stores, the specifics of which are subject to Buyer's specific
approval. To be considered for additional consideration such Approved Lease (or
two Approved Leases, if applicable), whether produced by Seller or Buyer, must
be executed by Buyer as landlord and the prospective tenant on or prior to
December 31, 1998. The additional consideration, if any, is payable to Escrow
Agent, in escrow as hereinafter provided, on the Commencement Date for the
particular Approved Lease. The additional consideration shall be an amount equal
to (A) the Effective Gross Income attributable to the particular Approved Lease,
(B) divided by 0.10, and (C) multiplied by 0.70. Brokerage fees earned with
respect to the leasing of all or any portion of the Earnout Space on or before
December 31, 1998, to a tenant shall be paid directly by Seller. Tenant and
building improvements and other concessions to the tenant treated as a landlord
expense under the Approved Lease shall be paid proportionately by Seller and
Buyer, seventy percent (70%) by Seller and thirty percent (30%) by Buyer
(Seller's portion to be paid by Seller prior to payment of the Earnout
Consideration or if not paid, credited against the amount due Seller). The
amount so calculated as due and owing to Seller shall be referred to as
"additional consideration". Seller shall have the entire Earnout Period in which
to obtain executed Approved Lease(s) for all or part of the Earnout Space. Once
the additional consideration has been placed in escrow in accordance with the
provisions of this
Agreement, the only bases (the "Return Events"), upon which Seller shall be
deprived of and not entitled to the additional consideration as it relates to a
specific lease is either: (i) the tenant is dispossessed of the leased premises
and the Lease is terminated prior to the Qualification Date or (ii) the tenant
has vacated the leased premises prior to the Qualification Date.
The Commencement Date for each Approved Lease of space in the Earnout Space
shall be the date upon which the matters set forth in item (a) shall have
occurred and the Qualification Date shall be the date which occurs after the
Commencement Date upon which item (b) shall have occurred, as follows:
(a) The following three events:
(1) the Approved Lease shall have been executed by each of
(2) the tenant shall have accepted the space and be law-
fully open for business therein; and
(3) there shall be no material default under such Approved
(b) The Tenant shall have received all concessions agreed to by
the Landlord and any one of the following two events have occurred:
(1) The tenant shall have paid full rent and reimbursements
for at least six (6) consecutive months, or
(2) Tenant shall have paid full rent and reimbursements for
nine (9) out of the first twelve (12) months in which
rental and reimbursements are to be paid under said
lease ("12-Month Rental Period").
Buyer and Seller acknowledge and agree that if at the end of the 12-Month Rental
Period, the Qualification Date has not occurred, the Buyer (landlord) shall have
the option of and must do one of the following: (i) disburse from the Escrow
Agreement the portion of the additional consideration applicable to said
Approved Lease for which the 12-Month Rental Period has expired, or (ii)
initiate and diligently pursue the dispossession and removal of the tenant from
the leased premises until said tenant has been removed.
Upon the occurrence of Commencement Date of such Approved Lease(s), Buyer shall
deposit the additional consideration for the particular Earnout Space Approved
Lease with Escrow Agent, who shall invest same in a money market account at
First Union National Bank of Florida or in another investment agreed to by the
parties hereto. The escrowed additional consideration and the earnings thereon
which are attributable to a particular Approved Lease for which the Commencement
Date has occurred shall be (i) disbursed to Seller on the Qualification Date (as
defined hereinabove) for such Approved Lease, or (ii) disbursed to Buyer upon
the occurrence of one of the Return Events for such Approved Lease. If a Return
Event occurs prior to December 31, 1998, Seller shall again be entitled to act
Section 2.2 and shall have the right until December 31, 1998, to lease the
Earnout Space or vacated portion thereof as provided in and subject to the
conditions of this Section 2.2.
In determining an "Approved Lease" in accordance with Exhibit 1.3 hereof, Buyer
and Seller agree as follows:
(1) To exercise due diligence in reviewing, consulting,
dealing with, and cooperating with each other to obtain an Approved Lease for
the Earnout Space and in reviewing, analyzing and being assured that a proposed
tenant or a proposed lease meet the standards for becoming an Approved Lease
hereunder and in complying with the provisions of this Section 2.2 and Exhibit
1.3 hereof. Buyer and Seller agree that they shall cooperate and work to assist
each other in this process, and that they are both obligated to exercise due
diligence and reasonable, good faith efforts to work through and approve a
proposed tenant or a proposed lease for all or part of the Earnout Space. To
this end, Buyer and Seller agree to fully cooperate with and assist each other
and communicate about the steps being taken and followed.
(2) Buyer and Seller agree to use their diligent, good faith
efforts to lease all or part of the Earnout Space in accordance with the
standards set forth on Exhibit 1.3 hereof, and to work with, cooperate with and
assist each other in analyzing, reviewing and gathering any necessary
information in regard to a potential tenant or potential lease.
(3) Buyer and Seller agree that in reviewing and approving
potential "Approved Leases", Buyer shall not unreasonably withhold, delay or
condition Buyer's consent and approval of a potential tenant or a potential
lease, provided the standards of Exhibit 1.3 are met.
(4) If Buyer has previously entered into a lease at some
other location with an entity or person whom Seller presents as a proposed
tenant which satisfies the guidelines of Exhibit 1.3 hereof, Buyer will accept
said tenant and will approve a Lease with such tenant using the same form and
substantially the same noneconomic terms and conditions as contained in such
(5) If a potential tenant or potential lease is presented to
Buyer which satisfies all of the standards set forth on Exhibit 1.3 hereof,
whether or not the Buyer consents to such lease, such lease shall be deemed to
be an Approved Lease and Buyer shall not have the right to refuse, turn down, or
disapprove such a potential tenant or potential lease that complies with the
standards of Exhibit 1.3.
(6) In the event Seller obtains a proposed tenant and
proposed lease for all or a significant portion of the Earnout Space and submits
said proposed tenant and proposed lease to Buyer for its approval, Buyer shall
have a period of fifteen (15) days after the receipt of the proposed lease and
any related materials within which to respond to Seller in writing. If the
response is in the negative, said response must be supplied to Seller in writing
within said fifteen (15) days, along with a detailed list which defines and sets
forth in clear and understandable terms the reasons for turning down or negating
said potential tenant
or potential lease. In the event Buyer does not respond or take any action in
regard to the written request or notice of a potential tenant or potential lease
(when and if said lease and supporting financial and operating expense
information are enclosed in the package) on the Earnout Space within said
fifteen (15) day period, said potential tenant and potential lease shall be
conclusively deemed to have been approved by Buyer as of the end of such fifteen
(15) day period, and shall become an Approved Lease which Buyer shall be
obligated to execute and perform.
(7) The provisions of this Section 2.2 shall survive the
2.3 End of Earnout Period. Notwithstanding any other provision of this
Agreement, there shall be no additional consideration payable with respect to
any Lease executed after the Earnout Period.
2.4 Earnest Money Deposit. An Earnest Money Deposit in the amount of
$50,000.00 shall be delivered to Escrow Agent within three (3) days after the
date of execution by the last of Buyer or Seller to execute and transmit a copy
of this Agreement to the other. This Agreement may be terminated by Seller if
the Earnest Money Deposit is not received by Escrow Agent by such deadline. The
Earnest Money Deposit paid by Buyer shall be held as specifically provided in
this Agreement and shall be applied to the Purchase Price at the Closing.
2.5 Closing Costs.
(a) Seller shall pay:
(1) Documentary stamp and other transfer taxes imposed upon
the transactions contemplated hereby;
(2) Cost of the Survey;
(3) Cost of satisfying any liens on the Property;
(4) Costs, if any, of curing title defects and recording any
curative title documents, up to a maximum of $25,000;
(5) All broker's commissions, finders' fees and similar
expenses incurred by either party in connection with the sale of the Property,
subject however to Buyer's indemnity given in Section 5.3 of this Agreement; and
(6) Seller's attorneys' fees relating to the sale of the
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
(2) Title insurance premium;
(3) Costs of the Phase 1 environmental site assessment to be
obtained by Buyer;
(4) Cost of recording the deed; and
(5) Buyer's attorneys' fees.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Property, review the economic data, underwrite the
tenants and review their leases, and to otherwise conduct its due diligence
review of the Property and all books, records and accounts of Seller related
thereto. Buyer hereby agrees to indemnify and hold Seller harmless from any
damages, liabilities or claims for property damage or personal injury arising
out of such inspection and investigation by Buyer or its agents or independent
contractors. Within the Inspection Period, Buyer may, in its sole discretion and
for any reason or no reason, elect to go forward with this Agreement to closing,
which election shall be made by notice to Seller given within the Inspection
Period. If such notice is not timely given, this Agreement and all rights,
duties and obligations of Buyer and Seller hereunder, except any which expressly
survive termination, shall terminate and Escrow Agent shall forthwith return to
Buyer the Earnest Money Deposit. If Buyer so elects to go forward, the Earnest
Money Deposit shall not be refundable except upon the terms otherwise set forth
(b) Buyer, through its officers, employees and other authorized
representatives, shall have the right to reasonable access to the Property and
all records of Seller related thereto, including without limitation all Leases
and Seller Financial Statements, at reasonable times during the Inspection
Period for the purpose of inspecting the Property, taking soil borings,
conducting Hazardous Materials inspections, reviewing the books and records of
Seller concerning the Property and otherwise conducting its due diligence review
of the Property. Seller shall cooperate with and assist Buyer in making such
inspections and reviews. Seller shall give Buyer any authorizations which may be
required by Buyer in order to gain access to records or other information
pertaining to the Property or the use thereof maintained by any governmental or
quasi-governmental authority or organization. Buyer, for itself and its agents,
agrees not to enter into 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 a "Phase 1" assessment of the Property, and a copy of any assessment
report, if made, shall be furnished by Buyer to Seller promptly upon its
completion. If the assessment report discloses the existence of any Hazardous
Material or any other matters concerning the environmental condition of the
Property or its environs, Buyer may notify Seller in writing, within ten (10)
business days after receipt of the assessment report, but not later than the end
of the Inspection Period, that it elects to terminate this Agreement, whereupon
this Agreement shall terminate and Escrow Agent shall return to Buyer its
Earnest Money Deposit.
3.3 Time and Place of Closing. Unless otherwise agreed by the parties, the
Closing shall take place at the offices of Escrow Agent at 10:00 A.M. on Friday,
August 9, 1996, provided that Buyer may designate an earlier date for Closing.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
4.1 Organization; Authority. Seller is duly organized, validly existing
and in good standing under the laws of the state of its organization and the
state in which the Shopping Center is located, and has full power and authority
to enter into and perform this Agreement in accordance with its terms, and the
persons executing this Agreement and other Transaction Documents have been duly
authorized to do so on behalf of Seller. Seller is not a "foreign person" under
Sections 1445 or 897 of the Internal Revenue Code nor is this transaction
subject to any withholding under any state or federal law.
4.2 Authorization; Validity. The execution and delivery of this Agreement
by Seller and Seller's consummation of the transactions contemplated by this
Agreement have been duly and validly authorized. To the best of Seller's
knowledge this Agreement 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 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 Marcus & Millichap and Seller agrees to indemnify Buyer from any such
claim arising by, through or under Seller.
4.5 Sale Agreements. The Property is not subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller relating to the Property.
4.7 Leases. There are no Leases affecting the Property, oral or written,
except as listed on the Rent Roll, and any Leases or modifications entered into
between the date of this Agreement and the Closing Date shall be with the
consent of Buyer, which consent shall not be unreasonably withheld, delayed or
conditioned. 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, which consent shall not be unreasonably
withheld, delayed or conditioned. 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, 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 cooperate with Buyer's auditors and to cause
its management agent to execute and deliver to Buyer or its accountants the
Audit Representation Letter should Buyer's accountants audit the records of the
4.9 Contracts. Except for Leases and Permitted Exceptions, there are no
management, service, maintenance, utility or other contracts or agreements
affecting the Property, oral or written, which extend beyond the Closing Date
and which would bind Buyer or encumber the Property, at Buyer's option, more
than thirty (30) days after Closing. All such Contracts are in full force and
effect in accordance with their respective terms, and all obligations of Seller
under the Contracts required to be performed to date have been performed in all
material respects; no party to any Contract has asserted any claim of default or
offset against Seller with respect thereto and no event has occurred or failed
to occur, which would in any way affect the validity or enforceability of any
such Contract; and the copies of the Contracts delivered to Buyer prior to the
date hereof are true, correct and
complete copies thereof. Between the date hereof and the Closing, Seller
covenants to fulfill all of its obligations under all Contracts, and covenants
not to terminate or modify any such Contracts or enter into any new contractual
obligations relating to the Property without the consent of Buyer (not to be
unreasonably withheld, delayed or conditioned) except such obligations as are
freely terminable without penalty by Seller upon not more than thirty (30) days'
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 of Seller's knowledge, there are no
material permits and licenses (collectively referred to as "Permits") required
to be issued to Seller by any governmental body, agency or department having
jurisdiction over the Property which materially affect the ownership or the use
thereof which have not been issued. To the best of Seller's knowledge, the
Property is properly zoned for its present use and is not subject to any local,
regional or state development order. To the best of Seller's knowledge, 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. To the best of Seller's knowledge, there are
no outstanding assessments, impact fees or other charges related to the
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 reasonably 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.
4.13 Condemnation. To the best of Seller's knowledge, neither the whole
nor any portion of the Property, including access thereto or any easement
benefiting the Property, is subject to temporary requisition of use by any
governmental authority or has been condemned, or taken in any proceeding similar
to a condemnation proceeding, nor is there now pending any condemnation,
expropriation, requisition or similar proceeding against the Property or any
portion thereof. Seller has received no notice nor has any knowledge that any
such proceeding is contemplated.
4.14 Governmental Matters. Seller has not entered into any commitments or
agree- ments 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. To the best of Seller's
knowledge, 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
4.17 Environmental Matters. Except for those matters appearing in the
Phase I Environmental Assessment Report prepared by ATEC dated October 31, 1995,
and the Site Investigation Report prepared by Golder Associates, Inc., dated
April 13, 1996, copies of which have been furnished to Buyer, Seller represents
and warrants as of the date hereof and as of the Closing to the best of Seller's
(a) 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;
(b) The Property does not now contain and to the best of Seller's
knowledge has not contained any: (a) underground storage tank, (b) material
amounts of asbestos- containing building material, (c) landfills or dumps, (d)
drycleaning plant or other facility using drycleaning solvents; or (e) hazardous
waste management facility as defined pursuant to the Resource Conservation and
Recovery Act ("RCRA") or any comparable state law. The Property is not a site on
or nominated for the National Priority List promulgated pursuant to
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
or any state remedial priority list promulgated or published pursuant to any
comparable state law; and
(c) 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.
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
Marcus & Millichap 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, subject only to outstanding Leases.
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 Improvements by virtue of a taking by
eminent domain, Seller shall, within ten (10) days of such damage or taking,
notify Buyer thereof and Buyer shall have the option to:
(a) terminate this Agreement upon notice to Seller given within ten
(10) business days after such notice from Seller, in which case Buyer shall
receive a return of its Earnest Money Deposit; or
(b) proceed with the purchase of the Property, in which event Seller
shall assign to Buyer all Seller's right, title and interest in all amounts due
or collected by Seller
under the insurance policies or as condemnation awards. In such event, the
Purchase Price shall be reduced by the amount of any insurance deductible to the
extent it reduced the insurance proceeds payable.
7. TITLE MATTERS
(a) Title Insurance. Prior to the end of the Inspection Period Buyer
shall order the Title Insurance Commitment from Chicago Title Insurance Company
and the Survey from a reputable surveyor familiar with the Property (Seller
agreeing to furnish to Buyer copies of any existing surveys and title
information in its possession promptly after execution of this Agreement). Buyer
will notify Seller in writing of any Title Defects, encroachments or other
matters not acceptable to Buyer which are not permitted by this Agreement not
later than ten (10) days prior to the end of the Inspection Period. 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 and as its sole
remedy, to: (i) refuse to purchase the Property, terminate this Agreement and
receive a return of the Earnest Money Deposit; or (ii) waive such Title Defects
and/or objections and close the purchase of the Property subject to them, in
which event all such waived Title Defects shall become Permitted Exceptions.
(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 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
(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
(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 excess of 5,000 square feet or more than
twenty percent (20%) of the other tenants who have signed leases for any portion
of the Property since the date of this Agreement. The Kroger Company,
Blockbuster Music/Blockbuster Entertainment and Revco Discount Drug Centers,
Inc. 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.
(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
(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 limited 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 the Property, including an indemnity against breach of the Leases by
Seller prior to the Closing Date;
(4) A bill of sale with respect to the Personal Property and
(5) The Survey;
(6) 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;
(7) All Tenant Estoppel Letters obtained by Seller, which must
include The Kroger Company, Blockbuster Music/Blockbuster Entertainment and
Revco Discount Drug Centers, Inc. 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;
(8) A general assignment of all assignable existing warranties
relating to the Property;
(9) An owner's affidavit, non-foreign affidavits, Georgia
non-tax withholding certificate or Georgia residency affidavit 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
(10) 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;
(11) Resolutions of Seller authorizing the transactions
(12) All keys and other means of access to the Improvements in
the possession of Seller or its agents;
(13) Materials; and
(14) Such other documents as Buyer may reasonably request to
effect the transactions contemplated by this Agreement.
In the event that all of the foregoing provisions of this Section
8.1 are not satisfied and Buyer elects in writing to terminate this Agreement,
then the Earnest Money Deposit shall be promptly delivered to Buyer by Escrow
Agent and, upon the making of such delivery, neither party shall have any
further claim against the other by reasons of this Agreement, except as provided
in Article 9.
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(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
(b) All of the obligations of Buyer contained in this Agreement
shall have been fully performed by or on the date of Closing in compliance with
the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the Closing
the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the balance of the Purchase
Price in accordance with Section 2.1 at Closing;
(2) Such other documents as Seller may reasonably request to
effect the transactions contemplated by this Agreement.
(d) The Assignment of Leases shall contain Buyer's indemnity of
Seller for claims, losses and damages arising after the Closing Date. Buyer
acknowledges and agrees that after Closing Buyer shall have the obligation to
refund and return security deposits under all leases applicable to the Property
as, if and when provided in the Leases.
(e) The reciprocal indemnities given in the Assignment of Leases
shall survive the Closing indefinitely.
(f) In the event that all conditions precedent to Buyer's obligation
to purchase shall have been satisfied but the foregoing provisions of this
Section 8.2 have not, and Seller elects in writing to terminate this Agreement,
then the Earnest Money Deposit shall be promptly delivered to Seller by Escrow
Agent and, upon the making of such delivery, neither party shall have any
further claim against the other by reasons of this Agreement, except as provided
in Article 9; except that it is expressly acknowledged and agreed that Buyer's
indemnity contained in Sections 3.1(a) and 5.3 of this Agreement shall survive
such termination for one (1) year. It is further acknowledged and agreed that
the obligations of Buyer under such indemnities are not subject to the
liquidated damages provisions set forth in Section 9.2 hereof.
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 and as Buyer's sole remedy
(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). Seller and
Buyer agree that if Buyer should fail or refuse to purchase the property from
Seller as provided in this Agreement, the amount of damages to Seller would be
difficult, if not impossible, to determine, and the amount specified in this
Section as liquidated damages represents a good faith reasonable estimate by the
parties of the amount of damages that Seller would incur in such event.
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 contained in this Agreement and the foregoing indemnity set forth
in this Section 10.1, shall survive the Closing for one (1) year, whereupon they
shall terminate and be null and void and of no further force or effect, except
as specifically contained in any Closing document. 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 contained in this Agreement,
and the foregoing indemnity set forth in this Section 10.2, shall survive the
Closing for one (1) year whereupon it shall terminate and be null and void and
of no further force or effect, except as specifically contained in any Closing
document. 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
11.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
to its attorneys, accountants and other consultants, their lenders and
prospective lenders, or where disclosure is required by law.
11.2 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.
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: The Vlass-Fotos Group, Ltd.
Attention: Mr. Michael B. Vlass
Two Ravina Drive, Suite 1540
Atlanta, Georgia 30346
Facsimile: (770) 395-7888
With a copy to: Holt, Ney, Zatcoff & Wasserman
Attention: Robert G. Holt, Esquire
100 Galleria Parkway, Suite 600
Atlanta, Georgia 30339-5911
Facsimile: (770) 956-1490
As to Buyer: RRC Acquisitions, Inc.
Attention: Robert L. Miller
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
Facsimile: (904) 634-3428
With a copy to: Ulmer, Murchison, Ashby & Taylor
Attention: William E. Scheu, Esq.
P. O. Box 479
Suite 1600, 200 W. Forsyth St.
Jacksonville, FL 32201 (32202 for courier)
Facsimile: (904) 354-9100
Any notice or demand so served shall constitute proper notice hereunder upon
delivery to the United States Postal Service or to such overnight courier. A
party may change its notice address by notice given in the aforesaid manner.
11.5 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. This Agreement shall be governed by the laws of the
State of Georgia 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 Cobb County, State of Georgia. Each party
waives its right to jurisdiction or venue in any other location.
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.
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.
11.15 No Recording. Neither this Agreement nor any notice, memorandum or
other notice or document relating hereto shall be recorded.
11.16 Seller's Knowledge. To the "best of Seller's knowledge", or similar
language as used herein shall mean the present knowledge of James D. Fotos, who
owns a 100% interest in Seller, and the good faith knowledge of Seller's
property manager, Maxwell Properties, Inc., with the clear understanding that no
specific investigation or examination has been undertaken.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
RRC ACQUISITIONS, INC.,
_____________________________ a Florida corporation
[- - - - - - - - - - - - - - - - -]
Name (Please Print)
[- - - - - - - - - - - - - - - - -]
Name (Please Print) Date: July ____, 1996
Tax Identification No. 59-3210155
VF SANDY PLAINS ASSOCIATES, L.P.,
_____________________________ a Georgia limited partnership
[- - - - - - - - - - - - - - - - -]
Name (Please Print) By Its Sole General Partner:
JDF Enterprise Control, Inc.,
_____________________________ a Georgia corporation
[- - - - - - - - - - - - - - - - -]
Name (Please Print)
Date: July ____, 1996
Tax Identification No.:___________________
JOINDER OF ESCROW AGENT
1. Duties. Escrow Agent joins herein for the purpose of acknowledging
receipt of the initial Earnest Money Deposit and agrees to comply with the terms
hereof insofar as they apply to Escrow Agent. Escrow Agent shall receive and
hold the Earnest Money Deposit in trust, to be disposed of in accordance with
the provisions of this joinder and Section 2.2 of the foregoing Agreement.
2. Indemnity. Escrow Agent shall not be liable to either party except for
claims resulting from the gross negligence or willful misconduct of Escrow
Agent. If the escrow is involved in any controversy or litigation, the parties
hereto shall jointly and severally indemnify and hold Escrow Agent free and
harmless from and against any and all loss, cost, damage, liability or expense,
including costs of reasonable attorneys' fees to which Escrow Agent may be put
or which may incur by reason of or in connection with such controversy or
litigation, except to the extent it is finally determined that such controversy
or litigation resulted from Escrow Agent's gross negligence or willful
misconduct. If the indemnity amounts payable hereunder result from the fault of
Buyer or Seller (or their respective agents), the party at fault shall pay, and
hold the other party harmless against, such amounts.
3. Conflicting Demands. If conflicting demands are made upon Escrow Agent
with respect to the escrow, the parties hereto expressly agree that Escrow Agent
shall have the 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. Buyer and Seller
agree to respond promptly in writing to any request by Escrow Agent for
clarification, consent or instructions. Any action proposed to be taken by
Escrow Agent for which approval of Buyer and/or Seller is requested shall be
considered approved if Escrow Agent does not receive written notice of
disapproval within fourteen (14) days after a written request for approval is
received by the party whose approval is being requested. Escrow Agent shall not
be required to take any action for which approval of Buyer and/or Seller has
been sought unless such approval has been received. No disbursements shall be
made, other than as provided in Sections 2,2, 2.4, 3.1(a), 9.1 and 9.2 of the
foregoing Agreement, or to a court in an interpleader action, unless Escrow
Agent shall have given written notice of the proposed disbursement to Buyer and
Seller and neither Buyer nor Seller shall have delivered any written objection
to the disbursement within 14 days after receipt of Escrow Agent's notice. No
notice by Buyer or Seller to Escrow Agent of disapproval of a proposed action
shall affect the right of Escrow Agent to take any action as to which such
approval is not required.
4. Continuing Counsel. Seller acknowledges that Escrow Agent is counsel to
Buyer herein and Seller agrees that in the event of a dispute hereunder or
otherwise between Seller and Buyer, Escrow Agent may continue to represent Buyer
notwithstanding that it is acting and will continue to act as Escrow Agent
hereunder, it being acknowledged by all parties that Escrow Agent's duties
hereunder are ministerial in nature.
5. Tax Identification. Seller and Buyer shall provide to Escrow Agent
appropriate Federal tax identification numbers.
ULMER, MURCHISON, ASHBY & TAYLOR
Its Authorized Agent
Date: July ____, 1996
Leasing Requirements for Earnout Space
1. The proposed tenant shall have a Dunn & Bradstreet rating of 4-A-1 or
better and shall be experienced in the operation of the type of business
proposed to be conducted at the leased premises.
2. The use proposed by said proposed tenant shall not be prohibited by or
cause a default by the landlord under any existing lease in the Shopping Center
and shall be consistent with that of a major tenant in a first class shopping
3. The base rental rate for the Earnout Space shall be reasonably
comparable to rental rates paid by tenants engaged in similar businesses or
trades in the Atlanta, Georgia metropolitan trade area which trade area shall
mean the Georgia counties of Fulton, Cobb, DeKalb, Gwinnett, Clayton, Henry,
Coweta, Douglas, Paulding and Forsyth.
4. The term of the lease shall not be less than sixty (60) months.
5. The monthly base rent shall not decrease at any time during the term
of the lease.
6. Buyer hereby approves as potential tenants those companies listed on
Schedule 1 attached hereto, provided that, at the time of execution of the
Approved Lease, such tenant, if one of those companies, then satisfies the
requirements of paragraph 1 above.
7. The proposed lease shall be in a form to be approved by Buyer, which
shall contain the following essential terms:
7.1 No security deposit shall be required from tenant.
7.2 Tenant shall not be required to pay percentage rent on any of
the following items:
(a) the amount of all discounts, refunds, credits, allowances
and/or adjustments made to customers;
(b) the amount of all sales taxes and other taxes in the nature
of sales taxes, whether or not the same be called sales
taxes, imposed by any governmental authorities, federal,
state or local, irrespective of whether the same be imposed
by present or future laws;
(c) the amount of all sales to employees of tenant or of any
subtenants or concessionaires of tenant that are made at
discounts from prices charged to customers;
(d) the amounts received for merchandise transferred to any
other place of business of tenant or any subtenant or
concessionaire of tenant or
any business organization affiliated with tenant, wherever
located, provided such merchandise is not used to fill a
sale made in the premises, and amounts received for
merchandise returned to suppliers for credit;
(e) interest or other carrying charges on lease, credit or
(f) the amounts charged to customers for mailing, delivery,
alterations,or nominal services rendered to the customers
(g) unpaid balance of credit sales that are charged off as "bad
debts," provided that if, at any time after any such unpaid
balance shall be so charged off and prior to the expiration
of the term of this lease, any amount shall be collected on
account thereof, such amount shall then be included in
(h) the amounts received from sales of distressed, damaged or
obsolete merchandise sold to non-retail customers, and
amounts received from sales of used trade fixtures and
store operating equipment;
(i) amounts received from concessionaires of tenant for
occupancy, for services rendered to such concessionaires by
tenant, or for supplies or equipment furnished to such
concessionaires by tenant;
(j) amounts paid by tenant to companies provided credit card
charges to tenant as to the fees and other charges
(k) other items that are customarily excluded from the
computation of percentage rent in the particular industry
in which the proposed tenant is engaged.
7.3 The lease shall not require that tenant continuously operate
its business on the premises.
7.4 Sales reporting by tenant to landlord with respect to the
calculation of percentage rent should not be required more
frequently than once per year.
7.5 No advance deposit shall be required.
7.6 Tenant shall have the right to alter the interior space of the
premises without having to obtain the approval of landlord, so
long as no such alteration impairs the structural integrity of
the building or violates any applicable law, ordinance, or
7.7 Landlord will allow tenant a 10-day grace period with respect
to monetary defaults.
7.8 Any tenant having a net worth in excess of $100 million will be
allowed to self insure with respect to the insurance
requirements of the lease, so long as such net worth is
maintained. The tenant must agree to provide to landlord
annually copies of its annual financial statements for the
preceding year, prepared and certified by independent certified
7.9 Landlord will agree to allow tenant to assign or sublet all or
a portion of the premises to any affiliate of tenant or to any
entity acquiring substantially all of the assets of tenant,
whether by asset purchase, merger or consolidation; provided,
however, that landlord shall not be obligated to agree to any
such assignment or subletting unless and until (a) the credit
rating of said assignee or sublessee shall be equal to or
better than the credit rating at that time of the assigning
tenant, or (b) the assigning tenant shall remain jointly and
severally liable to landlord for all obligations of assignee or
sublessee under the lease following said assignment or
8. The tenant, or tenants, under any lease covering the Earnout Space
shall be bona fide third parties unaffiliated with Seller.
List of Approved Potential Tenants
AMC Theatres Just for Feet
Baby Superstore The Linen Loft
Barnes & Noble, Inc. Linen Supermarket
Beall's Linens 'N Things
Bed Bath & Beyond Marshall's
Ben Franklin Stores Michael's Stores
Best Buy Co. MJ Designs
Books-A-Million Office Depot
Borders Books Office Max
Carmike Cinemas Old Navy
Cineplex Odeon Peebles, Inc.
Circuit City PetSmart
Cloth World Sears Homelife
CompUSA, Inc. Sports Authority
Computer City Stein Mart
The Container Store TJ Maxx
Crown Books Ulta Cosmetics
Ethan Allen United Artist Theater
General Cinema Uptons
Goody's Family Clothing Zany Brainy
Grand Slam USA
Audit Representation Letter
(Acquisition Completion Date)
KPMG Peat Marwick LLP
2700 Independent Square
One Independent Drive
Jacksonville, Florida 32202
(Acquisition Property Name)
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 statements
provided to you present fairly in all material respects the results of its
operations in conformity with generally accepted accounting principles. As
managers of this property known as "Sandy Plains Shopping Center," Maxwell
Properties, Inc., based upon its knowledge gathered in said capacity, confirms
only to the named addressee and to no one else, to the best of its knowledge and
belief the items set forth hereinbelow 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 we know of that should be
(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
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 assets conveyed to
RRC FL Three, Inc., as set forth in the title insurance delivered at Closing,
and there are no liens or encumbrances on such assets nor has any such asset
been pledged, that has not been disclosed, subject to the matters stated in such
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,
MAXWELL PROPERTIES, INC.
Legal Description of Real Property
Form of Estoppel Letter
RE: Sandy Plains Village, Cobb County, Georgia
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
3. As of ____________________, monthly minimum rental is $_______________
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 drycleaning solvents. To the best of Tenant's knowledge, no
asbestos or polychlorinated biphenyl ("PCB") is located at, on or in the
Premises. The term "Hazardous Substances" does not include those materials which
are technically within the definition set forth above but which are contained in
pre-packaged office supplies, cleaning materials or personal grooming items or
other items which are sold for consumer or commercial use and typically used in
other similar buildings or space.
The undersigned makes this statement for your benefit and protection with the
understanding that you intend to rely upon this statement in connection with
your intended purchase of the above described Premises from Landlord. The
undersigned agrees that it will, upon receipt of written notice from Landlord,
commence to pay all rents to you or to any Agent acting on your behalf.
Very truly yours,