PURCHASE AND SALE AGREEMENT

 

                                                                   Exhibit 10(k)

                           PURCHASE AND SALE AGREEMENT

 

                             SUSSEX COUNTY, DELAWARE

 

     THIS   PURCHASE   AND   SALE   AGREEMENT    (hereinafter    referred   to   as   the

"Agreement")   is made and entered   into as of   December   20, 2004 by and between

ROLLINS   CONTINENTAL,   INC., a New York   corporation   ("Seller") and LOR INC., a

Georgia corporation ("LOR") and RCTLOR, LLC, a Georgia limited liability company

("RCTLOR"; LOR and RCTLOR collectively, "Purchaser").

 

                              W I T N E S S E T H:

 

     WHEREAS,   Seller   desires to sell to   Purchaser   and   Purchaser   desires to

purchase   from Seller   certain real   property in   accordance   with the terms and

conditions hereinafter provided.

 

     NOW,   THEREFORE,   for and in   consideration   of the   sum of Ten and   No/100

Dollars ($10.00), in hand paid, and other good and valuable   consideration,   the

receipt and sufficiency of which are hereby   acknowledged,   Seller and Purchaser

do hereby covenant and agree as follows:

 

                                    ARTICLE 1

                                    PROPERTY

 

     1.1 Purchase of Property. Subject to the terms of this Agreement, including

without   limitation   Section   1.2   below,   Seller   agrees to sell and   convey to

Purchaser, and Purchaser agrees to buy from Seller, the following:

 

          (a) certain real property containing   approximately   433.72 acres more

     or less located in Lewes and Rehoboth   Hundred,   Sussex   County,   Delaware,

     such real   property   being   more   particularly   described   on Exhibit A and

     incorporated herein by reference, together with all buildings,   structures,

     improvements,   appurtenances,   rights, easements and rights-of-way incident

     thereto (collectively, the "Real Property");

 

          (b) all tangible   personal   property and fixtures of any kind owned by

     Seller   and   attached   to   or   used   in   connection    with   the   ownership,

      maintenance,   use,   leasing,   service,   or operation   of the Real   Property

     (collectively, the "Personal Property");

 

          (c) all intangible property of any kind owned by Seller and related to

     the Real Property or the Personal Property,   including without   limitation,

     Seller's   rights and   interests,   if any, in and to the   following   (to the

     extent    assignable):    (a)   all    plans   and    specifications    and   other

     architectural and engineering   drawings;   (b) all warranties and guaranties

     given or made in respect;   (c) all consents,   authorizations,   variances or

     waivers,    licenses,    applications,    permits   and    approvals    from   any

     governmental or quasi-governmental agency,   department,   board, commission,

     bureau or other entity or   instrumentality   (collectively,   the "Intangible

     Property;"   the   Intangible   Property,   the Personal   Property and the Real

     Property collectively, the "Property").

 

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     1.2 Joint Acquisition of Property. At Closing,   Seller shall convey to LOR,

and LOR shall receive from Seller, an approximately 42.15% undivided interest in

the Property (the "LOR Undivided Interest").   At Closing, Seller shall convey to

RCTLOR, and RCTLOR shall receive from Seller, an approximately   57.85% undivided

interest in the Property (the "RCTLOR Undivided Interest").   At Closing, LOR and

RCTLOR will enter into a   Tenancy-In-Common   Agreement.   Wherever this Agreement

provides that Purchaser shall pay a particular cost or expense,   or provides for

an   adjustment   to the   Purchase   Price   (whether an increase or   decrease),   or

otherwise   provides   for rights,   liabilities   or   obligations   to be   assigned,

assumed or performed by Purchaser,   including without   limitation   Sections 2.6,

4.3, 4.4, 5.3 and Article 8, such costs,   expenses,   Purchase Price adjustments,

rights,   liabilities and obligations   shall be divided between LOR and RCTLOR on

the basis of their   respective   42.15% and   57.85%   ownership   interests   in the

Property.

 

                                    ARTICLE 2

              PURCHASE PRICE, EARNEST MONEY, CLOSING AND CONDITIONS

 

     2.1 Purchase Price.   Subject to the   adjustments   provided for elsewhere in

this Agreement, the purchase price (the "Purchase Price") for the Property shall

be TEN MILLION EIGHT HUNDRED   THOUSAND AND NO/100THS   DOLLARS   ($10,800,000.00),

and shall be   allocated   between LOR and RCTLOR as   follows:   the portion of the

Purchase Price allocable to the LOR Undivided   Interest and to be paid by LOR at

Closing   shall be FOUR MILLION FIVE HUNDRED   FIFTY-TWO   THOUSAND TWO HUNDRED AND

NO/100THS   DOLLARS   ($4,552,200.00),   and   the   portion   of the   Purchase   Price

allocable to the RCTLOR   Undivided   Interest and to be paid by RCTLOR at Closing

shall   be SIX   MILLION   TWO   HUNDRED   FORTY-SEVEN   THOUSAND   EIGHT   HUNDRED   AND

NO/100THS DOLLARS ($6,247,800.00). The Purchase Price shall be paid by Purchaser

to Seller in cash at Closing by wire transfer of federal funds,   or by cashier's

or   certified   check,   or   by   closing    attorney's   escrow   account   check,   at

Purchaser's   election,   provided   that such   amount   shall be   adjusted   for the

"Earnest   Money"   (hereinafter   defined   in Section   2.2 below) and the   closing

prorations described hereinbelow.

 

     2.2 Earnest   Money.   Purchaser   shall   deliver to Fidelity   National   Title

Insurance Company,   Two Parkway Center, 1800 Parkway Place, Suite 700, Marietta,

GA 30067 (the "Escrow   Agent"),   not later than two (2) business   days after the

date hereof, the sum of NA Dollars ($ N/A ) (the "Earnest Money"), which Earnest

Money, together with any interest earned thereon, shall be either credited to or

delivered to Purchaser at Closing,   if not   theretofore   disbursed in accordance

with the terms and   conditions of this   Agreement.   After the   expiration of the

Inspection    Period,    the   Earnest    Money   shall   be   at   risk   and   shall   be

nonrefundable,    except   as   expressly    provided   herein,    including    without

limitation,   Seller's inability, refusal or unwillingness to satisfy the closing

conditions   set forth in Section 5.1 below,   and the terms of Sections   4.1, 4.2

and 9.2 and of Article 8.

 

     2.3   Closing.   The   consummation   of the   purchase and sale of the Property

herein    contemplated   (such   consummation   being   herein   referred   to   as   the

"Closing") shall take place on December 29, 2004.

 

                                       2

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     In the event the date of Closing   falls on a   Saturday,   Sunday or holiday,

the date of   Closing   shall be   extended   until,   and shall   occur on,   the next

business day.

 

     2.4 Place of   Closing.   The   Closing   shall   take   place at the   offices of

Fidelity National Title Insurance Company,   Two Parkway Center,   Suite 700, 1800

Parkway   Place,   Marietta,   Georgia   30067,   or   at   such   other   place   in   the

metropolitan   Atlanta   area   as may   be   reasonably   designated   by   Seller   and

Purchaser.

 

     2.5 Exchange.   Seller agrees that Seller shall   cooperate with   Purchaser's

desire to exchange   other   property of like kind and   qualifying   use within the

meaning of Section 1031 of the Internal   Revenue Code of 1986,   as amended,   and

the Regulations promulgated thereunder, for fee title in the Property,   provided

that Seller shall not be obligated to incur any additional   expense or liability

as a result of so   structuring   this   transaction   (other than sums   incurred in

connection with the review of necessary exchange   documents),   and said exchange

shall not extend the date of Closing without the mutual consent of Purchaser and

Seller,   nor shall Seller be required to take title to any exchange property for

the benefit of Purchaser.

 

     Purchaser   agrees that Purchaser   shall   cooperate with Seller's   desire to

exchange   other   property of like kind and   qualifying use within the meaning of

Section   1031   of the   Internal   Revenue   Code   of   1986,   as   amended,   and the

Regulations promulgated thereunder, for fee title in the Property, provided that

Purchaser shall not be obligated to incur any additional expense or liability as

a result   of so   structuring   this   transaction   (other   than sums   incurred   in

connection with the review of necessary exchange   documents),   and said exchange

shall not extend the date of Closing   without   the mutual   consent of Seller and

Purchaser,   nor   shall   Purchaser   be   required   to take   title to any   exchange

property for the benefit of Seller.

 

     2.6 Rights of Escrow Agent. Upon receipt of the Earnest Money, Escrow Agent

shall   promptly   deposit   the same into a   government   insured   interest-bearing

escrow   account with such bank as Escrow Agent may select subject to Purchaser's

and   Seller's   reasonable   approval   (the   "Depository").    The   parties   hereby

acknowledge   and agree that Escrow   Agent   shall have the right to disburse   the

Earnest Money to Purchaser or Seller upon ten (10) days'   written   notice to the

parties, but only if Escrow Agent shall not have received any written objections

to such disbursement   within ten (10) days after receipt by Purchaser and Seller

of said notice.   The parties   hereto   hereby   acknowledge   that the Escrow Agent

shall have no   liability   to any party on account of its failure to disburse the

Earnest Money and any interest thereon in the event of an unresolved   dispute as

to which party is   entitled to receive the same.   In the event of any dispute as

to who is entitled to receive the Earnest Money and any interest thereon, Escrow

Agent shall have the right, at its sole election, either to retain the funds and

disburse   them in   accordance   with the   final   order   of a court   of   competent

jurisdiction or to deposit the Earnest Money and any interest   thereon with said

court, pending a final decision of such controversy.   The parties hereto further

agree that Escrow   Agent shall not be liable for failure of the   Depository   and

shall   only be   liable   otherwise   in the   event of its   negligence   or   willful

misconduct.   Escrow   Agent's fee for serving in such capacity and Escrow Agent's

out-of-pocket   expenses   shall be paid 50% by Seller and 50% by   Purchaser.   All

interest   earned on the Earnest   Money shall accrue to the benefit of Purchaser,

but shall be   credited,   delivered   or   otherwise   disbursed   together   with the

Earnest Money in accordance with the terms and conditions of this Agreement.

 

                                       3

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                                    ARTICLE 3

                                   INSPECTION

 

     3.1 Inspection of Property. Purchaser, its agents and representatives shall

have a period (the "Inspection   Period") of N/A from the date hereof in which to

conduct due   diligence   with   respect to the Property and to enter upon and make

such studies, tests and/or inspections of the Property,   including environmental

inspections,   at Purchaser's sole cost and expense, as Purchaser deems necessary

or appropriate.   Such due diligence shall include review of all zoning, utility,

engineering,    access,   title,   geotechnical,    environmental   and   cost   issues

associated   with   developing   the   Property,   including   obtaining any necessary

governmental   approvals   or permits.   In the event that   Purchaser,   in its sole

discretion,    determines   that   the   Property   is,   for   any   reason   whatsoever

(including, without limitation, economic reasons),   unsatisfactory to Purchaser,

Purchaser shall have until the end of the last day of the Inspection   Period (as

it may be extended) to notify   Seller in writing that   Purchaser   has elected to

terminate   this   Agreement.   If   Purchaser   elects to terminate   this   Agreement

pursuant to the preceding sentence, then Escrow Agent shall promptly deliver One

Hundred and No/ 100   Dollars   ($100.00)   to Seller   from the   Earnest   Money and

Purchaser shall promptly deliver to Seller copies of any and all studies, tests,

reports, title examinations,   surveys or similar material that Purchaser has had

prepared   with   respect to the Property   (which   deliveries   and payment   Seller

acknowledges and agrees constitute adequate consideration for the rights granted

to Purchaser under this Agreement through the Inspection   Period).   Escrow Agent

shall   deliver   the   balance of the Earnest   Money and any   interest   thereon to

Purchaser   and,   upon   Seller's   receipt   of such   deliveries   and   payment   and

Purchaser's receipt of the balance of the Earnest Money, this Agreement shall be

terminated   and neither   Purchaser   nor Seller shall have any further   rights or

obligations   hereunder,   except   for   the   survival   of   certain   provisions   as

expressly   provided   for   herein.   In the event the final day of the   Inspection

Period falls on a Saturday,   Sunday or holiday,   the Inspection   Period shall be

extended until the next business day.   Purchaser shall pay all costs incurred in

making such studies, tests and/or inspections and shall indemnify Seller against

and   defend   and   hold   Seller   harmless   from any   liens,   claims,   losses   and

liabilities arising out of Purchaser's   exercising its right and privilege to go

upon the   Property;   provided   this   indemnity   shall not require   Purchaser   to

indemnify Seller for items merely discovered by Purchaser, such as environmental

matters.   This   indemnity   shall   survive   the   termination   of this   Agreement.

Provided   that   Purchaser   has   not   terminated   this   Agreement   prior   to   the

expiration of the Inspection Period,   Purchaser shall continue to have the right

prior to Closing to make on-site   inspections of the Property during   reasonable

business hours in accordance with the terms and limitations of this Section 3.1.

As provided in Section 2.2 above, if Purchaser does not terminate this Agreement

prior to the expiration of the Inspection   Period,   the Earnest Money thereafter

shall be at risk and   shall   be   nonrefundable,   except   as   expressly   provided

herein.

 

     3.2 As-Is Condition.   Seller   expressly   disclaims any   representations   or

warranties of any kind, whether express or implied, with respect to the Property

and   its   condition   or   fitness   for a   particular   purpose,   other   than   such

representations   and warranties as are expressly set forth in this Agreement and

in   the   Conveyance    Deed   as   hereinafter    described.    Except   as   otherwise

specifically   provided   herein,   the   Property   is to be   conveyed by Seller and

accepted   by   Purchaser   in "AS-IS,   WHERE-IS,   WITH ALL   Faults"   condition   at

Closing. The provisions of this Section 3.2 shall survive Closing.

 

 

                                       4

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                                    ARTICLE 4

                                   TITLE; SURVEY

 

     4.1 Title.   Except as   otherwise   agreed by the Seller in writing,   for the

purposes of this Agreement, "Permitted Exceptions" shall mean the following: (i)

current state and county ad valorem real   property   taxes not due and payable on

the date of Closing; (ii) easements for the maintenance of public utilities that

serve only the   Property;   (iii) any other   matters   which a   current,   accurate

survey or physical inspection of the Property would show and (iv) any matters of

public record,   other than Monetary   Encumbrances (as hereinafter   defined),   if

any.   Prior to the end of the   Inspection   Period,   Purchaser   shall secure,   at

Purchaser's   expense,   one   or   more   commitments    (collectively,    the   "Title

Commitment") for an owner's policy or policies of title insurance (collectively,

the "Title Policy") to be issued by a national title insurance   company selected

by Purchaser (the "Title Company") at its then current   standard rates,   without

any special premium, in an amount not less than the Purchase Price.   Purchaser's

obligation   to   consummate   the purchase and sale herein   contemplated   shall be

subject   to and   conditional   upon   Purchaser's   receipt at Closing of the Title

Policy or of a marked-up Title   Commitment   deleting all exceptions   (including,

without   limitation,   the   standard   exceptions   the   deletion of which does not

require a current   survey of the Property)   other than the Permitted   Exceptions

(as hereafter   defined).   The Title Policy shall insure the Purchaser that, upon

consummation   of the purchase and sale herein   contemplated,   Purchaser   will be

vested with good, fee simple,   marketable   and insurable   title to the Property,

subject only to the Permitted   Exceptions.   For the purposes of this   Agreement,

"good,   fee   simple,   marketable   and   insurable   title"   shall   mean fee simple

ownership,   insurable by the Title Company   under the Title Policy,   and free of

all claims,   liens and encumbrances of any kind or nature   whatsoever other than

the   Permitted   Exceptions.   Seller   hereby   covenants and agrees to furnish the

Title   Company   with   such   affidavits   and   indemnities   (subject   to   Seller's

reasonable approval) as may be reasonably required by the Title Company in order

to issue the Title   Policy   without any   exception   for   unfiled and   unrecorded

materialmen's   and   mechanics'   liens rights or claims of parties in   possession

(other than Purchaser or anyone acting by, through or under Purchaser) not shown

by the public   records and taxes or special   assessments   which are not shown as

existing   liens by the   public   records   and as   necessary   to enable   the Title

Company to issue so-called "gap" coverage in favor of Purchaser. Purchaser shall

have   until the end of the   Inspection   Period in which to give   Seller   written

notice of   Purchaser's   objections   to any   encumbrances   revealed   by the Title

Commitment.   Following   Purchaser's   initial title examination,   Purchaser shall

have until the date of Closing in which to   reexamine   title to the Property and

in which to give Seller notice of any   additional   objections   disclosed by such

reexamination and which were not filed and indexed of record as of the effective

date of the Title   Commitment;   upon   delivery   of such   notice to   Seller,   the

process   outlined in Section 4.2 below shall again be applicable with respect to

any additional objections.

 

     4.2 Objections to Title. In the event that the Title   Commitment shall show

that the Property is subject to encumbrances to which   Purchaser   objects,   then

Purchaser may elect: (a) to waive any objection to such encumbrances and proceed

to Closing,   subject to the   obligation of Seller to pay and remove or otherwise

bond   over   in   a   manner   reasonably    acceptable   to   Purchaser   all   Monetary

Encumbrances (as hereinafter   defined),   or (b) to terminate this Agreement,   in

which   event the Earnest   Money and any   interest   thereon   shall be returned to

Purchaser, and, upon the receipt thereof by Purchaser, all obligations hereunder

shall be null and void and of no   further   force or   effect,   or (c) to   deliver

written   notice to Seller,   within the time   periods   set forth   hereinabove   in

Section 4.1, of Purchaser's objections to such encumbrances   ("Purchaser's Title

Objection Notice").   Seller shall be obligated to pay and discharge or otherwise

 

 

                                       5

<PAGE>

 

bond over in a manner reasonably   acceptable to Purchaser at or prior to Closing

all   mortgages,   deeds to   secure   debt,   security   agreements,   mechanic's   and

materialmen's   liens,   judgment   liens,   tax   liens and   assessments,   and other

encumbrances   for the benefit of Purchaser that can be cured by the payment of a

sum certain ("Monetary Encumbrances") encumbering the Property.

 

     Within five (5) business days after Seller's   receipt of Purchaser's   Title

Objection   Notice,   Seller shall   deliver   written   notice to Purchaser   stating

whether   Seller   agrees   to   remove   any of such   encumbrances   (other   than the

Monetary   Encumbrances)   which are objected to in   Purchaser's   Title   Objection

Notice (the   "Non-Monetary   Encumbrances").   Seller shall have no   obligation to

remove   any such   Non-Monetary   Encumbrances,   and if   Seller   does not agree to

remove some or all of the   Non-Monetary   Encumbrances,   Purchaser shall have the

right,   upon   written   notice to Seller to acquire the   Property   subject to the

unsatisfied   Non-Monetary   Encumbrances.   Within   five (5)   business   days after

Purchaser's   receipt of Seller's   written   response,   Purchaser,   at Purchaser's

election,   shall provide   written notice to Seller (the "Title   Notice") that it

has   elected   to   (i)   acquire   the   Property    subject   to   such    Non-Monetary

Encumbrances or (ii) terminate this Agreement.   If Purchaser elects to terminate

this   Agreement,   then the   Earnest   Money   and any   interest   thereon   shall be

delivered   to   Purchaser,   and   upon   the   receipt   thereof   by   Purchaser,   all

obligations hereunder shall be null and void and of no further force and effect,

except those stated herein to survive any such termination.   Purchaser's failure

to timely   deliver the Title   Notice shall be deemed its election to acquire the

Property   subject to such   Non-Monetary   Encumbrances.   If   Purchaser   elects to

terminate   this Agreement by sending Title Notice   thereof,   then, in such event

the Earnest Money and any interest thereon shall be delivered to Purchaser,   and

upon the receipt thereof by Purchaser,   all obligations   hereunder shall be null

and void and of no further   force and   effect,   except   those   stated   herein to

survive any such   termination.   If Purchaser   does not terminate   this Agreement

within such time period,   Purchaser shall be deemed to have waived its objection

to such Non-Monetary   Encumbrance.   If, on or before the date of Closing, Seller

either fails to pay and   discharge any Monetary   Encumbrance   or fails to remove

any Non-Monetary   Encumbrance which Seller has agreed to remove,   Purchaser,   at

Purchaser's election, may (i) waive such objections and proceed to Closing; (ii)

terminate this Agreement, in which such event the Earnest Money and any interest

thereon   shall be delivered   to Purchaser   and,   upon the receipt   thereof,   all

obligations hereunder shall be null and void and of no further force and effect,

except   those   stated   herein to   survive   any such   termination;   or (iii) with

respect to any Monetary Encumbrance,   proceed to Closing,   satisfy such Monetary

Encumbrance   and receive a credit   against the   Purchase   Price in the amount of

such Monetary Encumbrance.   Any Non-Monetary   Encumbrances that Purchaser waives

or to which Purchaser fails to object within the designated time period shall be

deemed to be included in "Permitted Exceptions".

 

     4.3 Lease. Seller and Purchaser   acknowledge that the Property is currently

leased to Ritter   Farms   pursuant to that   certain   Lease (the   "Lease"),   dated

January 1, 2004 between Seller, as lessor,   and Ritter Farms, as lessee.   Seller

agrees   to assign   all of its   rights   and   Purchaser   agrees   to assume   all of

Seller's   obligations under the Lease effective as of the Closing Date. All rent

under the Lease shall be prorated at Closing.

 

     4.4 Intentionally Deleted.

 

 

 

                                       6

<PAGE>

 

                                    ARTICLE 5

                                     CLOSING

 

     5.1 Seller's Deliveries and Conditions to Purchaser's   Obligations.   Seller

shall execute and deliver at Closing the following documents,   dated the date of

Closing, the form of each of which shall be reasonably   acceptable to Seller and

Purchaser   (provided any form attached   hereto shall be acceptable to Seller and

Purchaser,   except   that the   Conveyance   Deed and   Quitclaim   Deed must also be

acceptable to the Title Company),   and the execution and accuracy of which shall

be a condition to   Purchaser's   obligation to   consummate   the purchase and sale

herein contemplated:

 

          (a) Conveyance Deed. A special warranty deed (the "Conveyance   Deed"),

      in the statutory form attached hereto as Exhibit C, duly executed by Seller

     conveying title to the Property, with the record legal description, subject

     to the Permitted   Exceptions,   together with all real property transfer tax

     returns, if any, required by the State of Delaware;

 

          (b)   Assignment   of   Lease.   Two   (2)   counterparts   of   an   Agreement

     Regarding   Assignment and Assumption of Leases (the   "Assignment of Lease")

     in the form attached hereto as Exhibit D duly executed by Seller   providing

     for   the   assignment   to   Purchaser   of   Seller's   rights   under,   and   the

     assumption by Purchaser of Seller's   obligations under, the Lease effective

     as of the Closing Date.

 

          (c) Bill of Sale and Intangible   Property   Assignment.   A Bill of Sale

     and   Intangible   Property   Assignment   (the   "Bill   of   Sale")   in the form

     attached   hereto as Exhibit E, duly executed by Seller   conveying   title to

     the   Personal   Property,   without   warranty as to the title or condition of

     such personal property;

 

          (d)   Certificate of   Non-Foreign   Status.   A certificate,   in the form

     attached   hereto as   Exhibit   F, duly   executed   by   Seller   setting   forth

     Seller's   address   and Social   Security   or tax   identification   number and

     certifying   that Seller is not a foreign person for purposes of the Foreign

     Investment in Real Property Tax Act ( a/k/a "FIRPTA");

 

          (e) Quitclaim Deed. If the legal   description of the Property prepared

     from the Survey differs from the legal description of the Property attached

     to the   Conveyance   Deed,   then   Seller   shall also   execute and deliver to

     Purchaser   at Closing,   or   thereafter   as provided in Section 4.4 hereof a

     Quitclaim   Deed, in the form attached hereto as Exhibit G, duly executed by

     Seller and   conveying   the   Property to   Purchaser   using the Survey   legal

     description;

 

          (f) Owner's Affidavit.   Two (2) counterparts of the Owner's Affidavit,

     in the form   attached   hereto as   Exhibit   H, duly   executed   by Seller and

     notarized,   in form   satisfactory   to the Title Company for the issuance of

     the Title Policy   without   exception for parties in possession   (other than

      Purchaser or anyone   acting by,   through or under   Purchaser),   mechanics',

     materialmen's or other statutory liens.

 

          (g) Evidence of   Authority.   Such   documentation   as may be reasonably

     required   by   Purchaser   and the   Title   Company   to   establish   that   this

     Agreement,   the   transactions   contemplated   herein and the   execution   and

     delivery of the documents required hereunder are duly authorized,   executed

     and delivered.

 

                                       7

<PAGE>

 

          (h)   Seller's   Certificate.   Two   (2)   counterparts   of a   certificate

     executed and sealed by Seller,   evidencing the   reaffirmation   of the truth

     and   accuracy   in   all   material   respects   of   Seller's    representations,

     warranties and agreements set forth in Article VII hereof.

 

          (i)   Settlement   Statement.   Four   (4)   counterparts   of a   settlement

     statement executed by Seller,   setting forth the   consideration,   including

     prorations   thereof and   adjustments   thereto,   exchanged   pursuant to this

     Agreement at Closing (the "Settlement Statement").

 

          (j)   Keys   and   Records.   All of the   keys to any   door or lock on the

     Property and such original   non-confidential   books and records in Seller's

     possession   as may be reasonably   necessary for the continued   operation of

     the Property.

 

          (k) Additional   Documents.   Such other documents,   as are customary or

     may be reasonably   necessary to   consummate   the sale of the Property or to

     induce the Title Company to issue the Title Policy.

 

     5.2 Purchaser's Delivery and Conditions to Seller's Obligation. At Closing,

Purchaser   shall   deliver to Seller the following   documents,   dated the date of

Closing,   the form of   which   shall   be   reasonably   acceptable   to   Seller   and

Purchaser   (provided any form attached   hereto shall be acceptable to Seller and

Purchaser),   and the   executed   and   accuracy of which   shall be a condition   to

Seller's obligation to consummate the purchase and sale herein contemplated.

 

          (a) Purchase   Price   Funds.   Immediately   available   funds in the full

     amount of the   Purchase   Price,   as adjusted   pursuant to the terms of this

     Agreement;

 

          (b)   Assignment of Lease.   Two (2)   counterparts   of the Assignment of

     Lease, duly executed by Purchaser.

 

          (c)   Bill of Sale.   Two (2)   counterparts   of the   Bill of Sale,   duly

     executed by Purchaser;

 

          (d)   Settlement   Statement.   Four (4)   counterparts   of the Settlement

     Statement.

 

          (e) Additional Documents. Such other documents as are customary or may

     be reasonably necessary to consummate the sale of the Property or to induce

     the Title Company to issue the Title Policy.

 

      5.3 Costs of the   Parties.   Seller   shall pay (i)   one-half of the State of

Delaware taxes imposed upon the transactions   contemplated in this Agreement and

the   conveyance   of the Property   (collectively,   the   "Transfer   Taxes");   (ii)

one-half of the cost of the Survey;   (iii) one half of the cost of all   premiums

payable with respect to the Title Policy, including the cost of any endorsements

to the Title Policy (collectively, the "Title Insurance Premium"); (iv) one-half

of any closing fees or escrow fees charged by the Escrow Agent;   (v) the cost of

recording   any   title   clearance   documents   required   in   accordance   with this

Agreement;   and (vi) any   additional   costs and charges   customarily   charged to

 

 

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sellers in accordance   with common   escrow   practices in the county in which the

Property is located, other than those costs and charges specifically required to

be paid by Purchaser hereunder. Purchaser shall pay (i) one-half of the Transfer

Taxes;   (ii)   one-half   of the cost of the Survey;   (iii)   one-half of the Title

Insurance   Premium;   (iv)   the cost of   recording   the   Conveyance   Deed and the

QuitClaim   Deed;   (v) one-half of any closing fees or escrow fees charged by the

Escrow   Agent;   (vi) any   additional   costs and charges   customarily   charged to

purchasers in accordance with common escrow practices in the county in which the

Property is located, other than those costs and charges specifically required to

be paid by Seller hereunder.   All costs and expenses of the parties' performance

of   their   respective    obligations    hereunder   and   the   consummation   of   the

transactions   contemplated   herein that have not been   assumed   specifically   by

either party under the terms hereof shall be borne by the party   incurring   such

cost or expense.

 

     5.4 No Brokers.   Seller   represents   and warrants that Seller has not dealt

with any broker or other finder in connection   with the sale to Purchaser of the

Property. Seller will indemnify and hold harmless Purchaser from and against any

and all   claims,   loss,   liability,   cost   and   expenses   (including   reasonable

attorneys fees)   resulting from any claim that may be made against   Purchaser by

any   broker or person   claiming a   commission,   fee or other   compensation   from

Purchaser by reason of this   transaction,   if such claim arises by or on account

of any act of Seller or Seller's   representatives.   This indemnity shall survive

the Closing and any termination, cancellation or expiration of this Agreement.

 

     Purchaser   represents   and warrants   that   Purchaser has not dealt with any

broker or other finder in connection with the sale to Purchaser of the Property.

Purchaser will   indemnify and hold harmless   Seller from and against any and all

claims, loss, liability, cost and expenses (including reasonable attorneys fees)

resulting   from any   claims   that may be made   against   Seller by any   broker or

person claiming a commission, fee or other compensation from Seller by reason of

this   transaction   if such claim arises by or on account of any act of Purchaser

or Purchaser's representatives. This indemnity shall survive the Closing and any

termination,   cancellation or expiration of this   Agreement.  

 

                               ARTICLE 6 PRORATED

                                     ITEMS

 

     6.1 Prorations.   Property taxes, community improvement district assessments

and other   similar   charges   assessed   against   the   Property   shall be prorated

between Seller and Purchaser at Closing.   Such proration shall be adjusted after

Closing   based on actual   tax   bills   received.   This   provision   shall   survive

Closing.

 

                                    ARTICLE 7

               REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

 

     In order to induce Purchaser to enter into this Agreement, Seller makes the

representations,   warranties and covenants contained in this Article Seven, each

of which is   material   to and is relied upon by   Purchaser.   Seller   represents,

warrants and covenants as follows:

 

 

 

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     7.1 Organization; Authority to Sell. Seller is a duly organized and validly

existing   corporation and is in good standing under the laws of the State of New

York. Seller is authorized to do business and in good standing under the laws of

the State of Delaware.   Seller has the right,   power and   authority to (a) enter

into this   Agreement;   (b) sell the Property to Purchaser in accordance with the

terms   and   conditions   hereof;   and (c)   perform   and   observe   the   terms   and

provisions hereof.

 

     7.2 No   Condemnation   Proceedings.   To   Seller's   knowledge,   there   are no

condemnation or eminent domain proceedings   pending,   threatened or contemplated

against the   Property or any part of the   Property,   and Seller has   received no

notice,   oral or written,   of the desire of any public authority or other entity

to take or use the Property or any part of the Property.

 

     7.3 Compliance   with Laws. To Seller's   knowledge,   Seller has not received

notice of any violations of law,   municipal or county   ordinances or other legal

requirements   with respect to the Property (or any part thereof) or with respect

to the use, occupancy or construction thereof.

 

     7.4 Property   Agreements.   Except for the Lease and any agreements   entered

into by   Purchaser   on its behalf or on behalf of Seller,   the   Property   is not

subject to any leases,   operating agreements,   maintenance   agreements,   service

agreements,    management   agreements,   brokerage   agreements,   lease   commission

agreements or other agreements or instruments in force or effect entered into by

Seller granting to any person or entity any right, title, interest or benefit in

and to all or any   part of the   Property   or any   rights   relating   to the   use,

operation, management, maintenance or repair of all or any part of the Property.

 

     7.5 Pending Litigation.   To Seller's   knowledge,   there is no litigation or

any   administrative   proceeding   pending with respect to the Property,   or which

could   affect   Seller's   ability   to   properly   and   timely   perform   under this

Agreement or for which Seller has received   service of process or written notice

of the threat thereof.

 

     7.6 Non-Foreign   Person.   Seller is not a "foreign   person" for purposes of

the withholding rules of FIRPTA.

 

     7.7   Mechanic's   Liens.   At or prior to Closing,   Seller   shall pay for all

labor that has been   performed   on, or materials   furnished   to, the Property at

Seller's   direction for which a mechanic's or materialmen's   lien or liens could

be claimed by any person or entity.

 

     7.8 No Options or   Contracts.   Seller has granted no   outstanding   purchase

options   or   rights   of first   refusal   with   respect   to all or any part of the

Property,   and has entered   into no   outstanding   contracts   with others for the

sale, mortgage or other transfer of all or any part of the Property.

 

     7.9   Action of   Seller,   Etc.   Seller   has taken   all   necessary   action to

authorize the execution,   delivery and performance of this   Agreement,   and upon

the execution and delivery of any document to be delivered by Seller on or prior

to the Closing,   this Agreement and such document shall constitute the valid and

binding   obligation   and   agreement   of Seller,   enforceable   against   Seller in

accordance with its terms.

 

 

 

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     7.10 No   Violations   of   Agreements.   To   Seller's   knowledge,   neither the

execution,   delivery or performance of this Agreement by Seller,   nor compliance

with the terms and provisions   hereof,   shall result in any breach of the terms,

conditions or provisions of, or conflict with or constitute a default under,   or

result in the   creation of any lien,   charge or   encumbrance   upon the   Property

pursuant to the terms of any indenture,   mortgage, deed of trust, deed to secure

debt,   note,   evidence of   indebtedness   or any other agreement or instrument by

which Seller or the Property are bound.

 

     7.11 Environmental   Matters. To Seller's knowledge,   Seller has received no

written notification from any governmental or quasi-governmental   authority that

that there are any   violations of any federal or state   environmental   laws with

respect to the   Property,   nor to Seller's   knowledge,   has Seller   received any

written notice from any governmental or   quasi-governmental   authority that such

authority is   contemplating   an   investigation of the Property with respect to a

violation or suspected violation of any such environmental law.

 

     7.12 No New Encumbrances.   During the term of this Agreement,   Seller shall

not convey or encumber any portion of the Property or any rights therein without

the prior written consent of Purchaser,   which consent shall not be unreasonably

withheld or delayed.

 

     7.13 Warranties and Representations. The truth and accuracy in all material

respects,   as of the date of Closing, of all representations and warranties made

by Seller   herein shall be an express   condition to   Purchaser's   obligation   to

consummate the transactions contemplated herein.

 

     7.14 No Breach.   Seller shall not be deemed to be in breach of any warranty

contained in this Agreement or any other document   executed by Seller at Closing

which shall be   determined   to be   inaccurate   in any   respect,   if, at Closing,

Purchaser has actual knowledge of such inaccuracy.   The reference to phrase, the

"knowledge" of Purchaser,   shall be deemed to include,   without limitation,   the

actual   knowledge of Thorne S. Winter or Donald P. Carson,   respectively   of RFA

Management Co.

 

                                    ARTICLE 8

                                  CONDEMNATION

 

     If the Property or any portion thereof be taken by condemnation or conveyed

under the threat of condemnation prior to Closing, or if there is any threatened

condemnation   against the Property as of the date of Closing,   Purchaser may, at

its sole election,   either:   (i) terminate this Agreement by notifying Seller in

writing on or before the last date for Closing as provided   for above,   in which

case the Earnest Money and any interest thereon shall be delivered to Purchaser,

and all rights and obligations of the parties under this Agreement shall expire,

except for the survival of certain   provisions as expressly provided for herein,

and this   Agreement   shall   terminate and be of no further force and effect;   or

(ii) proceed to Closing,   in which event the Purchase   Price shall be reduced by

the total of any awards or other   proceeds   received   by Seller on or before the

date of Closing with respect to any taking, and, at Closing, Seller shall assign

to Purchaser   all of its right to any and all awards or other   proceeds   paid or

payable thereafter by reason of any taking. Seller shall notify Purchaser of the

existence or threat of eminent domain   proceedings   promptly after Seller learns

thereof.

 

 

 

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<PAGE>

 

                                    ARTICLE 9

                                DEFAULT; REMEDIES

 

     9.1   Purchaser   Default.    If   all   conditions    precedent   to   Purchaser's

obligation   to   consummate   the   purchase   of the   Property   have been waived by

Purchaser or satisfied, and if Seller has performed its covenants and agreements

hereunder, but Purchaser has breached its covenants and agreements hereunder and

for any reason   whatsoever   has failed,   refused or is unable to consummate   the

purchase and sale of the Property by the date of Closing,   then the Escrow Agent

shall deliver the Earnest   Money and any interest   thereon to Seller as full and

complete   liquidated damages, it being acknowledged by Purchaser and Seller that

in such event it would be extremely impracticable and difficult to ascertain the

actual   damages   that would be suffered by Seller.   Upon proper   delivery of the

Earnest Money and any interest thereon to Seller as liquidated damages, as above

provided, no party to this Agreement shall have any liability to any other party

to this Agreement,   and this Agreement   shall, in its entirety,   be deemed of no

further   force and   effect,   except for the   survival of certain   provisions   as

expressly   provided for herein.   Such liquidated   damages shall be Seller's sole

remedy for Purchaser's failure to close when obligated to do so.

 

     9.2 Seller   Default.   If Seller has breached its covenants   and   agreements

under this Agreement for any reason whatsoever, including without limitation the

failure,   refusal or   inability   of Seller to   consummate   the purchase and sale

contemplated herein by the date of Closing, then Purchaser shall, at Purchaser's

sole election, as Purchaser's sole and exclusive remedies:

 

          (a) terminate this Agreement by written notice   delivered to Seller on

     or before the date of Closing,   in which case Escrow   Agent shall refund to

     Purchaser   the Earnest   Money and any   interest   thereon   and recover   from

     Seller any actual damages (but not punitive or speculative damages incurred

     by Purchaser as a result of such default, including,   without limitation, a

     reimbursement of all of Purchaser's   out-of-pocket expenses incurred to the

     date   of   such   termination   (including,   without   limitation,   Purchaser's

     attorneys' fees and expenses, surveyors' fees and expenses, and engineering

     fees and expenses); or

 

          (b) obtain specific performance of this Agreement against Seller.

 

                                   ARTICLE 10

                            MISCELLANEOUS PROVISIONS

 

     10.1 Entire Agreement;   Counterparts. This Agreement constitutes the entire

agreement    between   the   parties   hereto   with   respect   to   the    transactions

contemplated   herein,   and it supersedes all prior   understandings or agreements

between the parties.   This   Agreement   may be executed in one or more   duplicate

original counterparts,   each of which shall be effective as and shall constitute

an original   document   binding   upon the party or parties   signing the same.   It

shall not be necessary for each party to execute all counterparts, provided that

each party has executed at least one counterpart.

 

 

 

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     10.2 Binding Effect.   This Agreement shall be binding upon and inure to the

benefit of the parties hereto,   and their respective heirs,   devisees,   personal

representatives, permitted successors and permitted assigns.

 

     10.3 Survival of Warranties.   It is the express   intention and agreement of

the   parties   to this   Agreement   that all   covenants,   agreements,   statements,

representations and warranties made by Seller or Purchaser in this Agreement and

stated to survive   Closing   shall   survive this   Agreement,   the delivery of the

deeds and the Closing   for a period of nine (9) months   following   the   Closing,

other than,   the   provisions of Section 3.2, the indemnity   contained in Section

3.1 and the   indemnity   and   obligations   referred   to in the last   sentence   of

Section 4.3 and Section 5.4, all of which shall   survive   Closing in   accordance

with their respective terms.

 

     10.4 Waiver: Modification. Failure by Purchaser or Seller to insist upon or

enforce any of its rights shall not   constitute a waiver   thereof.   Either party

hereto may waive the   benefit of any   provision   or   condition   for its   benefit

contained in this Agreement.   No oral modification   hereof shall be binding upon

the parties, and any modification shall be in writing and signed by the parties.

 

     10.5 Time of Essence. TIME IS OF THE ESSENCE OF THIS AGREEMENT.

 

     10.6 Construction.   Each party hereto hereby   acknowledges that all parties

hereto   participated   equally   in the   drafting   of   this   Agreement   and   that,

accordingly,    no   court   construing   this   Agreement   shall   construe   it   more

stringently against one party than the other.

 

     10.7 Governing   Law. This Agreement   shall be governed by, and construed in

accordance with, the laws of the State of Delaware.

 

     10.8 Cumulative   Remedies.   Subject to the limitations set forth in Article

Nine above, each and every one of the rights,   benefits and remedies provided to

Purchaser   or   Seller   by this   Agreement,   or by any   instrument   or   documents

executed   pursuant to this Agreement,   are cumulative and shall not be exclusive

of any other of said rights,   remedies and benefits   allowed by law or equity to

Purchaser   or Seller,   except to the   extent   provided   in Article   Nine of this

Agreement.

 

     10.9 Date   Hereof.   For   purposes of this   Agreement,   "the date hereof' or

similar references shall mean the date first above written.

 

     10.10   Assignment.   In addition to the assignment   permitted in Section 2.5

herein, Purchaser may assign its interest in this Agreement,   either in whole or

in part,   without   the prior   written   consent   of Seller,   to any entity   which

controls,   is controlled by