AGREEMENT OF SALE
THIS AGREEMENT OF SALE (the "Agreement") is made this 24_day of September,
1996 by PENN NATIONAL GAMING, INC., a Pennsylvania corporation (the "Buyer"),
FRED V. SCHUBERT (the "Seller"), and MARC B. KAPLIN, ESQUIRE and RONALD M.
AGULNICK, ESQUIRE (hereinafter collectively referred to as the "Escrow Agents").
BACKGROUND
A. The Seller is the owner of that certain lot or parcel of ground
containing approximately 5.0094 acres, located at the intersection of Route 100
and Village Avenue in the Township of Uwchlan (the "Township"), Chester County,
Pennsylvania, as depicted as Lot No. 2 ("Premises") on the Record Plan -2- Lot
Subdivision for Fred V. Schubert dated October 20, 1992, last revised December
31, 1992, and prepared by Medveczky Associates ("Subdivision Plan"), a copy of
which has been supplied to the Buyer. The Premises is more fully described on
Exhibit "A" attached hereto and made a part hereof. The Premises presently
contains a building known as the "Cadwalader House."
B. Uwchlan Partnership (the "Partnership") is the owner of that certain
lot or piece of ground located to the south of the Premises and depicted on the
Plan as "Parcel C" containing 1.2020 acres (the "Partnership Property"). The
Partnership Property is more particularly described on Exhibit "B", attached
hereto and made a part hereof. The Partnership Property is presently used as a
parking lot and contains approximately eighty (80) parking spaces. As depicted
on the Plan, 29 parking spaces located adjacent the Partnership Property are
reserved for use by the restaurant and hotel buildings that are located on Lot
#1 (hereinafter defined) ("Reserved Spaces").
C. The Seller is also the owner of
Lot #1 which is also depicted on the Plan ("Lot #1") and on which there is
constructed a restaurant building occupied by "Hoss's" Restaurant and a Hampton
Inn. Lot #1 contains 5.5196 acres of land, more or less, comprised of a lot
containing 5.3122 acres, more or less, and a lot containing .2074 acres, more or
less, as shown as "Parcel B" on the Subdivision Plan. Lot #1 is subject to a
long term ground lease in which the Partnership is the Lessee. The Seller is a
limited partner in the Partnership. The Reserved Spaces are included in the
premises leased to the Partnership and are also included in the property
encumbered by a mortgage granted by the Seller.
D. The Buyer is in the business of operating restaurant and off-track
wagering facilities, and desires to develop on the Premises a building
containing a restaurant, off-track wagering facility, and needed parking spaces
(the "Facility"). In order to properly operate the Facility, the Buyer requires
the exclusive right to at least 330 parking spaces. The Buyer's architect has
estimated that approximately 250 parking spaces can be constructed on the
Premises in connection with the construction of the Building and the
preservation of the Cadwalader House. Accordingly, the Buyer requires the right
to either purchase or enter into a long term lease for the exclusive right to
use at least 80 of the parking spaces on the Partnership Property. Furthermore,
the Buyer requires that the Seller use its best efforts to obtain permission
from the Partnership and the Seller's lender to cause the location of the
Reserved Spaces be changed from the northern end of Parcel C to the southern end
(such relocation of the Reserved Spaces hereinafter referred to as the "Reserved
Spaces Relocation".
E. The Seller believes that he will be able to cause the Partnership to
sell or enter into a long term lease with the Buyer which will allow the Buyer
to acquire the exclusive right to use at least 80 parking spaces on Parcel C in
connection with the Facility (the sale or lease of Parcel C is hereafter
referred to as the "Parcel C Acquisition Right"). In addition, the Seller has
agreed to use its best efforts to obtain the appropriate consents necessary to
complete the Reserved Spaces Relocation so that the 80 or more parking spaces on
Parcel C acquired by the Buyer are located adjacent to the Premises.
F. The Seller desires to sell the Premises to the Buyer and the Buyer
desires to purchase the Premises from the Seller upon the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. SALE OF PREMISES. Subject to the terms and conditions of this
Agreement, the Seller hereby agrees to sell, transfer and convey to the Buyer
and the Buyer agrees to purchase from the Seller the Premises together with all
rights and appurtenances pertaining thereto (the "Appurtenances"), including but
not limited to:
A. All right, title and interest, if any, of the Seller in and
to any land in the bed of any street, road or avenue, open or proposed, in
front of or adjoining the Premises;
B. All right, title and interest, if any, of the Seller in and
to any rights-of-way or rights of ingress or egress on or to any land,
street, road, avenue or driveway, open or proposed, in, on, across, in front
of, abutting or adjoining any part of the Premises;
C. All right, title and interest, if any, of the Seller in and
to any easements adjacent to or serving the Premises;
D. Any reversionary rights attributable to the Seller with
respect to the Premises; and
E. Any Approvals and Permits (hereinafter defined) for the
development of the Premises which have previously been obtained by the Seller
from any public agencies, and all surveys, reports, studies or analyses of the
Premises in the Seller's possession.
(Hereinafter, the term "Premises" shall be deemed to include all of the
Appurtenances pertaining thereto.)
2. PURCHASE PRICE. The Buyer shall pay in exchange for the Premises and
the Parcel C Acquisition Right the sum of One Million Four Hundred Thousand
Dollars ($1,400,000.00). It shall be the Seller's obligation to pay to the
Partnership the compensation, if any, which the Partnership requires to convey
the Parcel C Acquisition Rights to the Buyer.
3. MANNER OF PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
paid in the following manner:
A. Deposit.
(1) Deposit. On the date hereof, the Buyer shall deliver to
the Escrow Agents the Buyer's plain check, subject to prompt collection, in the
amount of Fifty Thousand Dollars ($50,000.00) (the "Deposit").
(2) Application of Deposit. The Deposit shall be held by the
Escrow Agents in an interest-bearing money market account until consummation or
termination of this Agreement. If the Closing is completed hereunder, on the
Closing Date the Escrow Agents shall pay the Deposit and all interest accrued
thereon to the Seller, which sum shall be credited to the Buyer against that
portion of the Purchase Price. If the Buyer, without the right to do so,
defaults in the Buyer's obligations hereunder by failing to complete the Closing
(except in the event of a default by the Seller or lawful termination of this
Agreement by the Buyer), the Escrow Agents shall pay to the Seller the Deposit
together with all interest accrued thereon as liquidated damages, in accordance
with the provisions of Paragraph 17A below. If the Buyer terminates this
Agreement as a consequence of the Seller's default, the Escrow Agents shall
return the Deposit, together with all interest accrued thereon, to the Buyer.
B. Payment of Balance of Purchase Price. At the Closing, the Buyer
shall pay to the Seller the Purchase Price (subject to adjustments and
apportionments set forth in this Agreement and less the Deposit and all interest
accrued thereon) by certified check, bank check, title insurance company check
or wire transfer of immediately available federal funds.
4. INVESTIGATION PERIOD.
A. Investigation. The Buyer shall have a period commencing on the
Agreement Date and expiring at 11:59 P.M. sixty (60) days thereafter (such
period being referred to herein as the "Investigation Period") to inspect the
Premises as more particularly described in this Paragraph 4. During the
Investigation Period, the Buyer may inspect and/or cause one or more surveyors,
attorneys, engineers, architects, environmental consultants and/or other experts
of the Buyer's choice to inspect, examine, survey, appraise and otherwise do
that which, in the opinion of the Buyer, is necessary for the Buyer to satisfy
itself with regard to the physical condition of the Premises, the suitability of
the Premises for the development of the Facility, and all other aspects of the
Premises (the "Investigation"). If at any time prior to the expiration of the
Investigation Period the Buyer determines that it is not satisfied for any
reason, in its sole discretion, with the results of the Investigation, or the
status of any other condition of or relating to the Premises, whether known or
unknown on the Agreement Date, and notifies the Seller in writing of its
election to terminate this Agreement, this Agreement shall, without any further
action by the Buyer or the Seller, become null and void, and all of the parties
to this Agreement shall be released from any and all further obligation or
liability hereunder, except as expressly provided herein.
B. Cooperation by Seller. The Seller shall cooperate fully with the
Buyer with respect to the Investigation and shall not act in any manner to
hinder, obstruct, delay or prevent the same. The Seller shall promptly deliver
to the Buyer within five (5) days after the Agreement Date copies of all
Approvals and Permits, environmental reports, evaluations, surveys, analyses,
plans, engineering data, review letters, investigations and documents in the
Seller's possession or performed for the Seller with regard to the development
of the Premises, and all notes and correspondence related thereto, together with
all written consents necessary for the Buyer to make use of the same.
5. TITLE.
A. Title Report. Within ten (10) days after the Agreement Date, the
Buyer shall cause a search of title to the Premises to be made by any title
insurance company selected by Buyer (the "Title Company"), and upon receipt of
the title report (the "Title Report"), the Buyer shall furnish to the Seller and
the Seller's attorney, Ronald M. Agulnick, a copy thereof together with copies
of any matters which are listed as exceptions on the Title Report. Within ten
(10) days of delivery of the Title Report to the Seller, the Buyer shall notify
the Seller in writing of any conditions, defects, liens, encumbrances or other
items appearing as exceptions in the Title Report which are unsatisfactory to
the Buyer (hereinafter referred to as "Title Objections"). Within five (5)
business days after the receipt by the Seller of the Buyer's list of Title
Objections, the Seller shall notify the Buyer in writing of those Title
Objections, if any, that the Seller is unwilling or unable to remove (the
"Objection Notice"). The Buyer shall then have the right to either (1) waive
such Title Objections that the Seller is unwilling or unable to remove or (2)
terminate this Agreement by giving written notice thereof to the Seller within
fifteen (15) days after receipt of the Objection Notice, in which event the
Escrow Agents shall refund the Deposit, together with all interest accrued
thereon, to the Buyer, this Agreement shall be null and void, and neither of the
parties shall have any further obligations or liability under this Agreement.
The title agreed upon is hereinafter referred to as the "Certified Title".
B. Status of Title. At Closing, title will be transferred by the
Seller to the Buyer by special warranty deed. Title will be consistent with
Certified Title and shall be insurable by the Title Company at its regular rates
for regular risks pursuant to the standard stipulations of an ALTA policy of
owner's title insurance. The Seller shall furnish title affidavits reasonably
acceptable to the Seller in order to remove standard title objections. Permitted
Exceptions as used herein shall mean any exceptions originally appearing in the
Title Report which are not objected to in writing by the Buyer to the Seller or
which are objected to, but such objection is thereafter waived.
C. Inability to Convey Title. If the Seller is unable to
convey title at Closing in accordance with the requirements of this
Agreement, the Buyer shall have the option:
(1) Of taking such title to the Premises as Seller is able to
convey, with abatement of the Purchase Price in the amount (fixed or
ascertainable) of any liens or encumbrances on the Premises; or
(2) Of terminating Buyer's obligations under this Agreement,
in which event the Escrow Agents shall refund the Deposit, together with all
interest accrued thereon, to the Buyer, and this Agreement shall be null and
void and neither party shall have any further obligations hereunder.
(3) Notwithstanding the foregoing, if title to the Premises is
not as described in Paragraph 5.B. herein by reason of any willful act or
omission of the Seller subsequent to the Agreement Date, such act or omission
shall constitute a breach by the Seller and the Buyer shall be entitled to
pursue all remedies available to Buyer at law or in equity, including the right
to specific performance.
6. PARCEL C ACQUISITION RIGHT. The Buyer's obligation to perform its
obligations under this Agreement shall be contingent upon the Seller delivering
to the Buyer within thirty (30) days after the Agreement Date an Agreement of
Sale or long term lease for Parcel C which is satisfactory to the Buyer in the
Buyer's sole discretion which gives the Buyer the exclusive right to acquire or
lease a portion of Parcel C for use as a parking area for at least eighty (80)
cars at a cost of $1.00 to the Buyer. If the Seller does not deliver the said
Agreement to the Buyer within the said thirty (30) day period, or if the said
Agreement is not satisfactory to the Buyer in its sole discretion, Buyer shall
have the right to terminate this Agreement by giving written notice thereof to
the Seller and the Escrow Agents, in which event the Deposit, together with all
interest which has accrued thereon, shall be returned to the Buyer and this
Agreement shall become null and void. The Seller shall use its best efforts to
cause the Reserved Spaces Relocation.
7. APPROVALS AND PERMITS. The Buyer's obligation to complete the purchase
of the Premises from the Seller in accordance with this Agreement shall be
contingent upon the satisfaction of each of the following conditions with regard
to the Approvals and Permits (hereinafter defined) (any of which may be waived
in whole or in part in writing by the Buyer) on or before the Closing Date:
_._.A. Preliminary Opinion. A Preliminary Opinion of the
Township Zoning Officer issued pursuant to Section 916.2 of the Pennsylvania
Municipalities Planning Code ("MPC") to the effect that the construction of
the Building and the use thereof for the Facility is a permitted use under
the Uwchlan Township Zoning Ordinance.
B. Variances, Waivers and Special Exceptions. The Buyer shall have
obtained prior to the Closing Date all final and unappealable variances,
approvals of conditional uses, special exceptions, and/or waivers required to
lawfully construct the Project on the Premises. If the Buyer is unable, using
diligent efforts, to obtain any such variance, waiver, approval of conditional
use or special exception, the Buyer may either purchase the Premises despite not
having obtained such variance, waiver, approval of conditional use or special
exception or terminate this Agreement.
C. Subdivision and Land Development Approval. The Buyer shall have
obtained from the Township prior to the Closing Date final and unappealable
approval of a final land development plan or a final land development and
subdivision plan for the Project. The Buyer shall use diligent efforts to obtain
such approval.
D. Building Permits. The Buyer shall have obtained prior to the
Closing Date the right to obtain final and unappealable building permits from
the Township necessary to permit the construction of the Facility, upon the
submission of properly prepared building plans, payment of all necessary fees
and submission of a development agreement to the Township in the form
customarily required by the Township, and the financial security required by
such development agreement(s).
E. Sewer Allocation and Connection Permits. The Buyer shall have
obtained prior to the Closing Date (1) a final and unappealable allocation of
sewage treatment and sewage conveyance capacity in the sewage treatment and
sewage conveyance systems maintained by the Downingtown Area Sewer Authority
(the "Sewer Authority"), sufficient to provide sanitary sewer service to the
Facility (the "Allocation"); (2) such connection permits that are required to
permit connection of the Building and the Cadwalader House to the Sewer
Authority's sewer system; and (3) a binding and enforceable agreement giving the
Buyer the irrevocable right to connect the Building and Cadwalader House to the
said sewage collection and treatment system and obligating the operator(s) of
the sewage treatment plant and sewage collection system to accept, transport and
treat the effluent generated by the Building and the Cadwalader House. The
construction of the sewer collection lines of the size, specifications and
locations which will be depicted on the plans prepared by the Buyer shall be
acceptable to all governing authorities having jurisdiction without the
necessity of constructing any pumping or lift station to transport sewage from
the Premises to the lines of the Sewer Authority. The Buyer shall reserve the
Allocation and enter into an agreement for the furnishing of sewer capacity with
the Sewer Authority as soon as possible. In the event that this Agreement is
terminated for any reason, Seller shall immediately purchase the Allocation from
Buyer for a purchase price equal to the Buyer's cost for reserving such
Allocation.
F. Planning Module Approval and Water Quality Management Permit. The
Buyer shall have obtained prior to the Closing Date final and unappealable
"planning module for land development" approval, the final and unappealable
issuance of a water quality management permit (if required), and all other
required permits and approvals issued by the Pennsylvania Department of
Environmental Protection ("DEP"):
(1) Permitting the construction and installation of sewer
collection lines in the Premises and the connection of each of the Buildings
to such lines;
(2) Permitting the connection of the said sewer
collection lines to the Sewer Authority's sewage collection system; and
(3) Planning module approval permitting the treatment of the
effluent generated by the Building and Cadwalader House and collected by the
said sewer lines by the Sewer Authority's sewage treatment plant.
G. Water Service. The Buyer shall have obtained prior to the
Closing Date:
(1) A binding agreement from the Philadelphia Suburban Water
Company (the "Water Supplier"), that provides for:
(a) The installation of water lines to the Building
and Cadwalader House; and
(b) Adequate fire protection and domestic water
service to the Building and Cadwalader House.
H. Transportation Permits. The Buyer shall have obtained prior to
the Closing Date from the Pennsylvania Department of Transportation (hereinafter
referred to as "PennDOT"), Chester County (the "County") and/or the Township all
required final and unappealable highway occupancy permits (if needed) and other
approvals and permits required to permit the construction of street openings,
curb cuts, driveways and/or traffic signals (if applicable) from the Premises to
adjacent public streets.
I. Wetlands. The Buyer shall have obtained prior to the Closing Date
from DEP, the United States Army Corps of Engineers (the "Army Corps"), the
United States Environmental Protection Agency (the "EPA") and all other federal
and state agencies having jurisdiction over wetlands, all required final and
unappealable approvals, permits and/or waivers, if any, to permit construction
of the Project within any portion of the Premises determined to be within the
jurisdiction of the DEP, EPA, Army Corps and other such federal and state
agencies pursuant to the River and Harbor Act of 1899 (33 U.S.C. Sections 401
and 403), the Clean Water Act (33 U.S.C. Section 1344), the Marine Protection,
Research, and Sanctuaries Act of 1972 (33 U.S. Section 1413), the Pennsylvania
Dam Safety and Encroachments Act (32 P.S. Section 693.1 et seq.), the
Pennsylvania Clean Streams Law, (35 P.S. Section 691.1 et seq.), and any other
laws or regulations pertaining to construction on or near wetlands, waters of
the United States or waters of the Commonwealth of Pennsylvania.
J. SCS Approval. The Buyer shall have obtained prior to the Closing
Date from the Chester County Soil Conservation Service (the "CCSCS") all
required final and unappealable permits and approvals.
K. Stream Encroachment, Earth Disturbance, NPDES and Other
Environmental Approvals and Permits. The Buyer shall have obtained prior to the
Closing Date all final and unappealable environmental permits, approvals, and/or
waivers including, but not limited to, earth disturbance permits, NPDES permits,
grading permits, stream encroachment permits and approvals with regard to dams
and waterways, from all divisions of DEP having jurisdiction over any aspect of
the development of the Premises.
L. Electric Service. The Buyer shall have obtained, prior to the
Closing Date, written confirmation that electric service is readily available to
serve the Premises at the standard costs and rates of the electric company
serving that portion of the Township in which the Premises are located.
M. Historical. The Buyer shall have obtained prior to the
Closing Date final and unappealable permits, approvals and/or waivers from
the Pennsylvania Museum and Historical Commission confirming that no area of
the Premises contains items of historical or archaeological significance, or
such final and unappealable permits, approvals and/or waivers which are
required from the Pennsylvania Museum and Historical Commission to permit the
construction of the Facility even though areas of the Premises may be
determined to contain items of historical significance.
N. Horse Racing Commission Approval. The Buyer shall have
obtained prior to the Closing Date final and appealable approvals and permits
from the Pennsylvania State Horse Racing Commission to operate an off-track
wagering facility at the Premises.
O. Other Approvals and Permits. The Buyer shall have obtained prior
to the Closing Date all other final and unappealable permits, approvals and
agreements required to be obtained in order to develop the Premises in
accordance with the Buyer's subdivision, land development and building plans for
the Premises.
(The approvals, permits, variances, waivers, special exceptions and
agreements referred to in Subparagraphs A through N above are herein referred to
as the "Approvals and Permits").
P. Easements. The Buyer shall have the ability to connect the water
and sewer systems to be installed in the Premises to the public water and sewer
systems without easements or rights-of-way other than those which can and will
be furnished by the Sewer Authority or Water Supplier without additional charge
or cost to Buyer. If any easement or right-of-way is required which will cross
or burden the lands of an adjoining property owner to obtain water or sewer
service, the Seller shall, if requested by the Buyer, cooperate with the Buyer
in obtaining such easement or right-of-way. (All easements and rights-of-way
referred to in this Paragraph 6.P. are collectively referred to herein as the
"Easements.") If any Easement is obtained by the Seller during the period of
this Agreement, such Easement shall be in a form approved by the Buyer, which
approval will not be unreasonably withheld.
Q. Cooperation of Seller and Buyer. The Seller shall cooperate with
the Buyer to obtain the Approvals and Permits and Easements and will not act in
any manner to hinder, obstruct, delay or prevent the same. The Seller shall join
with the Buyer as a petitioner or applicant whenever required on any
applications to obtain the Approvals and Permits provided that the Seller shall
not be obligated to incur any costs or expenses in connection therewith.
R. Right to Terminate. If the Buyer is not able to obtain all of the
Approvals and Permits prior to the Closing, or if the Buyer is not able to
obtain all required Easements, the Buyer may terminate this Agreement and the
Escrow Agents shall return the Deposit, together with all interest accrued
thereon, to the Buyer and all parties shall be released from all liabilities and
obligations hereunder, except Buyer's obligation to sell and Seller's obligation
to buy the Allocation.
8. FINAL AND UNAPPEALABLE. For the purpose of this
Agreement, the Approvals and Permits shall not be deemed final and unappealable,
unless and until the period of time for the taking of an appeal from the grant
of an Approval or Permit has expired without an appeal of any kind having been
filed, or if an appeal has been filed, it has been dismissed.
9. CLOSING. Closing on the sale of the Premises to the Buyer(herein
referred to as "Closing") shall be held at such place as Buyer shall designate
on or before twelve (12) months after the date hereof (herein referred to as the
"Closing Date"). The Buyer shall give the Seller twenty (20) days' advance
written notice of the Closing Date.
10. POSSESSION. Possession of the Premises shall be given on the
Closing Date by special warranty deed executed and delivered by the Seller
conveying fee simple title to the Premises subject only to the Permitted
Exceptions.
11. TENDER WAIVED. Formal tender of an executed deed and purchase
money is hereby waived.
12. APPORTIONMENTS. At Closing, the following apportionments shall
be made:
A. Real Estate Taxes. Real estate taxes shall be apportioned
on a per diem basis on the basis of the fiscal or calendar year of each
taxing authority.
B. Water, Sewer and Other Utility Charges. Any water, sewer
or other utility charges assessed against or incurred because of the Premises
shall be apportioned on a per diem basis.
C. Real Estate Transfer Taxes. All real estate transfer taxes
imposed by any governmental body or bodies shall be borne equally by the
Buyer and the Seller.
D. Preferential Assessment. The Seller shall be solely
responsible for any roll-back taxes in connection with the placement of the
Premises into a preferential assessment under Act 319 or Act 515 or
otherwise. The Seller shall discharge such obligation at Closing.
13 REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of Seller. In order to
induce the Buyer to enter into this Agreement and purchase the Premises, and
with full knowledge that the Buyer is relying thereon, the Seller hereby
warrants and represents to the Buyer as follows:
(1) Power to Perform. The Seller has full power and authority
to enter into and fulfill his obligations under this Agreement and to consummate
the sale of the Premises, and the execution, delivery and performance of this
Agreement by the Seller constitutes a valid and binding obligation of the Seller
in accordance with its terms. No consent, waiver or approval by any other party
is required in connection with the execution and delivery by the Seller of this
Agreement or the performance by the Seller of the obligations to be performed by
him under this Agreement or any instrument contemplated hereby, except
confirmation of the understanding with the Partnership regarding Parcel C and
the Reserved Spaces, and the release of the lien of Meridian Bank on Parcel C.
Neither the entering into of this Agreement nor the completion of such sale will
constitute a violation or breach by the Seller of any contract or other
instrument to which the Seller is a party or to which the Seller is subject or
by which any of the Seller's assets or properties may be affected, or of any
judgment, order, writ, injunction or decree issued against or imposed upon the
Seller, nor will the said sale result in a violation of any applicable law,
order, rule, or regulation of any governmental authority.
(2) Title to Premises and Partnership Property. The Seller is
the sole owner of the Premises and the Premises is not subject to any lease or
to any other estate or to any outstanding option or agreement of sale. The
Partnership is the sole owner of the Partnership Property.
(3) Contracts. There will not be at Closing, any contracts,
written or oral, to which the Seller is a party and which affect the Premises.
(4) Condemnation. There are no condemnation proceedings
pending with regard to the Premises, and the Seller does not know of any
proposed condemnation proceeding with regard to any portion of the Premises.
(5) Notices. The Seller has not received any written notices
of uncorrected violations of any applicable ordinances, regulations, or other
laws with respect to the Premises (the "Violation Notices"). If any Violation
Notices are issued after the Agreement Date and prior to Closing, the Seller
shall pay the cost of complying with such Violation Notices, regardless of the
cost of compliance.
(6) Assessments. There are not now, nor will there at Closing
be, any assessments for public improvements against the Premises which are
unpaid by the Seller, nor is the Premises subject to or affected by any special
assessments, whether or not presently a lien thereon. Any assessments or special
assessments levied between the Agreement Date and the Closing Date shall be paid
by the Seller prior to or at the time of Closing.
(7) Water, Sewer and Tax Bills. On the Closing Date, all
taxes and all water and sewer charges due in connection with the Premises
will have been paid.
(8) Zoning. The present zoning classification of the Premises
is "PC-2", and the prensent zoning classification of Parcel C is "PC".
(9) Environmental Matters. To the best of the Seller's
actual knowledge,
(a) The Premises does not contain and there has
been no application, use, treatment, production, generation, discharge,
disposal, release or storage on, from or onto the Premises, or any lot or
property adjacent thereto, of any Toxic Waste, Hazardous Waste, Industrial Waste
or Hazardous Substance as defined by the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. '6901 et seq.; the Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA"), 42 U.S.C. '9601 et seq., as amended
by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"); the
Pennsylvania Hazardous Sites Clean-Up Act, 35 P.S. 6020.101 et seq.; the
Pennsylvania Solid Waste Management Act, 35 P.S. '6018.101 et seq.; the
Pennsylvania Clean Streams Law, 35 P.S. '691.1 et. seq.; any implementing
regulations thereunder, or any other applicable federal, state or local
statutes, regulations, ordinances or rules.
(b) There are no underground tanks on the Premises.
(c) No petroleum as defined by RCRA, 42 U.S.C.
'6991 (8), its implementing regulations or any applicable state or local
statutes, regulation ordinances or rules has been released from or onto the
Premises.
(d) There is not located on or under the premises
polychlorinated biphenyls or asbestos.
(10) Contributions. No commitments have been made to any
governmental authority, utility company, association, or any other organization
or group of individuals relating to the Premises which would impose an
obligation upon Buyer to make any contribution or dedication of land, or to
construct, install or maintain any improvements of a public or private nature on
or off the Premises. The Buyer, however, shall be responsible for all utility
tap-in, connection and reservation fees established by the providers of such
utilities.
(11) Continuing Representations. The foregoing
representations by Seller shall be continuing representations and warranties
of the Seller which shall remain in effect until completion of the Closing
but not thereafter.
B. Covenants of Seller. The Seller hereby covenants that the
Seller will:
(1) Maintenance of Premises. Prior to the Closing Date,
maintain the Premises in compliance with all applicable zoning ordinances and
any other acts, ordinances or regulations affecting the use and improvement
thereof. If the Seller fails to discharge his maintenance obligations as set
forth in this Paragraph 13.B.(1), the Buyer shall have the right to perform such
maintenance and to charge the Seller the cost of such maintenance.
(2) Alterations to Premises. Prior to the Closing Date, not
make or permit to be made any alterations, improvements, or additions to the
Premises without the prior written consent of the Buyer, which consent shall not
be unreasonably withheld or delayed.
(3) Satisfaction of Liens. Not permit any liens, easements,
encumbrances or other clouds on the title to the Premises to be created after
the date hereof (hereinafter referred to as "Title Imperfections"). If the
Seller creates or permits any Title Imperfections to be created in violation
hereof, the Seller shall satisfy such Title Imperfections by the payment of
money, either by such payment or by depositing in escrow with the Title Company
sufficient funds as will cause the Title Company to insure the Buyer against any
loss which is caused to the Buyer due to the existence of such liens or
encumbrances.
(4) Inspection and Tests. Permit the Buyer and the Buyer's
agents and employees to inspect the Premises from time to time. Commencing with
the Agreement Date, the Buyer and Buyer's agents and employees shall have the
right to enter upon the Premises to conduct or cause to be conducted upon the
Premises ground tests, soil analysis, topographical surveys, engineering studies
and other physical examination of the Premises as the Buyer may deem necessary.
The Buyer shall hold the Seller harmless and shall indemnify and defend the
Seller against any and all claims, including costs, fees, expenses and
reasonable attorneys' fees, for or in respect of injuries (including death) or
damage of any kind to the person or property of Seller, Buyer or of any other
person whomsoever caused by or in connection with Buyer's entry onto the
Premises and/or such tests or related activities. If, however, any such injury,
death or damage is caused by the act (negligent or otherwise) of the Seller or
any employee or representative of the Seller, the Seller shall be liable
therefor.
(5) Leases. Not enter into any lease for the Premises or any
part thereof which is not terminable on or before the Closing Date, without
obtaining the prior written approval of the Buyer.
C. Representations and Warranties of Buyer. In order to induce the
Seller to enter into this Agreement, the Buyer hereby warrants and represents to
the Seller that (1) the Buyer has the full power and authority to enter into and
fulfill its obligations under this Agreement, and (2) the execution of this
Agreement by the Buyer constitutes the valid and binding obligation of the Buyer
in accordance with its terms.
14. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
A. Conditions Precedent. The obligation of the Buyer to
purchase the Premises from the Seller in accordance with this Agreement is
subject to satisfaction of each of the following conditions (the "Conditions
Precedent"), any of which may be waived in whole or in part by the Buyer on
or prior to the Closing Date:
(1) Seller's Representations and Warranties. Each of the
representations and warranties of the Seller contained in this Agreement shall
be true and correct in all respects on the Closing Date, as though made on such
date.
(2) Compliance with Covenants. The Seller shall have performed
and complied with all of the terms, conditions and covenants required by this
Agreement to be performed and complied with prior to or on the Closing Date.
(3) Title Policy. A title policy or unconditional
commitment therefor meeting the requirements of Paragraph 5.B. hereof shall
have been issued by the Title Company to the Buyer.
(4) Approvals and Permits. All of the Approvals and Permits
shall have been obtained, shall be in full force and effect and shall be final,
unappealable and unrevoked, and no federal, state or local agency of any kind
shall have taken any action, the effect of which is to prevent, delay or impair
the lawful construction of the Facility upon and the use of the Premises.
(5) Easements. The Buyer and/or Seller shall have obtained all
required Easements without any cost to Buyer, except that any Easements to
obtain water or sewer service shall be obtained at the Buyer's cost.
(6) Environmental Condition. On the Closing Date no Toxic
Waste, Hazardous Waste or Hazardous Substance, as defined in Paragraph 12.A.(9)
above will be located on, under, or adjacent to the Properties.
(7) Contemporaneously with the Closing on the Purchase of the
Premises the Buyer shall have either completed the purchase of the Partnership
Property or extend a lease for the Partnership Property. If the Buyer acquires
the right to lease the Partnership Property, such lease shall be for a term of
not less than ninety-nine (99) years, at an annual gross rental not to exceed
One Dollar ($1.00) per year, plus all real estate taxes assessed upon the leased
premises, and the Lease shall grant the Buyer the exclusive right to use the
Partnership Property.
B. Buyer's Rights If Conditions Precedent Are Not Satisfied. If, on
the Closing Date, all of the Conditions Precedent to the Buyer's obligation to
consummate the purchase of the Premises which are set forth in this Agreement
have not been satisfied, the Buyer shall elect to either (1) waive such of those
conditions as are unsatisfied; or (2) terminate this Agreement. If the Buyer
terminates this Agreement because the Conditions Precedent have not been
satisfied, the Deposit and all accrued interest shall be returned to the Buyer
and the parties hereto shall be released from all liabilities and obligations
under this Agreement, other than the Buyer's obligation to sell and the Seller's
obligation to buy the Allocation.
Notwithstanding the foregoing, if, on the Closing Date, all of the
Conditions Precedent to the Buyer's obligations to consummate the purchase of
the Premises which are set forth in this Agreement have not been satisfied
because the Seller has intentionally breached any of the Seller's
representations, warranties or covenants, all Deposit and all interest accrued
thereon shall be returned to the Buyer and the Buyer shall have all rights and
remedies set forth in Paragraph 18.B. herein.
15. RECORDING. This Agreement may not be recorded by either party
hereto.
16. CONDEMNATION. If, prior to Closing, all or any part of the Premises is
taken by eminent domain proceedings or a notice of any eminent domain proceeding
with respect to the Premises or any part thereof is received by the Seller, the
Seller shall immediately give notice thereof to Buyer and Buyer shall have the
right, exercisable in writing within thirty (30) days of receipt of such notice
to either:
A. Complete the purchase of the Premises hereunder in
accordance with this Agreement; or
B. Terminate this Agreement, in which event the Deposit, together
with all interest accrued thereon, shall be returned to the Buyer and this
Agreement shall be null and void.
Failure to deliver such written notice shall be deemed an election
by Buyer to complete the purchase of the Premises. If the Buyer elects (or is
deemed to have elected) to complete the purchase of the Premises, the purchase
shall be completed in accordance with this Agreement, except that at Closing the
Seller shall assign, transfer, and pay to Buyer all rights that the Seller has
to any of the proceeds of such eminent domain proceedings and all proceeds from
such proceedings theretofore received by the Seller.
17. REAL ESTATE BROKERS. The Seller and Buyer respectively warrant to each
other that no finders, real estate brokers or other persons entitled to claim a
fee or commission have interested either of them in this transaction and that
they have not had any dealings with any person which may entitle that person to
a fee or commission. The Seller and Buyer hereby agree to indemnify and hold the
other harmless against any losses, costs or expenses (including attorney's fees)
arising out of any claim of any broker or finder in conjunction with this
transaction, the obligation for which was incurred by the breaching party. The
terms of this Paragraph 16 shall survive the Closing Date.
18. DEFAULT.
B. By Buyer. If, after all of the Conditions Precedent to the
Buyer's obligations are satisfied, the Buyer, without justification, fails to
complete the Closing and the Seller is not in default hereunder, then as the
Seller's sole and exclusive remedy, the Escrow Agents shall pay the Deposit and
all interest accrued thereon to the Seller as liquidated damages and not a
penalty, such being agreed between Buyer and Seller to be a necessary condition
to this Agreement to compensate the Seller for expenses and expenditures
incurred and made in connection therewith, the damages sustained as a result of
withdrawing the Premises from the market, and otherwise for the Buyer's
non-compliance with this Agreement. Thereupon, this Agreement shall become null
and void and of no further force and both parties shall be released of further
liability and obligations hereunder, and the Seller shall have no further
remedy, either at law or in equity. The Buyer shall reimburse the Seller for any
legal fees incurred by the Seller in obtaining the Deposit in the event the
Buyer is unsuccessful in a challenge to the Seller's right to receive the
Deposit. Notwithstanding the foregoing, if a court of competent jurisdiction
renders a final, unappealable decision that the Buyer has wrongfully encumbered
the Seller's title to the Premises, the Seller shall be entitled to
consequential damages as a result of such wrongful action of the Buyer.
C. By Seller. If the Seller defaults hereunder, the Buyer
shall be entitled to pursue all rights and remedies which are available at
law, and the equitable remedy of specific performance.
19. 1445 CERTIFICATION. The Seller acknowledges that Section 1445 of the
Internal Revenue Code provides that a transferee of a United States real
property interest must withhold tax if the transferor is a foreign person. To
inform the Buyer that withholding of tax is not required upon the disposition of
a United States real property interest by the Seller, the Seller shall deliver
on the Closing Date a sworn certification to the effect that the Seller is not a
non-resident alien for Federal Income Tax purposes, in a form reasonably
satisfactory to the Buyer.
20. ESCROW AGENTS. The Buyer and the Seller have requested that the
Deposit be held in escrow by the Escrow Agents. Notwithstanding anything herein
to the contrary, the Escrow Agents shall not release the Deposit unless directed
to do so by written notice signed by the Buyer and the Seller, or by a final and
unappealable order of a court of competent jurisdiction. The Escrow Agents are
merely responsible for the safe-keeping of the Deposit and shall not be required
to determine any questions of fact or law. The Escrow Agents shall be protected
in acting in good faith upon instruments or documents believed to have been
signed by a proper person or persons, not only as to their due execution and the
validity and effectiveness of their provisions, but also as to the truth and
acceptability of any information contained therein. The Escrow Agents shall not
have any duties except those which are expressly set forth herein. The Escrow
Agents shall not be bound by any notice of, or demand with respect to, any
waiver, modification, or amendment of this Agreement unless in writing, signed
by all of the parties to this Agreement and if the duties or responsibilities of
the Escrow Agents are affected, unless the Escrow Agents shall have given their
prior written consent thereto. The Escrow Agents shall not be entitled to a fee
for their services as Escrow Agents, nor shall they have any liability to the
Buyer or the Seller for anything done or omitted to be done by them in good
faith, their liability being limited solely to gross negligence or willful
misconduct. The Seller acknowledges that, separate and distinct from his duties
as Escrow Agent, Marc B. Kaplin is acting as counsel to Buyer. The Seller
expressly consents to the foregoing and waives any right to hereafter claim that
the same in any way constitutes a conflict of interest. Furthermore, if any
dispute arises after the date of this Agreement, Marc B. Kaplin shall not be
precluded in any manner from continuing to represent Buyer in any matter
regarding this Agreement. The Buyer acknowledges that, separate and distinct
from his duties as Escrow Agent, Ronald M. Agulnick is acting as counsel to the
Seller. The Buyer expressly consents to the foregoing and waive any right to
hereafter claim that the same in any way constitutes a conflict of interest.
Furthermore, if any dispute arises after the date of this Agreement, Ronald M.
Agulnick shall not be precluded in any manner from continuing to represent the
Seller in any matter regarding this Agreement.
21. GENERAL PROVISIONS.
A. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors, and assigns.
B. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto and supersedes all prior negotiations, understandings
and agreements of any nature whatsoever with respect to the subject matter
hereof. No amendment, waiver or discharge of any provision of this Agreement
shall be effective against either party unless that party shall have consented
thereto in writing.
C. Governing Law. This Agreement shall be governed,
interpreted, and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
D. Notices. All notices or other communications required or
permitted to be given under the terms of this Agreement shall be in writing,
sent by Certified Mail, postage prepaid, return receipt requested, or by
private carrier guaranteeing next day service, addressed as follows:
(1) If to the Seller, addressed as follows:
Fred V. Schubert
114 Schubert Drive
Downingtown, PA 19335
With a copy to:
Ronald M. Agulnick, Esquire
Crawford, Wilson, Ryan & Agulnick, P.C.
220 West Gay Street
West Chester, PA 19380
(2) If to Buyer, addressed as follows:
Penn National Gaming, Inc.
Suite 203
825 Berkshire Boulevard
Wyomissing, PA 19610
With a copy to:
Marc B. Kaplin, Esquire
Lesser & Kaplin, P.C.
350 Sentry Parkway, Building 640
Blue Bell, PA 19422
or to such other address or addresses and to the attention of such other person
or persons as any of the parties hereto may notify the others in accordance with
the provisions of this Agreement.
E. Captions. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or
extend the scope or intent of this Agreement or any
provision hereof.
F. Merger of Representations, Warranties and Covenants. All
representations, warranties and covenants made by the Seller and the Buyer in
this Agreement and all obligations of the Seller and the Buyer not discharged at
Closing arising out of, or in connection with, this Agreement shall merge with
the deed to the Premises and shall not survive the Closing Date.
G. Time is of the Essence. Time is of the essence of this
Agreement and all of its terms and conditions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
SELLER:
/s/ Fred V. Schubert
FRED V. SCHUBERT
BUYER:
PENN NATIONAL GAMING, INC.
(CORPORATE SEAL) By: /s/ Peter M. Carlino
Name/Title: Chairman
Attest: /s/ Susan M. Montgomery
Name/Title: Assistant to Chairman
ESCROW AGENTS:
/s/ Marc B. Kaplin
MARC B. KAPLIN, ESQUIRE
/s/ Ronald M. Agulnick
RONALD M. AGULNICK, ESQUIRE