AGREEMENT OF PURCHASE AND SALE (this "Agreement") dated as of October
27, 2003, by and between SADG-11 ASSOCIATES, L.P., a Pennsylvania limited
partnership having an address at 102 Colliery Road, Dickson City, Pennsylvania
18519 ("Seller"), and CEDAR SHOPPING CENTERS PARTNERSHIP, L.P., a Delaware
limited partnership, having an address at 44 South Bayles Avenue, Port
Washington, New York 11050 ("Buyer").
W I T N E S S E T H:
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A. Seller owns the real property and improvements thereon located at
Main Street (Route 341) Dickson City, Pennsylvania, known as Sunset Crossings
Shopping Center (more precisely described herein as the "Property").
B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, the Property, upon the terms and conditions and for the purchase price
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration set forth herein, the
parties hereto agree as follows:
SECTION 1. Certain Definitions.
"Actions" mean any claims, actions, suits, proceedings or
investigations, including, without limitation, condemnation and tax certiorari
proceedings, whether at law or in equity or before any court, arbitrator,
arbitration panel or Governmental Authority.
"Affiliate" of a party means any Person which, directly or
indirectly, controls, is controlled by or is under common control with, such
party.
"Broker" means Metro Commercial Real Estate, Inc., having an
office at 303 Fellowship Road, Suite 202, Mount Laurel, NJ 08054.
"Court Order" means any judgment, decree, injunction, order,
decision, directive, regulation or ruling of any Governmental Authority that is
binding on any Person or its property under Law.
"Due Diligence Period" means the period commencing on the
later to occur of (a) the date a complete copy of this Agreement executed by
Buyer and Seller with all exhibits attached has been delivered to Buyer or its
counsel, and (b) the date Seller has delivered to Buyer the documents described
in Section 5(a), or written confirmation that Seller does not have such
documents (such date, the "Effective Date") and expiring on the last day of the
thirtieth (30th) calendar day following the Effective Date, provided, however,
that if a Phase I environmental report of the Property obtained by Buyer within
the Due Diligence Period (the "Phase I") indicates that a Phase II is
recommended, and Buyer has initiated a Phase II investigation within the initial
Due Diligence Period, but the results of such investigation have not been
received by Buyer, then the Due Diligence Period shall be extended until five
(5) days after the date Buyer has received the results of such Phase II
investigation, provided that such extension of the Due Diligence Period shall
not exceed thirty (30) days in any event.
"Escrow Agent" means Lawyers Title Insurance Corporation, or
any substitute escrow agent appointed hereunder
"Governmental Authority" means any agency, instrumentality,
department, commission, court, tribunal or board of any government, whether
foreign or domestic and whether national, federal, state, municipal or local.
"Hazardous Substances" means, without limitation, (i) all
substances which are designated pursuant to Section 311(b)(2)(A) of the Federal
Water Pollution Control Act ("FWPCA"), 33 U.S.C. ss.1251 et seq.; (ii) any
element, compound, mixture, solution, or substance which is designated pursuant
to Section 102 of the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. ss.9601 et seq.; (iii) any hazardous waste
having the characteristics which are identified under or listed pursuant to
Section 3001 of the Resource Conservation and Recovery Act ("RCRA"), ss.6901 et
seq.; (iv) any toxic pollutant listed under Section 307(a) of the FWPCA; (v) any
hazardous air pollutant which is listed under Section 112 of the Clean Air Act,
42 U.S.C. ss.7401 et seq.; (vi) any imminently hazardous chemical substance or
mixture with respect to which action has been taken pursuant to Section 7 of the
Toxic Substance Control Act, 15 U.S.C. ss.2601 et seq.; and (vii) petroleum,
petroleum products, petroleum by-products, petroleum decomposition by-products,
and waste oil; (viii) "hazardous materials" within the meaning of the Hazardous
Materials Transportation Act, 49 U.S.C. ss. 1802 et seq., (ix) any hazardous
substance or material identified or regulated by or under any applicable
provisions of the laws of the Commonwealth of Pennsylvania; (x) asbestos or any
asbestos containing materials; or (xi) any other hazardous or toxic substance or
pollutant identified in or regulated under any other applicable federal, state
or local Laws.
"Law" or "Laws" mean laws, statutes, rules, regulations,
codes, orders, ordinances, judgments, injunctions, decrees and policies.
"Leases" mean all leases affecting the Property on the date
hereof, which Seller represents and warrants are all listed on Exhibit F
attached hereto and made a part hereof, together with amendments or medications
made after the date hereof and which have been approved by Buyer in writing.
"Liabilities" mean debts, liabilities, obligations,
guarantees, indemnities, duties and responsibilities of any kind and
description, whether absolute or contingent, monetary or non-monetary, direct or
indirect, known or unknown or matured or unmatured, or of any other nature.
"Licenses" means licenses, franchises, permits, certificates,
certificates of occupancy, easements, rights and other authorizations issued by
a Governmental Authority or any other Person.
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"Person" means any natural person, corporation, business
trust, joint venture, association, company, limited liability entity, firm,
partnership, or other entity or government or Governmental Authority.
"Property" means: (a) that certain parcel of real property
commonly known as Sunset Crossing Shopping Center, Dickson City, Pennsylvania,
as more particularly described on Exhibit A annexed hereto and hereby made a
part hereof (the "Land"), (b) the buildings and other improvements located upon
the Land (collectively, the "Improvements"), (c) all easements, rights of way,
privileges, appurtenances, development rights, air rights, strips, gores and
other rights pertaining to the Land and the Improvements, if any, including,
without limitation, development rights, and all income therefrom, including
rights to any Taking awards or proceeds, (d) any land in the bed of any street,
road, avenue, open or proposed, public or private, in front of or adjoining the
Land or any portion thereof, to the center line thereof, and any award to be
made in lieu thereof and in and to any unpaid award for damage to the Land and
the Building by reasons of change of grade of any street occurring after the
date of execution and delivery of this Agreement, (e) all Tenant Leases, (f) all
Operating Agreements, and (g) any Licenses required or used in or relating to
the ownership, use, maintenance, occupancy or operation of any part of the
Property.
"Service Contracts" means any all service agreements,
maintenance agreements, supply agreements, and any other similar contracts and
agreements affecting Property.
"Taking" means any proceedings or negotiations instituted
which do or may result in a taking by condemnation or eminent domain of the
Property or any portion thereof.
"Tenants" mean the tenants and other parties under the Tenant
Leases.
SECTION 2. Sale and Purchase of the Property. Based upon and subject to
the terms, agreements, warranties, representations and conditions of this
Agreement, Seller hereby agrees to sell, convey, transfer, assign and deliver to
Buyer on the Closing Date (as hereinafter defined), and Buyer hereby agrees to
buy and accept on the Closing Date, the Property.
SECTION 3. Purchase Price and Manner of Payment.
(a) The purchase price for the Property is ELEVEN MILLION TWO
HUNDRED THOUSAND and 00/100 DOLLARS ($11,200,000.00) (the "Purchase Price"), and
shall be payable as follows:
(i) upon the execution of this Agreement, the sum of
$50,000.00 (the "Initial Deposit") shall be paid by
Buyer by wire transfer to Escrow Agent;
(ii) upon the expiration of the Due Diligence Period,
the sum of $100,000.00 (the "Additional Deposit"; the
Initial Deposit and the Additional Deposit, together with interest accruing
thereon, shall be referred to herein as the "Deposit") shall be paid by Buyer by
wire transfer to Escrow Agent; and
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(iii) upon closing of title, the balance of the
Purchase Price, subject to adjustment in accordance with this Agreement, shall
be paid by wire transfer of immediately available funds to Seller or its
designee.
(b) The Deposit shall be held by Escrow Agent in escrow in an
interest bearing account. Any interest accrued on the Deposit shall be paid to
whichever party is entitled to the Deposit in accordance with the provisions of
this Agreement. If the Closing shall occur, interest shall be credited against
the Purchase Price. The Deposit shall be held and disbursed by Escrow Agent in
accordance with the escrow provisions annexed hereto as Exhibit B.
(c) Seller represents that its federal tax identification
number is 23-3073396. Seller acknowledges and agrees that Seller's tax
identification number shall be used on the account into which the Deposit is
placed.
SECTION 4. Title Matters.
(a) Seller shall convey to Buyer at the Closing good,
marketable, insurable fee simple title to the Property, free of all deeds of
trust, mortgages, liens, easements, covenants, restrictions, leases, licenses
and other encumbrances ("Encumbrances"), subject only to the Permitted
Encumbrances (as hereinafter defined), which title shall be insurable by a
reputable title insurance company, selected by Buyer, licensed in the
Commonwealth of Pennsylvania (the "Title Company"), by issuance of an ALTA
owner's title insurance policy (the "Owner's Policy"), insuring the title of the
Property at its ordinary rates and without special premiums, and in the standard
form issued by the Title Company in the Commonwealth of Pennsylvania, without
exception or reservations of any kind, including, without limitation, the
standard pre-printed exceptions to the title policy, other than the Permitted
Encumbrances (any such other exceptions or reservations, the "Non-Permitted
Encumbrances").
(b) The term "Permitted Encumbrances" as used in this
Agreement shall mean:
1. any state of facts which a current accurate land
title survey of the Property would show, provided that such facts would not
render title other than good and marketable and would not impair the continued
use of the Property for a shopping center;
2. those matters specifically set forth on Exhibit C
annexed hereto and hereby made a part hereof, subject, however, to the
provisions of subsection (e) of this section; [we would expect to attach a copy
of our current title policy Schedule B, Section 2 as Exhibit C to this
agreement, omitting reference to our existing mortgage.]
3. all Laws, provided such Laws are not violated by
the existing improvements and do not prohibit the use of the Property as a
shopping-center;
4. all presently existing and future liens of real
estate taxes or assessments and water rates, water meter charges, water frontage
charges and sewer taxes, rents and charges, if any, provided that such items are
not yet due and payable and are apportioned as provided in this Agreement; and
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5. the Leases.
(c) If Buyer's commitment for an Owner's Policy (the "Title
Commitment") discloses judgments, bankruptcies or other returns against other
Persons having names the same as or similar to that of the Seller, Seller shall,
on the request of Buyer, to deliver to Buyer and the Title Company affidavits
showing that such judgments, bankruptcies or other returns are not against the
Seller. Seller shall deliver any customary affidavits required by the Title
Company to eliminate exceptions other than the Permitted Encumbrances appearing
in the Title Commitment.
(d) At the Closing, Seller shall deliver to each of Buyer and
the Title Company an affidavit and/or indemnity with respect to mechanic's liens
certifying that there are no unpaid bills for services rendered or materials
furnished to the Property.
(e) Buyer shall furnish to Seller or its counsel within thirty
(30) days after the date hereof, a copy of the Title Commitment, together with a
statement specifying any objections to title, and may furnish Seller with a
current survey of the Premises, together with objection to any conditions
disclosed by such survey ("Buyer's Statement"), provided Buyer shall have no
right to object to any Permitted Exceptions other than the matters set forth on
Exhibit C hereto. Seller or its counsel shall, within ten (10) days of receipt
by Seller's counsel of Buyer's Statement, give notice to Buyer ("Seller's
Notice") as to which, if any, of the defects set forth in Buyer's Statement that
Seller will not commit to cure at or before the Closing. If Seller does not,
within ten (10) days after receipt of Buyer's Statement, advise Buyer in writing
that it will remove all of the defects listed in Buyer's Statement, then Buyer's
sole right shall be to either (a) waive such defects and close title without
abatement or reduction of the Purchase Price, or (b) terminate this Agreement,
in either case upon notice to Seller and Escrow Agent given within five (5) days
after the expiration of such ten (10) day period. If Buyer elects to terminate
this Agreement, the Deposit shall be returned to Buyer, and upon such return,
except as expressly provided herein, this Agreement and all rights and
obligations of the respective parties hereunder shall be null and void. If Buyer
does not notify Seller of its election to terminate this Agreement within such
five (5) day period, Buyer shall conclusively be deemed to have waived its right
of termination on account of such defects, provided, however, that
notwithstanding anything to the contrary set forth in this Agreement, Seller
shall be obligated to cure at or before the Closing all any Encumbrance which
can be removed at time of closing by payment of a liquidated amount or by
posting a bond, as well as any Encumbrance arising after the date of Buyer's
delivery of Buyer's Statement and prior to the Closing Date, except for any of
the foregoing arising from the acts or omissions of Buyer, its agents,
contractors or employees. Seller shall not be obligated to cure non-liquidated
Encumbrances (e.g., easements, covenants and restrictions) of record as of the
date of Buyer's title commitment and which Seller advises Buyer in Seller's
Notice that Seller does not wish to cure.
(f) Seller shall have the right to pay off any monetary
Encumbrances against the Property on the Closing Date out of the cash then
payable provided, provided in the case of Encumbrances held by institutional
lenders, Seller shall deliver a pay off letter at the closing from the lender
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holding such encumbrance of record, and in the case of Encumbrances held by
non-institutional lenders, recordable instruments of release or discharge of
such Encumbrances in form and substance satisfactory to the Title Company are
then delivered to Buyer.
SECTION 5. Due Diligence.
(a) Promptly after the full execution of this Agreement,
Seller shall deliver copies of the following documents to Buyer, to the extent
in Seller's possession or control: (i) all Leases currently in effect, (ii) all
existing environmental reports for the Property, (iii) the latest, full size
survey of the Property, (iv) construction drawings for the Property, if any, (v)
title reports, together with copies of all title exception documents, (vi) metes
and bounds description of the Land, (vii) annual operating expense reports and
tax bills for the past three years, (viii) utility bills for the past twelve
(12) months, (ix) information, on a tenant by tenant basis, setting forth the
reimbursements paid by each tenant for common area maintenance charges, taxes
and insurance, together with a supporting schedule of expenses for the Property,
(x) a list and description of all rent delinquencies as of the date hereof, (xi)
all existing service contracts currently affecting the Property and (xii) any
plans or proposals submitted or reviewed by the local authorities regarding
potential expansion or development of the Property.
(b) Buyer shall have the right, at any time after the
Effective Date, to inspect the Property, and to investigate existing zoning, the
physical, structural and environmental condition of the Property, the compliance
of the Property with Laws, the rental income and recoveries listed in the rent
roll, the operating expenses, taxes and other costs of operating the Property,
and any other factors Buyer deems relevant in determining whether to purchase
the Property. For purposes of conducting such inspections and studies, Buyer
shall have access to the Property at all reasonable times, subject to Section
5(d) below.
(c) Buyer may terminate this Agreement, for any reason or for
no reason at all, in Buyer's sole discretion, on notice to Seller and Escrow
Agent given at any time during the Due Diligence Period, which notice may be
given by email to Charles@Charlesbrodskylaw.com and to thedrehergroup.dreher@
verizon.net, with a copy concurrently sent by facsimile to Messrs. Brodsky and
Dreher at their facsimile numbers set forth herein. In the event of such
termination, Escrow Agent shall return the Deposit to Buyer, whereupon, except
as expressly provided herein, this Agreement and all rights and obligations of
the respective parties hereunder shall be null and void. If Buyer does not elect
to terminate this Agreement pursuant to this Section 5(c) within the Due
Diligence Period, Buyer shall conclusively be deemed to have waived its right of
termination under this Section 5(c), the Deposit shall be non-refundable, except
as otherwise expressly provided hereunder, and Buyer shall post the Second
Deposit with Escrow Agent no later than two (2) business days after the
expiration of the Due Diligence Period.
(d) Seller shall permit Buyer and its agents and consultants
access to the Property from time to time for the purpose of undertaking surveys
and engineering, environmental, soils, wetlands and other similar tests,
borings, drillings and studies, provided that neither Buyer nor its agents or
consultants unreasonably interfere with Seller's tenants' peaceful use and
enjoyment of the Property, and provided Buyer promptly repairs any damage to the
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Property caused by such entry and restores the Lands to the condition that
existed prior to such entry. Seller shall cooperate with Buyer and enforce
provisions of Leases if necessary in order to facilitate entry by Buyer into
tenant spaces as reasonably required by Buyer. Buyer shall hold and save Seller
harmless from and against any and all loss, cost, damage, injury or expense
arising out of or in any way related to the acts or omissions of Buyer, its
agents, employees and consultants, relating to any such entry, and such
obligation shall survive the termination of this Agreement, except that Buyer
shall not be liable for costs or damages resulting from Buyer's discovery or
exacerbation of pre-existing conditions, absent Buyer's negligence. Prior to any
such entry, Buyer shall furnish to Seller evidence that Buyer (or its respective
contractors entering onto the Property to perform borings, drillings or other
intrusive testings) has procured comprehensive liability insurance from an
insurer authorized to do business in the Commonwealth of Pennsylvania which is
reasonably acceptable to Seller protecting Seller from claims for bodily injury
or death in single limit amount of not less than $1,000,000, naming Seller as an
additional insured. Such insurance shall provide that at least thirty (30) days'
notice of termination, cancellation, modification or lapse of coverage shall be
given to Seller. The indemnification provision contained in this Section 5(d)
shall survive the termination of this Agreement and/or the closing of title.
SECTION 6. Closing Date. The closing of this transaction (the
"Closing") shall be conducted on the date occurring ten (10) days after the
expiration of the Due Diligence Period (the "Closing Date"). The Closing shall
be conducted by mail in escrow with the Title Company pursuant to an escrow
procedure reasonably acceptable to Seller and Buyer, or at such place as the
parties may otherwise agree. Upon the Closing, exclusive possession of the
Property, subject to the rights of tenants under the Leases as tenants only,
shall be delivered to Buyer, and Buyer shall thence have the right to enjoy the
rents, issues and profits therefrom.
SECTION 7. Closing Deliveries and Closing Costs.
7.1 Seller Deliveries. At the Closing, Seller shall deliver or cause to
be delivered to Buyer the following items executed and acknowledged by Seller,
as appropriate:
(a) A special or limited warranty deed conveying fee simple
title to the Property to Buyer in accordance with this Agreement.
(b) A general instrument of transfer, conveying, transferring
and selling to Buyer, all right title and interest of Seller in and to all of
the personal property, if any, owned by Seller, all rights of Seller in any in
and to any Service Contract which Buyer has advised Seller it wishes to assume,
to the extent the same are assignable, and any intangible property forming part
of the Property.
(c) An assignment by Seller and assumption by Buyer of all of
Seller's right, title and interest in and to the Leases, including security
deposits, in the form attached hereto as Exhibit D.
(d) A non-foreign affidavit for Seller complying with the
requirements of Internal revenue Code Section 1445 (f) (3) and regulations
promulgated thereunder.
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(e) Form 1099.
(f) A certificate stating that all representations and
warranties of Seller set forth in Section 10 hereof remain true and correct as
of the Closing Date (or certifying as to any changes thereto, subject, however,
to the provisions of Section 10.4 herein).
(g) an updated rent roll for the Property, certified by Seller
to be true and correct (Seller shall deliver this updated rent roll to Buyer at
least two (2) business days prior to the closing);
(h) Any document required by law to be executed by Seller in
order to allow Buyer to record any transfer document, including any transfer or
documentary stamp return.
(i) original estoppels certificate from the following tenants:
Giant, Dollar General, Blockbuster, Mama Luna Pizza, Premier Tanning and Holiday
Hair, all in a form substantially similar to the form attached hereto as Exhibit
E (or in such other form as may be prescribed under the respective lease with
such tenant), dated no earlier than thirty (30) days prior to the closing, and
confirming, in the case of tenants, (a) the factual matters with respect to such
tenants as set forth in the Rent Roll (as hereinafter defined) and in Sections
10.1 (g), (h) and (i) hereof and (b) that Seller as landlord is not in default
under such tenant's lease, nor are there any work allowances, concessions or
improvements to be performed or provided by Seller as landlord that have not
been performed or provided by Seller in full. Seller shall promptly request such
estoppel certificate from all tenants of the Property and pursue same in good
faith. If Seller is unable to obtain the estoppel certificates required under
this subsection by the Closing Date, then the Closing Date shall be adjourned
for a period not to exceed fifteen (15) days, to enable Seller to continue to
pursue same. If such estoppel certificates have not been obtained after the
expiration of such adjournment of the Closing Date, then Buyer shall have the
right to terminate this Agreement, by delivering written notice of termination
to Seller, in which event the Deposit, and all interest accrued thereon, shall
be returned to Buyer and except as expressly provided herein, this Agreement and
all rights and obligations of the respective parties hereunder shall be null and
void.
(j) The original fully executed Leases, or, if not available,
a copy of each missing Lease certified by Seller as being a true and completed
photocopy.
(k) Copies of all Tenant Lease files in Seller's possession or
control;
(l) notices to each tenant under the Leases advising that
Seller's interest in the Property has been conveyed to Buyer and instructing
that all rent and additional rent payable under the Leases is to be remitted to
Buyer, that any security deposit is thereafter being held by Buyer, and that all
insurance required to be maintained by such tenant is to be amended to name
Buyer as a named insured to the extent such tenant is required to so name the
landlord under its Lease, such notices to be in form as reasonably required by
Buyer;
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(m) A statement showing all closing prorations.
(n) All keys to the Property in the possession of Seller.
(o) Evidence reasonably satisfactory to Buyer and the Title
Company respecting the due organization of Seller and the due authorization and
execution by Seller of this Agreement and the documents required to be delivered
hereunder.
(p) Such other documents and instruments as may be reasonably
required by this Agreement or by the Title Company in order to consummate the
transaction contemplated by this Agreement and to issue the Owner's Policy to
Buyer, including but limited to, as to any work on the Property requested by
Seller, a mechanic's lien affidavit, a gap affidavit, and a contractor's
affidavit stating the amount paid and the amount outstanding under the contract
to complete such work.
7.2 Buyer Deliveries. At the Closing, Buyer shall deliver or cause to
be delivered to Seller the following items executed and acknowledged by Buyer,
as appropriate:
(a) Payment of the balance of Purchase Price, as adjusted, to
be made in accordance with Section 3 above.
(b) A counterpart of the document referred to in Section
7.1(c) above.
(c) Such other documents as may be required under the terms of
this Agreement or as may otherwise be reasonably necessary to consummate the
transactions contemplated under this Agreement, taking into account the terms
and conditions of this Agreement.
7.3 Closing Costs. At the Closing, Seller and Buyer shall each pay
one-half of the transfer taxes, including transfer taxes of the Commonwealth of
Pennsylvania and of the county in which the Property is located, payable in
connection with the transaction contemplated hereby. Buyer shall pay (a) the
title insurance premium for the Owner's Policy, if any, (b) the costs of any
survey (or an update thereto), and (c) all fees, costs or expenses in connection
with Buyer's due diligence reviews hereunder. Seller shall pay the costs of
recording discharges of Encumbrances required to be removed by Seller under this
Agreement. Except as expressly provided in the indemnities set forth in this
Agreement, Seller and Buyer shall pay their respective legal, consulting, and
other professional fees and expenses incurred in connection with this Agreement
and the transaction contemplated hereby and their respective shares of
prorations as hereinafter provided.
SECTION 8. Closing Adjustments. (a) The following shall be prorated,
between Seller and Buyer as of 12:00 AM on the Closing Date (so that Buyer will
be debited all taxes and other expenses, and be credited with all rents,
accruing as of the Closing Date) on the basis of the actual number of days
elapsed over the applicable period) and shall take into account the percentage
of such revenues or expenses attributable to the Property:
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(i) All real estate taxes, water charges, sewer
rents, vault charges and assessments on the Property on the basis of the fiscal
year for which assessed. If any assessments on the Property are payable in
installments, then the installment for the current period shall be prorated,
with Seller paying its share of any installments due before the Closing Date and
Buyer assuming the obligation to pay its share of any installments due after the
Closing Date.
(ii) Subject to Section 8(b) of this Agreement, all
fixed and base and minimum rent and regularly scheduled items of additional rent
under the Leases (including any reimbursements for taxes and common areas
operating costs), and other tenant charges if, as and when received.
(iii) Expenses and payments under Service Contracts
which Buyer shall elect to assume.
(iv) Fuel, if any, at Seller's cost therefor.
(v) Utilities not payable directly by tenants,
including, without limitation, telephone, steam, electricity and gas, on the
basis of the most recently issued bills therefor, subject to adjustment after
the Closing when the next bills are available, or if current meter readings are
available, on the basis of such readings.
(b) Rents under the Leases which are delinquent as of the
Closing Date shall not be prorated on the Closing Date. Buyer shall include such
delinquencies in its normal billing and shall diligently pursue the collection
thereof in good faith after the Closing Date (but Buyer shall not be required to
litigate or declare a default in any Tenant Lease). Subject to the terms of the
immediately succeeding sentence, to the extent rents are collected by or on
behalf of Buyer on or after the Closing Date, such payments shall be applied
first toward to the rents that shall then be due and payable with respect to
rents for months after the Closing, second to the rents for the month in which
the Closing occurs, and third to any delinquent rents owed with respect to
months prior to the Closing, with Seller's share thereof being promptly
delivered to Seller by Buyer. If percentage rents are collected by or on behalf
of Buyer on or after the Closing Date, such percentage rents shall be allocated
to the period to which they relate irrespective of the provisions of the
immediately preceding sentence and appropriate portions thereof shall be applied
to Buyer and Seller in proportion to the duration of such party's ownership of
the Property during such period, with Seller's share thereof being promptly
delivered to Seller by Buyer. Seller hereby reserves the right to pursue any
remedy against any tenant owing delinquent rents and any other amounts to
Seller, which right shall include the right to continue or commence legal
actions or proceedings against any tenant; provided, however, that Seller shall
not, following the Closing, commence legal actions or proceedings for collection
of rents against any tenant while such tenant remains a tenant at the Property.
Buyer shall reasonably cooperate with Seller in any collection efforts hereunder
(but shall not be required to litigate or declare a default under any Tenant
Lease). With respect to delinquent rents and any other amounts or other rights
of any kind respecting tenants who are no longer tenants of the Property at any
time following the Closing Date, Seller shall retain all rights relating to its
share thereof.
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(c) The amount of any security deposits held by Seller under
the Leases shall be credited to Buyer, and thereafter, Buyer shall be
responsible for same.
(d) If any of the items described in this Section 8 hereof
cannot be apportioned at the Closing because of the unavailability of
information as to the amounts which are to be apportioned or otherwise, or are
incorrectly apportioned at Closing or subsequent thereto, such items shall be
apportioned or reapportioned, as the case may be, as soon as practicable after
the Closing Date or the date such error is discovered, as applicable.
(e) If the Closing shall occur before a real estate or
personal property tax rate or assessment is fixed for the tax year in which the
Closing occurs, the apportionment of taxes at the Closing shall be upon the
basis of the tax rate or assessment for the preceding fiscal year applied to the
latest assessed valuation. Promptly after the new tax rate or assessment is
fixed, the apportionment of taxes or assessments shall be recomputed and any
discrepancy resulting from such recomputation and any errors or omissions in
computing apportionments at Closing shall be promptly corrected and the proper
party reimbursed.
(f) If after the closing, the parties discover any errors in
adjustments and apportionments, same shall be corrected as soon after their
discovery as possible. The provisions of this Article 8 shall survive the
closing, provided that no adjustments shall be made later than one (1) year
after the Closing Date unless prior to such date the party seeking the
adjustment shall have delivered a written notice to the other specifying the
nature and basis for such claim.
SECTION 9. Defaults. (a) In the event the Buyer fails or refuses to
consummate the purchase of the Premises in accordance with the provisions of
this Agreement for any reason constituting a default on the part of Buyer, then
Escrow Agent shall pay to Seller the Deposit then paid and Seller shall retain
the Deposit then paid as full liquidated damages in full and complete
satisfaction of all claims against the Buyer and without recourse to any other
remedies, legal or equitable. The parties have agreed that actual damages in
such event are impossible to determine, and therefore have agreed upon the
foregoing liquidated damages, after negotiation, as the parties' best estimate
of actual damages which would be incurred in such circumstances.
(b) If the conditions set forth in Article 12.1 have not been
satisfied as of the Closing Date, then Buyer may elect to (i) accept title to
the Premises subject to the defaulted obligation of Seller (and in the case of a
liquidated Encumbrance, use the Purchase Price to eliminate such title defect),
or (ii) seek specific performance of this Agreement (and receive reimbursement
from Seller for reasonable attorneys' fees and costs, if Buyer is the prevailing
party in such action) or (iii) terminate this Agreement and elect to receive the
return of the Deposit and any interest earned thereon, and in the event such
Seller's default is a Willful Default (as hereinafter defined), be compensated
by Seller for all actual damages sustained by Buyer as a result of Seller's
breach of this Agreement, including, without limitation, reasonable attorneys'
fees and disbursements. The term "Willful Default" as used in this Agreement
shall mean (a) Seller's willful refusal to convey title to the Property at the
Closing, (b) Seller's refusal to cause any Encumbrance to be released (or
insured over) but only if and to the extent that Seller is obligated to do so
under this Agreement, (c) Seller voluntarily taking any action which has the
effect of frustrating the intention of the parties under this Agreement (e.g.
entering into a new lease without Buyer's consent); or (d) an intentional
material breach of a representation or warranty of Seller under this Agreement
-11-
SECTION 10. Representations, Warranties and Covenants.
10.1 Representations, Warranties and Covenants of Seller. Seller hereby
represents and warrants to Buyer that, as of the date hereof:
(a) The Seller is a limited partnership, duly organized,
validly existing and in good-standing under the laws of the Commonwealth of
Pennsylvania. The Seller has all requisite power and authority to own, lease,
and operate its assets and property and to conduct its business as now being
conducted;
(b) Other than as to the mortgage from Seller to First
National Community Bank dated September 11, 2001 and modified on December 26,
2001, Seller has not sold, conveyed, transferred, given, pledged, mortgaged or
otherwise disposed of, encumbered or granted in any manner all or any portion of
the Property; there are no outstanding, options, rights, agreements, or other
commitments to which Seller is a party relating to or providing for the sale,
conveyance, transfer, gift, pledge, mortgage or other disposition, encumbrance
or granting of, or permitting any Person to acquire all or any portion of the
Property; Seller owns the Property free and clear of any liens other than
Permitted Encumbrances, and has the absolute right, power and capacity to sell,
assign, convey, transfer and deliver the Property as contemplated by this
Agreement;
(c) This Agreement has been duly executed and delivered and
constitutes the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as enforceability may be
limited by applicable law affecting creditors' rights generally and principles
of equity, whether considered in a proceeding at law or in equity. No consent,
approval, authorization or order of, or declaration, filing or registration
with, any Governmental Authority or Person is required in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(d) Seller is not a "foreign person" under the Foreign
Investment in Real Property Tax Act of 1980 ("FIRPTA") and upon consummation of
the transaction contemplated hereby, Buyer will not be required to withhold from
the Purchase Price any withholding tax;
(e) There are no pending or, to Seller's actual knowledge,
threatened Actions affecting the Property or any part thereof; nor are there any
special assessments levied or payable in connection with the Property other than
the pending application of Giant Food Stores, LLC for special exception to
develop a portion of the Shopping Center as a gasoline filling station;
(f) To the best of Seller's knowledge, the Land and
Improvements are free of any liens and encumbrances other than the Permitted
Encumbrances;
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(g) All of the Leases to which either the Seller is a party
(by assignment or otherwise) or is bound in existence on the date hereof have
been delivered or made available to Buyer. The copies of the Leases that have
been delivered or made available by Seller to Buyer are true, correct and
complete. Exhibit F annexed hereto and hereby made a part hereof sets forth a
complete list of all Leases (including, without limitation, all leases,
amendments, modifications and "side letters") to which either the Seller is a
party or is bound, and is true, complete and correct in all material respects.
All Leases are in full force and effect. To the best actual knowledge of Seller,
all Tenant listed on Exhibit F are in possession of their respective premises
and generally open for business, and there are no other parties in possession of
the Property, except as otherwise noted on Exhibit F. Except as set forth on
Exhibit F, neither Seller as landlord nor any tenant under any of the Tenant
Leases is in default under any Tenant Leases and the Seller has not received
from any Tenant any written notice claiming any default by the landlord under
its Tenant Lease which default remains uncured. The Seller has not received
written notice of any defense to, offsets, claims or disputes against rental
payable or obligations under any Tenant Lease (including, without limitation,
any objection to billings of common area maintenance expenses or taxes). To the
best actual knowledge of Seller, no guarantor of any Tenant Lease has been
released or discharged, voluntarily (involuntarily, or by operation of law) from
any obligation related to such Tenant Lease except in accordance with the terms
of such Tenant Lease. Attached as Exhibit F-1 is a true copy of the first draft
of a lease for certain vacant space in the Shopping Center, which draft was sent
to the Seller's real estate broker for presentation to the potential tenant on
October 10, 2003. Attached as Exhibit F-2 is a true copy of a proposed amendment
to the lease with ZTN Pizza, Inc., which amendment is presently circulating for
signature by the parties thereto;
(h) Annexed hereto as Exhibit G is a rent roll and security
deposit schedule (the "Rent Roll") for all Leases in effect as of the date
hereof, which is true and correct in all respects and which shows for each
rentable space in the Property the tenant name, space number, monthly base or
minimum rental, and common area maintenance expense and real estate tax
reimbursement amounts, security deposit held, and the expiration date of each
Lease. There are no tenant security deposits to be held by the Landlord under
the Leases except as listed in the Rent Roll. At the Closing, Seller shall
deliver to Buyer an updated Rent Roll. If any changes shall occur in such Rent
Roll Certificate, Buyer shall have the rights relating thereto as set forth in
Section 10.4 hereof;
(i) Except as set forth on Exhibit H annexed hereto and made a
part hereof, all alterations and improvements required to be performed by the
landlord under any of the Leases have been completed, all construction and other
allowances and monetary concessions required to be paid by the landlord under
the Leases have been paid, and no tenant under any of the Leases is entitled to
any free rent or rent concession period. All brokerage fees and commissions
payable or which will be payable in the future with respect to the Leases have
been paid in full with the exception of a commission to Bennett Williams Real
Estate arising out of the leasing of a portion of the Shopping Center to ZTN
Pizza, Inc. d/b/a Mama Luna Pizza, which commission will be paid by Seller to
such broker prior to Closing;
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(j) All of the Service Contracts to which Seller is a party
(by assignment or otherwise) or is bound, are in existence on the date hereof
and have been delivered or made available to Buyer. The copies of the Service
Contracts that have been delivered or made available by the Seller to Buyer are
true, correct and complete. Exhibit I annexed hereto and hereby made a part
hereof sets forth a list of all Service Contracts to which Seller is a party or
is bound, and is true, complete and correct in all material respects. Except as
set forth on Exhibit I, the Operating Agreements are in full force and effect.
No default exists under any Operating Agreement and to the best of Seller's
knowledge, no event or act has occurred which with the giving of notice thereof
or the passage of time or both would constitute a default under any Operating
Agreement. Except as set forth on Exhibit I, all Operating Agreements are
terminable without premium or penalty on no more than 30 days' notice to the
contractor, vendor or other service provider thereunder;
(k) Seller's Phase I Report which has been delivered to Buyer
constitutes a true and complete copy of the report which was received by Seller,
and Seller has no actual knowledge of any Hazardous Substances at the Property
except as may be set forth in Seller's Phase I Report, and except for any
Hazardous Substances that may be sold by a tenant in the ordinary course of
business and ordinary cleaning and maintenance materials used by any tenant;
(l) Seller has received no written notice that there are
uncorrected violations of any applicable Laws affecting the Property or the use
and occupancy thereof; to Seller's actual knowledge, Seller has obtained all
approvals, permits and authorizations from all governmental authorities
necessary for the lawful construction, use and operation of the Property,
including, without limitation, a certificate of occupancy for each tenant space,
permitting such space to be used for retail (or restaurant) purposes, as
applicable, and zoning regulations and ordinances applicable in Dickson City,
Pennsylvania have not been violated by existing Improvements or the use thereof;
(m) No petition has been filed or has, to Seller's knowledge,
been threatened to be filed, by or against Seller under any chapter of the
United States Bankruptcy Code or any state bankruptcy, insolvency or similar
statute;
(n) No work has been performed or is in progress at, and no
materials have been furnished to, the Property which, though not presently the
subject of, might give rise to construction, mechanic's, materialmen's,
municipal or other liens against, the Property or any portion thereof; and
(o) There are no employees employed by Seller or any property
manager or otherwise at or in connection with the Property for or to which Buyer
shall have any responsibilities or liabilities following the Closing. There are
no employment, union, collective bargaining, contracts or similar agreements in
effect in connection with the Property or the operation and/or maintenance
thereof.
10.2. Survival of Seller's Representations and Warranties. The
representations and warranties contained in Section 10.1 are true, accurate and
complete and not misleading in any material respect as of the date hereof and
shall be deemed to be repeated at and as of the Closing Date, and shall be true,
accurate and complete and not misleading in any material respect as of such
date. The representations and warranties in Section 10.1 shall survive the
Closing for a period of six (6) months.
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10.3 General Disclaimer. the sale of the PROPERTY hereunder is and will
be made on an "as is" ,"where is," and "with all faults" basis, and Except as
specifically set forth in this agreement, without representations and warranties
of any kind or nature, express, implied or otherwise, including any
representation or warranty concerning title to the PROPERTY OR THE Property, the
physical condition of the Property, the environmental condition of the Property
(including the presence or absence of hazardous substances on or affecting the
Property), the compliance of the Property with applicable laws and regulations
(including zoning and building codes or the status of development or use rights
respecting the Property), the financial condition of the Property, or any other
representation or warranty respecting any income, expenses, charges, liens or
encumbrances, rights or claims on, affecting or pertaining to the PROPERTY or
any part thereof. Except as to matters specifically set forth in THIS AGREEMENT,
Buyer will acquire the PROPERTY solely on the basis of its own physical and
financial examinations, reviews and inspections and the title insurance
protection afforded by the Owner's Policy (in the event buyer elects to purchase
same).
10.4. Changed Circumstances. If any event shall occur after the
Effective Date, and before the Closing Date, which is not caused by Seller
("Changed Circumstance"), that renders untrue any representation or warranty
made by Seller in this Agreement, it shall not constitute a breach by Seller of
such representation or warranty, and Seller's reaffirmation of such
representation or warranty at Closing may be qualified by such Changed
Circumstance. If Seller shall obtain knowledge of any Changed Circumstance,
Seller shall provide notice thereof to Buyer within a reasonable period of time.
In the event Buyer receives actual notice of any Material Changed Circumstance,
whether from Seller or any other source, including its own investigations, then
Buyer shall have the right to terminate this Agreement, in which event both
parties shall be relieved from any further obligation under this Agreement, and
the Deposit shall be returned to Buyer. For purposes of this Agreement, a
"Material" Changed Circumstance shall be one that (when taken together with all
other Changed Circumstances) would be reasonably expected to decrease the annual
net operating income of the Property by more than one (1%) percent or would
otherwise reasonably be considered material by a Buyer of similar properties.
10.5 Representations, Warranties and Covenants of Buyer.
(a) Buyer is a limited partnership duly organized, validly
existing, and in good standing under the laws of the State of Delaware, and has
full power and authority to own, lease and operate its properties and assets and
to conduct its business as now being conducted.
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(b) Buyer has the full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and the
execution, delivery and performance of this Agreement by Buyer has been duly
authorized by all necessary action. The purchase of the Property by Buyer from
Seller, the execution and delivery of this Agreement, the fulfillment of the
terms set forth in this Agreement and the consummation of the transactions
contemplated by this Agreement will not conflict with or constitute a default
under the organizational documents of Buyer, or a default under any contract by
which Buyer is bound, or would be a violation of any Laws applicable to Buyer.
This Agreement has been duly executed and delivered and constitutes the legal,
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms. Buyer does not require any consent, approval, authorization or
order of, or declaration, filing or registration with, any Governmental
Authority or Person in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.
SECTION 11. Operation of the Property Between Contract and Closing.
From and after the date hereof and until the Closing, Seller shall comply with
all laws, ordinances, rules or regulations affecting the Property and shall
maintain the Property in its existing condition, reasonable wear and tear
excepted. Seller shall pay when due any and all taxes, assessments and levies
with respect to the Property and timely make all payments with respect to and
perform all obligation secured by any encumbrances affecting the Property.
Seller shall do or cause to be done all things reasonably within Seller's
control to preserve intact and unimpaired any and all Licenses in favor of,
constituting or benefiting any portion of the Property. Seller shall promptly
notify Buyer of (i) the occurrence of any fire or other casualty causing damage
to the Property, or (ii) receipt of notice of eminent domain proceedings or
condemnation of or affecting the Property or notice from any governmental
authority relating to the condition, use or occupancy of the Property,
(including, without limitation, all notices of violation of codes with respect
to the Property), or (iii) knowledge of any default by any tenant of the
Property under any of the Leases, or (iv) any notice of Seller's default as
landlord under any Lease received by Seller from any tenant of the Property or
the receipt or delivery from any tenant of any default or termination notice or
claim of offset or defense to the payment of rent; or (v) receipt of notice from
any tenant that such tenant intends to vacate its leased premises, or (vi)
receipt of any notice of any actual or threatened litigation against Seller or
affecting or relating to the Property. Seller shall not, without the prior
written consent of Buyer in each instance, do the following:
(i) enter into or amend or modify any lease or other
occupancy agreement for the Property;
(ii) enter into any other agreement concerning the
Property not cancelable at the Closing;
(iii) convey or agree to convey the Property or any
portion thereof or any interest or option therein or in Seller to any third
party, or cause or permit the Property to become subject to any Non-Permitted
Encumbrances;
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(iv) make any structural alteration to any
improvements on the Property, or any alteration to any HVAC, electrical,
plumbing, sprinkler or other utility system serving the Property; or
(v) apply any of the security deposits, whether to a
default of a Tenant or otherwise, without the consent of the Buyer; or
(vi) consent to the assignment or subletting by any
tenant of all or any portion of its premises (to the extent that Seller as the
landlord under the respective Lease has the right to withhold such consent.
SECTION 12. Conditions To Closing and Post-Closing Matters.
12.1 Conditions of Buyer's Obligation to Close. (a) The obligations of
Buyer to consummate the transactions contemplated by this Agreement are, at the
option of Buyer, subject to the conditions set forth below, which conditions may
be waived by Buyer without releasing or waiving of its rights hereunder:
(i) Title to the Property shall be as specified in
Section 3.1
(ii) The representations and warranties of Seller
contained herein are true and correct in all material respects (subject,
however, to the provisions of Section 10.4 hereof);
(iii) Seller shall have tendered to Buyer all of the
closing documents which Seller is required to deliver hereunder and otherwise
performed all obligations required to be performed under this Agreement; and
(iv) The property is in substantially the same
physical condition as existed upon the expiration of the Due Diligence Period,
reasonable wear and tear excepted; and
(b) In the event that the conditions contained in this Section
12.1 are not satisfied, except if such failure shall constitute a default by
Seller under this Agreement (in which event the provisions of Section 9 shall be
applicable), Buyer shall have as its sole remedy hereunder the right to (i)
waive such unsatisfied condition whereupon the transactions contemplated by this
Agreement shall be consummated as provided in this Agreement, or (ii) terminate
this Agreement, by notice to Seller. Upon the giving of such termination notice,
this Agreement shall terminate and, except as otherwise set forth herein,
neither party to this Agreement shall have any further rights or obligations
hereunder.
SECTION 13. CASUALTY AND CONDEMNATION.
13.1 Casualty. In the event of any fire or other casualty
affecting the Property prior to the Closing Date, Seller shall promptly notify
Buyer thereof, describing the nature and extent thereof. If such casualty would
cost at least Two Hundred and Fifty Thousand ($250,000.00) Dollars to repair, or
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would not be fully covered by Seller's insurance (with no deductible, or with
only such deductible as Seller would agree to reimburse Buyer for), or would
give any tenant of the Property the right to terminate its Lease, then Buyer
may, at its election, at any time within fifteen (15) calendar days after
receipt of notice of such casualty, terminate this Agreement by notice to Seller
and Escrow Agent, whereupon the Deposit shall be refunded to Buyer and, except
as provided herein, neither party shall have any further rights against the
other hereunder. In the event Buyer does not terminate this Agreement by reason
of any such casualty within such fifteen (15) day period, or in the event that
Buyer does not have the right to so terminate this Agreement, then and in that
event, the sale of the Property shall be consummated as herein provided and
Seller shall assign to Buyer on the Closing Date all of Seller's right, title
and interest in and to all insurance proceeds payable by reason of such casualty
and shall pay over to Buyer all amounts theretofore received by Seller in
connection with such casualty and the amount of any deductible, in each case,
net of Seller's costs incurred in obtaining such proceeds or restoring the
Property.
13.2 Condemnation. In the event of any Taking prior to the
Closing Date, Seller shall promptly notify Buyer thereof, describing the nature
and extent thereof. Buyer may thereupon, at its election, at any time within
fifteen (15) calendar days after receipt of written notice of such condemnation,
terminate this Agreement by notice to Seller and Escrow Agent, whereupon the
Deposit shall be refunded to Buyer and, except as provided herein, neither party
shall have any further rights against the other hereunder. In the event Buyer
does not terminate this Agreement by reason of any such Taking within such
fifteen (15) day period, then and in that event, the sale of the Property shall
be consummated as herein provided and Seller shall assign to Buyer on the
Closing Date all of Seller's right, title and interest in and to all awards
payable by reason of such Taking and shall pay over to Buyer all amounts
theretofore received by Seller in connection with such Taking, in each case, net
of Seller's costs incurred in obtaining such award or restoring the Property.
SECTION 14. NOTICES. Except as otherwise expressly provided in Section
5(c), all notices, requests or other communications which may be or are required
to be given, served or sent by either party hereto to the other shall be deemed
to have been properly given, if in writing and, unless otherwise specified
herein, and (a) upon delivery, if delivered in person or by facsimile
transmission with receipt thereof confirmed by printed facsimile acknowledgment,
(b) one (1) business day after having been deposited for overnight delivery with
any reputable overnight courier service, or (c) three (3) business days after
having been deposited in any post office or mail depository regularly maintained
by the United States Postal Office and sent by registered or certified mail,
postage paid, return receipt requested, and in each case, addressed as follows:
To Seller:
---------
102 Colliery Road
Dickson City, Pennsylvania 18519
Facsimile: (570) 383-0126
Telephone: (570) 383-0250
Attn: Richard Dreher
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With a Copy To:
--------------
Charles Brodsky, Esq.
11 Chambers Street, 2nd floor
Princeton, NJ 08542
Facsimile: 609-430-3058
Telephone: 609-430-3044
To Buyer:
--------
44 South Bayles Avenue
Port Washington, New York 11050
Attention: Ms. Brenda Walker
Facsimile: 516-767-6497
Telephone: 516-883-5577
With a Copy To:
--------------
Warren S. Sacks, P.C.
707 Westchester Avenue
White Plains, New York 10604
Facsimile: (914) 682-1707
Telephone: (914) 428-8300
SECTION 15. MISCELLANEOUS. (a) Buyer and Seller each warrant and
represent to the other that except for Metro Commercial Real Estate, Inc. (the
"Broker"), no broker, agent or finder was involved in the negotiation and
consummation of this transaction. Buyer and Seller each agree to indemnify and
hold the other harmless, and defend the other from and against any claim, loss,
damage, liability, cost and expense (including, without limitation, reasonable
attorneys' fees) resulting from a breach of the foregoing representation. If the
Closing shall occur, Seller shall pay any fee or commission due the Broker
pursuant to a separate agreement with the Broker. The provisions of this Section
shall survive the Closing or earlier termination of this Agreement.
(b) This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to principles of conflicts of law.
(c) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(d) Neither this Agreement nor any memorandum thereof shall be
recorded and any attempted recordation hereof shall be void and shall constitute
a default hereunder.
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(e) Whenever the context requires, the use in this Agreement
of a pronoun of any gender shall be deemed to refer also to any other gender,
and the use of the singular shall be deemed to refer also to the plural.
(e) Rule of Construction. Seller and Buyer are business
entities having substantial experience with the subject matter of this Agreement
and have each fully participated in the negotiation and drafting of this
Agreement. Accordingly, this Agreement shall be construed without regard to the
rule that ambiguities in a document are to be construed against the drafter.
(f) Business Days. If the expiration of any period or the
occurrence of any date referred to in this Agreement would occur on a day which
is other than a business day, then such period shall be deemed to expired and/or
such date shall be postponed to the first business day occurring thereafter. The
term "business day" shall mean a day of the week other than Saturday, Sunday or
legal holidays on which banking institutions or state government offices in the
Scranton, PA area are authorized or required to close.
(g) If any provision of this Agreement is held to be invalid
or unenforceable as against any person or under certain circumstances, the
remainder of this Agreement and the applicability of such provision to other
persons or circumstances shall not be affected thereby. Each provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
(h) This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute but one and the same instrument. This Agreement
may be executed by facsimile which shall be deemed an original for all purposes.
In the event this Agreement is executed by the exchange of facsimile copies, the
parties agree to exchange ink-signed counterparts promptly after the execution
and delivery of this Agreement.
(i) Seller acknowledges that as a REIT, Buyer will be
required, after the Closing, to comply with certain requirements of the
Securities and Exchange Commission; accordingly, Seller agrees to be bound by
and to comply with the provisions set forth in Exhibit J attached hereto and
made a part hereof, in order to facilitate such compliance by Buyer. The
foregoing covenant of Seller shall survive the Closing.
(j) Seller and Buyer agree that either party may elect to
structure the purchase of the Premises within the meaning of Section 1031 of the
Internal Revenue Code by assigning its rights, but not its obligations,
hereunder to a qualified intermediary as provided in Income Tax Regulations
Section 1.1031(k)-1(g)(4) on or before the Closing Date, and the other party
hereby agrees to cooperate therewith, provided that (a) the other party will not
be required to incur any costs as a result of such like-kind exchange, (b) the
Closing Date shall not be adjourned by reason thereof, (c) the other party will
incur no expense, liability or obligation, in connection with said structuring,
other than acknowledging and consenting to exchanging party's assignment in
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connection with such exchange, (d) the other party shall have no obligation to
take title to any real property in connection with such exchange, and (e) the
other party shall make no representation or warranty in connection with, and
shall have no responsibility for, compliance by such exchange with the Internal
Revenue Code or any regulations thereunder.
[signature page follows]
-21-
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
SELLER:
SADG-11 Associates, L.P.,
a Pennsylvania limited partnership
By: SADG-2, Inc.
a Pennsylvania corporation, general partner
By: /s/ Richard C. Dreher
-------------------------------
Richard C. Dreher, President
BUYER:
Cedar Shopping Centers Partnership, L.P.
a Delaware limited partnership
By: Cedar Shopping Centers, Inc.
a Maryland corporation, general partner
By: /s/ Leo S. Ullman
-----------------------------------
Name: Leo S. Ullman
Title: President
Escrow Agent hereby executes this Agreement
to acknowledge receipt of the Initial Deposit
and to confirm its agreement to hold and
disburse the Deposit in accordance with the
terms and conditions of the foregoing Agreement
Lawyers Title Insurance Corporation
By:
------------------------------
Craig Federer
EXHIBIT A
---------
(Legal Description of the Land)
EXHIBIT B
---------
ESCROW PROVISIONS
(a) The Deposit shall be held by Escrow Agent, and disbursed
by Escrow Agent in the following manner:
(i) to Seller upon consummation of the Closing; or
(ii) to Seller upon receipt of written demand
therefor, stating that either (x) this Agreement has been
terminated pursuant to a provision herein which states that
Seller is entitled to the Deposit upon termination, and
certifying the basis for such termination or (y) Buyer has
defaulted in the performance of Buyer's obligations under this
Agreement and the facts and circumstances underlying such
default; provided, however, that Escrow Agent shall not honor
such demand until at least five (5) days business days after
it has sent a copy of such demand to Buyer, in accordance with
the notice procedure set forth in the Agreement nor thereafter
if Escrow Agent shall have received written notice of
objection from Buyer in accordance with the provisions of
paragraph (b) of this Exhibit B; or
(iii) to Buyer upon receipt of written demand
therefor, stating that either (x) this Agreement has been
terminated pursuant to a provision hereof which states that
Buyer is entitled to the Deposit upon termination, and
certifying the basis for such termination, or (y) Seller has
defaulted in performance of Seller's obligations under this
Agreement and the facts and circumstances underlying such
default; provided, however, that Escrow Agent shall not honor
such demand until at least the greater of five (5) business
days after it has sent a copy of such demand to Seller in
accordance with the notice procedure set forth in the
Agreement, nor thereafter if Escrow Agent shall have received
written notice of objection from Seller in accordance with the
provisions of paragraph (b) of this Exhibit B.
(b) Upon receipt of written demand for the Deposit by Buyer or
Seller pursuant to clause (ii) or (iii) of paragraph (a) above, Escrow
Agent shall promptly send a copy thereof to the other party. The other
party shall have the right to object to the delivery of the Deposit by
sending written notice of such objection to Escrow Agent within five
(5) business days after Escrow Agent delivers a copy of the written
demand to the objecting party but not thereafter. Such notice shall set
forth the basis for objecting to the delivery of the Deposit. Upon
receipt of such notice, Escrow Agent shall promptly send a copy thereof
to the party who made the written demand.
(c) In the event of any dispute between the parties regarding
the Deposit, Escrow Agent, at its option, may disregard all
instructions received and either (i) hold the Deposit until the dispute
is mutually resolved and Escrow Agent is advised of this fact in
writing by both Seller and Buyer, or Escrow Agent is otherwise
instructed by a final unappealable judgment of a court of competent
jurisdiction, or (ii) deposit the Deposit with a court of competent
jurisdiction (whereupon Escrow Agent shall be released and relieved of
any and all liability and obligations hereunder from and after the date
of such deposit).
(d) Escrow Agent may rely upon, and shall be protected in
acting or refraining from acting upon, any written notice, instruction
or request furnished to it hereunder and believed by it to be genuine
and to have been signed or presented by the proper party or parties,
provided that any modification of this Agreement shall be signed by
Escrow Agent, Buyer and Seller.
(e) Seller and Buyer shall jointly and severally hold Escrow
Agent harmless against any loss, damage, liability or expense incurred
by Escrow Agent not caused by its willful misconduct or gross
negligence, arising out of or in connection with its entering into this
Agreement and the carrying out of its duties hereunder, including the
reasonable costs and expenses of defending itself against any claim of
liability or participating in any legal proceeding. Escrow Agent may
consult with counsel of its choice, and shall have full and complete
authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such
counsel.
(f) Escrow Agent may resign at will and be discharged from its
duties or obligations hereunder by giving notice in writing of such
resignation specifying a date when such resignation shall take effect;
provided, however, that (i) prior to such resignation a substitute
escrow agent is approved in writing by Seller and Buyer, which approval
shall not be unreasonably withheld or delayed, or (ii) Escrow Agent
shall deposit the Deposit with a court of competent jurisdiction. After
such resignation, Escrow Agent shall have no further duties or
liability hereunder.
(g) Buyer and Seller, together, shall have the right to
terminate the appointment of Escrow Agent hereunder by giving to it
notice of such termination, specifying the date upon which such
termination shall take effect and designating a replacement Escrow
Agent, who shall sign a counterpart of this Agreement. Upon demand of
such successor Escrow Agent, the Deposit shall be turned over and
delivered to such successor Escrow Agent, who shall thereupon be bound
by all of the provisions hereof.
(h) Seller and Buyer shall share equally the responsibility
for reimbursement to Escrow Agent of all out-of-pocket expenses,
disbursements and advances (including reasonable attorneys' fees)
incurred or made by Escrow Agent in connection with the carrying out of
its duties hereunder. Escrow Agent agrees that it shall not charge any
such fees, expenses, disbursements or advances if the Deposit is
released from escrow hereunder without a dispute between Seller and
Buyer with respect thereto.
(i) Escrow Agent's agreements and obligations hereunder shall
terminate and Escrow Agent shall be discharged from further duties and
obligations hereunder upon final payment of the Deposit in accordance
with the terms of this Agreement.
EXHIBIT C
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(Additional Permitted Exceptions to Title)
EXHIBIT D
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(Assignment and Assumption of Leases and Security Deposits)
EXHIBIT E
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(Estoppel Certificate)
TO: Cedar Shopping Centers Partnership, L.P. (or it designated nominee
acquire title to the Shopping Center), its mortgage lender, and their successors
and/or assigns
The undersigned ("Tenant"), under that certain lease, dated
_______________ (hereinafter referred to as the "Lease"), with ____________
("Landlord"), for certain premises located at the Sunset Crossings Shopping
Center in Dickson City, Pennsylvania (the "Shopping Center"), containing
approximately __________ square feet (hereinafter referred to as the "Premises")
hereby ratifies the Lease and certifies that:
1. The Lease has not been modified, changed or amended, except by the
documents listed in Schedule A attached hereto. The Lease is in full force and
effect.
2. Tenant has accepted possession of and is now occupying the Premises.
3. The current term of the Lease commenced on _____________________ and
expires on _________________. Tenant has ______ (__), remaining renewal options
of ______ years each.
4. The present base or minimum monthly rental under the Lease is
$_________________. Monthly rent commenced on ______________, ____. Monthly
rental has been paid through __________, 20__. There has been no prepayment of
rent other than as provided by the Lease.
6. Tenant is currently making contributions toward common area
maintenance expenses, real estate taxes and insurance in the sum of $_____ per
month. Payments have been made through _____, 20__.
7. The amount of the security deposit paid under the terms of the Lease
and not returned to Tenant is $_________.
8. There are no defaults under the Lease by Landlord, nor to the best
of the undersigned's knowledge has any event occurred which, with passage of
time or the giving of notice or both, would constitute a default by Landlord
under the Lease, except as set forth in Schedule A.
9. All work to be performed by Landlord under the Lease has been
completed in accordance with the terms of the Lease and has been accepted by the
undersigned; Tenant has received all construction allowances, rent concessions
and other "free rent" which Tenant is entitled to receive under the Lease,
except as set forth in Schedule A.
10. To Tenant's knowledge there are no current default-related credits,
offsets or deductions to which it is entitled under the Lease.
11. Tenant has not previously assigned the Lease or sublet all or any
portion of the Premises.
12. Tenant has no right or option to purchase any portion of the
Shopping Center.
13. Tenant confirms and agrees that the Lease is and shall at all times
be subject and subordinate to any mortgages or deeds of trust now or hereafter
affecting the Shopping Center, and any amendments, modifications,
consolidations, substitutions, replacements, additions, renewals, extensions or
re advances thereof.
This certification is binding upon the undersigned and may be
relied upon by you and any successor in interest to you or any mortgage lender
of the Shopping Center.
The undersigned individual hereby certified that he is duly authorized
to sign, acknowledge and deliver this letter on behalf of Tenant.
IN WITNESS WHEREOF, Tenant has executed and delivered this Estoppel
Certificate effective ____________ ____, 2003.
-----------------------------
By:
-------------------------------
Name:
Title:
EXHIBIT F
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(Tenant Leases)
EXHIBIT F-1
(Proposed Chinese Buffet Tenant Lease)
EXHIBIT F-2
(Proposed Amendment to ZTN Pizza, Inc. Lease)
EXHIBIT G
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(Rent Roll)
EXHIBIT H
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(Service Contracts)
EXHIBIT I
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(Unpaid Brokerage Commissions)
EXHIBIT J
---------
8-K and Audit Requirements
For the period of time commencing on the execution of the
attached Agreement of Purchase and Sale and continuing through the first
anniversary of the Closing Date, Seller shall, from time to time, upon
reasonable advance notice from Buyer, provide Buyer and its representatives,
agents and employees with access to all financial and other information
pertaining to the period of Seller's ownership and operation of the Property,
which information is relevant and reasonable necessary, in the opinion of Cedar
Shopping Centers, Inc. ("Cedar") outside, third party accountants (the
"Accountants"), to enable Cedar and its Accountants to prepare financial
statements in compliance with any and or all of (a) Rule 3-14 of Regulation S-X
of the Securities and Exchange Commission (the "Commission"); (b) any other rule
issued by the Commission and applicable to Cedar; and (c) any registration
statement, report or disclosure statement filed with the Commission by, or on
behalf of, Cedar; provided however, that in any such event(s), Buyer shall
reimburse Seller for those third party, out-of-pocket costs and expenses that
Seller incurs in order to comply with the foregoing requirement. Seller
acknowledges and agrees that the following is a representative description of
the information and documentation that Cedar and the Accountants may require in
order to comply with (a), (b), and (c) above. Seller shall provide the following
information, and documentation on a per-building basis, if available
(capitalized terms not defined herein shall have the meanings as ascribed to
such terms in the attached Agreement of Sale):
1. Rent rolls for the calendar month in which the closing occurs
and the eleven (11) calendar months immediately preceding the
calendar month in which the closing occurs;
2. Seller's written analysis of both (a) scheduled increases in
base rent required under the Leases in effect on the Closing
Date; and (b) rent concessions imposed by those Leases;
3. Seller's internally-prepared operating statements;
4. Access to Lease files;
5. Most currently available real estate tax bills;
6. Access to Seller's cash receipt journal(s) and bank statements
for the Property;
7. Seller's general ledger with respect to the Property,
excluding Seller's proprietary accounts;
8. Seller's schedule of expense reimbursements required under the
Leases in effect on the Closing Date;
9. Schedule of those items of repairs and maintenance performed
by, or at the direction of the Seller, during Seller's final
fiscal year in which Seller owns and operates the Property
(the "Final Fiscal Year");
10. Schedule of those capital improvements and fixed assets
additions made by, or at the direction of, Seller during the
Final Fiscal Year;
11. Access to Seller's invoices with respect to expenditures made
during the Final Fiscal Year; and
12. Access (during normal and customary business hours) to
responsible personnel to answer accounting questions.
Nothing herein shall require Seller to conduct its own audits
or generate any requested materials that are not in its possession.
The provisions of the foregoing information shall be for
informational purposes only, shall not be deemed to be representations or
warranties under this Agreement, and shall not expose Seller to any liability on
account thereof.
Upon Buyer's request, for a period of (2) years after Closing,
Seller shall make Seller's books, records, existing supporting invoices and
other existing substantiating documentation available to Buyer for inspection,
copying, and audit by Buyer's designated accountants, at the expense of Buyer.
This obligation shall survive the Closing for a period of two (2) years and
shall not be merged with any instrument of conveyance delivered at Closing.