CEDAR-SOUTH PHILADELPHIA I, LLC
44 South Bayles Avenue
Port Washington, New York 11050
May 15, 2003
SPSP Corporation
Passyunk Supermarket, Inc.
Twenty Fourth Street Passyunk Partners, L.P.
44 West Lancaster Avenue, Suite 110
Ardmore, Pennsylvania 19003
Re: 2301-11 Oregon Avenue, Philadelphia, Pennsylvania, 2426 South
23rd Street, Philadelphia, Pennsylvania and 2300 W. Passyunk
Avenue, Philadelphia, Pennsylvania
(collectively, the "Property")
Gentlemen:
This letter ("Amendment Letter") amends that certain Agreement to Enter
Into Net Lease dated as of April 23, 2003 (the "Agreement") among Cedar South
Philadelphia I, LLC ("Cedar") and SPSP Corporation ("SPSP"), Passyunk
Supermarket, Inc. ("Passynuk") and Twenty Fourth Street Passyunk Partners, L.P.
("24th Street"; SPSP, Passyunk and 24th Street are collectively referred to
herein as the "Owners"). Any undefined capitalized terms used herein shall have
the meanings ascribed to them in the Agreement.
The parties hereto agree as follows:
1. Section 7 of the Agreement is deleted in its entirety, and the
following is inserted in lieu thereof:
Closing Date. The consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at 10:00 A.M. on
Wednesday, June 11, 2003, TIME BEING OF THE ESSENCE, at the office of
Ledgewood Law Firm, P.C., 1521 Locust Street, 8th Floor, Philadelphia,
Pennsylvania 19102. Notwithstanding the foregoing, Cedar shall use good
faith efforts to cause the Closing to occur as soon as is reasonably
practicable. It shall be a condition to the Closing that (i) the Owners
and Cedar shall contemporaneously therewith deliver (or cause to be
delivered) to the other party the documents and other items referred to
in Section 16 below, (ii) the conditions to Closing set forth in Section
19(a) below shall have either been satisfied or waived by Cedar, and
(iii) the conditions to Closing set forth in Section 19(b) below shall
have either been satisfied or waived by Owners. The date on which the
Closing shall take place is hereinafter referred to as the "Closing
Date".
2. Section 11(a) of the Agreement is modified by deleting the first
sentence thereof and replacing it with the following:
Notwithstanding anything to the contrary implied or provided by
law or in equity, if, prior to the Closing, any material portion of the
Premises is damaged by fire, the elements or any other casualty or if
any material portion of the Premises is taken by eminent domain or
otherwise, Cedar shall have the right to terminate this Agreement by
written notice to the Owners, which notice shall be given by Cedar
within fifteen (15) days after the Owners shall notify Cedar in writing
of such casualty, whereupon the Advance Amount (as hereinafter defined)
shall be promptly returned to Cedar, and this Agreement and the
obligations of the parties hereunder shall terminate (and no party
hereto shall have any further obligations in connection herewith except
under those provisions that expressly survive the Closing or a
termination of this Agreement).
3. Section 17 of the Agreement is deleted in its entirety and the
following is inserted in lieu thereof:
(a) (i) If all of the conditions to Cedar's performance
under this Agreement shall be satisfied, and Cedar shall default in its
obligations under this Agreement, the Owners may terminate this
Agreement on written notice to Cedar, whereupon the Owners shall retain
the Advance Amount, and this Agreement and the obligations of the
parties hereunder shall terminate (and no party hereto shall have any
further obligations in connection herewith except under those provisions
that expressly survive a termination of this Agreement). Cedar
acknowledges that, if Cedar shall default under this Agreement as
aforesaid, the Owners will suffer substantial adverse financial
consequences as a result thereof. Accordingly, subject to the provisions
of Section 17(a)(ii) below, the Owners' sole and exclusive remedy
against Cedar shall be the right to retain the Advance Amount, as and
for its sole and full and complete liquidated damages, it being agreed
that the Owners' damages are difficult, if not impossible, to ascertain.
(ii) Notwithstanding anything to the contrary
contained in Section 17(a)(i) above, in the event that Cedar
shall contest the existence of a default by Cedar in its
obligations under this Agreement, the Owners shall be permitted
to prosecute an action for damages or proceed with any other
legal course of conduct in connection therewith and Cedar's
liability shall not be limited to the Advance Amount, but shall
in no event be less than the Advance Amount.
(b) If the Owners shall default hereunder by failing to
close or by reason of a breach of a representation or warranty by
Owners, Cedar may elect to either (x) terminate this Agreement, in which
case the Owners shall deliver the Advance Amount to Cedar, and Cedar and
the Owners shall have no further rights or obligations under this
Agreement, except those expressly provided herein to survive the
termination of this Agreement, or (y) prosecute an action for specific
performance of this Agreement; provided, however, that in the event that
the aggregate amount of damages reasonably claimed by Cedar in
connection with such default shall be less than $175,000 (1) the
existence of such default shall not be a basis for Cedar not to close
hereunder, (2) if Cedar shall thereafter close, Cedar shall not be
deemed to have waived its right to pursue its remedies under this
Agreement, including, without limitation, those remedies set forth
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in Section 15(c) above as a result of the Owners' default, and (3) if
Cedar shall thereafter fail to close hereunder, the provisions of
Section 17(a) hereof shall apply provided, however, if the amount of
damage reasonably claimed by Cedar pursuant to Section 17(b) hereof
shall be greater than $25,000 and less than $175,000, in such case the
Owners shall be required to return to Cedar that portion of the Advance
Amount equal to the amount of damage reasonably claimed by Cedar. In the
event that Cedar shall prosecute an action for specific performance
pursuant to this Section 17(b), the prevailing party in such action
shall be entitled to recover as a part of such action the actual
out-of-pocket costs and reasonable attorneys' fees incurred by such
prevailing party in connection with such action.
4. Exhibit I of the Agreement is modified as follows: Clause (e) of
Paragraph 1 is deleted in its entirety, and the following is inserted in lieu
thereof:
(e) "Agreement to Enter Into Net Lease" shall mean that
certain Agreement to Enter Into Net Lease dated as of April __, 2003
between Landlord and Tenant, as the same has been amended.
5. Exhibit S of the Agreement is modified to delete any references
therein to the Letter of Credit.
5A. Prior to Closing, the Owners shall cause any currently existing
loans made by the shareholders and partners of the Owners to the Owners to
either be paid off in full or converted to equity. From and after the Closing,
the Owners shall comply with all requirements typically required of "special
purpose bankruptcy remote entities"; provided, however, that the Owners shall be
permitted to lend to the shareholders and partners of the Owners (or affiliates
of the shareholders and partners of the Owners) the proceeds of the loan being
made at Closing by Cedar-South Philadelphia II, LLC to the Owners (and the
proceeds of the liquidation of other assets currently owned by the Owners),
provided that the loan documents evidencing such loans state that (i) if the
borrowers under such loans have any claims against the Owners, the borrowers'
sole remedy shall be an offset against the outstanding loan amount, and (ii) the
borrowers under such loans will not commence any action to enforce such claims
other than an action to offset against the outstanding loan amount.
6. Upon the terms and as set forth in that certain letter agreement
of even date herewith between Stroock, as legal counsel to and on behalf of
Cedar, and Ledgewood Law Firm, P.C., as escrow agent ("Escrowee"), (i)
contemporaneously with the execution of this letter agreement, Cedar shall
deliver to Escrowee, by wire transfer of immediately available federal funds in
accordance with the wiring instructions attached hereto as Schedule 1, the
amount of $1,000,000 (the "Initial Advance Amount"), to be held in escrow in
accordance with the terms of that certain Escrow Agreement dated as of April 23,
2003 among Cedar, Lender, the Owners and Escrowee (the "Escrow Agreement") and
(ii) Escrowee shall deliver to Cedar the Letter of Credit, together with a
letter to the issuer of the Letter of Credit authorizing the cancellation
thereof (collectively, the "LC Documents"). Upon full execution of this
Amendment Letter, Escrowee shall be authorized to deliver the Initial Advance
Amount to the Owners, and the Escrow Agreement shall be deemed to be terminated.
Within two (2) business days after Cedar's
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receipt of the LC Documents, Cedar shall deliver to the Owners, by wire transfer
of immediately available federal funds in accordance with the wiring
instructions attached hereto as Schedule 2, an additional $1,000,000 (the
"Remaining Advance Amount"; the Initial Advance Amount and the Remaining Advance
Amount are collectively referred to herein as the "Advance Amount"), TIME BEING
OF THE ESSENCE. If the Remaining Advance Amount is not timely received as set
forth in the preceding sentence, Cedar shall be in default in its obligations
under the Agreement, the Owners may terminate the Agreement on written notice to
Cedar, whereupon the Owners shall retain the Initial Advance Amount, and the
Agreement and the obligations of the parties thereunder shall terminate (and no
party thereto shall have any further obligations in connection therewith except
under those provisions that expressly survive a termination of the Agreement).
If the Closing shall occur, the Advance Amount shall be credited against the
loan amount funded pursuant to the commitment letter attached as Exhibit Q to
the Agreement. The provisions of the last sentence of this Paragraph 6 shall
survive the Closing.
7. At Closing, Cedar agrees to pay all reasonable legal fees and
costs incurred by the Owners from and after April 23, 2003 in connection with
the transactions contemplated by the Agreement and the Commitment Letter,
accompanied by Cedar's attorneys' normal itemization of any such fees and costs.
8. Except as amended by this letter agreement, the terms and
provisions of the Agreement remain unmodified and in full force and effect. Any
future reference to the Agreement shall be deemed to be a reference to the
Agreement, as amended by this letter agreement and as it may, from time to time,
hereafter be further amended.
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Kindly acknowledge your agreement with the foregoing by signing this
letter agreement in the space provided below.
Cedar-South Philadelphia I, LLC
By: /s/ Leo S. Ullman
---------------------------
Name: Leo S. Ullman
Title: President
AGREED AND ACKNOWLEDGED:
SPSP Corporation
By: /s/ Gary E. Erlbaum
---------------------
Name: Gary E. Erlbaum
Title: President
Passyunk Supermarket, Inc.
By: /s/ Gary E. Erlbaum
---------------------
Name: Gary E. Erlbaum
Title: President
Twenty Fourth Street Passyunk Partners, L.P.
By: Twenty Fourth Street Passyunk Corporation, its general partner
By: /s/ Marc Erlbaum
---------------------
Name: Marc Erlbaum
Title: President
AGREED AS TO PARAGRAPH 6:
Ledgewood Law Firm, P.C.,
as Escrowee
By: /s/ Richard J. Abt
---------------------
Name: Richard J. Abt
Title: Member
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