REAL PROPERTY PURCHASE AGREEMENT
EXHIBIT
2.2
THIS REAL
PROPERTY PURCHASE AGREEMENT (this “Agreement”) is made as of the 6th day of
February 2009, by and between XXXX XXXXXX, a married
individual, and XXXXXXX XXXXXXX, a married
individual (collectively, “Seller”), and LIFEWAY FOODS, INC., an
Illinois corporation or its nominee or permitted assignee (“Purchaser”). The
Closing Date of this Agreement is set forth in Section 13 below.
1. Property.
Seller hereby agrees to sell and Purchaser hereby agrees to purchase, upon and
subject to the terms and conditions described below, that certain real property
consisting of approximately 1.1355 acres located at 000-000 Xxxxxx Xxxxxx xx xxx
Xxxx xx Xxxxxxxxxxxx, Xxxxxx of Philadelphia and State of Pennsylvania and more
particularly described in Exhibit A
attached hereto and made a part hereof, together with all easements, rights,
privileges and appurtenances thereunto belonging (the “Land”) and all
improvements, buildings and fixtures thereon (the “Improvements”). The legal
description of the Land as set forth on Exhibit A is
subject to verification after receipt and approval of the Survey (as hereinafter
defined) by Purchaser. The Land and the Improvements are sometimes referred to
herein collectively as the “Premises.”
2. Purchase
Price. The purchase price of the Premises shall be Two Million Dollars
($2,000,000) (the “Purchase Price”). Purchaser shall deposit the
Purchase Price, less the credits authorized to Purchaser hereunder, in
immediately available funds, in escrow with the Escrow Agent on or prior to the
Closing Date.
3. Title
Examination of Premises.
(a) Purchaser
shall obtain from Chicago Title Insurance Company (Cleveland, Ohio) (in its
capacity as the escrow agent, the “Escrow Agent,” and in its capacity as the
title company, the “Title Company”) a commitment (the “Commitment”) for an ALTA
Owner’s Policy of Title Insurance (which does not contain a creditors’ rights
exception or arbitration clause) in such form as shall be available under
Pennsylvania law and as Purchaser shall require (the “Title Policy”), in an
amount equal to the Purchase Price, setting forth: (i) the state of title to the
Premises as of the effective date of the Commitment; (ii) the Title Company’s
requirements to delete the standard printed exceptions from the Title Policy;
(iii) the results of a special tax search; and (iv) committing to issue those
endorsements required by Purchaser.
(b) Purchaser
agrees to accept title to the Premises subject only to (i) real estate taxes and
assessments, both general and special, which are a lien but not then due and
payable (the “Taxes”), (ii) any outstanding oil, gas or mineral reservations of
record without any right of entry, and (iii) other title matters approved or
deemed approved by Purchaser; provided, however,
Purchaser shall be required (in addition to any actions required of Seller
hereunder) to take such actions as necessary to delete the standard printed
exceptions from the Title Policy, including, without limitation, executing and
delivering
to the Title Company such documents or surveys or obtaining necessary
endorsements (at Purchaser’s cost). In the event the Commitment or
the Survey discloses any matter affecting title to the Premises other than the
Taxes, Purchaser shall notify Seller of the title matters which Purchaser
approves and the title matters to which Purchaser objects within the later of:
(a) ten (10) business days after receipt by Purchaser of both the Commitment and
the Survey and; (b) ten (10) business days after the date of this Agreement, and
Seller shall remove any such title matters objected to by Purchaser, at Seller’s
expense, within five (5) business days after Purchaser notifies Seller of such
title matters. If Purchaser fails to notify Seller of its approval of, or
objection to, any such title matters, Purchaser shall be deemed to have accepted
all title matters set forth in the Commitment, except for the
Taxes.
(c) In
the event that, despite the use of Seller’s reasonable commercial efforts,
Seller is unable to remove any such title matters objected to by Purchaser
within said five (5) days, Purchaser shall have the right to elect either: (i)
to waive such title matter(s), proceed to close this transaction and accept
title to the Premises subject to such title matter(s); or (ii) to terminate this
Agreement by giving notice of termination to Seller, in which event all monies
and documents deposited by Purchaser in escrow shall be returned to Purchaser
and this Agreement shall be of no further force or effect.
(d) Notwithstanding
any other provision of this Agreement to the contrary, Seller shall have the
unconditional obligation to remove or cure, at no cost to Purchaser, any title
matters which are a lien for the payment of money only, any encumbrance which
can be removed by the payment of a definite sum of money, or any title matter
which arose after the Effective Date as a result of the acts or omissions of
Seller.
(e) It
shall be a condition precedent to Purchaser’s obligation to purchase the
Premises that the Title Company can and will, on the Closing Date, issue the
Title Policy to Purchaser in the amount of the Purchase Price, insuring that
title to the Premises is vested in Purchaser, free and clear from all liens and
encumbrances, except for the Taxes and other title matters approved by Purchaser
as herein provided, and containing such endorsements as may be required by
Purchaser, and without exception for claims of parties in possession not shown
by public records, encroachments, overlaps, boundary line disputes or other
matters described by the Survey which Purchaser has not approved or easements
not shown by public records or other title matters customarily shown (in the
Philadelphia, PA metropolitan area) as standard permitted exceptions on Schedule
B of a fee owner’s policy of title insurance. On or before the Closing Date,
Seller shall execute and deliver to the Title Company such documents or
affidavits as are required by the Title Company to delete the standard printed
exceptions from the Title Policy.
(f) Purchaser
shall pay all fees charged by the Title Company in connection with the issuance
of the Title Policy, including the cost of the examination of title, the cost of
a special tax search, the cost of the issuance of the Commitment, and the
premium for the issuance of the Title Policy, including endorsements thereto
(collectively, the “Title Costs”).
4. Survey of
Premises. Purchaser shall cause a survey of the Premises (the “Survey”)
to be prepared, and the perimeter legal description of the Land prepared and
certified by the surveyor shall be used in the Deed (as hereinafter defined).
The Survey shall be certified to Seller, Purchaser, the Title Company and any
other party designated by Purchaser.
5. Title to
Premises. On the Closing Date, Seller shall convey good and marketable
indefeasible fee simple title to the Premises to Purchaser, subject only to the
Taxes and such other title matters approved by Purchaser, by special warranty
deed (the “Deed”). The Deed shall be in form and substance reasonably
satisfactory to Purchaser. Taxes and the title matters approved by Purchaser
shall be specifically, not categorically, excepted from the warranties of title
in the Deed.
6. Due
Diligence Investigation.
(a) The
“Due Diligence Period” shall commence on the Effective Date and shall expire on
that date occurring twenty (20) days after the Effective Date (the “Due
Diligence Period”). During the Due Diligence Period, Purchaser, its agents,
contractors and engineers shall have the right to enter upon the Premises for
the purpose of inspecting the physical condition of the Premises and conducting
the Due Diligence Investigation contemplated by the Stock Purchase Agreement and
such related investigations to determine the suitability of the Premises for
Purchaser’s intended uses thereof (“Due Diligence Investigations”); provided, however,
such access during the Due Diligence Period shall be scheduled (after
Purchaser’s reasonable request), limited in scope, and accompanied by Seller (to
the extent practicable, solely after normal business hours). The
right to conduct Due Diligence Investigations includes the right of Purchaser
and Purchaser’s employees, agents and contractors to enter upon any portion of
the Premises to take measurements, make inspections, conduct test borings, make
boundary and topographical survey maps, and to conduct geotechnical, soil,
environmental, groundwater, wetland and other studies (together, the “Studies,
Reports and Surveys”) required by Purchaser in its sole discretion and to
determine the existence and adequacy of utilities serving the Premises, zoning
and compliance with laws. Purchaser shall, at or prior to the
completion of the Due Diligence Period, repair, restore and return the Premises
to the same condition the Premises was in prior to Purchaser’s initiation of
such Due Diligence Investigations, and indemnify and defend Seller from and
against and hold Seller harmless from and against any and all loss, cost,
liability, or expense (including reasonable attorneys’ fees) arising out of
Purchaser’s activities on the Premises during the Due Diligence Investigations;
provided, however, that, such
indemnity shall not cover or extend to (i) any claims of diminution in the value
of the Premises as a consequence of the results revealed by the Due Diligence
Investigations, or (ii) the non-negligent exposure or release by Purchaser of
hazardous substances or materials located in, on, or under the Premises.
Notwithstanding any other provision hereof, this indemnity obligation shall
survive the termination of this Agreement for a period of one (1) year. No such
Due Diligence Investigations shall (unless specifically set forth in this
Agreement and/or the Stock Purchase Agreement) constitute a waiver or
relinquishment on the part of Purchaser of its rights under any covenant,
condition, representation, or warranty of Seller under this Agreement. Upon
execution of this Agreement, Seller shall deliver to Purchaser, at no cost to
Purchaser, such of the following as are in the possession of or available to
Seller: existing soil and groundwater tests, surveys, title policies,
environmental reports, underground storage tank test results, waste disposal
records, permit records, traffic studies and other engineering tests and studies
pertaining
to the
Premises. Notwithstanding the foregoing, Seller shall have no
obligations to Purchaser for, and Purchaser hereby waives and relinquishes any
claims and/or rights under, any covenant, condition, representation, or warranty
of Seller in this Agreement and/or of Sellers in the Stock Purchase Agreement
with respect to, the Encroachments and/or any environmental and/or any other
conditions or matters that are actually disclosed in the Commitment, the Survey,
the Phase I Report(s) and/or the Phase II Report(s) and/or any of the other
Studies, Reports, and Surveys obtained as part of the Due Diligence
Investigation(s) (such terms used herein but not defined herein shall have
meanings as defined in the Stock Purchase Agreement) contemplated hereby and/or
by the Stock Purchase Agreement.
(b)
Prior to the expiration of the Due Diligence Period, Purchaser shall deliver
written notice of its election to proceed or not to proceed with the purchase of
the Premises to Seller and, if Purchaser elects to proceed with the purchase of
the Premises, this Agreement shall remain in effect and the parties shall
proceed to close this transaction, subject to the terms and conditions hereof,
and, provided
there is no material change in the condition of the Premises prior to Closing,
all due diligence matters shall be deemed waived or satisfied with no right to
terminate this Agreement in the event Purchaser shall later determine that the
Premises is not suitable for Purchaser’s intended use. Notwithstanding the
foregoing or Section 6(a), if Purchaser elects to proceed with the purchase of
the Premises pursuant to Section 6(a), then Purchaser shall deliver written
notice of such election prior to the end of the Due Diligence Period, and
Purchaser shall continue to have access to the Premises prior to the Closing for
any of the purposes described in Section 6(a). If Purchaser elects not to
proceed with the purchase of the Premises pursuant to Section 6(a), then
Purchaser shall deliver written notice of such election prior to the end of the
Due Diligence Period, this Agreement shall terminate on the date Seller receives
such notice, and in such event all monies and documents deposited by Purchaser
in escrow shall be returned to Purchaser and neither party shall have any
further rights or obligations hereunder except as otherwise expressly set forth
herein. If Purchaser does not deliver any written notice to Seller on or before
the expiration of the Due Diligence Period, Purchaser shall be deemed to have
elected to proceed with the purchase of the Premises.
(c) Purchaser
shall provide Seller with a copy of the Phase I Report(s), Phase II Report(s)
and any and all other Studies, Reports and Surveys (whether in draft or final
form) promptly upon Purchaser’s receipt of any of the Phase I Report(s), Phase
II Report(s) and/or any of the other Studies, Reports and Surveys, at no cost to
Seller (and notwithstanding any termination of this Agreement for any
reason).
7. Seller
Representations and Warranties. Seller represents and warrants to
Purchaser that, except (i) for the Encroachments, and/or any environmental
and/or any other conditions or matters that are actually disclosed in the
Commitment, the Survey, the Phase I Report(s), Phase II Report(s) and/or any of
the other Studies, Reports, and Surveys obtained as part of the Due Diligence
Investigation(s), and (ii) as set forth on Exhibit C
attached hereto:
(a) Seller
is the owner of good and marketable indefeasible fee simple title in and to the
Premises. The Premises is comprised of separate parcel(s) from any other
property, and no subdivision is required to convey the Premises.
(b) Seller
has the capacity and authority to execute this Agreement and perform the
obligations of Seller under this Agreement. This Agreement constitutes a legal
and valid binding obligation of Seller, enforceable in accordance with its
terms.
(c) To
Seller’s knowledge, (and except as may be set forth in the Phase I Report(s)
and/or Phase II Report(s)) there are no wetlands, oil or gas xxxxx (capped or
uncapped) or underground storage tanks (in use or abandoned) on or about the
Premises, and all previously existing underground storage tanks on or about the
Premises were removed in compliance with all applicable laws, rules, regulations
and orders. To Seller’s knowledge, (and except as may be set forth in the Phase
I Report(s) and/or Phase II Report(s)) neither Seller nor any prior owner or
occupant of the Premises has: (i) caused or permitted, and Seller has received
no notice and has no knowledge of, the generation, manufacture, refinement,
transportation, treatment, storage, deposit, release, salvage, installation,
removal, disposal, transfer, production, burning or processing of Hazardous
Substances (as hereinafter defined) or other dangerous or toxic substances or
solid wastes on, under or about the Premises or any adjacent properties; (ii)
caused or permitted, and Seller has received no notice and has no knowledge of,
the Release (as hereinafter defined) or existence of any Hazardous Substance on,
under or affecting the Premises or any adjacent properties; or (iii) caused or
permitted, and Seller has received no notice and has no knowledge of, any
substances or conditions on, under or affecting the Premises or any adjacent
properties which may support any claim or cause of action, whether by any
governmental agency or any other person, under any applicable federal, state, or
local law, rule, ordinance or regulation. For the purpose of this Agreement, the
terms “Hazardous Substances” and “Release” shall have the same meaning as set
forth the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. Sections 9601 et. seq.; provided, however,
that the definition of Hazardous Substances shall also include petroleum and
related by-products, hydrocarbons, radon, asbestos, urea formaldehyde and
polychlorinated biphenyl compounds.
(d) Except
for those leases set forth on Schedule 7(d) attached hereto (the “Existing
Leases”), there are no outstanding written or oral leases in any way affecting
the Premises, and no person or entity has any right with respect to all or any
portion of the Premises (whether by option to purchase, right of first refusal,
contract, or otherwise) that would prevent or interfere with Purchaser taking
title to, and exclusive possession of, all of the Premises on the Closing Date;
and Seller is not subject to any judgment or decree of a court of competent
jurisdiction or governmental agency that would limit or restrict Seller’s right
to enter into and carry out this Agreement. Neither the execution of this
Agreement nor the consummation of the transactions contemplated herein will
constitute a breach under any contract or agreement to which Seller is a party
or by which Seller is bound or affected or which affects the Premises or any
part thereof.
(e) The
Premises are free of all construction or mechanic’s liens, and Seller has not
commenced any construction or taken any other action that may result in such a
lien.
(f) There
are no actions, suits or proceedings pending, or to the knowledge of Seller
threatened, before any judicial body or any governmental authority or any order,
writ, injunction, decree or demand of any court or any governmental authority
relating to the Premises or any part thereof, and the Premises is in compliance
with all laws, rules, regulations and orders applicable thereto.
(g) Seller
has not received any notice of, and to the knowledge of Sellers, there are no
(i) proposed special assessments, condemnation, or changes in the roads adjacent
to the Premises; (ii) pending public improvements which will result in any
charge being levied or assessed against, or a lien being created upon, the
Premises; or (iii) pending or threatened eminent domain or condemnation
proceedings against or involving the Premises or any adjacent
parcel.
(h) Seller
has not received any notice of, and to the knowledge of Sellers there are no,
disputes related to those certain encroachments as shown on the ALTA/ACSM Land
Title Survey, dated September 29, 2008, by Xxxxxxx Surveying, Inc.
(collectively, the “Encroachments”).
(i) Seller
has made no commitment to any governmental authority, utility company,
association or any other organization or group of individuals, or to any
individual, relating to the Premises which would impose upon Purchaser an
obligation 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.
(j) There
is ingress and egress to the Premises sufficient for the current use of the
Premises, and title to Premises is insurable without exception for lack of legal
right of access.
(k) Except
for the Encroachments, to Seller’s knowledge, neither the Premises nor any use
or occupancy of it is in violation of and is in full conformance with any
applicable law, ordinance or regulation, including, without limitation, any
zoning or other municipal ordinance. The use of the Premises as a
dairy product manufacturing facility with cold storage is a legal non-conforming
use under the applicable zoning ordinance.
(l) Except
as otherwise specifically set forth in this Agreement, the Premises are being
sold and conveyed to Purchaser, pursuant hereto, in “as is, where is, with all
faults” condition.
(m) Seller
has not received any notice of, and to the knowledge of Seller, there are no
defaults under, any of the permits described in Section 11(a)(v)
hereof.
Seller
shall fully disclose to Purchaser, immediately upon its occurrence, any change
in facts, assumptions or circumstances of which Seller becomes aware prior to
the Closing Date that may affect, to any material extent, the representations
and warranties set forth above. Notwithstanding anything contained herein to the
contrary, if Seller’s failure to disclose any change in facts, assumption or
circumstances would constitute a breach under this Agreement, Seller’s eventual
disclosure of such change in facts, assumption or circumstances shall not be
deemed a cure of such breach and shall not in any way affect Purchaser’s right
to pursue any and all remedies available to Purchaser under Section 12 of this
Agreement as a result of such breach; provided, however, if Purchaser proceeds
to Closing and purchases the Premises pursuant hereto after receiving such
subsequent written disclosure from Seller, Purchaser shall not be entitled
to
pursue
any remedies against Seller related to such written disclosure being in breach
of Seller’s representations and warranties hereunder and/or under the Stock
Purchase Agreement. The representations and warranties of Seller contained
herein shall survive the Closing Date for the shorter of the period beginning on
the Closing Date and ending (i) twelve (12) months from the Closing Date or (ii)
on December 31, 2009; provided, however,
that the representations and warranties set forth in Sections 7(a), (b), (d) -
(h) shall survive until the expiration of the applicable statute of limitations
therefor; and that any claim or suit based on fraud shall survive the Closing
until the expiration of the applicable statute of limitations (as applicable,
the “Survival
Period”).
8. Purchaser
Representations and Warranties. Purchaser represents and warrants to
Seller that:
(a) Purchaser
has the capacity and authority to execute this Agreement and perform the
obligations of Purchaser under this Agreement. This Agreement constitutes a
legal, valid and binding obligation of Purchaser. All action necessary to
authorize the execution, delivery and performance of this Agreement by Purchaser
has been taken and such action has not been rescinded or modified.
(b) Purchaser
is not subject to any judgment or decree of a court of competent jurisdiction or
governmental agency that would limit or restrict Purchaser’s right to enter into
and carry out this Agreement. Neither the execution of this Agreement nor the
consummation of the transaction contemplated herein will constitute a breach
under any contract or agreement to which Purchaser is a party or by which
Purchaser is bound or affected or which affects the Premises or any part
thereof.
(c) As
of the date of the execution of this Agreement and as of the Closing Date,
Purchaser is not subject to any Financial Impairment (as defined in the Stock
Purchase Agreement).
9. Seller’s
Covenants. Seller shall not enter into or consent to any lien, easement,
lease, restriction, governmental improvement or other matter affecting Seller’s
title to the Premises or the permitted use of the Premises or that may result in
the imposition of any assessment against the Premises or any part thereof,
without first obtaining the prior written consent of Purchaser, which Purchaser
may withhold, in its sole discretion. Seller shall not remove, plant or add any
soil, trees, plants or improvements or make any other alterations to the
Premises from and after the Effective Date. Seller shall refrain from
supporting any changes to the zoning classification of the
Premises.
10. FIRPTA.
On the Closing Date, Seller shall provide an affidavit in accordance with the
requirements of the Foreign Investment in Real Property Tax Act of 1980, I.R.C.
Section 1445 (1984), as then in effect, in form and substance reasonably
satisfactory to Purchaser and the Escrow Agent. If Seller fails to deliver such
affidavit to Purchaser when required, Purchaser and the Escrow Agent may take
all steps required or permitted by law, including, without limitation,
withholding from the funds due Seller at Closing, ten percent (10%) of the
Purchase Price and paying this sum directly to the Internal Revenue
Service.
11. Conditions
to Purchaser’s Obligations.
(a) The
obligation of Purchaser to consummate the transaction contemplated by this
Agreement is conditioned upon the fulfillment of each of the following
conditions as of the Closing Date (or such earlier contingency date as specified
below), all or any portion of which may be waived in whole or in part by
Purchaser at or prior to Closing (or such earlier contingency date as specified
below):
(i) Seller
shall have performed, observed, and complied in all material respects with all
of the covenants, agreements and conditions required by this Agreement to be
performed, observed and complied with by Seller prior to or as of the Closing
Date as and when required;
(ii) All
of the representations and warranties made by Seller and set forth in this
Agreement shall be true and correct in all material respects as of the Effective
Date and as of the Closing Date;
(iii) The
Title Company shall be prepared to issue the Title Policy;
(iv) There
shall not have been any material, adverse change in the condition of the
Premises prior to Closing;
(v) Seller
shall have transferred and assigned to Purchaser, pursuant to an assignment
agreement in form and substance reasonably satisfactory to Purchaser, (A) any
and all water use, irrigation, and consumptive use permits applied for or issued
in respect of the Premises and (B) any and all environmental resource or surface
water management permits applied for or issued in respect of the
Premises;
(vi) Seller
shall have provided Purchaser confirmation from the applicable regulating
entity, in form and substance reasonably satisfactory to Purchaser, that the
zoning classification of the Property permits, as of right, the use of the
Property as a dairy product manufacturing facility with cold
storage;
(vii) Seller
shall have delivered to Purchaser evidence reasonably satisfactory to Purchaser
that the Existing Leases (with the exception of those certain agreements with
Jobbers as referred to in Schedule 4.14 to the Stock Purchase Agreement (as
defined below) have been terminated; and
(viii) Purchaser
and Shareholders (as hereinafter defined) shall have completed or shall
simultaneously complete that purchase transaction concerning that certain stock
of Fresh Made, Inc., a Pennsylvania corporation (“Fresh Made”), for which
Purchaser and the holders of the equity interests of Fresh Made (collectively,
“Shareholders”) have executed a Stock Purchase Agreement dated of even date
herewith, as may be amended from time to time (the “Stock Purchase
Agreement”).
(b) If
any of the conditions of Section 11(a) hereof are not fulfilled, in whole or in
material part, or if at any time Purchaser determines, in its reasonable
judgment, that any of the conditions set forth in Section 11(a) hereof cannot be
fulfilled, in whole or in material part, on or before the Closing Date (or such
earlier contingency date as specified above), then Purchaser, as its sole option
(and as Purchaser’s sole remedy in the event that any of the conditions of
Section 11(a) hereof are not and/or cannot be fulfilled, as aforesaid), shall
have the right, exercisable by notice to Seller: (1) to waive such condition and
proceed to close this transaction; (2) to terminate this Agreement, in which
event all monies and documents deposited by Purchaser in escrow shall be
returned to Purchaser, and this Agreement shall have no further force or effect,
except for those provisions which expressly survive Closing; (3) to extend the
Closing Date to permit such conditions to be satisfied for one period of up to
thirty (30) days; or (4) if Seller shall be in default hereunder, to exercise
its remedies described in Section 12 below.
12. Default. In
the event of a breach or default hereunder, each party shall (subject to the
waivers and other limitations contemplated by this Agreement) be entitled to all
available legal and equitable remedies; provided, however, that each
party’s rights and obligations hereunder shall be subject to the terms,
provisions and limitations of Article 9, in general, and, in particular, the
waivers, relinquishments and other limitations of Section 9.4 and 9.5, of the
Stock Purchase Agreement, incorporated by reference herein; provided, further that the
representations and warranties made in this Agreement shall survive the Closing
Date for the shorter of the period beginning on the Closing Date and ending (i)
twelve (12) months from the Closing Date or (ii) on December 31, 2009; provided, further that the
representations and warranties set forth in Sections 7(a), (b), (d) - (h) shall
survive until the expiration of the applicable statute of limitations therefor;
provided, further that any
claim or suit based on fraud shall survive the Closing until the expiration of
the applicable statute of limitations; provided, further that each
covenant made in this Agreement shall survive for a period stated in such
covenant, and if no such period is specified, then such covenant shall survive
the Closing for a period of twelve (12) months from the Closing
Date. For purposes of this Section 12, capitalized terms used in
Section 9.4 of the Stock Purchase Agreement and not otherwise specifically
defined in this Agreement have the meanings set forth in the Stock Purchase
Agreement.
13. Closing.
(a) Closing
shall take place at the time, place and on the date constituting the Closing
Date (as such term is defined in the Stock Purchase Agreement). The
Escrow Agent shall act as escrow agent for the closing of this transaction. This
Agreement shall serve as escrow instructions to the Escrow Agent. If any of the
terms of this Agreement are inconsistent with the Escrow Agent’s standard
conditions of acceptance, the terms of this Agreement shall control. The Escrow
Agent is hereby designated as the real estate reporting person in connection
with this transaction for information reporting to the Internal Revenue Service
in accordance with Section 6045 of the Internal Revenue Code of 1986, as
amended. The parties shall provide all information required by the Escrow Agent
to fulfill its reporting obligations hereunder and to report proceeds from this
transaction on a Form 1099-S.
(b) Seller
and Purchaser shall deposit their respective documents, and Purchaser shall
deposit the Purchase Price, less the credits authorized to Purchaser hereunder,
with the Escrow Agent on or before the Closing Date.
(c) At
Closing, Seller shall pay: (i) one-half of the real estate state and local
transfer taxes required to be paid in connection with the transfer of the
Premises to Purchaser; and (ii) any other charges or prorations as required
herein. At Closing, Purchaser shall pay: (i) the Title Costs; (ii)
the cost of recording the Deed; (iii) the cost of the Survey; (iv) the Escrow
Agent’s fees for its services as escrow agent hereunder; (v) one-half of the
state and local transfer taxes; (vi) the notary and other conveyance fees
required to be paid in connection with the transfer of the Premises to
Purchaser; and (vii) any other charges or prorations as required
herein.
(d) At
Closing, the Escrow Agent shall: (i) deliver the Deed to Purchaser by filing the
Deed in the governmental office for filing and recording in the public records
in the City in which the Premises are located; (ii) pay to Seller the Purchase
Price less any credits to which Purchaser is entitled as provided for herein;
(iii) cause the Title Company to issue the Title Policy; and (iv) charge Seller
and Purchaser for other respective costs as provided for herein.
(e) The
transfers and deliveries described in this Agreement shall be mutually
interdependent and shall be regarded as occurring simultaneously, and, any other
provision of this Agreement notwithstanding, no such transfer or delivery shall
become effective or shall be deemed to have occurred until all of the other
transfers and deliveries provided for in this Agreement shall also have occurred
or been waived in writing by the party entitled to waive the
same. Such transfers and deliveries shall be deemed to have occurred
and the Closing shall be effective as of the close of business on the Closing
Date. The Closing and the closing of the transactions contemplated by
the Stock Purchase Agreement shall take place simultaneously.
14. Condemnation
and Eminent Domain. If the Premises is subjected to a taking, either
total or partial, by eminent domain for any public or quasi-public use, or if
notice of intent of a taking or a sale in lieu of taking is received by Seller
or Purchaser, Purchaser shall have the right, as its sole option (and as
Purchaser’s sole remedy under such circumstances), exercisable by
notice to Seller, provided by Purchaser within ten (10) business days after
notice from Seller of the occurrence of such taking, to either proceed to close
this transaction, in which event Purchaser shall be entitled to participate in
any such condemnation or eminent domain proceedings and to receive all of the
proceeds attributable to any portion of the Premises to be conveyed to
Purchaser, or to terminate this Agreement, in which event all funds and
documents shall be returned to the depositing party; Seller and Purchaser shall
each pay their respective costs and expenses of this transaction chargeable to
them; and Seller and Purchaser shall have no further rights or obligations
hereunder.
15. Taxes. General
real estate taxes and assessments, which are a lien but not then due and
payable, shall be prorated and adjusted between Seller and Purchaser as
follows: Seller shall be responsible for such taxes as they relate to
calendar years prior to 2009; and Purchaser shall be responsible for such taxes
as they relate to calendar year 2009 and thereafter, regardless of the
Closing
Date. Notwithstanding the foregoing or any other provision herein to the
contrary, respreads of any general taxes and assessments applicable to the
Premises, and all special taxes and assessments, if any, applicable to the
Premises, relating to, and/or charged or assessed for any calendar years prior
to 2009 shall be charged to Seller and paid from Seller’s proceeds at
Closing.
16. Possession.
Exclusive possession of the Premises shall be delivered by Seller to Purchaser
on the Closing Date, free of all tenancies, leases and occupants whatsoever
(with the exception of those certain agreements with Jobbers as referred to in
Schedule 4.14 to the Stock Purchase Agreement).
17. Notices.
All notices, requests and other communications under this Agreement shall be in
writing, shall be made by personal delivery or by next business day delivery by
a nationally recognized overnight courier and shall be addressed as provided for
in Exhibit B
hereof. Such notices shall be deemed given on the date on which received by a
party, in the case of personal delivery, or on the next business day immediately
following receipt by the courier, in the case of an overnight
courier.
18. Broker’s
Commission. Seller and Purchaser represent and warrant to the other that
the warranting party has not had any contact or dealings through or with any
real estate broker, agent or finder who has acted as the procuring cause in
connection with the purchase and sale of the Premises. Each party covenants and
agrees to indemnify, defend and hold harmless the other party from and against
any and all claims or demands and any and all loss, cost, damage or expense,
including, without limitation, attorneys’ fees arising from the covenanting
party’s breach of its foregoing representation, warranty and covenant. The
foregoing indemnity shall survive the termination of this Agreement or the
Closing of the transaction contemplated hereby.
19. Damage/Destruction.
Until the Closing Date, Seller shall maintain insurance coverage insuring the
Premises, in the form and in the amount as is in effect on the date of
Purchaser’s execution hereof, and shall maintain the Premises in the same
condition as existed on the date of Purchaser’s execution hereof, except for
ordinary wear and tear. If, before the Closing Date, all or any material part of
the Premises is destroyed or damaged by fire or other casualty insured under
such coverage, Purchaser shall have the right, as its sole option (and as
Purchaser’s sole remedy under such circumstances), exercisable by notice to
Seller provided by Purchaser within ten (10) business days after notice from
Seller of the occurrence of such destruction or damage: (a) to terminate this
Agreement by written notice to Seller and to receive back all monies paid to or
deposited with the Escrow Agent hereunder or in connection herewith; or (b) to
accept the Premises in its then current condition and to receive the proceeds
of, or the assignment of the right to receive, any insurance settlement arising
from such damage and an amount equal to the deductible on Seller’s insurance
policy.
20. Time of
Essence. The parties agree that time is of the essence and that the
failure of a party to perform any act on or before the date specified herein for
performance thereof shall be deemed cause for the termination hereof by the
other party, without prejudice to other remedies available for default
hereunder.
21. Confidentiality.
Without the prior written consent of the other party, neither Seller nor
Purchaser will disclose to any person, other than their legal counsel, proposed
or current lender, employees, accountants, potential tenants or users,
environmental consultants and any other
consultants who need such information to assist in evaluating and documenting
the transaction contemplated hereunder, any of the terms, conditions or other
facts with respect to this Agreement, including the status thereof; provided, however, that either
party hereto may make such disclosure if compelled by court order or if such
party has first received the written opinion of counsel that such disclosure
must be made in order that such party does not commit a violation of law to
comply with the requirements of any law, governmental order or regulation. In
furtherance of the foregoing, Purchaser may not, at any time, file or record any
memorandum of this Agreement.
22. Force
Majeure. Purchaser or Seller shall not be required to perform
any obligation under this Agreement or be liable to each other for damages so
long as the performance or non-performance of the obligation is delayed, caused
or prevented by an act of God or force majeure. An “act of God” or
event of “force majeure” (together, “Force Majeure Event”) is defined as
hurricanes, earthquakes, floods, fire, war, insurrection or any other cause not
reasonably within the control of Purchaser or Seller (excluding in any case the
payment of money), as the case may be, and which by the exercise of due
diligence and reasonable commercial efforts the non-performing party is unable,
in whole or in part, to prevent or overcome. All time periods,
including the Closing Date, will be extended (not to exceed one period of up to
thirty (30) days) for the period that the
Force Majeure Event is in place. In the event that such Force Majeure
Event continues beyond the thirty
(30) days
referenced in this sub-paragraph, either party may cancel the Purchase Agreement
by delivering written notice to the other, in which event all monies and
documents deposited by Purchaser into escrow shall be returned to Purchaser and
this Agreement shall be of no further force and effect.
23. Legal
Fees and Costs. In the event any party
hereto incurs legal expenses to enforce or interpret any provision of this
Agreement, the prevailing party in any litigation or other legal proceedings
will be entitled to recover such legal expenses, including, without limitation,
reasonable attorney’s fees, investigation costs and related disbursements, in
addition to any other relief to which such party shall be entitled.
24.
Miscellaneous.
This Agreement constitutes (with the exception of the Stock Purchase Agreement
(as supplemented by that certain Forbearance Agreement dated January 30, 2009
incorporated by reference herein)) the entire agreement between Seller and
Purchaser regarding the sale and purchase of the Premises and shall be binding
upon and inure to the benefit of Seller, Purchaser and their respective heirs,
executors, administrators and permitted assigns. This Agreement shall not be
assigned by Seller without the prior written consent of Purchaser, which
Purchaser may withhold in its sole discretion. This Agreement shall be governed
by Pennsylvania law. This Agreement may be assigned by Purchaser at the Closing,
without the consent of Seller, to any affiliate of Purchaser; provided, however,
that nothing herein shall limit or otherwise affect, in any manner whatsoever,
the continuing financial obligation of Purchaser to Seller hereunder, as obligor
and/or as surety; provided, further,
however, Purchaser is acquiring the Premises in connection with the Stock
Purchase Agreement, is entering into this Agreement for the benefit of Fresh
Made (after the consummation of the transaction contemplated by the Stock
Purchase Agreement), intends for Fresh Made to obtain legal title to
the
Premises, and has no intent to obtain legal title to the Premises. If
any time period set forth herein ends on a Saturday, Sunday or legal holiday,
then such time period shall be automatically extended to the next following
business day. This Agreement may not be changed, altered or modified except by
an instrument in writing signed by the party against whom enforcement of such
change would be sought. Each party has participated fully in the negotiation and
preparation of this Agreement with full benefit of counsel. Accordingly, this
Agreement shall not be more strictly construed against either party. This
Agreement may be executed in counterparts and all such counterparts shall
constitute one agreement binding on all the parties, notwithstanding that all
the parties are not signatories to the same counterpart.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have
caused this Agreement to be duly executed on and as of the Effective
Date.
PURCHASER:
LIFEWAY FOODS, INC.,
an Illinois corporation
By: /s/ Xxxxx
Smolyanysky
Printed Name: Xxxxx
Xxxxxxxxxx
Title: President and Chief
Executive Officer
SELLER:
/s/ Xxxx
Xxxxxx
Xxxx Xxxxxx, an
individual
/s/ Xxxxxxx
Xxxxxxx
Xxxxxxx Xxxxxxx, an
individual
[SIGNATURE
PAGE TO REAL PROPERTY PURCHASE AGREEMENT]
ESCROW CONSENT AND
ACKNOWLEDGEMENT
The
undersigned agrees to act as the Title Company and the Escrow Agent for the
transaction described in the above Agreement as provided herein.
|
CHICAGO
TITLE
INSURANCE COMPANY
By: /s/
Printed
Name: ______________________
Title: _____________________________
Date: _____________________________
Escrow
Number:
____________________
|
EXHIBIT
A
LEGAL DESCRIPTION OF
LAND
EXHIBIT
B
NOTICE
ADDRESSES
If to
Seller: Mr.
Xxxxxxx Xxxxxxx, Co-Partner
0000
Xxxxxx Xxx
Xxxxxxxxxx
Xxxxxx, XX 00000
Phone
Number: (000) 000-0000
and
Xx. Xxxx Xxxxxx,
Co-Partner
000 Xxxx
Xxxxxxx Xxxx, Xxx. #X-00
Xxxxxxxxxxxx,
XX 00000
Phone
Number: (000) 000-0000
With Copy
to: Fox
Rothschild LLP
Building #10, Sentry Parkway
East
000 Xxxxxx Xxxxx, Xxxxx
000
X.X. Xxx 0000
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx,
Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to
Purchaser: Lifeway
Foods Inc.
0000 X. Xxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx
Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With Copy
to: XxXxxxxx
Xxxxxxx LLC
000 Xxxxxxxx Xxxxxx, Xxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx,
Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EXHIBIT
C
DISCLOSURE
SCHEDULE
[None ,
if blank]
SCHEDULE
7(d)
EXISTING
LEASES
