Exhibit 10.46
AGREEMENT TO ENTER INTO NET LEASE
THIS AGREEMENT (this "Agreement") made as of this 23 day of April,
2003 between SPSP Corporation, a Pennsylvania corporation, having an office at
00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000 ("SPSP"),
Passyunk Supermarket, Inc., a Pennsylvania corporation, having an office at 00
Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxxx 00000 ("Passyunk"), and
Twenty Fourth Street Passyunk Partners, L.P., a Pennsylvania limited
partnership, having an office at 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxx 00000 ("00xx Xxxxxx"; SPSP, Passyunk and 00xx Xxxxxx are
collectively referred to herein as the "Owners"), and Cedar-South Philadelphia
I, LLC, a Delaware limited liability company, having an office at 00 Xxxxx
Xxxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000 ("Cedar").
W I T N E S S E T H
WHEREAS, the Owners are the owners of the Property (as herein
defined); and
WHEREAS, the Owners desire to enter into a net lease with Cedar, and
Cedar desires to enter into a net lease with the Owners, of all of the Owners'
right, title and interest in and to the Property, subject to the terms and
conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Owners and Cedar agree as follows:
1. Lease and Assignment.
(a) Owners agree to net lease to Cedar, and Cedar agrees to net
lease from Owners, subject to the terms and conditions of this Agreement, all of
Owners' right, title and interest in and to all of those certain plots, pieces
and parcels of land (the "Land") known by the addresses 0000-00 Xxxxxx Xxxxxx,
0000 Xxxxx 00xx Xxxxxx and 0000 X. Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
and are commonly known as South Philadelphia Shopping Plaza, as more
particularly described in Schedule X-0, Xxxxxxxx X-0 and Schedule A-3 attached
hereto, together with the buildings and improvements (collectively, the
"Building") located on the Land (the Building and Land are hereinafter
collectively referred to as the "Premises"), and all of the Owners' right, title
and interest, if any, in, to and under (i) all easements, rights of way,
privileges, appurtenances, strips, gores and other rights pertaining to the
Premises, including, without limitation and without warranty, any existing
development rights, (collectively, the "Appurtenances"); (ii) any land in the
bed of any street, road, avenue, open or proposed, public or private, in front
of or adjoining the Premises or any portion thereof, and any award to be made in
lieu thereof and in and to any unpaid award for damage to the Premises by
reasons of change of grade of any street occurring after the date of execution
and delivery of this Agreement (collectively, the "Adjoining Land"); and (iii)
the fixtures, equipment, machinery, furniture, furnishings, appliances, supplies
and other items of personal property (and
replacements thereof), now owned by the Owners and contained in or on, the
Premises (collectively, the "Personalty"). The Land, the Building, the
Appurtenances, the Adjoining Land and the Personalty are hereinafter referred to
as the "Leased Property".
(b) The Owners agree to assign to Cedar, and Cedar agrees to accept
from the Owners, subject to the terms and conditions of this Agreement, all of
the Owners' right, title and interest in and to (i) all leases, lettings and
licenses with respect to the Premises, and all amendments, modifications,
supplements, additions, extensions and renewals thereof (collectively,
"Leases"), all subleases under the Leases (the "Subleases") and, except as
expressly provided herein, security and other deposits thereunder affecting the
Premises (the items set forth in this clause (a) are collectively referred to as
the "Lease Documents"); (ii) subject to the provisions of Section 20(c) below,
all service agreements, maintenance agreements, supply agreements and any other
contracts and agreements affecting the Premises and all income therefrom
(collectively, "Contracts"); and (iii) any licenses, permits approvals, and
certificates required or used in or relating to the ownership, use, maintenance,
occupancy or operation of any part of the Leased Property (the "Licenses").
(c) The Leased Property, the Lease Documents, the Contracts and the
Licenses are sometimes hereinafter collectively referred to as the "Property".
2. Basic Rent. Contemporaneously with the lease and assignment
described in Section 1 above, Cedar shall pay to the Owners, by wire transfer of
immediately available Federal funds, the first installment of Basic Rent (as
defined in the Lease (as defined below)) due under the Lease in accordance with
the terms thereof, subject to apportionments to be made as provided in this
Agreement.
3. Intentionally deleted.
4. Permitted Encumbrances. Subject to the terms and provisions of
this Agreement, title to the Premises shall be leased by Owner to Cedar, and
Cedar shall accept the same subject only to the items set forth on Schedule B
attached hereto (collectively, the "Permitted Encumbrances").
5. Title Insurance.
(a) The Owners have delivered to Cedar a title insurance report and
commitment (the "Commitment") for a leasehold title insurance policy (the "Title
Policy") from First American Title Insurance Company ("First American"). Upon
receipt of any updates or revisions to the Commitment, the Owners shall furnish
copies thereof to Cedar's attorneys (the Commitment and any updates or revisions
thereto are hereinafter collectively referred to as the "Report"). At Closing,
the Owners shall be required to remove any exceptions to title which are not
Permitted Encumbrances (the "Title Objections"), including, without limitation,
all mortgages and all unpaid water charges and real estate taxes (other than
real estate taxes that are not yet due and payable).
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(b) First American shall be the sole insurer under the Title Policy;
provided, however, that, in the event that First American shall not be prepared
at Closing to issue the Title Policy in accordance with the terms of this
Agreement that is subject only to the Permitted Encumbrances, and Cedar is
unwilling to waive any items which are not Permitted Encumbrances, and if
Fidelity National Title Agency ("Fidelity") shall be prepared to issue such a
Title Policy, Fidelity shall be the sole insurer under the Title Policy (the
company ultimately issuing the Title Policy, the "Title Company"). At Closing,
Cedar shall pay the costs of the premium and all other costs incurred in
connection with obtaining the Title Policy.
(c) Notwithstanding anything to the contrary contained herein, if
the Owners are unable to remove any Title Objections by the Closing Date, the
Owners, in order to attempt to remove such Title Objections, may adjourn the
Closing to a date no later than thirty (30) days following the scheduled date of
Closing set forth in Section 7 hereof. Promptly after the Owners have removed
all such Title Objections, if any, the Owners shall reschedule the Closing Date,
upon at least three (3) business days prior notice to Cedar (the "New Closing
Notice"); provided, however, that if Cedar shall have notified the Owners of any
Title Objections which have arisen between the date of the New Closing Notice
and the rescheduled Closing Date, the Owners may, by sending Cedar a notice,
further adjourn the Closing in order to attempt to eliminate any such Title
Objections.
(d) If the Report discloses judgments, bankruptcies or other returns
against other persons having names the same as, or similar to, that of the
Owners, the Owners shall deliver to the Title Company, if required by the Title
Company, affidavits showing that such judgments, bankruptcies or other returns
are not against the Owners in order to induce the Title Company to omit
exceptions with respect to such judgments, bankruptcies or other returns. In
addition, the Owners shall deliver to the Title Company, if required by the
Title Company, all other affidavits customarily required of sellers of property
similar to the Premises.
(e) Notwithstanding anything to the contrary contained herein, the
Owners shall cure and remove, at the Owners' cost and expense, (i) any
violations assessed against the Premises as of the Closing Date which are not
the responsibility of one or more tenants and which may be satisfied by the
payment of money, (ii) all fines and penalties that shall have accrued as of the
Closing Date with respect to any such violations assessed against the Premises
as of the Closing Date, and (iii) any violations assessed against the Premises
as of the Closing Date that adversely affect the use of the Premises more than
to a de minimis extent for its present use.
6. Third Party Reports.
(a) Cedar shall have until 5:00 p.m. (Eastern time) on May 12, 2003
(the period of time commencing upon the date hereof and continuing through and
including such time on such date being herein called the "Third Party Report
Period") within which to obtain (i) a Phase I environmental assessment of the
Premises certified to Cedar and otherwise satisfactory to Cedar in Cedar's sole
and absolute discretion, and (ii) an appraisal of the Premises certified to
Cedar, indicating a value of the Premises of at least $38,500,000 and otherwise
satisfactory to Cedar in Cedar's sole and absolute discretion (collectively, the
"Third
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Party Reports"). During the Third Party Report Period, the Owners shall provide
Cedar and Cedar's consultants with access to the Premises upon reasonable
advance notice.
(b) If, on or before the expiration of the Third Party Report
Period, Cedar shall not have received each of the Third Party Reports meeting
the requirements of Section 6(a) above, then Cedar shall have the right to
terminate this Agreement in accordance with this Section 6. In such case, Cedar
shall promptly notify the Owners and Ledgewood Law Firm, P.C., as escrow agent
("Escrowee") under that certain escrow agreement among Cedar, Cedar-South
Philadelphia II, LLC, the Owners and Escrowee (the "Escrow Agreement") thereof
in writing on or before 5:00 p.m. (Eastern time) on the date that the Third
Party Report Period shall expire (such notice being herein called the
"Termination Notice") that Cedar desires to terminate this Agreement, whereupon
the Escrowee shall present the letter of credit being held by Escrowee under the
Escrow Agreement (the "Letter of Credit") for payment and pay the proceeds of
the Letter of Credit to the Owners, 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). In the event that Cedar
shall fail to have delivered the Termination Notice to the Owners on or before
5:00 p.m. (Eastern time) on the date that the Third Party Report Period shall
expire, Cedar shall be deemed to have agreed that the Third Party Reports are
acceptable to Cedar and that Cedar intends to proceed with the transactions
contemplated by this Agreement without a reduction in, or an abatement in or
credit against, the Basic Rent (and, thereafter, Cedar shall have no further
right to terminate this Agreement pursuant to this Section 6).
7. Closing Date.
(a) The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at 10:00 A.M. on Friday, May 16,
2003, at the office of Escrowee. It shall be a condition to the Closing that (i)
the Owners and Cedar shall contemporaneously therewith deliver (or cause to be
delivered) to Escrowee 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".
(b) Once the Closing has occurred, Escrowee shall promptly deliver
to Cedar all of the deliveries made by Owners pursuant to Section 16(a) below,
and promptly deliver to Owners all of the deliveries made by Cedar pursuant to
Section 16(b) below.
8. Apportionments.
(a) General. For purposes of this Section 8, the "Proration Date"
shall be 11:59 P.M. on the day preceding the Closing so that Cedar shall be
deemed to be the net lessee of the Property and therefore entitled to any
revenues and responsible for any expenses for the entire day upon which the
Closing occurs. The Owners and Cedar shall prepare a schedule of adjustments
("Schedule of Adjustments") prior to the Proration Date. Such adjustments, if
and
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to the extent known and agreed upon as of the Closing, shall be (i) paid by
Cedar to the Owners at the Closing (if the prorations result in a net credit to
the Owners) or (ii) deducted from the installment of Basic Rent to be paid by
Cedar to the Owners at the Closing (if the prorations result in a net credit to
the Cedar). Any such adjustments not determined or not agreed upon as of the
Closing shall be allocated on a fair and equitable basis as soon as invoices or
bills are available, with final adjustments to be made as soon as reasonably
possible after the Closing. Any apportionment or proration errors made at the
Closing are subject to correction if written notice thereof is given within
ninety (90) days after the Closing. Cedar and the Owners shall each act promptly
and reasonably in connection with determining the prorations under this Section
8. This Section 8 shall survive the Closing.
(b) Rentals. "Rental" or "Rentals" as used herein includes fixed
monthly rentals, additional rentals, percentage rentals, escalation rentals,
retroactive rentals, operating cost pass-throughs, utility charges, common area
maintenance or management charges, administrative charges, and all other sums
and charges payable by tenants under the Leases ("Tenants"). Subject to the
provisions of Section 8(c) below, Rentals shall be prorated at the Closing. The
Owners shall be entitled to all Rentals accruing on or prior to the Proration
Date and Cedar shall be entitled to all Rentals accruing after the Proration
Date.
(c) Delinquent Rentals. Rentals are delinquent when payment thereof
is due on or prior to the Proration Date but has not been made by the Proration
Date (any such Rentals being "Delinquent Rentals"). Delinquent Rentals shall be
prorated between Cedar and the Owners as of the Proration Date. At the Closing,
Cedar shall pay to the Owners the Owners' share of any Delinquent Rentals that
exist for the month in which the Closing Date occurs. Any Rentals collected by
Cedar or the Owners, as the case may be, after the Closing, less any costs of
collection (including reasonable attorneys fees) reasonably allocable thereto
shall be promptly applied in the following order of priority: (i) first, to
Cedar for the month in which the Closing Date occurs, (ii) then, to Cedar for
the month or months following the month in which the Closing Date occurs,
provided the received Rental is then due and payable, and (iii) then, to the
Owners for any period prior to the month in which the Closing Date occurs. Cedar
shall use reasonable efforts to collect Delinquent Rentals but shall have no
obligation to commence a legal proceeding to collect such sums. Cedar and the
Owners agree that any payments due to the Owners or Cedar, as the case may be,
as a result of collected Delinquent Rentals shall be payable promptly upon
receipt thereof. The parties confirm that all amounts due and payable in respect
of Leases which have expired or otherwise terminated prior to the Closing Date
shall be the sole property of the Owners and, notwithstanding anything to the
contrary contained herein, the Owners may take such actions as they desire to
collect such amounts. Notwithstanding the provisions of this Section 8(c) to the
contrary, any amount collected by the Owners in connection with any such action
shall be retained by the Owners. The Owners and Cedar shall from time to time
after Closing, and upon request of the other party, provide the requesting party
with reasonably detailed information regarding the status of such party's
collection of Delinquent Rentals.
(d) Taxes and Assessments. All real estate taxes (including business
improvement district charges) on the Premises shall be prorated based on the
actual current tax
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xxxx. If such tax xxxx has not yet been received by the Proration Date, then
Cedar and the Owners shall estimate the real estate taxes based upon Cedar's and
the Owners' good faith estimate of the change in the amount of the previous
year's tax xxxx, and Cedar and the Owners shall after the Closing reprorate the
real estate taxes as soon as the actual current tax xxxx is available. All
amounts payable for real estate taxes accruing on or prior to the Proration Date
shall be the obligation of the Owners, and all amounts payable for real estate
taxes accruing after the Proration Date shall be the obligation of Cedar. Any
delinquent taxes on the Premises shall be paid at the Closing by the Owners.
(e) Operating Expenses. The parties acknowledge and confirm that
operating expenses are passed-though to Tenants and, accordingly, Owners and
Cedar shall not prorate operating expenses at the Closing. Notwithstanding the
foregoing, if, as of the Closing Date, Owners have any arrearages with respect
to operating expenses, then, to the extent that Cedar, after the Closing,
receives from any Tenant a payment (or payments) designated by such Tenant as
being on account of operating expenses for the period prior to the Closing Date,
Cedar shall promptly pay such amounts to Owners. Cedar shall, at Owners'
request, use reasonable efforts to collect any such unpaid pre-Closing operating
expense payments, but shall have no obligation to commence any legal proceedings
to collect such sums.
(f) Tenant Security Deposits. Cedar shall be credited with and the
Owners shall be debited with the sum of all tenant security deposits (and any
interest due to Tenants thereon, less an amount equal to the aggregate of
administrative fees that shall have accrued as of the Closing Date that the
Owners shall be permitted to retain pursuant to the provisions of each of the
Leases and otherwise under law, which amount shall be retained by the Owners)
being held by the Owners.
(g) License and Permit Fees. Periodically recurring governmental
fees for transferable Licenses issued in respect of the Premises for the use of
any part thereof, if assignable and to the extent assigned, shall be prorated
between Cedar and the Owners as of the Proration Date on an accrual basis. The
Owners shall be responsible for all amounts due thereunder which accrue on or
prior to the Proration Date and Cedar shall be responsible for all amounts which
accrue after the Proration Date.
(h) Ongoing Contracts. Amounts payable under those Contracts, if
any, which Cedar shall elect to have remain in effect after the Closing shall be
prorated on an accrual basis. The Owners shall be responsible for all amounts
due thereunder which accrue on or prior to the Proration Date, and Cedar shall
be responsible for all amounts due thereunder which accrue after the Proration
Date. The Owners shall pay in full all amounts due under any Unassumed Contracts
(as hereinafter defined).
(i) Leasing Commissions. Cedar shall be credited with, and the
Owners shall be debited with, the sum of the leasing commissions set forth on
Exhibit A attached hereto (the "Leasing Commissions Schedule"). Cedar shall be
responsible for paying such commissions to the respective brokers and Cedar
shall indemnify and hold Owner harmless from and against any claims that the
brokers set forth on Exhibit A may bring against the Owners after the Closing
Date for the payment of the balance of the brokerage commission
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payable to such broker, provided that Cedar's indemnity shall not exceed, as to
the claim of any broker, the amount of the credit that is set forth on Exhibit A
for such broker.
(j) Tenant Improvements. Cedar shall be credited with, and the
Owners shall be debited with, the sum of the tenant improvement allowances set
forth on Exhibit B attached hereto (the "TI Schedule"). Cedar shall be
responsible for paying such tenant improvement allowances to the respective
Tenants. If the amount of the tenant improvement allowances that is paid to a
Tenant shall be less than the amount of the tenant improvement allowance for
such Tenant that is set forth on Exhibit B, Cedar shall promptly remit such
excess to Owners.
9. Assessments. If, on the Closing Date, the Premises or any part
thereof shall be or shall have been affected by an assessment or assessments
which are or may become payable in installments, the Owners shall be required to
pay and discharge at Closing any installments then due and payable and all
delinquent installments. Any installments of such assessments that are not yet
due and payable as of the Closing Date shall be the obligation of Cedar.
10. Condition of the Property. Except as otherwise provided herein
to the contrary, Cedar agrees to accept the Property in its "as is" condition on
the date hereof, reasonable wear and tear excepted, and subject to the
provisions of Section 11 hereof. Cedar has (i) examined, inspected and
investigated to the full satisfaction of Cedar, the physical nature and
condition of the Property, (ii) independently investigated, analyzed and
appraised the value and profitability of the Property and (iii) reviewed such
other documents and materials as Cedar has deemed advisable. Cedar acknowledges
that, except as specifically set forth in this Agreement, neither the Owners,
nor any real estate broker, agent, employee, servant, consultant or
representative of the Owners has made any representations or warranties
whatsoever regarding the subject matter of this Agreement or the transaction
contemplated hereby, including without limitation, representations as to the
physical nature or condition of the Property, zoning laws, building codes, laws
and regulations, environmental matters, the violation of any laws, ordinances,
rules, regulations or orders of any Governmental Authority, water, sewer or
other utilities, rents or other income, expenses applicable to the Property,
capital expenditures, leases, existing or future operations of the Property or
any other matter or thing affecting or related to the Property or the operation
thereof. In executing, delivering and/or performing this Agreement, Cedar has
not relied upon and does not rely upon, and the Owners shall not be liable or
bound in any manner by, express or implied warranties, guaranties, promises,
statements, representations or information pertaining to any of the matters set
forth above in this Section 10 made or furnished by the Owners or by any real
estate broker, agent, employee, servant or any other person representing or
purporting to represent the Owners to whomever made or given, directly or
indirectly, verbally or in writing, unless such warranties, guaranties,
promises, statements, representations or information are expressly and
specifically set forth herein.
11. Casualty and Condemnation.
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(a) 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, and
Escrowee given by Cedar within fifteen (15) days after Owners shall notify Cedar
in writing of such casualty, whereupon the Letter of Credit shall be promptly
returned to Cedar, together with a letter from Escrowee to the issuer of the
Letter of Credit authorizing the cancellation thereof, 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). If Cedar does not terminate this Agreement, this Agreement shall
remain in full force and effect and the parties shall nonetheless proceed to the
Closing in accordance with this Agreement, and all proceeds or awards received
by the Owners (after deducting the Owners' actual out-of-pocket cost of
collecting the same and any reasonable expenses that the Owners shall have
incurred in restoring the Premises), or the Owners' rights to such proceeds or
awards, from such taking or casualty shall be assigned (by documentation
reasonably satisfactory to Cedar and the Owners) by the Owners to Cedar, and the
Owners shall pay over to Cedar at the Closing an amount equal to the amount, if
any, by which the amount of the deductible under the applicable insurance policy
for the Premises that is in effect at the time of such casualty shall be greater
than the deductible as of the date of this Agreement, if any, on the applicable
insurance policy for the Premises.
(b) The Owners shall promptly notify Cedar of any such casualty and
of any proposed taking. The Owners shall not adjust or settle any claims in
connection with any casualty or proposed taking or enter into any construction
or other contract for the repair or the restoration of the Premises without
Cedar's prior written consent, which consent shall not be unreasonably withheld
or delayed. Notwithstanding the foregoing, in the event of a fire or other
casualty at the Premises, Cedar's prior consent shall not be required for any
action which the Owners shall elect to take in order to repair or remediate any
condition which poses a danger to the health and welfare of Tenants, their
invitees, and/or the general public or as otherwise required by the Tenant
Leases.
(c) In the event there is damage to or destruction of an immaterial
part of the Premises by fire or other casualty or a taking of an immaterial part
of the Premises, Cedar shall not have the right to terminate this Agreement, all
proceeds or awards received by the Owners (after deducting the Owners' actual
out-of-pocket cost of collecting the same and any reasonable expenses that the
Owners shall have incurred in restoring the Premises), or the Owners' rights to
proceeds or awards, from such taking or casualty shall, at the Closing, be
assigned (by documentation in form and substance reasonably satisfactory to
Cedar and the Owners) by the Owners to Cedar, and the Owners shall pay over to
Cedar at the Closing an amount equal to the amount, if any, by which the amount
of the deductible under the applicable insurance policy for the Premises that is
in effect at the time of such casualty shall be greater than the deductible as
of the date of this Agreement, if any, on the applicable insurance policy for
the Premises.
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(d) For purposes of this Section 11, a casualty or condemnation
shall be deemed material if such casualty or condemnation affects more than
fifty percent (50%) of the square footage of the Premises.
(e) The parties hereby waive the provisions of any statute which
provides for a different outcome or treatment in the event of a casualty or a
taking.
12. Brokers and Advisors.
(a) The Owners represent and warrant to Cedar that the Owners have
not employed, dealt with or negotiated with any broker in connection with this
transaction other than Fameco of Conshohocken, PA (the "Broker"). Cedar
represents and warrants to the Owners that Cedar has not employed, dealt with or
negotiated with any broker in connection with this transaction other than the
Broker. Cedar agrees to pay any commission payable to the Broker in connection
with this transaction by separate agreement.
(b) The Owners hereby agree to indemnify, defend and hold Cedar
harmless from and against any and all claims, losses, liability, costs and
expenses (including reasonable attorneys' fees) incurred by Cedar by any broker
(other than the Broker), or any other person claiming a commission, fee or other
compensation by reason of this transaction, if such broker dealt with or claims
to have dealt with the Owners in connection with this transaction.
(c) Cedar hereby agrees to indemnify, defend and hold the Owners
harmless from and against any and all claims, losses, liability, costs and
expenses (including reasonable attorneys' fees) resulting from any claim that
may be made against the Owners by any broker (including the Broker), or any
other person, claiming a commission, fee or other compensation by reason of this
transaction, if such broker dealt with or claims to have dealt with Cedar in
connection with this transaction.
(d) The provisions of this Section 12 shall survive the Closing, or
if the Closing does not occur, the termination of this Agreement.
13. Tax Reduction Proceedings. If the Owners have heretofore filed
applications for the reduction of the assessed valuation of the Premises and/or
instituted certiorari proceedings to review such assessed valuations for any tax
years prior to the tax year in which the Closing Date is to occur, Cedar
acknowledges and agrees that the Owners shall have sole control of such
proceedings, including the right to withdraw, compromise and/or settle the same
or cause the same to be brought on for trial and to take, conduct, withdraw
and/or settle appeals, and Cedar hereby consents to such actions as the Owners
may take therein. Prior to the Closing, the Owners shall not withdraw,
compromise or settle any such proceedings for the tax year in which the Closing
Date is to occur without the prior written consent of Cedar, which consent shall
not be unreasonably withheld or delayed. Any refund or tax savings for any year
or years prior to the tax year in which the Closing Date occurs shall belong
solely to the Owners. Any tax savings or refund for the tax year in which the
Closing Date occurs shall be prorated in accordance with Section 8 hereof
between the Owners and Cedar after deduction of reasonable attorneys' fees and
other reasonable expenses related to the
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proceeding. Cedar and the Owners shall each execute all consents, receipts,
instruments and documents which may reasonably be requested in order to
facilitate settling such proceeding and collecting the amount of any refund or
tax savings. Notwithstanding anything contained herein to the contrary, if any
tax savings or refund shall create an obligation to reimburse any Tenant under
any Lease for Rentals paid, then that portion of such savings or refund equal to
the amount of such required reimbursement shall be paid to Cedar, and Cedar
shall disburse the same to the applicable Tenant. Cedar shall deliver to the
Owners, within six (6) months after receipt of such tax savings or refund,
evidence reasonably satisfactory to the Owners that Cedar has made such payments
to the Tenants or, if a Tenant is in default in the performance of any of its
Lease obligations beyond any applicable notice and cure periods, that Cedar has
applied the refund against any amounts that such Tenant owes under its lease,
and to the extent that Cedar shall fail to deliver such evidence to the Owners,
Cedar shall deliver to the Owners the portion of such refund or tax savings that
Cedar would otherwise have paid to such Tenant, and the Owners shall disburse
the same to the applicable Tenant. The provisions of this Section 13 shall
survive the Closing.
14. SEC Filing and Audit Requirements. Upon Cedar's request, for a
period of two (2) years after Closing, the Owners shall provide Cedar, without
any out-of-pocket expense to the Owners, with copies of, or access to, such
factual information as may be reasonably requested by Cedar, and in the
possession or control of the Owners, to enable Cedar Income Fund, Ltd. to file
Form 8-K and comply with other filing requirements (as specified in Exhibit C
attached hereto), if, as and when such filing may be required by the Securities
and Exchange Commission (the "SEC"). Without limitation of the foregoing, (i)
Cedar or its designated or independent or other accountants may audit the
operating statements of the Owners for the Premises, and the Owners shall supply
such documentation in their possession or control as Cedar or its accountants
may reasonably request in order to complete such audit, and (ii) the Owners
shall furnish Cedar with such financial and other information as may be
reasonably required by Cedar or its assigns to make any required filings with
the SEC or other governmental authority. This obligation shall survive the
Closing for a period of two (2) years.
15. Representations and Warranties.
(a) The Owners, jointly and severally, represent and warrant to
Cedar that the following are true and correct as of the date hereof and shall be
true and correct as of the Closing Date:
(i) SPSP is a corporation duly organized and validly existing
under and by virtue of the laws of the State of Pennsylvania and is in good
standing in the State of Pennsylvania. SPSP has all requisite power and
authority to execute, deliver and perform the transactions contemplated by this
Agreement. SPSP is the owner in fee of certain real property more particularly
described in Schedule A-1 attached hereto which constitutes a portion of the
Premises.
(ii) Passyunk is a corporation duly organized and validly
existing under and by virtue of the laws of the State of Pennsylvania and is in
good standing in the State of Pennsylvania. Passyunk has all requisite power and
authority to execute, deliver and
10
perform the transactions contemplated by this Agreement. Passyunk is the owner
in fee of certain real property more particularly described in Schedule A-2
attached hereto which constitutes a portion of the Premises.
(iii) 00xx Xxxxxx is a limited partnership duly organized and
validly existing under and by virtue of the laws of the State of Pennsylvania
and is in good standing in the State of Pennsylvania. 00xx Xxxxxx has all
requisite power and authority to execute, deliver and perform the transactions
contemplated by this Agreement. 24th Street is the owner in fee of certain real
property more particularly described in Schedule A-3 attached hereto which
constitutes a portion of the Premises.
(iv) This Agreement constitutes the legal, valid and binding
obligation of the Owners, enforceable against the Owners in accordance with its
terms. The Owners have taken all necessary action to authorize and approve the
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement.
(v) The execution and delivery of this Agreement and the
performance by the Owners of their obligations hereunder do not and will not (a)
to the Owners' knowledge, conflict with or violate any judgment, order, writ,
injunction or decree of any court or governmental or quasi-governmental entity
with jurisdiction over the Owners or the Property, including, without
limitation, the United States of America, the State of Pennsylvania or any
political subdivision of either of the foregoing, or any decision or ruling of
any arbitrator to which any of the Owners is a party or by which any of the
Owners or the Property is bound or affected or (b) violate or constitute a
default under any material document or instrument to which any of the Owners is
a party or is bound or any of the Owners' corporate formation or governing
documents.
(vi) There are no actions, suits or proceedings (including
landlord/tenant or condemnation proceedings) pending or, to the Owners'
knowledge, threatened in writing against the Premises, at law or in equity,
before any federal, state, municipal or governmental department, commission,
board, bureau, agency or instrumentality which could (x) materially adversely
affect title to the Premises, (y) if adversely determined, prohibit the Owners
from consummating the transactions contemplated hereby, or (z) materially
adversely affect the continued use and enjoyment of the Premises for its current
use.
(vii) The Owners have delivered to Cedar copies of the Leases
and Subleases, and copies of all related brokerage agreements for which a
commission remains due and payable (the "Brokerage Agreements"), which copies
are true, correct and complete in all material respects. Exhibit D annexed
hereto (the "Schedule of Leases") sets forth a true and complete list of the
Leases, Subleases and Brokerage Agreements, which Leases, Subleases and
Brokerage Agreements are in full force and effect and have not been amended,
except as set forth in the Schedule of Leases. The Owners represent that all
security deposits made by Tenants under the Leases and held by or on behalf of
the landlord thereunder are cash security deposits, and the Schedule of Leases
sets forth the amount of all such security deposits (plus accrued interest
thereon, if any, required to be paid to the respective Tenants thereunder).
Except as set forth on the Leasing Commissions Schedule and as set forth in the
Leases, no
11
leasing commission is now or will hereafter become due or owing in connection
with any of the Leases, including, without limitation, in connection with any
renewals or extensions of the term thereof. The rent roll (the "Rent Roll")
annexed hereto as Exhibit E is true, correct and complete based upon the current
operation of the Premises, the rents set forth on the Rent Roll are the rents
currently being collected, and the rents set forth on the Rent Roll were
actually collected for the previous month. All of the material landlord's
obligations under the Leases which the landlord is obligated to perform prior to
the Closing have or will have been performed.
(viii) No guarantor of any of the Leases has been released or
discharged voluntarily (or, to the best of the Owners' knowledge, either
involuntarily or by operation of law) from any obligation related to a Lease.
All of the improvements to be constructed by the Owners, if any, contemplated
under the Leases or as required therein and in all collateral agreements and
plans and specifications respecting same have been completed as so required,
and, except as set forth on the TI Schedule, any fees, costs, allowances,
advances or other expenses to be paid by the Owners for tenant improvements or
tenant finish work have been paid in full. As of the Closing Date, neither the
Owners' interest in the Leases nor any of the rentals due or to become due under
the Leases will be assigned, encumbered or subject to any liens.
(ix) The Owners have delivered to Cedar true, correct and
complete copies of lease estoppel certificates from all Tenants that were
delivered to the Owners in connection with the Owners' proposed refinancing of
the existing mortgage loan currently encumbering the Property (collectively, the
"Tenant Estoppel Certificates").
(x) True, correct and materially complete copies of the
Contracts have been delivered to Cedar. Exhibit F annexed hereto (the "Schedule
of Contracts") sets forth a true and complete list of the Contracts, which
Contracts are in full force and effect and have not been amended, except as set
forth in the Schedule of Contracts. To the Owners' best knowledge, no party to
the Contracts is in default with respect to any of its obligations or
liabilities pertaining to the Contracts. Except as set forth on the Schedule of
Contracts, all of the Contracts set forth on the Schedule of Contracts may be
terminated without penalty or payment by the Owners on no more than thirty (30)
days' notice.
(xi) Except as set forth in the Leases, there are no
outstanding options to purchase, rights of first offer, rights of first refusal,
warrants, calls, commitments, conversion rights, rights of exchange, plans or
other agreements of any character, absolute or contingent, to acquire all, or
any portion of, the Property.
(xii) As of the Closing Date, the Personalty will not have
been assigned or conveyed to any other party.
(xiii) The Owners have heretofore delivered to Cedar a copy of
the operating expense statement for the 12-month period ending December 31,
2002, a copy of which is attached hereto as Exhibit G (the "Operating
Statement"). The Owners have no
12
knowledge of any inaccuracies or omissions contained in the Operating Statement.
The Operating Statement is correct and complete in all material respects.
(xiv) There are no employment contracts, union contracts,
labor leases, pension plans, profit sharing plans or employee benefit plans
which relate to the Owners or the Premises, and there are no employees which
relate to the Premises.
(xv) Neither SPSP, Passyunk nor 24th Street is a "foreign
person" as defined pursuant to Section 1445 of the Internal Revenue Code of
1986, as amended.
(xvi) The Owners maintain fire and extended coverage insurance
upon the Property as set forth on Exhibit H annexed hereto (the "Existing
Insurance"). Copies of certificates evidencing this insurance have been
delivered to Cedar, and the insurance evidenced by such certificates is in full
force and effect.
(b) Cedar represents and warrants to the Owners as of the date
hereof and as of the Closing Date that:
(i) Cedar has all the requisite power and authority to execute
and deliver this Agreement and to carry out Cedar's obligations hereunder and
the transactions contemplated herein. This Agreement constitutes the legal,
valid and binding obligation of Cedar, enforceable against Cedar in accordance
with its terms. Cedar has taken all necessary action to authorize and approve
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement.
(ii) The execution and delivery of this Agreement and the
performance by Cedar of its obligations hereunder do not and will not (x) to
Cedar's knowledge, conflict with or violate any law, rule, judgment, regulation,
order, writ, injunction or decree of any court or governmental or
quasi-governmental entity with jurisdiction over Cedar, including, without
limitation, the United States of America, the State of Pennsylvania or any
political subdivision of either of the foregoing, or any decision or ruling of
any arbitrator to which Cedar is a party or by which Cedar is bound or affected
or any agreement to which Cedar is a party or, to Cedar's knowledge, binding
upon Cedar, or (y) violate or constitute a default under any material document
or instrument to which Cedar is a party or is bound.
(iii) There is no action or proceeding pending or threatened
in writing against Cedar which could, if adversely determined, prohibit Cedar
from consummating the transactions contemplated by this Agreement.
(c) The representations and warranties contained in Section 15(a)
and Section 15(b) above will survive the Closing for a period of four (4)
months, before the expiration of which the party claiming a breach must have
notified the other in writing of the alleged breach. Any such claim shall be
limited to actual damages (specifically including, without limitation,
reasonable attorneys' fees and expenses and court costs) suffered by the
claiming party (specifically excluding consequential or punitive damages).
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16. Deliveries to be made on the Closing Date.
(a) The Owners' Documents: The Owners, pursuant to the provisions of
this Agreement, shall deliver or cause to be delivered to Escrowee on the
Closing Date the following instruments, documents and items:
(i) Two (2) counterparts of the net lease, in the form
attached hereto as Exhibit I (the "Net Lease"), duly executed by the Owners, as
landlord.
(ii) Two (2) counterparts of the Memorandum of Lease, in the
form attached hereto as Exhibit J (the "Net Lease Memorandum"), duly executed by
the Owners, as landlord.
(iii) Two (2) counterparts of the Guaranty, duly executed by
Xxxx Erlbaum, Xxxxxx Erlbaum, and Xxxxxx Xxxxxxxx in favor of Cedar, in the form
attached hereto as Exhibit K.
(iv) Two (2) counterparts of the Assignment and Assumption of
Leases in the form of Exhibit L attached hereto and made a part hereof (the
"Lease Assignment"), duly executed by the Owners.
(v) Two (2) counterparts of the Assignment and Assumption of
Contracts and Permits in the form of Exhibit M attached hereto and made a part
hereof (the "Contracts and Permits Assignment"), duly executed by the Owners.
(vi) Two (2) counterparts of a letter to the Tenants of the
Premises in the form attached hereto as Exhibit N, duly executed by the Owners.
(vii) Two (2) counterparts of the Schedule of Adjustments,
duly executed by the Owners.
(viii) The Owners' Estoppel Certificate (as hereinafter
defined).
(ix) A recordable termination of lease, in form and substance
reasonably acceptable to the Owners, Title Company, and Cedar, terminating of
record that certain lease originally from Constellation Properties, Inc. to Penn
Fruit Co., Inc., dated as of May 15, 1958 and recorded in Deed Book CAB 800 Page
428.
(x) Keys to the Building (if any).
(xi) A duly executed certification as to the Owners'
non-foreign status.
(xii) The consent of the boards of directors and members of
the Owners authorizing the Net Lease and the transactions contemplated by this
Agreement, in form reasonably satisfactory to Cedar and the Title Company.
14
(xiii) Originals of all of the Leases in effect on the Closing
Date or, to the extent originals are unavailable, photocopies thereof with a
certificate executed by the Owners as to the authenticity of such photocopies,
together with all leasing and property files and records in connection with the
continued operation, leasing and maintenance of the Property that shall be in
the Owners' possession.
(xiv) Originals of all of the Contracts that are being assumed
by Cedar on the Closing Date or, to the extent originals are unavailable,
photocopies thereof with a certificate executed by the Owners as to the
authenticity of such photocopies.
(xv) The Licenses affecting the Premises as of the Closing
Date that shall be in the Owners' possession (other than those Licenses that
must remain at the
Premises).
(xvi) Copies of the all of the following items that shall be
in Owners' possession (to the extent that the same had not been previously
delivered to Cedar): (A) all accounting, financial, and other books and records
reasonably required for the continued leasing and operation of the Property
which are maintained in connection with the current leasing and operation of the
Premises, and (B) all building plans and specifications (including "as-built"
drawings) with respect to the improvements at the Premises.
(xvii) Copies of the documents required to be delivered to the
Title Company pursuant to Section 5(c) above.
(xviii) Such other documents, instruments and deliveries as
are otherwise required by this Agreement or reasonably required by Cedar in
order to consummate the transaction contemplated hereby.
(b) Cedar's Documents: Cedar, pursuant to the provisions of this
Agreement, shall deliver or cause to be delivered to the Owners on the Closing
Date the following instruments, documents and items:
(i) Two (2) counterparts of the Net Lease, duly executed by
Cedar, as tenant.
(ii) Two (2) counterparts of the Lease Memorandum, duly
executed by Cedar, as tenant.
(iii) Two (2) counterparts of the Lease Assignment, duly
executed by Cedar.
(iv) Two (2) counterparts of the Contracts and Permits
Assignment, duly executed by Cedar.
(v) Two (2) counterparts of the Schedule of Adjustments, duly
executed by Cedar.
15
(vi) The consent of the members of Cedar authorizing the Net
Lease and the transactions contemplated by this Agreement, in form reasonably
satisfactory to the Owners and the Title Company.
(vii) Such other documents, instruments and deliveries as are
otherwise reasonably required by this Agreement or by the Owners in order to
consummate the transaction contemplated hereby.
17. Default by Cedar or the Owners.
(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 and Escrowee, whereupon Escrowee shall present the Letter of Credit for
payment and pay the proceeds of the Letter of Credit to the Owners, 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 proceeds of the Letter of Credit, 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 amount of the Letter of Credit, but shall in no event be less
than the amount of the Letter of Credit.
(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 and direct the Escrowee to return the Letter
of Credit to Cedar, together with a letter to the issuer of the Letter of Credit
authorizing the cancellation thereof, 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 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)
16
hereof shall be greater than $25,000 and less than $175,000, in such case
Escrowee shall only pay to Owners the proceeds of the Letter of Credit (net of
the amount of damage reasonably claimed by Cedar) and Escrowee shall pay to
Cedar 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.
18. Merger. Except as otherwise expressly provided to the contrary
in this Agreement, no representations, warranties, covenants or other
obligations of the Owners set forth in this Agreement shall survive the Closing,
and no action based thereon shall be commenced after the Closing. Except as
otherwise expressly provided herein, the delivery of the Net Lease at the
Closing, without the simultaneous execution and delivery of a specific agreement
which by its terms shall survive the Closing, shall be deemed to constitute full
compliance by the parties with all of the terms, conditions and covenants of
this Agreement on their part to be performed.
19. Conditions to Closing.
(a) Conditions to Cedar's Obligation to Close. Cedar's obligation to
close hereunder shall be subject to the following conditions:
(i) The Owners shall have performed, satisfied and complied
with, or tendered performance of, in all material respects, all of the
covenants, agreements and conditions required by this Agreement to be performed
or complied with by the Owners on or before the Closing Date.
(ii) All representations and warranties of the Owners in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date.
(iii) Title to the Premises shall be in accordance with
Section 4 hereof, subject only to such matters permitted by Section 4 hereof.
(iv) The Owners shall have delivered to Cedar a master
estoppel certificate (the "Owners' Estoppel Certificate"), in the form attached
hereto as Exhibit P.
The foregoing obligations of the Owners under this Section 19(a) are
for the benefit of Cedar, and Cedar may, in its sole discretion, waive any or
all of such conditions and close title under this Agreement without any decrease
in, abatement of, or credit against, the Basic Rent.
(b) Conditions to the Owners' Obligation to Close. The Owners'
obligation to close hereunder shall be subject to the following conditions:
17
(i) Cedar shall have performed, satisfied and complied with,
or tendered performance of, in all material respects, all of the covenants,
agreements and conditions required by this Agreement to be performed or complied
with by Cedar on or before the Closing Date.
(ii) All representations and warranties of Cedar in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement, and as of the Closing Date.
(iii) Simultaneously with the Closing hereunder, the Owners
and Cedar-South Philadelphia II, LLC shall have closed on the transaction
contemplated by that certain loan commitment letter attached hereto as Exhibit
Q, and such loan shall have been funded.
The foregoing obligations of Cedar under this Section 19(b) are for
the benefit of the Owners, and the Owners may, in its sole discretion, waive any
or all of such conditions and close title under this Agreement without any
increase in the Basic Rent.
20. Prior to Closing.
(a) Insurance. Until Closing, the Owners or the Owners' agents shall
keep the Premises insured against fire and other hazards covered by extended
coverage endorsement and commercial general liability insurance against claims
for bodily injury, death and property damage occurring in, on or about the
Premises in accordance with the Existing Insurance.
(b) Operation. Until Closing, the Owners or the Owners' agents shall
operate and maintain the Property substantially in accordance with the Owners'
current practices with respect to the operation and maintenance of the Property,
and deliver the Property to Cedar at Closing in its condition as of the date
hereof, normal wear and tear and the provisions of Section 11 excepted. The
Owners shall not, other than in the ordinary course of operating and managing
the Property, remove from the Property any Personalty unless such item shall be
replaced with a similar item of comparable quality, utility and value. The
Owners shall give Cedar prompt notice of any action, suit or proceeding against
the Premises, at law or in equity, before any federal, state, municipal or
governmental department, commission, board, bureau, agency or instrumentality
which is filed prior to the date of Closing of which the Owners have knowledge.
(c) Contracts.
(i) Between the date hereof and the Closing, the Owners shall
have the right to enter into only those Contracts which the Owners reasonably
determine are necessary to carry out its obligations under Section 20(b) above,
provided that each of such Contracts shall be cancelable on not more than thirty
(30) days' written notice (without penalty, unless the Owners agrees to pay any
such termination penalty at Closing). If the Owners enter into any such
Contract, the Owners shall, within ten (10) days after the full execution of
such Contract, provide Cedar with written notice thereof, together with a copy
of such Contract, and,
18
unless Cedar, within seven (7) days thereafter, notifies the Owners in writing
of Cedar's intention to assume such Contract, the Owners shall terminate such
Contract as of the Closing.
(ii) Prior to the date of this Agreement, Cedar has designated
those Contracts which Cedar wishes the Owners to terminate as of the Closing
(the "Unassumed Contracts"), as indicated with an asterisk (*) on the Schedule
of Contracts. Provided that the Closing occurs hereunder, the Owners shall
terminate such Unassumed Contracts effective as of the Closing Date; and
provided, further, however, that if an Unassumed Contract cannot be terminated
without the payment of a termination fee, the Owners shall pay such termination
fee directly to the applicable party under such Unassumed Contract. The
provisions of the last sentence of this Section 20(c)(ii) shall survive the
Closing.
(d) Leases. Between the date of this Agreement and the Closing Date,
the Owners shall be permitted to (i) execute new Leases, provided that the terms
of any such new Leases shall be consistent with the Owners' past practices of
leasing space at the Premises and the rents thereunder shall not be less than
the projected rents for such spaces that are set forth on the Rent Roll, and
(ii) renew the terms of existing Leases, provided that said renewals shall be
pursuant to the exercise of options contained in and in accordance with such
existing Leases. In all events, the Owners shall keep Cedar apprised of the
actions being taken with respect to new Leases and existing Leases and shall
notify Cedar prior to executing any new Leases or renewals of existing Leases.
Between the date of this Agreement and the Closing Date, the Owners shall not
amend existing Leases other than to renew the terms thereof in accordance with
this Section 20(d).
(e) Alterations. Between the date of this Agreement and the Closing
Date, the Owners will not effect or approve any alterations to or in the
Premises, other than those alterations performed in the normal course of
maintenance and repair of the Premises, or those alterations required by the
terms of a Lease.
(f) Employees. Between the date of this Agreement and the Closing
Date, the Owners will not hire any employees in connection with the management,
operation or maintenance of the Premises.
21. Post-Closing Leasing. The parties hereto acknowledge that Store
Number 15B and Store Number 15C (containing approximately 7,600 square feet in
the aggregate) at the Premises, as more particularly set forth on the plan
attached hereto as Exhibit R (the "Vacant Space") are currently vacant. In the
event that the Owners shall not have leased the entire Vacant Space pursuant to
Section 20(d) above during the period between the date of this Agreement and the
Closing Date, Cedar shall be permitted, during the period commencing on the
Closing Date and ending on the date that shall be the earliest to occur of (i)
the date on which Owner delivers to Cedar a Qualifying Lease or Leases (as
defined below) for the entirety of the Vacant Space, (ii) the date that Cedar
shall have entered into leases for the entirety of the Vacant Space, whether or
not such leases meet the requirements of this Section 21, and (iii) the third
(3rd) anniversary of the Closing Date (such period, the "Leasing Period"), to
deduct from each monthly installment of basic rent payable under the Net Lease
an amount equal to 1/12 of the difference between (1) the product of (x) $18.00,
and (y) the number of square feet in the
19
Vacant Space with respect to which Cedar shall not either (A) have entered into
a Lease during the Leasing Period, or (B) have been presented a Qualified Lease
and (2) the product of (x) the amount, if any, by which the average basic rent
per square foot with respect to all leases described in (A) or (B) exceeds
$18.00 per square foot, and (y) the number of square feet subject to all leases
described in (A) or (B) above (such amount, the "Offset Amount"). During the
Leasing Period, the Owners shall be permitted to obtain prospective Tenants for
the Subject Spaces and negotiate new leases for the Subject Spaces, provided
that the rent under said leases is not less than $18.00 per square foot per
annum, and the terms of any such leases are consistent with the Owners' past
practices of leasing space at the Premises (a "Qualifying Lease"). In the event
that the Owners shall deliver to Cedar a lease meeting the requirements of the
immediately preceding sentence which has been signed by the prospective tenant
thereunder within three (3) business days after the date that the prospective
Tenant shall have executed such lease and delivered same to the Owners, Cedar
shall no longer be permitted to deduct the Offset Amount with respect to the
portion of the Vacant Space that is the subject of such Lease from and after the
date that shall be the date that the prospective Tenant shall have executed such
lease and delivered same to the Owners. In the event Cedar enters into a lease
that does not meet the requirements of this Section 21, Cedar shall no longer be
permitted to deduct the Offset Amount with respect to the portion of the Vacant
Space that is the subject of such lease from and after the date that Cedar has
executed such lease. In no event shall the Owners be permitted to execute any
leases on Cedar's behalf. In all events, the Owners shall keep Cedar apprised of
the actions being taken with respect to new Leases for the Vacant Space and
Cedar shall be responsible for the payment of all leasing commissions and tenant
improvement allowances with respect to the leasing of the Vacant Spaces. The
provisions of this Section 21 shall survive the Closing.
22. Notices. All notices, requests, demands and other communications
provided for by this Agreement shall be (a) in writing, (b) sent either by hand
delivery service or by same day or overnight recognized commercial courier
service, addressed to the address of the parties stated below or to such changed
address as such party may have fixed by notice, and (c) deemed to have been
delivered on the date of receipt thereof (or the date that such receipt is
refused, if applicable).
To the Owners: c/o Greentree Properties Corporation
00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xx. Xxxx X. Erlbaum
with a copy to: Greentree Properties Corporation
00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
with a copy to: Ledgewood Law Firm, P.C.
0000 Xxxxxx Xxxxxx
00
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Abt, Esq.
To Cedar: Cedar-South Philadelphia I, LLC
00 Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxx Xxxxxx
with a copy to: Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxx, Esq.
To Escrowee: Ledgewood Law Firm, P.C.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Abt, Esq.
provided, that any notice of change of address of a party listed above shall be
effective only upon receipt by the other parties listed above.
23. Amendments. This Agreement may not be modified or terminated
orally or in any manner other than by an agreement in writing signed by all the
parties hereto or their respective successors in interest, as the case may be.
24. Governing Law; Consent to Service. This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without giving effect to principles of conflicts of law. With
respect to any claim or action arising hereunder, each party (a) irrevocably
submits to the exclusive jurisdiction of the courts of the Commonwealth of
Pennsylvania and the United States District Court located in Philadelphia
County, and appellate courts from any thereof, and (b) irrevocably waives any
objection which it may have at any time to the laying on venue of any suit,
action or proceeding arising out of or relating to this Agreement brought in any
such court, irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
25. No Offer. This document is not an offer by the Owners, and under
no circumstances shall this Agreement have any binding effect upon Cedar or the
Owners unless and until Cedar and the Owners shall each have executed this
Agreement and delivered to each other executed counterparts of this Agreement.
26. Partial Invalidity. 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.
21
27. Counterparts. 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.
28. No Third Party Beneficiaries. The warranties, representations,
agreements and undertakings contained herein shall not be deemed to have been
made for the benefit of any person or entity other than the parties hereto.
29. Waiver. No failure or delay of either party in the exercise of
any right given to such party hereunder or the waiver by any party of any
condition hereunder for its benefit (unless the time specified herein for
exercise of such right, or satisfaction of such condition, has expired) shall
constitute a waiver of any other or further right nor shall any single or
partial exercise of any right preclude other or further exercise thereof or any
other right. The waiver of any breach hereunder shall not be deemed to be a
waiver of any other or any subsequent breach hereof.
30. Assignment. Cedar shall have the right to assign Cedar's rights
and obligations under this Agreement to an entity in which Cedar Income Fund
Partnership, L.P. ("Fund") holds an equity interest and for which Fund is
responsible for the day-to-day management and control. Any such assignee shall
assume all obligations of Cedar under this Agreement by a written instrument
substantially in the form of Exhibit S attached hereto. Except as set forth in
this Section 30, Cedar shall not have the right to assign its rights and
obligations under this Agreement without the prior written consent of the
Owners.
31. Tax Treatment Non-Confidentiality. Notwithstanding any terms or
conditions in this Agreement to the contrary, but subject to restrictions
reasonably necessary to comply with federal or state securities laws, any person
may disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided relating to such
tax treatment and tax structure. The provisions of this Section 31 shall survive
the Closing.
32. Headings. The headings which have been used throughout this
Agreement have been inserted for convenience of reference only and should not be
construed in interpreting this Agreement. Words of any gender used in this
Agreement shall include any other gender and words in the singular shall include
the plural, and vice versa, unless the context requires otherwise. The words
"herein," "hereof," "hereunder" and other similar compounds of the words "here"
when used in this Agreement shall refer to the entire Agreement and not to any
particular provision or section. The terms "include" and "including" when used
in this Agreement shall each be construed as if followed by the phrase "without
being limited to" or "without limitation". As used in this Agreement, the term
"business day" shall be deemed to mean any day, other than a Saturday or Sunday,
on which commercial banks in Pennsylvania are not required or authorized to be
closed for business.
33. Construction. This Agreement shall be given a fair and
reasonable construction in accordance with the intentions of the parties hereto.
Each party hereto
22
acknowledges that it has participated in the drafting of this Agreement, and any
applicable rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be applied in connection with the
construction or interpretation hereof. Each party has been represented by
independent counsel in connection with this Agreement. For purposes of
construction of this Agreement, provisions which are deleted or crossed out
shall be treated as if never included herein.
34. Binding Effect. This Agreement is binding upon, and shall inure
to the benefit of, the parties and each of their respective successors and
assigns, if any.
35. Waiver of Jury Trial. Each of Cedar and the Owners hereby
irrevocably waive all right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.
36. Litigation. In connection with any litigation arising out of
this Agreement, the prevailing party shall be entitled to recover all costs,
including reasonable attorneys' fees for services rendered in connection with
such litigation, including appellate proceeding and post judgment proceedings.
37. Section Headings. The headings of the various sections of this
Agreement have been inserted only for the purpose of convenience and are not
part of this Agreement and shall not be deemed in any manner to modify, expand,
explain or restrict any of the provisions of this Agreement.
38. Incorporation by Reference. The Schedules and Exhibits to this
Agreement are incorporated herein by reference and made a part hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
OWNERS:
SPSP Corporation
By: _______________________
Name:
Title:
Passyunk Supermarket, Inc.
By: _______________________
Name:
Title:
Twenty Fourth Street Passyunk
Partners, L.P.
By: Twenty Fourth Street Passyunk
Corporation, its general partner
By: _______________________
Name:
Title:
CEDAR:
By: Cedar-South Philadelphia I,
LLC
By: _______________________
Name:
Title:
AGREED AS TO SECTIONS 6(b), 7(b), 11(a) and 17:
Ledgewood Law Firm, P.C.,
as Escrowee
By: _______________________
Name:
Title:
24
Schedule A-1
0000-00 Xxxxxx Xxxxxx
ALL THAT CERTAIN parcel of land with the buildings and improvements thereon
erected, situate in the 26th Xxxx of the City of Philadelphia, bounded and
described in accordance with an ALTA/ACSM Land Title Survey made by Xxxxxx and
Xxxxxx Engineers, Philadelphia, PA, dated January 23, 2003, last revised
February 19, 2003:
BEGINNING at a point formed by the intersection of the Southeasterly side of
00xx Xxxxxx (60 feet wide) and the Northeasterly side of Vare Avenue (108 feet
wide); thence extending from said point of beginning North 59 degrees 26 minutes
18 seconds East along the said Southeasterly side of 00xx Xxxxxx and partly
crossing the bed of an area reserved for sewer and drainage purposes only (60
feet wide) the distance of 278.677 feet to an angle point; thence extending
North 15 degrees East along the said Southeasterly side of 00xx Xxxxxx and
crossing the bed of the said area reserved for sewer and drainage purposes the
distance of 342.254 feet to a point; thence extending South 75 degrees East the
distance of 208.308 feet to a point; thence extending North 15 degrees East the
distance of 125.500 feet to a point; thence extending South 75 degrees East the
distance of 152.286 feet to a point; thence extending South 15 degrees West the
distance of 53.563 feet to a point; thence extending South 75 degrees East the
distance of 44.406 feet to a point on the Northwesterly side of an area reserved
for sewer and drainage purposed only (60 feet wide); thence extending North 15
degrees East along the Northwesterly side of said reserved for sewer and
drainage purposes only the distance of 58.063 feet to a point; thence extending
South 75 degrees East crossing the bed of the said area reserved for sewer and
drainage purposes only the distance of 345 feet to a point on the Northwesterly
end of Xxxxxx Street (60 feet wide not on City Plan not physically improved);
thence extending South 15 degrees West partly along the Northwesterly end of
said Xxxxxx Street the distance of 430 feet to a point on the Northeasterly side
of Xxxxx Street (60 feet wide); thence extending North 75 degrees West along the
said Northeasterly side of Xxxxx Street the distance of 135 feet to a point;
thence extending South 15 degrees West crossing the Northwesterly end of said
Xxxxx Street and crossing the Southeasterly end of the said area reserved for
sewer and drainage purposes only the distance of 460 feet to a point on the said
Northeasterly side of Oregon Avenue (120 feet wide); thence extending North 75
degrees West along the said Northeasterly side of Oregon Avenue the distance of
210 feet to a point; thence extending South 15 degrees West along the
Northwesterly side of Oregon Avenue the distance of 6 feet to a point; thence
extending North 75 degrees West along the said Northeasterly side of Oregon
Avenue (114 feet wide) the distance of 125.803 feet to a point of curve; thence
extending Northwestwardly along the said Northeasterly side of Oregon Avenue on
the arc of a circle curving to the right having a radius of 600 feet the arc
distance of 138.632 feet more or less to a point; thence extending North 15
degrees 00 minutes 00 seconds East the distance of 145.050 feet to a point;
thence extending Northwestwardly on the arc of a circle curving to the right
having a radius of 460 feet the arc distance of 160.494 feet more or less to a
point; thence extending South 52 degrees 22 minutes 00 seconds West the distance
of 140.000 feet to a point on the said Northeasterly side of Oregon Avenue;
thence extending Northwestwardly along the said Northeasterly side of Oregon
Avenue on the arc of a circle curving to the right having a radius of 600 feet
the arc distance of 74.055 feet more or less to a point of tangent on the said
Northeasterly side of Vare Avenue; thence extending North 30 degrees 33 minutes
42 seconds West along the said Northeasterly side of Vare Avenue the distance of
75.945 feet to a point on the said Southeasterly side of 24th Street, being the
first mentioned point and place of beginning.
BEING known as 0000-00 Xxxxxx Xxxxxx.
2
Schedule A-2
0000 Xxxxx 00xx Xxxxxx
ALL THAT CERTAIN parcel of land with the buildings and improvements thereon
erected, situate in the 26th Xxxx of the City of Philadelphia, bounded and
described in accordance with an ALTA/ACSM Land Title Survey made by Xxxxxx and
Xxxxxx Engineers, Philadelphia, PA, dated January 23, 2003, last revised
February 19, 2003:
BEGINNING at a point on the Easterly side of 00xx Xxxxxx (60 feet wide and
legally open) measured South 15 degrees West, along the said side of 00xx Xxxxxx
237.673 feet Southward from the Southeasterly side of Passyunk Avenue (100 feet
wide, legally open); thence extending South 75 degrees East 86.721 feet to a
point; thence extending South 5 degrees 24 minutes 21 seconds East 32.009 feet
to a point; thence extending South 75 degrees East 77.500 feet to a point;
thence extending North 15 degrees East 182.083 feet to a point; thence extending
South 75 degrees East 46.869 feet to a point; thence extending South 15 degrees
West 20 feet to a point; thence extending South 75 degrees East 182.750 feet to
a point on the Westerly side of 23rd Street (60 feet wide, legally open) said
point being 263.917 feet from the South side of Xxxxxx Street (60 feet wide,
legally open); thence extending South 15 degrees West, along the Westerly side
of said 00xx Xxxxxx, 220.146 feet to a point; thence extending North 75 degrees
West 44.406 feet to a point; thence extending North 15 degrees East 53.563 feet
to point; thence extending North 75 degrees West 152.286 feet to a point; thence
extending South 15 degrees West 125.500 feet to a point; thence extending North
75 degrees West 208.308 feet to a point on the Easterly side of 00xx Xxxxxx;
thence extending, along the said side of 24th Street, North 15 degrees East
160.000 feet to the point and place of beginning.
BEING known as 0000 Xxxxx 00xx Xxxxxx.
Schedule A-3
0000 X. Xxxxxxxx Xxxxxx
ALL THAT CERTAIN parcel of land with the buildings and improvements thereon
erected, situate in the 26th Xxxx of the City of Philadelphia, bounded and
described in accordance with an ALTA/ACSM Land Title Survey made by Xxxxxx and
Xxxxxx Engineers, Philadelphia, PA, dated January 23, 2003, last revised
February 19, 2003:
BEGINNING at the intersection of the Southeasterly side of Passyunk Avenue (100
feet wide) and the Southeasterly side of 00xx Xxxxxx (60 feet wide); thence from
said point of beginning extending along the Southeasterly side of Passyunk
Xxxxxx Xxxxx 00 degrees 59 minutes 33 seconds East 405.085 feet to the
Southwesterly side of Xxxxxx Street (60 feet wide); thence extending along the
Southwesterly side of Xxxxxx Street South 75 degrees 00 minutes 00 seconds East
32.139 feet to the Northwesterly side of 23rd Street (60 feet wide); thence
extending along the Xxxxxxxxxxxxx xxxx xx 00xx Xxxxxx Xxxxx 00 degrees 00
minutes 00 seconds West 263.917 feet to a point; thence leaving the
Northwesterly side of 00xx Xxxxxx and extending through the center of a 12 inch
wall North 75 degrees 00 minutes 00 seconds West 182.750 feet to a point; thence
extending North 15 degrees 00 minutes 00 seconds East 20.000 feet to a point;
thence extending North 75 degrees 00 minutes 00 seconds West 46.869 feet to a
point; thence extending South 15 degrees 00 minutes 00 seconds West 182.083 feet
to a point; thence extending North 75 degrees 00 minutes 00 seconds West 77.500
feet to a point; thence extending North 05 degrees 24 minutes 21 seconds West
32.009 feet to a point; thence extending North 75 degrees 00 minutes 00 seconds
West 86.721 feet to a point on the Southeasterly side of 00xx Xxxxxx; thence
extending along the Xxxxxxxxxxxxx xxxx xx 00xx Xxxxxx Xxxxx 00 degrees 00
minutes 00 seconds East 237.673 feet to the point and place of beginning.
BEING known as 0000 Xxxx Xxxxxxxx Xxxxxx.
Schedule B
Permitted Encumbrances
1. Easement Agreement between Xxxxx X. Xxxxxx and Xxxxxxx Xxxxxx, co-partners
and Food Fair, Inc., (Parking Easement) as set forth in Deed Book DCC 1723
page 109.
2. Rights granted to Philadelphia Electric Company and Xxxx Telephone Company
in Deed Book CAB 2 page 523.
3. Rights granted to Philadelphia Electric Company in Deed Book CJP 2463 page
255.
4. Subject to right of way for sewer and drainage purposes as set forth in
agreement between Xxxxxx X. Xxxxxxx and others and the City of
Philadelphia dated 8/12/1955 recorded 12/21/1995 in Deed Book 190 page
268.
5. Rights granted to Philadelphia Electric Company in Deed Book CAB 455 page
511.
6. Rights granted to Philadelphia Gas Works in Deed Book CAB 56 page 160.
7. Rights of tenant, as tenant only, under Lease disclosed by Memorandum of
Lease dated 9/11/1997 and recorded 9/26/1997 in Deed Book JTD 425 page
121.
8. Easement Agreement dated 9/11/1997 and recorded 9/26/1997 in Deed Book JTD
425 page 131.
9. Rights of tenant, as tenant only, under Lease disclosed by Memorandum of
Lease dated 2/9/2001 and recorded 3/7/2001 in Document ID # 50221790.
10. Rights of tenant, as tenant only, under Lease disclosed by Memorandum of
Lease with Xxxx Stores Pennsylvania, L.P. and recorded 11/13/2001 in
Document ID # 50355331.
11. Rights of tenants in possession under written leases as set forth on the
attached rent roll.
12. Easements, or claims of easements, not shown by the public record.
13. Discrepancies or conflicts in boundaries, easements, encroachments or area
content which a satisfactory current survey would disclose.
14. Possible additional tax assessments for new construction and/or major
improvements, a lien not yet due and payable.
15. ALTA/ACSM Land Title Survey made by Xxxxxx and Xxxxxx Engineers,
Philadelphia, PA dated January 23, 2003, last revised February 19, 2003,
discloses the following:
a. parking easement adjacent to McDonald's parcel;
x. xxxx face of one-story metal building is 8" over property line (into
McDonald's);
c. transformer near Oregon Avenue;
d. gas main;
e. roof overhangs Passyunk Avenue.
f. Surveyor notes that the recorded easements may not evidence the
complete extent of the location of the utility faculties on the property.
2
