CONTRIBUTION AGREEMENT

 

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                             CONTRIBUTION AGREEMENT

 

        AGREEMENT (this "Agreement") made as of this 2nd day of October 2003 by

and among FIREHOUSE REALTY CORP., a Pennsylvania corporation ("Firehouse"), REED

DEVELOPMENT ASSOCIATES, INC., a Pennsylvania corporation ("Reed"), SOUTH RIVER

VIEW PLAZA, INC., a Pennsylvania corporation ("South"), RIVER VIEW DEVELOPMENT

CORP., a Pennsylvania corporation ("Development"), RIVERVIEW COMMONS, INC., a

Pennsylvania corporation ("Commons"; and together with Firehouse, Reed, South

and Development, the "Owners", or each individually, an "Owner") and

CSC-RIVERVIEW LLC ("Cedar").

 

                               W I T N E S S E T H

 

        WHEREAS, the Owners and Cedar desire to form a Pennsylvania limited

partnership (the "Partnership");

 

        WHEREAS, the Owners are the owners in fee of the Fee Property (as

hereinafter defined) and the owners of a leasehold estate in the Leasehold

Property (as hereinafter defined);

 

        WHEREAS, the Owners desire to contribute the Property (as hereinafter

defined) to the Partnership, in exchange for preferred interests in and to the

Partnership; and

 

        WHEREAS, Cedar desires to contribute the Initial Funding Amount (as

hereinafter defined) to the Partnership in exchange for common interests in and

to the Partnership.

 

        NOW, THEREFORE, in consideration of the foregoing and the mutual

covenants and agreements herein contained, the parties hereto covenant and agree

as follows:

 

                                     ARTICLE I

                              Issuance of Interests

 

        1.1      Interests. The Owners and Cedar hereby agree to form the

Partnership, to contribute the Property and the Initial Funding Amount to the

Partnership and to cause the Partnership to issue interests in and to the

Partnership to Owners and Cedar (and to an affiliate of Cedar) so that said

formation, contribution and issuance (collectively, the "Contribution") will

result in:

 

                A.       Said affiliate of Cedar becoming the general partner of

the Partnership, owning one percent (1%) of the common interests in and to the

Partnership ("Cedar GP Interests");

 

                B.       Cedar becoming a limited partner of the Partnership,

owning ninety-nine percent (99%) of the common interests in and to the

Partnership ("Cedar LP Interests" and, together with Cedar GP Interests, the

"Interests"); and

 

                C.       The Owners becoming limited preferred partners of the

Partnership, owning a preferred interest (the "Preferred Interest").

 

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        1.2      Permitted Exceptions. Upon the Contribution, the Property shall

be subject only to those matters set forth on EXHIBIT A annexed hereto

(collectively, the "Permitted Exceptions").

 

        1.3      Other Agreement.

 

        The parties acknowledge that, pursuant to the terms of that certain

Recapitalization Agreement (the "Other Agreement"), among Delaware 1851

Associates, LP, Indenture of Trust of Bart Blatstein dated as of June 9, 1998

("1998 Trust"), Irrevocable Indenture of Trust of Barton Blatstein dated July

13, 1999 ("1999 Trust"; and together with 1998 Trust, "Original LPs"),

Welsh-Square, Inc. ("WSI"; and together with Original LPs, the "Other Agreement

Owners"), and CSC-Columbus LLC (the "Other Agreement Buyer"), the Other

Agreement Owners have agreed to consummate the transaction as more particularly

described in the Other Agreement (the closing of such transaction, the "Other

Agreement Closing"). Notwithstanding anything to the contrary contained herein

or in the Other Agreement, the Closing under this Agreement is specifically

contingent, as set forth in Sections 7.2.1(L) and 7.2.2(C) hereof, upon the

Other Agreement Closing (which shall include, without limitation, the making of

the loan contemplated by the Other Agreement (the "Other Agreement Owners

Loan")). It is expressly understood and agreed that the Closing and the Other

Agreement Closing shall occur simultaneously and that, if the Other Agreement is

terminated in accordance with its terms, then this Agreement shall similarly

terminate and, in connection with any such termination, if (i) the Other

Agreement Owners are entitled to the downpayment under the Other Agreement in

connection with such termination, then, in such case, the Owners shall be

entitled to the Downpayment in connection with such a termination under this

Agreement, and (ii) the Other Agreement Buyer is entitled to a refund of the

downpayment under the Other Agreement in connection with such termination, then,

in such case, Cedar shall be entitled to a refund of the Downpayment. A default

by the Other Agreement Owners under the Other Agreement shall be deemed to be a

default by Owners under this Agreement and a default by the Other Agreement

Buyer under the Other Agreement shall be deemed to be a default by Cedar under

this Agreement.

 

                                   ARTICLE II

                             Initial Funding Amount

 

        2.1      Initial Funding Amount. In consideration for (i) the

contribution by the Owners of the Property to the Partnership, and (ii) the

issuance of the Interests to Cedar, Cedar shall (i) loan to Owners an amount

equal to Twenty Six Million Seven Hundred Forty-Three Thousand ($26,743,000.00)

Dollars (the "Owners Loan"), on a nonrecourse basis, secured by the Preferred

Interest, and (ii) contribute to the Partnership an initial capital amount equal

to the sum of all legal fees, title insurance premiums and other closing costs

to be paid by Cedar in connection with the Closing (as hereinafter defined), as

the same may be adjusted pursuant to the terms of this Agreement (the "Initial

Capital Amount"). The Owners Loan and the Initial Capital Amount are sometimes

collectively referred to herein as the "Initial Funding Amount".

 

        2.2      Property Contribution. In consideration for (i) the issuance of

the Preferred Interest to the Owners, (ii) the making by Cedar of the Owners

Loan, and (iii) the contribution by Cedar of the Initial Capital Amount to the

Partnership, Owners shall contribute to the Partnership

 

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(a) their fee interest in certain real property located at 1100, 1300 and 1400

South Christopher Columbus Boulevard, Philadelphia, Pennsylvania and 1401 South

Water Street, Philadelphia, Pennsylvania (also collectively known as Riverview

Shopping Center) all as more particularly described on EXHIBIT B annexed hereto

together with all improvements located thereon, subject only to the Permitted

Exceptions (the "Fee Property") and (b) their right, title and interest in (A)

that certain Lease dated October 16, 1991 by and between Interstate Land

Management Corporation ("Interstate") and Commons, as amended by that certain

First Amendment to Lease dated June 24, 1992 (as so amended, "Parking Lease I"),

with respect to the premises particularly described on EXHIBIT B-1 annexed

hereto, (B) that certain Lease dated June 24, 1992 by and between Interstate and

Commons, as amended by that certain First Amendment to Lease dated February 10,

1993 (as so amended, "Parking Lease II"), with respect to the premises

particularly described on EXHIBIT B-2 annexed hereto (the leased property

described on EXHIBIT B-1 and EXHIBIT B-2 together with all improvements located

thereon, collectively, the "Leasehold Property"), (C) the Personal Property (as

that term is hereinafter defined), (D) the Leases (as that term is hereinafter

defined), (E) all easements and rights appurtenant to the Fee Property and/or

the Leasehold Property, if any, (F) to the extent assignable, the Permits (as

that term is hereinafter defined), other than that certain liquor license, LID

No. 47678 owned by Reed (the "Liquor License"), (G) and all Records and Plans

(as that term is hereinafter defined) in the Owners' possession or control. The

Fee Property, together with the foregoing items (A) through (G), are hereinafter

referred to collectively as, the "Property".

 

        2.3      Method of Payment. The Initial Funding Amount shall be disbursed

as follows: simultaneously with the execution and delivery of this Agreement,

Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the "Downpayment") by

wire transfer of immediately available federal funds to the account of Escrow

Agent (as hereinafter defined) in accordance with the wire instructions set

forth on EXHIBIT C annexed hereto, to be held in escrow pursuant to the

provisions of Article IX hereof, and (b) at the closing of the transactions

contemplated hereby (the "Closing"), the balance of the Owners Loan in the sum

of Twenty Six Million Two Hundred Forty-Three Thousand ($26,243,000.00) Dollars,

subject to a credit to Cedar for the interest earned on the Downpayment and

subject to other apportionments and other adjustments required to be made

pursuant to this Agreement (the "Balance of the Initial Funding Amount") by wire

transfer of immediately available federal funds to the bank account, designated

in writing by the Owners prior to Closing. Except as otherwise expressly

provided in this Agreement, the Downpayment shall be fully non-refundable.

 

        2.4      Downpayment. The party or parties hereunder that shall be

entitled to receive the Downpayment shall receive all interest that shall have

accrued thereon; provided, however, that if the Closing shall occur, the amount

of any interest earned on the Downpayment shall be credited in favor of Cedar

against the Balance of the Initial Funding Amount. The Downpayment, together

with all interest thereon, shall be held by Escrow Agent in accordance with

Article IX hereof.

 

                                   ARTICLE III

                                   Disclaimer

 

        3.1      Disclaimer of Warranties. Cedar is acquiring the Interests with

the Property being "AS IS" with all faults and defects. Except as specifically

stated in this Agreement, the Owners

 

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hereby specifically disclaim any representation or warranty, oral or written,

including, but not limited to, those concerning (i) the nature and condition of

the Property, (ii) the manner, construction, condition and state of repair or

lack of repair of any improvements located on the Property, (iii) the compliance

of the Property or its operation with any laws, rules, ordinances, or

regulations of any government or other body, it being specifically understood

that Cedar has had the full opportunity to determine for itself the condition of

the Property, and (iv) the income and expenses of the Property. The issuance of

the Interests as provided for herein is made with the understanding that Cedar

has inspected the Property, is aware of the condition thereof, and has apprised

itself of all information with respect to the Property and that, except as

otherwise provided herein, the issuance is made with the Property in an "as is"

condition. Cedar expressly acknowledges that in consideration of the agreements

of the Owners herein, except as otherwise specified herein, THE OWNERS MAKE NO

WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OR ARISING BY DECLARATION OF

LAW, INCLUDING, BUT IN NO WAY LIMITED TO, ANY WARRANTY OF QUANTITY, QUALITY,

CONDITION, HABITABILITY, MERCHANTABILITY, SUITABILITY OR FITNESS FOR A

PARTICULAR PURPOSE OF THE PROPERTY, THE INTERESTS, ANY IMPROVEMENTS, THE

PERSONALTY OR SOIL CONDITIONS. The Owners are not liable or bound in any manner

by expressed or implied warranties, guarantees, promises, statements,

representations or information pertaining to the Interests or the Property made

or furnished by any real estate broker, agent, employee, servant or other Person

(as hereinafter defined) representing or purporting to represent the Owners

unless such representations are expressly and specifically set forth herein. For

purposes of this Agreement, the term "Person" shall mean any individual,

partnership, corporation, limited liability company, trust or other entity.

 

                                   ARTICLE IV

                    The Owners' Representations and Covenants

 

        4.1      The Owners jointly and severally represent as follows:

 

                A.       Firehouse is a corporation duly organized and validly

existing under and by virtue of the laws of the Commonwealth of Pennsylvania and

is in good standing in the Commonwealth of Pennsylvania. Firehouse has all

requisite power and authority to execute, deliver and perform this Agreement and

to consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT D

is a true, correct and complete copy of the Certificate of Incorporation of

Firehouse, which Certificate of Incorporation has not been amended or modified.

The sole asset of Firehouse is Firehouse's interest in the Property.

 

                B.       Reed is a corporation duly organized and validly

existing under and by virtue of the laws of the Commonwealth of Pennsylvania and

is in good standing in the Commonwealth of Pennsylvania. Reed has all requisite

power and authority to execute, deliver and perform this Agreement and to

consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT E is

a true, correct and complete copy of the Certificate of Incorporation of Reed,

which Certificate of Incorporation has not been amended or modified. The sole

asset of Reed is the Liquor License and Reed's interest in the Property.

 

                C.       South is a corporation duly organized and validly

existing under and by virtue of the laws of the Commonwealth of Pennsylvania and

is in good standing in the

 

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Commonwealth of Pennsylvania. South has all requisite power and authority to

execute, deliver and perform this Agreement and to consummate the transactions

contemplated hereby. Annexed hereto as EXHIBIT F is a true, correct and complete

copy of the Certificate of Incorporation of South, which Certificate of

Incorporation has not been amended or modified. The sole asset of South is

South's interest in the Property.

 

                D.       Development is a corporation duly organized and validly

existing under and by virtue of the laws of the Commonwealth of Pennsylvania and

is in good standing in the Commonwealth of Pennsylvania. Development has all

requisite power and authority to execute, deliver and perform this Agreement and

to consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT G

is a true, correct and complete copy of the Certificate of Incorporation of

Development, which Certificate of Incorporation has not been amended or

modified. The sole asset of Development is Development's interest in the

Property.

 

                E.       Commons is a corporation duly organized and validly

existing under and by virtue of the laws of the Commonwealth of Pennsylvania and

is in good standing in the Commonwealth of Pennsylvania. Commons has all

requisite power and authority to execute, deliver and perform this Agreement and

to consummate the transactions contemplated hereby. Annexed hereto as EXHIBIT H

is a true, correct and complete copy of the Certificate of Incorporation of

Commons, which Certificate of Incorporation has not been amended or modified.

The sole asset of Commons is Commons' interest in the Property.

 

                F.       The Owners are the owner in fee of the Fee Property,

subject only at Closing to the Permitted Exceptions. Commons is the owner of a

leasehold estate in the Leased Property.

 

                G.       This Agreement (i) has been duly authorized, executed

and delivered by the Owners and no other proceedings on the part of the Owners

are necessary to authorize this Agreement or to consummate the transactions

contemplated hereby, and (ii) is the legal, valid and binding obligation of the

Owners enforceable against the Owners in accordance with its terms (subject to

bankruptcy, insolvency, reorganization, moratorium or similar laws affecting

creditors' rights generally).

 

                H.       The execution, delivery, observance and performance by

the Owners of this Agreement and the transactions contemplated hereby will not

(i) result in any violation of the organizational documents of any of the

Owners, (ii) violate any material contractual provision, law, statute,

ordinance, rule, regulation, judgment, decree or order applicable to any of the

Owners, (iii) conflict with, or cause a breach of, or a default under, or result

in a termination, modification, or acceleration of, any material obligation of

any of the Owners.

 

                I.       The Property is encumbered by a first mortgage (the

"Mortgage") securing a loan in the original principal amount of Twenty-Four

Million and 00/100 Dollars ($24,000,000) (the "Mortgage Loan"), made by First

Union National Bank of North Carolina ("Mortgagee")to the Owners on March 25,

1997 assigned to State Street Bank and Trust Co. A true, correct and complete

schedule of the documents evidencing the Mortgage Loan (the "Mortgage Loan

Documents") is annexed hereto as EXHIBIT I. True, accurate and complete copies

of the Mortgage Loan Documents in all material respects have been delivered to

Cedar.

 

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The Mortgage Loan Documents are in full force and effect and have not been

amended. As of the date hereof, no default exists under any of the Mortgage Loan

Documents. The outstanding principal balance of the Mortgage Loan as of the date

hereof is Twenty Two Million Four Hundred Eighteen Thousand Eight Hundred Eighty

Four ($22,418,884.00) Dollars. The portion of the November 2003 payment under

the Mortgage Loan Documents that will be applied in reduction of the outstanding

principal balance of the Mortgage Loan is Twenty Nine Thousand Two Hundred

Eighty Two ($29,282.00) Dollars. There is no prepayment penalty or other fee

payable in connection with a voluntary prepayment of the Mortgage Loan other

than a prepayment fee (the "Prepayment Fee") in an amount equal to the greater

of (i) one percent (1%) of the outstanding principal balance of the Mortgage

Loan and (ii) the positive excess of (1) the present value, as of the date of

such prepayment, of all future installments of principal and interest due under

the Mortgage Loan Documents absent any such prepayment including the principal

amount due at maturity, discounted at an interest rate per annum equal to the

Treasury Constant Maturity Yield Index (as defined in the Mortgage Loan

Documents) published during the second full week preceding the date on which

such premium is payable for instruments having a maturity coterminous with the

remaining term of the Mortgage Loan, over (2) the then outstanding principal

balance hereof immediately before such prepayment (as more fully set forth in

the Mortgage Loan Documents). Upon the payment of the Prepayment Fee, the

Mortgage Loan may be freely pre-paid and the Mortgage discharged.

 

                J.       The Property is not subject to any mortgages, liens or

encumbrances other than (i) the Mortgage Loan, (ii) the Permitted Exceptions

(upon Closing), and (iii) that certain mortgage made to Fleet Bank, dated Sept

2, 2002, in connection with a line of credit made by Fleet Bank, which such

mortgage is freely terminable and shall be discharged by the Owners, at their

sole cost and expense, at or prior to the Closing.

 

                 K.       No consent, approval, waiver, license, authorization or

declaration of, or filing or registration with, any Person is or will be

required in connection with the execution, delivery and performance of this

Agreement by the Owners.

 

                L.       There are no material contracts or agreements, written

or oral, which affect the Property, except those described either in this

Agreement or set forth in Exhibits to this Agreement.

 

                M.       There are no takings, condemnations, betterments,

assessments, actions, suits, arbitrations, claims, attachments, assignments for

the benefit of creditors, insolvency, bankruptcy, reorganization or other

proceedings, actual or proposed, pending or, to the best of the Owners'

knowledge, threatened against the Property or the Owners except for claims

covered under applicable insurance policies.

 

                N.       No tax certiorari proceeds with respect to the Property

are presently pending or remain outstanding, other than that certain Real Estate

Market Value Appeal for Tax Year 2004, dated September 24, 2003, filed on

September 24, 2003, alleging overvaluation of the portion of the Property owned

by Firehouse with respect to the Property to be properly reflected in Board of

Revision of Taxes Notice of Proposed Changes in Market Value for Real Estate

Taxes in 2004, dated August 1, 2003.

 

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                O.       True, correct and complete copies (in all material

respects) of the leases, licenses or other occupancy agreements affecting the

Property (collectively, the "Leases") and subleases affecting the Property

(collectively, the "Subleases") have been delivered to Cedar. The information

set forth on EXHIBIT J annexed hereto (the "Schedule of Leases") is true,

complete and correct in all material respects, and the Leases and the Subleases

are in full force and effect and have not been amended, except as set forth in

the Schedule of Leases. The Schedule of Leases sets forth the amount of all

security deposits (plus accrued interest thereon, if any, required to be paid to

the respective tenants under the Leases (the "Tenants")) made by Tenants under

the Leases and held by or on behalf of the landlord thereunder. The rent roll

(the "Rent Roll") annexed hereto as EXHIBIT K is true, correct and complete in

all material respects based upon the current operation of the Property and the

rents set forth on the Rent Roll are the rents currently being collected. All of

the landlord's obligations under the Leases which the landlord is obligated to

perform in all material respects prior to the Closing have or will have been

performed.

 

                P.       Except as set forth on the Schedule of Leases:

 

                        (a)      (there are no Leases or Subleases and no Person,

                                other than the Owners, the Tenants and

                                subtenants under the Subleases (the

                                "Subtenants"), has any right of possession of

                                 the Property;

 

                        (b)      there are no unsatisfied "Take-Over" space

                                obligations or "Take-Back" space obligations

                                ("Take-Over" space obligations mean rent

                                obligations of the Tenant in other buildings

                                assumed by the landlord, and "Take-Back" space

                                obligations mean obligations imposed upon the

                                 landlord to sublet or otherwise be responsible

                                for the obligations of a Tenant under a Lease);

 

                        (c)      To the Owners' knowledge there are no disputes

                                with Tenants as to the amount of their rental

                                obligations;

 

                        (d)      the rents set forth on the Rent Roll were

                                actually collected for the month of September,

                                 2003;

 

                        (e)      there are no arrearages under any of the Leases;

 

                        (f)      no Tenant or Subtenant has any option to

                                purchase the Property;

 

                         (g)      none of the Owners has received from any Tenant

                                any written notice claiming any material default

                                by the landlord under its Lease which has not

                                been complied with, and none of the Owners has

                                delivered to Tenant any written notice claiming

                                a default by Tenant under a Lease which has not

                                been complied with, and, to the best knowledge

                                of the Owners, there are no circumstances which,

                                after notice and the expiration of any

                                applicable grace period, would constitute a

                                 default by either the landlord or any Tenant

                                under the Leases in any material respect;

 

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                        (h)      no Tenant has any right of first offer, right of

                                first refusal, option or other preferential

                                right to expand its premises; and

 

                        (i)      no Tenant has asserted offsets or claims

                                 against, or has any defense to, rental payable

                                or obligations under the Leases.

 

                Q.       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 the Lease.

All of the improvements to be constructed by the landlord, 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 in

all material respects, and any fees, costs, allowances, advances or other

expenses to be paid by the landlord for tenant improvements or tenant finish

work have been paid in full. None of the rentals due or to become due under the

Leases has been or will be, at the closing, assigned, encumbered or subject to

any liens.

 

                R.       There are no management, service, supply, equipment

rental, and similar agreements affecting the Property, and there are no

month-to-month service arrangements on expired or automatic renewable contracts

(collectively, the "Service Contracts") which will bind the Property, the

Partnership, Cedar or the Owners after the Closing.

 

                 S.       All federal, state and local tax returns required to be

filed by the Owners have been timely, duly and accurately completed and filed,

and all federal, state and local taxes required to be paid by the Owners have

been paid in full in connection with all filed returns.

 

                T.       The Owners have no material liabilities or obligations

of any nature, other than in the ordinary course of business (whether known or

unknown and whether absolute, accrued, contingent or otherwise) except for the

Mortgage Loan. Except in connection with the Mortgage Loan, the interests of the

Owners in the Property have not been pledged or transferred.

 

                U.       Other than as contemplated by this Agreement, 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 or the Interests.

 

                V.       As of the date hereof, none of the Owners has entered

into any brokerage agreements or lease commission agreements, other that certain

listing agreement between Reed and Seligsohn, Soens, Hess, dated as of May 1,

2003 (the "Seligsohn Agreement"). No leasing commission is now or will hereafter

become due or owing in connection with any of the Leases, including, without

limitation, pursuant to the Seligsohn Agreement, or in connection with any

renewals or extensions of the term of any of the Leases, other than any

commissions incurred, between the date of this Agreement and Closing, pursuant

to Cedar's prior written consent, in connection with new Lease executed (with

the prior written consent of Cedar) during the period between the date of this

Agreement and the Closing. Any commissions incurred resulting from a new Lease

so approved by Cedar and executed, shall be paid by Cedar.

 

                W.       The Personal Property (as hereinafter defined) has not

been assigned or conveyed to any other party (other than as security for the

Mortgage Loan). For purposes of this

 

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Agreement, the term "Personal Property" shall mean all equipment, appliances,

tools, machinery, supplies, building materials and other personal property of

every kind and character owned by the Owners and attached to, appurtenant to,

located in or used in connection with the operation of the Property, other than

the Liquor License.

 

                X.       The Owners have received no written notice of any

violation or any alleged violation of any Environmental Laws has been issued or

given by any Governmental Authority (as hereinafter defined) which remains

uncured. For purposes of this Agreement, the term "Hazardous Materials" shall

mean (a) any toxic substance, hazardous waste, hazardous substance or related

hazardous material; (b) asbestos in any form which is or could become friable,

urea formaldehyde foam insulation, transformers or other equipment which contain

dielectric fluid containing levels of polychlorinated biphenyls in excess of

presently existing federal, state or local safety guidelines, whichever are more

stringent; and (c) any substance, material or chemical which is defined as or

included in the definition of "hazardous substances", "toxic substances",

"hazardous materials", "hazardous wastes" or words of similar import under any

federal, state or local statute, law, code, or ordinance or under the

regulations adopted or guidelines promulgated pursuant thereto, including, but

not limited to, the Environmental Laws. For purposes of this Agreement, the term

"Environmental Laws" shall mean the Comprehensive Environmental Response,

Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section9061, et

seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C.

Section1801, et seq.; the Resource Conservation and Recovery Act, as amended, 42

U.S.C. Section6901, et seq.; and the Federal Water Pollution Control Act, as

amended, 33 U.S.C. Section1251, et seq., as any of the foregoing may be amended

from time to time, and any other federal, state and local laws and regulations,

codes, statutes, orders, decrees, guidance documents, judgments or injunctions,

now or hereafter issued, promulgated, approved or entered thereunder, relating

to pollution, contamination or protection of the environment, including, without

limitation, laws relating to emissions, discharges, releases or threatened

releases of pollutants, contaminants, chemicals or industrial, toxic or

hazardous substances or wastes into the environment or otherwise relating to the

manufacture, processing, distribution, use, treatment, storage, disposal,

transport or handling of Hazardous Materials. For purposes of this Agreement,

the term "Governmental Authority" shall mean the United States government, any

state, regional, local or any other political subdivision of any of the

foregoing, and any agency, department, commission, board, court bureau or

instrumentality of any of them having jurisdiction over the Property or any of

the Owners.

 

                Y.       The Owners have delivered to Cedar a true, correct and

complete copy of the Phase I Environmental Report, dated as of September 27,

2001, prepared by IVI Environmental, Inc., as updated by that certain Phase I

Environmental Site Assessment dated as of August 8, 2003, prepared by IVI

Environmental, Inc. directly for Cedar.

 

                Z.       [intentionally omitted]

 

                AA.      There are, and at the Closing there will be, no

employees and no employment contracts, operating agreements, management

contracts, listing agreements, consulting agreements, union contracts, labor

agreements, pension plans, profit sharing plans or employee benefit plans which

relate to any of the Owners or the Property (collectively, "Operating

Agreements"), other than the Seligsohn Agreement. True, correct and complete

 

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copies of the Selligs Agreement has been delivered to Cedar. Neither the Owners,

nor to the Owners' best knowledge, any other party is in default with respect to

any of its obligations or liabilities pertaining to the Seligsohn Agreement.

There are, and at Closing will be, no unpaid fees or commissions owing with

respect to the Property, other than any fees incurred, between the date of this

Agreement and Closing, pursuant to Cedar's prior written consent, in connection

with new Lease executed (with the prior written consent of Cedar) during the

period between the date of this Agreement and the Closing. Any fees incurred

resulting from a new Lease so approved by Cedar and executed, shall be paid by

Cedar.

 

                BB.      The Owners maintain insurance with respect to the

Property as set forth on EXHIBIT L annexed hereto. True, correct, and complete

copies of these policies have been delivered to Cedar and are in full force and

effect. True, correct, and complete copies of all policies of liability

insurance held in connection with the Property during the Owners' tenure of

ownership of the Property have been delivered by the Owners to Cedar. None of

the Owners has received any written notice from any insurance company which has

issued a policy with respect to the Property or from Mortgagee requesting or

requiring performance of any structural or other major repair or alteration to

the Property which has not been complied with.

 

                CC.      None of the Owners is a "foreign person" as defined

pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended.

 

                DD.      All Records and Plans in the possession or control of

the Owners have been made available to Cedar. For purposes of this Agreement the

term "Records and Plans" shall mean all of the following items which are in the

possession of or under the control of the Owners: (A) all accounting, tax,

financial, and other books and records (including tax returns) maintained in

connection with the renovation, construction, use, maintenance, repair, leasing

and operation of the Property and the formation, existence and operation of the

Owners, (B) all building plans and specifications (including "as-built"

drawings) with respect to the improvements and (C) all structural reviews,

architectural drawings and engineering, soil, seismic, geologic and

architectural reports, studies and certificates and other documents pertaining

to the Property. Records and Plans also means such additional books, records,

plans, specifications, reports, studies and other documents maintained or

prepared after the date of this Agreement. Except as expressly provided herein,

no representations are given regarding the accuracy or completeness of the

Records and Plans.

 

                EE.      A true, correct and complete schedule in all material

respects of the lease documents evidencing the Owners leasehold estate in the

Leasehold Property (the "Leasehold Documents") is annexed hereto as EXHIBIT M.

True, accurate and complete copies of the Leasehold Documents have been

delivered to Cedar. The Leasehold Documents are in full force and effect and

have not been amended, except as set forth on EXHIBIT M. As of the date hereof,

no default exists under any of the Leasehold Documents and, to the knowledge of

the Owners, no condition exists which, with the giving of notice or the passage

of time would give rise to a default under any of the Leasehold Documents. The

Owners know of no reason why Interstate would not agree to execute and deliver

the Parking Lease Memoranda (as that term is hereinafter defined), it being

understood that the Owners have not yet engaged in dialogue with Intrastate in

connection with the Parking Lease Memoranda,

 

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        The representations and warranties made in this Section 4.1 shall

survive the Closing shall survive the Closing and remain in full force and

effect for a period of four (4) months after the date of the Closing. The Owners

shall have no liability to Cedar in respect of said representations and

warranties unless Cedar shall have delivered to the Owners, within such four (4)

month period, a claim specifying the alleged breach of any one or more of such

representations, in which case the Owner's liability shall survive with respect

to the matters alleged in such claim until resolution thereof. For purposes of

this Agreement the term "material" shall mean (unless the context clearly

indicates otherwise) any fact or condition, the presence or absence of which,

has or could have a significant adverse effect on the financial condition or

value of the Property or the continued use and enjoyment thereof.

 

        4.2      Cedar represents as follows:

 

                A.       Cedar is a limited liability company duly organized and

validly existing under and by virtue of the laws of the State of Delaware and is

in good standing in the State of Delaware. Cedar has all requisite power and

authority to execute, deliver and perform this Agreement and to consummate the

transactions contemplated hereby.

 

                B.       This Agreement (i) has been duly authorized, executed

and delivered by Cedar and no other proceedings on the part of Cedar are

necessary to authorize this Agreement or to consummate the transactions

contemplated hereby, and (ii) is the legal, valid and binding obligation of

Cedar enforceable against Cedar in accordance with its terms (subject to

bankruptcy, insolvency, reorganization, moratorium or similar laws affecting

creditors' rights generally).

 

                C.       The execution, delivery, observance and performance by

Cedar of this Agreement and the transactions contemplated hereby will not (i)

result in any violation of the organizational documents of Cedar, (ii) violate

any contractual provision, law, statute, ordinance, rule, regulation, judgment,

decree or order applicable to Cedar, (iii) conflict with, or cause a breach of,

or a default under, or result in a termination, modification, or acceleration

of, any obligation of Cedar, or (iv) permit any other party to terminate or

modify any agreement or instrument to which Cedar is a party or by which any of

them is bound.

 

        4.3      The Owners hereby covenant and agree with Cedar as follows:

 

                A.       At all times up to the Closing Date, the Owners shall

maintain or cause to be maintained insurance upon the Property in the same

coverages and amounts as the insurance policies on the Property on the date

hereof.

 

                B.       At all times up to the Closing Date, the Owners shall

operate and maintain the Property in substantially the same manner as it is now

operated and maintained, and the Owners shall use reasonable efforts to maintain

the physical condition of the Property in its current condition, reasonable and

ordinary wear and tear and damage by fire and casualty excepted.

 

                C.       The Owners shall neither transfer nor remove any

Personal Property (other than the Liquor License) or fixtures from the Property

subsequent to the date hereof, unless the same are no longer needed for the

maintenance and operation of the Property or except for

 

                                       11

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purposes of replacement thereof, in which case such replacements shall be

promptly installed prior to Closing and shall be comparable in quality to the

items being replaced.

 

                D.       The Owners shall not without the prior written consent

of Cedar, which consent may be granted or withheld in Cedar's sole discretion,

to (i) enter into any Lease nor modify, renew, extend, replace, terminate or

otherwise change any of the terms, conditions or covenants of any existing

Lease, or (ii) consent to any Sublease or any modification, renewal,

replacement, termination or other change of any of the terms, conditions or

covenants of any existing Sublease.

 

                E.       The Owners shall not enter into any new Service Contract

after the date hereof without the prior written consent of Cedar, which consent

may be granted or withheld in Cedar's sole discretion.

 

                F.       The Owners shall not enter into any Operating Agreement

after the date hereof without the prior written consent of Cedar, which consent

may be granted or withheld in Cedar's sole discretion.

 

                G.       The Owners shall not amend or modify any Permits with

respect to the Property and shall keep in full force and effect and/or renew all

Permits. For purposes of this Agreement, the term "Permits" shall mean all

approvals, consents, registrations, franchises, permits, licenses, variances,

certificates of occupancy and other authorizations with regard to zoning,

landmark, ecological, environmental, air quality, subdivision, planning,

building or land use required by any Governmental Authority for the

construction, lawful occupancy and operation of the Improvements and the actual

use thereof.

 

                H.        The Owners shall timely comply with all Legal

Requirements in all material respects. For purposes of this Agreement, the term

"Legal Requirements" shall mean any law, statute, ordinance, order, rule,

regulation, decree or other requirement of a Governmental Authority, and all

conditions of any Permit.

 

                I.       The Owners shall pay all obligations and trade creditors

in the normal course of business and not defer any expenses or costs which would

be paid or incurred in the normal course of business.

 

                J.       The Owners shall not, without the written consent of

Cedar, convey any interest, directly or indirectly, in the Property.

 

                K.       The Owners shall not withdraw, settle or otherwise

compromise any protest or reduction proceeding affecting real estate taxes

assessed against the Property for any fiscal period in which the Closing is to

occur or any subsequent fiscal period without the consent of Cedar, which

consent may be granted or withheld in Cedar's sole discretion.

 

                L.       The Owners shall not create, assume, incur or suffer to

exist any lien (other than the Permitted Exceptions).

 

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                M.       The Owners shall use good faith efforts to obtain the

Tenant Estoppel Certificates, the Landlord Consent, and the Landlord Estoppel

(as those terms are defined in Section 7.2.1).

 

                N.       The Owners shall not bring (or permit to be brought) any

Hazardous Materials in, upon, under, over or from the Property in violation of

Environmental Laws.

 

                O.       The Owners shall not remove or dispose of (or permit to

be removed or disposed of) any Hazardous Materials in, upon, under, over or from

the Property in violation of Environmental Laws.

 

                P.       The Owners shall not hereafter engage any new employees

for any of the Owners or the Property.

 

                Q.       The Owners shall make all payments as required by the

Mortgage Loan.

 

                 R.       The Owners shall, at Cedar's sole cost and expense,

cooperate with Cedar with regard to any financing that is arranged for by Cedar

in connection with the transactions contemplated by this Agreement, and the

Owners will execute all documents reasonably required pursuant to such

financing, provided same do not impose cost or liability on the Owners.

 

                S.       The Owners shall not collect any rent under any Lease

more than one (1) month in advance.

 

                T.       The Owners shall not make any material alterations to

the Property.

 

        4.4      The Owners acknowledge that Cedar desires that a memorandum of

lease be placed of record prior to the Closing with respect to each of Parking

Lease I and Parking Lease II. Accordingly, the Owners covenant and agree that

they shall, within five (5) days of the date hereof, contact Interstate and

thereafter shall use their reasonable and good faith efforts to obtain from

Interstate as soon as possible, a memorandum of lease, in form (i) suitable for

recording, (ii) satisfying any applicable statutory requirements, and (iii)

reasonably acceptable to Cedar, with respect to each of Parking Lease I and

Parking Lease II (collectively, the "Parking Lease Memoranda"). Upon obtaining

the Parking Lease Memoranda from Interstate, the Owners shall countersign such

documents, shall deliver same to the Title Company to be placed of record and

shall deliver a duplicate original of each to Cedar at the Closing. The Owners

shall promptly deliver to Cedar copies of all correspondence sent to or received

from Interstate in connection with the Parking Lease Memoranda and shall

otherwise keep Cedar informed with respect to the Owners' progress with respect

to obtaining the Parking Lease Memoranda from Interstate. Nothing contained in

this paragraph shall be deemed to require the Owners to obtain the Parking Lease

Memoranda as a condition of Closing.

 

                                    ARTICLE V

                                    Brokerage

 

        5.1      The parties agree that Michael Salove Company (the "Broker") is

the broker in connection with this transaction. The Owners agree to pay any

commission payable to the Broker in connection with this transaction by separate

agreement. Provided the Closing occurs,

 

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<PAGE>

 

Cedar shall, at the Closing, reimburse the Owners for a portion of the fee paid

to the Broker in the amount of Two Hundred Fifty Thousand ($250,000.00) Dollars.

 

        5.2      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 (other than the Broker), or any

other person claiming a commission fee or other compensation by reason of this

transaction, if the same shall arise by, through or on account of any alleged

act of Cedar or Cedar's representatives.

 

        5.3      The Owners hereby agree to jointly and severally indemnify,

defend and hold Cedar 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 Cedar by any broker (including the

Broker), or any other person, claiming a commission fee or other compensation by

reason of this transaction, if the same shall arise by, through or on account of

any alleged act of the Owners or the Owners' representatives.

 

        5.4      The obligations under this Article V shall survive the Closing

or a termination of this Agreement.

 

                                   ARTICLE VI

                             Title and Due Diligence

 

        6.1      Title.

 

                6.1.1    Title Commitment; Title Objections. The Owners have

ordered and have caused to be delivered to Cedar, a title insurance report and

commitment (the "Commitment") for the Title Policy (as hereinafter defined) from

Legal Abstract Co., 2200 Walnut Street, Philadelphia, Pennsylvania 19103 (the

"Title Company"). Upon receipt of any updates or revisions to the Commitment,

Cedar shall furnish copies thereof to the Owners' attorneys. The parties

acknowledge and agree that the Commitment contains certain objections to title

which are not Permitted Exceptions (the "Title Objections"). If any supplement,

amendment or modification of the Commitment contains any additional Title

Objections not contained in the original Commitment, Cedar shall give notice to

the Owners, within ten (10) days of its receipt of such supplement, amendment or

modification, setting forth such additional Title Objections contained therein.

In the event Cedar fails to give notice within such ten (10) days following its

receipt of such supplement, amendment or modification, Cedar shall be deemed to

have waived its right to object thereto.

 

                6.1.2    Encumbrances to Eliminate. The Owners shall be required

to eliminate (a) all mortgages (other than the Mortgage), (b) unpaid water

charges and assessments, (c) any other Title Objections which are in a

liquidated amount and which may be satisfied by the payment of money, and (d)

any other Title Objections that were contained in the original Commitment.

 

                6.1.3    Other Exceptions. Except as set forth in Section 6.1.2

above, the Owners shall not be required to bring any action or institute any

proceeding, or to otherwise incur any costs or expenses in order to attempt to

eliminate any Title Objections. If the Owners fail to eliminate any and all

Title Objections (other than those encumbrances set forth in Section 6.1.2

 

                                       14

<PAGE>

 

above which the Owners shall be obligated to remove), then, Cedar may elect, as

its sole right and remedy, to either (i) proceed with the transactions

contemplated hereby subject to such exceptions, and Cedar shall close hereunder,

without reduction of the Initial Capital Amount, notwithstanding the existence

of same, and the Owners shall have no obligations whatsoever after the Closing

Date with respect to the Owners' failure to eliminate such exceptions, or (ii)

terminate this Agreement by notice given to Owners, in which event Cedar shall

be entitled to a return of, and Escrow Agent shall promptly deliver, the

Downpayment to Cedar. Upon such return and delivery, this Agreement shall

terminate and neither party hereto shall have any further obligations hereunder

other than pursuant to those provisions that expressly survive a termination of

this Agreement.

 

        6.2      Liens, Judgments and Encumbrances. If, at the Closing, the

Property is subject to any mortgage or mortgages, unpaid taxes, water charges

and assessments, or any other liens, judgments and monetary encumbrances, the

existence thereof shall not constitute a Title Objection provi