FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-24206
Penn National Gaming, Inc.
State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
Pennsylvania 23-2234473
Penn National Gaming, Inc.
825 Berkshire Blvd.
Wyomissing, PA 19610
610-373-2400
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ____
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ___ No ____
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title Outstanding as of May 13, 1996.
Common stock par value .01 per share 4,396,750
2
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
INDEX
PART - FINANCIAL INFORMATION
Page
Item 1. - Financial Statements
Consolidated Balance Sheets -
March 31, 1996 (unaudited) and December 31, 1995 4 - 5
Consolidated Statements of Income -
Three and Months Ended March 31, 1996
and 1995 (unaudited) 6
Consolidated Statement of Shareholders' Equity -
Three months ended March 31, 1996 (unaudited) 7
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996
and 1995 (unaudited) 8
Notes to Consolidated Financial Statements 9 - 11
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 14
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8 - K 15
3
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
March 31, December 31,
1996 1995
(Unaudited)
----------- ------------
Assets
Current
Cash $ 10,592 $ 7,514
Accounts receivable 1,430 1,618
Prepaid expenses and other current assets 1,152 600
Deferred income taxes 112 104
-------- ---------
Total current assets 13,286 9,836
-------- ---------
Property, plant and equipment, at cost
Land and improvements 3,349 3,336
Building and improvements 8,651 8,651
Furniture, fixtures and equipment 4,804 4,696
Transportation equipment 309 309
Leasehold improvements 4,389 4,363
Leased equipment under capitalized lease 824 824
Construction in progress 612 255
-------- --------
22,938 22,434
Less accumulated depreciation and amortization 7,010 6,728
-------- --------
Net property and equipment 15,928 15,706
-------- --------
Other assets
Excess of cost over fair market value of net
assets acquired (net of accumulated amortization) 1,881 1,898
Miscellaneous 278 92
Total other assets 2,159 1,990
------- --------
$ 31,373 $ 27,532
======== ========
See accompanying notes to consolidated financial statements
4
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
March 31, December 31,
1996 1995
(Unaudited)
----------- ------------
Liabilities and Shareholders Equity
Current
Maturities of long-term debt and capital lease
obligations $ 249 $ 250
Accounts payable 2,639 1,395
Purses due horseman 1,193 1,293
Uncashed pari-mutuel tickets 857 704
Accrued expenses 733 702
Customer deposits 408 315
Taxes, other than income taxes 246 246
Income taxes 1,537 797
------- -------
Total current liabilities 7,862 5,702
------- -------
Long-term liabilities
Long-term debt and capital lease obligations,
net of current maturities 126 140
Deferred income taxes 918 888
------ --------
Total long-term liabilities 1,044 1,028
------- -------
Commitments and contingencies
Shareholders' equity
Preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued - -
Common stock, $.01 par value, 10,000,000 shares
authorized; 4,350,500 and 4,300,000 issued and
outstanding 44 43
Additional paid in capital 13,246 12,821
Retained earnings 9,177 7,938
-------- --------
Total shareholders' equity 22,467 20,802
-------- --------
$31,373 $27,532
======= =======
See accompanying notes to consolidated financial statements
5
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended
March 31,
1996 1995
------------------
Revenues
Pari-mutuel revenues
Penn National races $ 4,482 $ 5,195
Import simulcasting 7,593 5,914
Export simulcasting 850 472
Admissions, programs and other racing revenues 869 668
Concession revenues 766 582
------- -------
Total revenues 14,560 12,831
------ -------
Operating expenses
Purses, stakes and trophies 2,925 2,876
Direct salaries, payroll taxes and employee benefits 1,909 1,733
Simulcast expenses 2,288 2,190
Pari-mutuel taxes 1,267 1,130
Other direct meeting expenses 2,225 1,843
Off-track wagering concessions expenses 508 408
Other operating expenses 1,399 1,091
------- -------
Total operating expenses 12,521 11,271
------ ------
Income from operations 2,039 1,560
------- -------
Other income (expenses)
Interest (expense) (12) (18)
Interest income 66 67
Other - (4)
------ -------
Total other income 54 45
------- -------
Income before income taxes 2,093 1,605
Taxes on income 854 678
------- -------
Net Income $ 1,239 $ 927
-------- -------
Earnings per share $ 0.28 $ 0.22
-------- ----------
Weighted average number of common shares outstanding 4,434 4,300
-------- ---------
See accompanying notes to consolidated financial statements
6
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
Additional
Common Stock Paid-In Retained
Shares Amounts Capital Earnings Total
----------------------------------------------
Balance, at January 1, 1996 4,315,00 $43 $12,821 $7,938 $20,802
Issuance of common stock 35,500 1 425 - 426
Net income for the three months
ended March 31, 1996 - - - 1,239 1,239
-------- --- ------- ------ -------
Balance at March 31, 1996 4,350,500 $44 $ 13,246 $9,177 $22,467
========= === ======== ====== =======
See accompanying notes to consolidated financial statements
7
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
(IN THOUSANDS)
(UNAUDITED)
Three months ended
March 31,
1996 1995
------------------
Cash flows from operating activities
Net income $ 1,239 $ 927
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 299 185
Deferred income taxes 22 (5)
Decrease (Increase) in
Accounts receivable 188 172
Prepaid expenses (552) (93)
Miscellaneous other assets (186) (44)
Increase (decrease) in
Accounts payable 1,244 (197)
Purses due horsemen (100) 609
Uncashed pari-mutuel tickets 153 106
Accrued expenses 31 (341)
Customers deposits 93 27
Taxes other than income payable - 125
Income taxes payable 740 508
------ ------
Net cash provided by operating activities 3,171 1,979
----- -----
Cash flows from investing activities
Expenditures for property and equipment (504) (1,879)
------ -------
Net cash (used) by investing activities (504) (1,879)
------ -------
Cash flows from financing activities
Proceeds of sale common stock 426 -
Principal payments on long-term debt and
capital lease obligations (15) (23)
----- -------
Net cash provided by (used) in financing activities 411 (23)
----- -------
New increase in cash 3,078 77
Cash, at beginning of period 7,514 5,502
----- ------
Cash, at end of period $10,592 $ 5,579
======= =======
See accompanying notes to consolidated financial statements
8
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The consolidated financial statements include the accounts of Penn
National Gaming, Inc. and its wholly-owned subsidiaries, Mountainview
Thoroughbred Racing Association, Pennsylvania National Turf Club, Inc.,
Penn National Speedway, Inc. and Sterling Aviation, Inc. (collectively, the
"Company").
The financial information has been prepared in accordance with the
Company's customary accounting practices and has not been audited. All
significant intercompany balances and transactions have been eliminated. In the
opinion of management, the information presented reflects all adjustments
necessary for a fair statement of interim results. All such adjustments are of a
normal and recurring nature. The foregoing interim results are not necessarily
indicative of the results of operations for the full year ending December 31,
1996.
2. Wagering Information
Three months ended
March 31,
1996 1995
------------------
Pari-mutuel wagering in Pennsylvania
on Penn National races $21,308 $24,752
------- -------
Pari-mutuel wagering on simulcasting
Import simulcasting from other
Pennsylvania racetracks 5,324 6,722
Import simulcasting from out of
Pennsylvania racetracks 33,746 24,346
Export simulcasting to out of
Pennsylvania wagering facilities 28,338 15,748
------ ------
67,408 46,816
------ ------
Total pari-mutuel wagering $88,716 $71,568
======= =======
9
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. Commitments
The Company has a $4,200,000 credit facility with a commercial bank. The
facility provides for a working capital line of credit in the amount of
$2,500,000 at optional interest rates and a letter of credit facility for
$1,700,000. The credit facility is unsecured and contains various covenants
which include tangible net worth, debt to tangible net worth and debt coverage
ratios. At March 31, 1996, the Company was contingently obligated under the
letter of credit facility with face amounts aggregating $1,436,000. The
$1,436,000 consists of $1,336,000 relating to the horsemen's account balances
and $100,000 for Pennsylvania pari-mutuel taxes. All letters of credit expire
December 31, 1996. The Company to date has not drawn down on the working capital
line of credit.
In February 1996, the Company entered into an agreement to purchase land
for its proposed Williamsport OTW facility. The agreement provides for a
purchase price of $555,000 and is subject to numerous contingencies including
approval from the Pennsylvania State Horse Racing Commission. On February 20,
1996, the Company submitted an application to the Pennsylvania State Horse
Racing Commission for approval of the Williamsport OTW facility.
On February 26, 1996, the Company entered into a joint venture agreement
with Bryant Development Company, the holder of an option to purchase the Charles
Town Race Track in Jefferson County, West Virginia. The Company will hold an 80%
interest in the joint venture with Bryant Development holding the remainder. The
joint venture intends to purchase the Track from its current owners, subject to
approval of a referendum permitting installation of video lottery terminals at
the track, for a purchase price which is currently being renegotiated. On March
29, 1996, the Company paid $250,000 to extend the purchase option until December
31, 1996.
In March 1996, the Company entered into an agreement to purchase land for
its proposed Downingtown OTW facility. The agreement provides for a purchase
price of $1,696,000 and is subject to numerous contingencies including approval
from the Pennsylvania State Horse Racing Commission. On March 26, 1996, the
Company submitted an application to the Pennsylvania State Horse Racing
Commission for approval of the Downingtown OTW facility.
4. Supplemental Disclosures of Cash Flow Information
Cash paid during the three months ended March 31, 1996 and 1995 for
interest was $12,000 and $18,000 respectively.
10
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Cash paid during the three months ended March 31, 1996 and 1995 for income
taxes was $92,000 and $200,000 respectively.
5. Subsequent Items
On April 18, 1996, the Company announced that its Board of Directors has
declared a 3- for-2 split of its Common Stock which will be in the form of a 50%
common stock dividend payable May 23, 1996 to shareholders of record on May 3,
1996. Shareholders will receive one additional share of stock for each two
shares held on the record date and fractional shares will be rounded up to the
nearest whole number.
11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three months ended March 31, 1996 compared to three months ended March 31, 1995
Total revenue increased by approximately $1.7 million or 13.5% from $12.8
million to $14.5 million for the three months ended March 31, 1996. The increase
was attributable to an increase in import and export simulcasting revenues,
admissions, programs, other racing revenues and concession revenues, partially
offset by a decrease in pari-mutuel revenues on Penn National races. The
increase in import simulcasting revenues, admissions, programs and concession
revenues was mainly attributable to the York OTW facility being open for a full
quarter in 1996 compared to 10 days in the same quarter of 1995. The increase in
export simulcasting revenues of $378,000 or 80.1% from $472,000 to $869,000
resulted from the Company's races being broadcast to additional out-of-state
locations. The decrease in pari- mutuel revenues on Penn National races was due
to inclement winter weather conditions that resulted in decreased wagering on
Penn National races throughout the state of Pennsylvania. For the quarter, Penn
National was scheduled to run 61 days but canceled 11 days due to weather.
Total operating expenses increased by approximately $1.2 million or 11.1%
from $11.3 million to $12.5 million for the three months ended March 31, 1996.
The increase in operating expenses resulted from the operation of the York OTW
facility for a full quarter in 1996 and the expansion of the corporate staff and
office facility in Wyomissing in June 1995.
Income from operations increased by approximately $479,000 or 30.7% from
$1.6 million to $2.0 million due to the factors described above.
Net income increased by approximately $312,000 or 33.7% from $927,000 to
$1,239,000 for the three months ended March 31, 1996. Income tax expense
increased from $678,000 to $854,000 due to the increase in income for the
period.
Three months ended March 31, 1995 compared to the three months ended March 31,
1994.
Total revenues increased by $4.8 million or 61.2% from $8.0 million to
$12.8 million in the three months ended March 31, 1995. The increase was
primarily attributable to an increase in all types of pari-mutuel revenues,
admissions, programs and other racing revenues and concession revenues. The
increase in revenues resulted from a 29% increase in Penn National live race
days in 1995 and the opening of the Chambersburg and York OTW facilities in
April 1994 and March 1995, respectively.
Total operating expenses increased by $3.4 million or 43.1% from $7.9
12
million to $11.3 million in the three months, ended March 31, 1995. The
increase, which was in substantially all categories of operating expenses, was
caused by a 29% increase in Penn National live race days in 1995 and the opening
of the Chambersburg and York OTW facilities in April 1994 and March 1995,
respectively. The decrease in management fees was a result of the management
fees being discontinued when the Company completed the May 1994 initial public
offering.
Income from operations increased by $1.5 million from $81,000 to $1.6
million in the three months ended September 30, 1995, reflecting the factors
described above.
Net income increased by $900,000 from $27,000 to $927,000 in the first
quarter of 1995 due to the factors described above. The increase in net income
was offset in part by an increase in the income tax expense from $(170,000) to
$678,000 which was attributable to the increase in income for the quarter.
Liquidity and Capital Resources
Historically, the Company's primary sources of liquidity and capital
resources have been cash flow from operations and borrowing from banks and
related parties. During the three months ended March 31, 1996, the Company's
cash position increased by approximately $3.1 million from $7.5 million at
December 31, 1995 to $10.6 million as a result of increased cash flow from
operations.
Net cash provided from operating activities totaled approximately $3.2
million for the three months ended March 31, 1996 of which $1.5 million came
from net income and non-cash expenses.
Cash flows used in investing activities totaled approximately $500,000 for
capital expenditures. Capital expenditures were primarily for improvements and
equipment at the race track and the construction of the Lancaster OTW facility.
Cash flows from financing activities totaled approximately $426,000 from
the exercise of warrants and resulting issuance of 35,500 shares of common
stock.
The Company has a $4,200,000 credit facility with a commercial bank. The
facility provides for a working capital line of credit in the amount of
$2,500,000 at optional interest rates and a letter of credit facility for
$1,700,000. The credit facility is unsecured and contains various covenants
which include tangible net worth, debt to tangible net worth and debt coverage
ratio. At March 31, 1996, the Company was contingently obligated under the
letter of credit facility with face amounts aggregating $1,436,000. The
$1,436,000 consists of $1,336,000 relating to the horsemen's account balances
and $100,000 for Pennsylvania pari-mutuel taxes. All letters of credit expire
December 31, 1996. The Company to date has not drawn down on the working capital
line of credit.
On February 26, 1996, construction began on the Lancaster OTW facility.
The Company estimates the construction costs to be approximately $2.5 million
which will be funded from the Company's cash reserves. The projected opening
date of the Lancaster OTW is July 1996.
13
On February 26, 1996, the Company entered into a joint venture agreement
with Bryant Development Company, the holder of an option to purchase the Charles
Town Race Track in Jefferson County, West Virginia. The Company will hold an 80%
interest in the joint venture with Bryant Development holding the remainder. The
joint venture intends to purchase the Track from its current owners, subject to
approval of a referendum permitting installation of video lottery terminals at
the track, for a purchase price which is currently being renegotiated. On March
29, 1996, the Company paid $250,000 to extend the purchase option until December
31, 1996. The Company intends to fund, if successful, the joint venture
operations through additional borrowing and the Company's working capital.
The Company believes that the cash on hand, cash generated from
operations, and the above credit facility will be sufficient to fund its
anticipated future cash requirements.
14
Part II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K.
(a) Exhibits
10.51 Assignment of agreement of sale dated March 6, 1996
between the Company and Montgomery Realty Growth Fund,
Inc.
(b) Reports on Form 8-K
None
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PENN NATIONAL GAMING, INC.
By: /s/ Robert S. Ippolito
Dated May 14, 1996 Robert S. Ippolito
Chief Financial Officer
Secretary/Treasurer
16
EXHIBIT INDEX
Exhibit Nos. Description of Exhibits Page No.
10.51 Assignment of agreement of sale dated March 6, 1996 between the
Company and Montgomery Realty Growth Fund, Inc.
17
ASSIGNMENT OF AGREEMENT OF SALE
THIS ASSIGNMENT OF AGREEMENT OF SALE is made this 6th day of March,
1996 by MONTGOMERY REALTY GROWTH FUND, INC., a Pennsylvania corporation with an
office at Plymouth Plaza, Suite 200, 580 West Germantown Pike, Plymouth Meeting,
Pennsylvania 19462 ("Assignor") and PENN NATIONAL GAMING, INC., a Pennsylvania
corporation with an office at 825 Berkshire Boulevard, Wyomissing, Pennsylvania
19610 ("Assignee").
Background
Assignor and George H. Ruark and Barbara A. Ruark (collectively
"Sellers") entered into an Agreement of Sale dated July 31, 1995, as amended by
an Amendment of Agreement of Sale dated August 15, 1995 (as amended, the
"Agreement of Sale") pursuant to which Assignor has agreed to purchase from
Sellers three parcels of land located in Uwchlan Township, Chester County,
Pennsylvania, and described more fully in Exhibit "A" attached hereto (the
"Property'). Assignor now desires to assign its rights as buyer under the
Agreement of Sale to Assignee, and Assignee desires to accept such assignment on
the terms set forth in this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, Assignee and Assignor, intending to be legally
bound, hereby agree as follows:
1. Assignment. Assignor hereby assigns to Assignee all of its right,
title and interest in and to the Agreement of Sale and the Property, and
Assignee hereby accepts such assignment and agrees to perform all of the
obligations that the buyer under the Agreement of Sale is required to perform
after the date of this Assignment.
2. Purchase Price. In consideration of Assignor's agreements under this
Assignment, Assignee shall pay to Assignor the purchase price of One Hundred
Thousand Dollars ($100,000) (the "Purchase Price"). Upon the execution of this
Agreement Assignee shall deliver the Purchase Price to Lesser & Kaplin, P.C.
("Escrow Agent") who shall hold the Purchase Price in an escrow account and
shall release it in
accordance with this Assignment. In addition to the Purchase Price, if Assignee
does not elect to terminate this Assignment as provided in Section 3 hereof,
then, at the earlier of (i) the expiration of the 45-day period referred to in
Section 3 or (ii) five (5) days after the date on which the conditions set forth
in Section 3 have been satisfied, (x) Assignee shall immediately deposit with
Porter & Painter Realtors, the escrow agent designated in the Agreement of Sale
(the "Agreement Escrow Agent"), a $100,000 letter of credit, which letter of
credit will replace the deposits currently held by the Agreement Escrow Agent
(the "Assignor's Deposit") and (y) the Escrow Agent shall deliver the Purchase
Price to the Assignor. If the Assignee terminates this Agreement pursuant to
Section 3, the Escrow Agent shall return the Purchase Price to the Assignee. If
the Agreement of Sale is terminated for any reason after Assignor's Deposit has
been released, and the buyer is entitled to a refund of any deposit monies held
thereunder, Assignee shall be entitled to receive such refunded deposits and
Assignor waives any and all claims to receive all or any part of such deposits.
3. Conditions. Assignee shall commission an environmental investigation
of' the Property (the "Investigation"), and Assignee and its authorized agents
shall have the right to have access to the Property for the purpose of
conducting such Investigation. In the event that either (a) the results of the
Investigation demonstrate that any contamination, as defined in the Agreement of
Sale, is present on, under or adjacent to the Property, or that any portion of
the Property is located in a wetland, flood plain or other environmentally
sensitive area that would adversely impact Assignee's ability to develop the
Property for a shopping center containing approximately 50,000 square feet of
gross leasable area, which provides for the operation of a restaurant and
off-track wagering facility pursuant to a land development plan in the form
shown on the plan attached hereto as Exhibit "C" (the "Project") or in such
other form which is commercially feasible and acceptable to the Assignee in the
exercise of reasonable discretion, or (b) the Sellers do not execute the
Sellers' Estoppel Certificate attached hereto as Exhibit "D", then in either
case, Assignee shall have the right, within forty-five (45) days after the date
of this Assignment, to notify Assignor in writing that it elects to terminate
this
Assignment, in which case this Assignment shall terminate, neither of the
parties shall have any further rights or obligations under this Assignment, and
Escrow Agent shall refund the Purchase Price and all interest thereon to
Assignee. Assignee shall promptly after receipt deliver a copy of all reports of
the environmental investigation to the Assignor. If (x) the Sellers sign Exhibit
'1D" and (a) and (b) above are satisfied, the Escrow Agents shall disburse the
Purchase Price and all interest thereon to Assignor. If Assignee elects to
terminate this Agreement for the reasons described in (a) above, then the Escrow
Agent shall return the Purchase Price to the Assignee.
4. Representations. Assignor represents and warrants
that:
a. the copy of the Agreement of Sale attached
hereto as Exhibit "B" is a true, correct and complete copy
of the Agreement of Sale and that there are no further
amendments, extensions or modifications to the Agreement of
Sale;
b. the Agreement of Sale is in full force and
effect and Assignor has not exercised or given any notice
purporting to exercise any termination rights under the
Agreement of Sale; and
c. neither Sellers nor, to the best of Assignor's
knowledge, Assignor is in default under the Agreement of
Sale.
5. Assignee's Covenants. Assignee agrees that:
a. Assignee shall commission its environmental investigation
within five (5) days after the date hereof, and if any further tests or reports
are necessary by Assignee's environmental engineer, then Assignee shall
commission such tests or reports within five (5) (Lays after such
recommendation; and
b. Assignee shall indemnify Assignor for any loss of
Assignor's Deposit if such losses are caused by a breach by Assignee under the
Agreement of Sale during Assignee's Investigation.
c. Assignee will not file any land development, special
exception, or conditional use application with Uwchlan Township until the Seller
has signed Exhibit "D". If the Assignor does not deliver a fully signed copy of
Exhibit "D" to the Assignee by 5:00 p.m. on March 15, 1996, the Assignee shall
have the right to terminate this Assignment, in which event the Escrow Agent
shall return the Deposit to the Assignee.
6. Successors. This Assignment shall bind and inure to
the benefit of Assignee, Assignor and their respective
successors and assigns.
7. Escrow Agent. The Assignor and the Assignee have requested that the
Purchase Price be held in escrow by the Escrow Agent to be applied in accordance
with this Agreement. The Escrow Agent is merely responsible for the safe-keeping
of the Purchase Price and shall not be required to determine any questions of
fact or law. The Escrow Agent shall dispose of the Purchase Price together with
any interest accrued thereon in accordance with the provisions of this
Agreement. The Escrow Agent shall be protected in acting in good faith upon
instruments or documents believed to have been signed by a proper person or
persons, not only as to their due execution and the validity and effectiveness
of their provisions, but also as to the truth and acceptability of any
information contained therein. The Escrow Agent shall not have any duties except
those which are expressly set forth herein. The Escrow Agent shall not be bound
by any notice of, or demand with respect to, any waiver, modification, or
amendment of this Agreement unless in writing, signed by all of the parties to
this Agreement and if the duties or responsibilities of the Escrow Agent are
affected, unless the Escrow Agent shall have given its prior written consent
thereto. The Escrow Agent shall not be entitled to a fee for its services as
Escrow Agent, nor shall it have any liability to the Assignor or the Assignee
for anything done or omitted to be done by it in good faith, its liability being
limited solely to gross negligence or willful misconduct. If this Agreement, in
accordance with its terms, is canceled and terminated and the liability of the
Assignor and the Assignee ended, the Escrow Agent shall return the Purchase
Price together with all interest accrued thereon in accordance with the
provisions of this Agreement. The Assignee acknowledges that, separate and
distinct from its duties as Escrow Agent, the Escrow Agent is acting as counsel
to Assignee. The Assignor expressly consents to the foregoing and waives any
right to hereafter claim that the same in any way constitutes a conflict of
interest. Furthermore, if any dispute arises after the date of this Agreement,
the Escrow Agent shall not be precluded in any manner from continuing to
represent Assignee in any matter regarding this Agreement.
8. Governing Law. This Assignment shall be governed in
accordance with the laws of the Commonwealth of
Pennsylvania.
9. Counterparts. This Assignment may be executed in
counterparts, each of which shall be an original, and all of
which taken together shall constitute one agreement.
IN WITNESS WHEREOF. the parties have executed this
Assignment on the day and year first written above.
(Seal) MONTGOMERY REALTY GROWTH FUND, INC.
Attest: \s\ Louis P. Meshon By: \s\Charles Morrowes
Name: Louis P. Meshon Name: Charles Morrowes
Title: Secretary Title: President
(Seal) PENN NATIONAL GAMING, INC.
Attest: \s\ Susan M. Montgomery By: \s\ Peter M. Carlino
Name: Susan M. Montgomery Name: Peter M. Carlino
Title: Assistant to the Chairman Title: Chairman/CEO
EXHIBIT LIST
Exhibit "A" Property Description
Exhibit "B" Agreement of Sale
Exhibit "C" Plan
Exhibit "D" Sellers' Estoppel Certificate
SCHEDULE "C"
Premises "A"
ALL THAT CERTAIN, parcel of land, Situate in Uwchlan Township, Chester County,
Pa.,being shown as Lot 7 on Plan of Subdivision for Kode Development Associates
dated 7/8/1986, and being last revised 2/12/1912 by Chester Valley Engineers,
Inc., Paoli, Pa., and being more fully described as follows:
BEGINNING at a monument (found) on the widened Southerly right of way line of
Milford Road CL.R. 15141), a point on line of lands now or late of Betty Ann
Gayle Cox, said widened right of way line being parallel with and 30 feet
Southerly from the title line therein; thence from the point of beginning, along
said widened right of way line, the following two courses and distances. (1)
South 86 degrees 42 minutes 43 seconds East 7.16 feet; (2) South 87 degrees 37
minutes 17 seconds East 495.33 feet to a monument (found) a point of curvature;
thence along the Westerly right of way line of Grump Road, 60 feet wide, the
following three courses and distances Ci) along a curve to the right having a
radius of 25 feet, an arc length of 39.27 feet, and a chord which bears South 42
degrees 37 minutes 17 seconds East 3S.36 feet to a monument (found) a point of
tangency; (2) South 2 degrees 22 minutes 43 seconds West 562.52 feet to a
monument (found), a point of curvature; (3) along a curve to the left having a
radius of 671.01 feet, an arc length of 267.92 feet, and a chord which bears
South degrees 3 minutes 35 seconds East 266.14 feet to a spike (set). a corner
of Lot 1; thence leaving said right of way line, along Lot 1, West 129.75 feet
to an iron pin (set), a point on line of lands now or late of Samuel H. Windham;
thence along said, lands of Windhamr North 24 degrees 41 minutes 25 seconds West
462.79 feet to a monument (found) a corner of lands now or late of George H.
Ruark; thence along said lands of Ruark, along the aforesaid lands of Ccx, South
86 degrees 42 minutes 7 seconds East 351.13 feet to a monument (found); thence
along said lands of Cox, North 3 degrees 17 minutes 53 seconds East 472.38 feet
to the point of beginning.
CONTAINING 12.954 acres of land, be the same more or less.
BEING the same premises which George W. Ruark, widower, by Deed bearing date the
19th day of May AD, 1992 and recorded at West Chester in the Office for the
Recording of Deeds, on the 11th day of May AD, 1992 in and for the County of
Chester in Record Book 2980 page 35 etc., granted and conveyed unto George H
Puark and Barbara A. Ruark, his wife, in fee.
Premises B:
ALL THAT CERTAIN Lot of parcel of ground, Situate in Uwchlan Township, Chester
County,Pa., being shown as (Lot Nol on subdivision plan for George W. Ruark , by
Henry S.Conrey, Inc. Division of Chester Valley Engineers Paoli, Pa., dated
1/6/1972 and revised to 8/3/1972 and being more fully described, to wit:
BEGINNING at a point in the centerline of Milford Road (L.R. 15141) as proposed
60 feet wide, said point being the Northwest corner of Lot No. 2 on the
aforesaid plan and being Westerly along the center line of Milford Road 1,904.57
feet from a point marking the intersection of the centerline of Milford Road
with the centerline of Route 113 (L.R. 270); thence from said point of beginning
along the West line of Lot No. 2, South 3 degrees 17 minutes 53 second West
502.38 feet to an iron pin in the line of lands of the grantor herein , George
W. Ruark; thence along said lands North 86 degrees 42 minutes 7 seconds West
151.12 feet to a point in the line of lands ofSamuel H. .Windham; thence along
said lands North 24 degrees 41 minutes 25 seconds West 568.92 feet to a point in
the center line of the aforesaid Milford Road: thence along said centerline,
South 86 degrees 42 minutes 7 seconds East 418.11 feet to the pointof beginning.
CONTAINING 3.282 Acres of land, be the same more or less.
BEING the same premises which George W. Puark, widower, by Deed bearing date the
22nd day of August AD, 1972 and recorded at West Chester in the Office for the
Recording of Deeds, in and for the County of Chester on the 12th day of
September AD, 1972 in Deed Book No. W-40 page 540 etc., granted and conveyed
unto George H. Ruark and Barbara A.Ruark, his wife, in fee.
Premises C:
ALL THAT CERTAIN Lot or parcel of ground, Situate in Uwchlan Township, Chester
County,Pa., being shown as Lot No. 2, on subdivision Plan for George W. Ruark ,
by Henry S.Conrey. Inc., Division of Chester Valley Engineers, Paoli , Pa.,
dated 1/6/1972 andrevised to 8/3/1972. and being more fully described, to wit:
BEGINNING at a point in the centerline of Milford Road (L.R. 15141) as proposed
60 feet wide, said point being Westerly along the centerline of Milford Road
1,704.57 feet from a point marking the intersection of the centerline of Milford
Road with the centerline of Route 113 (L.R. 270); thence from the said point of
beginning alonglands of George W. Ruark of which this was a part, the following
two courses and distances (1) South 3 degrees 17 minutes 53 seconds West 502.38
feet to an iron pin(2) North 86 degrees 42 minutes 7 seconds West 200 feet to an
iron pin the Southeast corner of Lot No. 1 on the aforesaid plan; thence along
Lot No. 1, North 3 degrees 17 minutes 53 seconds East 502.38 feet to a point in
the center line of the aforesaid Milford Road; thence along said centerline,
South as degrees 42 minutes 7 seconds East 200 feet to the point of beginning.
Containing 2.307 acres of land, be the same more or less.
BEING the same premises which James E. Cox, by Deed bearing date the 28th day of
August AD, 1989 and recorded at West Chester in the Office for the Recording of
Deeds,in and for the County of Chester on the 1st day of September AD, 1989 in
Record Book No. 1677 page 380 etc. , granted and conveyed unto George H. Ruark
and Barbara A. Ruark, his wife, in fee.
AGREEMENT OF SALE
THIS AGREEMENT OF SALE is made this 31st day or July, l995 by and
between GEORGE W.RUARK, and BARBARA A. RUARK,individuals, residing at 10 Milford
Road, (P.O. Box 213), Lionvills, PA 19341 ("Sellers") and the MONTGOMERY REALTY
GROWTH FUND INC., a Pennsylvania corporation, having its office at Plymouth
Plaza, Suite 200, 580 West Germantown Pike, Plymouth Meeting, Pennsylvania,
19462 (Buyer).
WITNESSETH:
1. The premises. Sellers agree to sell, and Buyer
agrees to buy, the following (jointly called the
"premises"):
ALL THOSE THREE CERTAIN parcels of land with any buildings and
improvements. erected thereon, situate on Pennsylvania Route 113 and/or
Milfornd Road, Uwchlan Townsh1p, Chester County, Pennsylvania, being
tax parcels No. 3304-64, 33-4-64.1 and 33-4-64.2 containing
approximately 12.9, 3.2 and 2.3 acres respectively as more particularly
discribed on Exhibit "A" attached hereto and made a part hereof.
2. Warranty of ownership. Sellers represent and warrant to Buyer that
all persons having a legal or equitable interest in the Premises (or whose
joinder in the deed would be necessary to convey title to the Buyer hereunder),
have been identified herein and have signed this agreement as "aellers".
3 . Survey. In accordance with the terms of this
Agreement, Buyer may, at Buers's expense, order a survey of
the Premises by a licensed or registered surveyor for the
purposes of obtaining subdivision and/or land development
approval and for convoyancing.
4. Purchase Price. The Purchase Price shall be Ninety
Thousand Dollars ($90,000) per net acre of Premises. If or
example the net acreage of the premise. is Eighteen and Four
Tenths (18.4) acres, the Purchase Price would be One Million
Six Hundred Fifty-Six Thousand Dollars. ($1,656,000.00). Net
Acreage is hereby defined as the gross acreage of the
Premises less any areas thereof that are within the right-of-way of any public
or private street or road.
The Purchase Price shall be payable by Buyer according to the
following schedule:
(a) (i) Upon the execution of this agreement by Sellers, the
sum of Twenty-Five Thousand Dollars ($25,00O.OO) shall be paid by Buyer directly
to the escrow agent, designated in paragraph 5, in cash or letter or credit. If
a letter of credit is used, the form thereof shall be satisfactory to Seller,
whose approval thereof shall not be unreasonably withheld.
(a).(ii) Within ninety (90) days of the date of execution of this
Agreement by Sellers, the additional sum of Fifty Thousand Dollars (50,000.00)
shall be paid by Buyer directly to the escrow agent, designated in paragraph 5,
in cash or letter of credit.
(a) (iii) within six (6) months of the date of execution of this
Agreement by Sellers the additional sum of Twenty-Five Thousand Dollars
($25,000.00) shalL be paid by Buyer directly to the escrow agent, designated in
paragraph 5, in
cash or letter of credit.
(b) At Settlment,the Purchase Price (including the deposit from (a)
above and all interest earned thereon) shall be paid by Buyer to Sellers.
5. Deposit.(a) All monies paid on deposit prior to Settlement under
paragraph 4(a) (hereinafter called the "Deposit Monies), shall be held in escrow
by Porter & Painter Realtors, 407 West Lincoln Highway, Exton, Pennsylvania,
19341, Sellers' real estate agent, ("Escrow Agent) in an interest-bearing
federally insured or money market account (if cash) pending termination or
consumation of this Agreement. Buyer's tax indentification number is 23-
2648161. At settlement hereunder, all such Deposit Monies and all interest
accrued thereon shall be applied against the total Purchase price due under this
agrement, with said interest being applied against the payment due from Buyer to
Sellers under paragraph 4(b) above. In the event of termination of this
Agreement for any reason other than Buyer' default hereunder, all Deposit Monies
and interest
thereon shall be returned to Buyer.
6. Title. The Title shall be good and marketable and such as will be
insured by a reputable title insurance company in the Southeastern Pennsylvia,
area at its regular rate in fee simple, free and clear of all liens,
encumbrances and title objections whatsoever, except such easements,
restrictions and conditions presently of record which will not, in the Buyer's
sole judgment, interfere or impair the Buyer's ability to develop the Premises
in accordance with the Project (as herainarter defined) and which will not
prevent the Buyer from obtaining such financing as the Buyer may apply for;
provided that, promptly upon the execution, of this Agreement, Buyer shall order
and obtain a report of title for the Premises setting forth all liens and
encumbrances of affecting the Premises. Within thirty (30) days from the date of
this Agreement, Buyer' shall furnish a copy of the title report to Sellers and
shall determine which, if any, of the exceptions, restrictions, liens and
encumbrances set forth in such report are acceptable to Buyer, in Buyers's sole
discretion. Before the expiration of such period, Buyer shall set forth in a
written exhibit to be attached hereto as Exhibit B all such exceptions,
restrictions, liens and encumbrances affecting the premises which do not impair
or interfere with Buyer's development of the Project. Within seven (7) days
after receipt of Buyer's delivery of the proposed exhibit, Sellers may notify
Buyer of any additional restrictions or conditions affecting title not listed on
Buyer's proposed exhibit to which the title will be subject, provided such
additional restrictions or conditions were created before this agreement and do
not include any monetary liens or encumbrances. If such additional restrictions
or conditions are unacceptable to Buyer, Buyer may, within seven (7) days
thereafter, terminate this Agreement by written notice to Sellers. If Sellers do
not notify Buyer of any such additional restrictions or conditions, or if Buyers
accepts such additional restrictions or conditions of which Sellers have given
notice, then the agreed title exhibit shall be signed by all parties to this
agreement prior to attachaent hereto and, notwithstanding anything to the
contrary herein contained, title to be conveyed hereunder at settlement shall be
subject to the exceptions, restriations, liens and encunbrances set forth in
such Exhibit "3" as signed by the
parties and attached hereto. In the event the Sellers are unable to convey title
to the premises as aforesaid. the Buyer shall have the option of: (a) taking
such title as the sellers can give without abatement of price (except that the
purchase proceeds shall be applied to discharge anymonetary encumbrances the
amount of which is fixed or ascertainable): or (b3 having atl. Monies refunded
to the Buyer, and in such latter event this Agreement shall null and void and
there shall be no further liability on either of the parties hereto; provided
that if Sellers' inability to deliver title in condition as required results
from any grant or encumbrance created or permitted by Sellers, then, in addition
to the return of all monies, Buyer shall be entitled to payment by Sellers of an
amount equal to Buyer's actual costs in pursuing the governmental approvals and
permits described in paragraph 13, including, but limited to, all engineering,
legal, architectural and other professional and consulting fees and expenses,
and all governmental applications, processing and review fees. Sellers' deed
ofconveyance to Buyer shall be a deed of special warranty.
7. Settlement. Settlement
shall be held on or before thirty (30) after the end or the contingency period
(as defined in Paragraph 13 below), provided tflat all othar conditions set
forth herein shall have been satisfied on or before settlement. Notwithstanding
the foregoing, Buyer may, at any time, advance the date for settlement by
providing sellers with written notice not less than twenty (20) days prior to
the advanced settlement and all other times and dates set forth herein are of
the essence of thi Agreement.
8. Apportionments, Tranfer Taxes, etc.
(a) If Settlement takes place hereunder, real estate taxes on
the Premises shall be apportioned between the parties as of the date of
settlement. For the purpose of apportioning real estate taxes, county and
township taxes shall be apportioned on a i.e., July 1 to June 30. All other
property apportionable charges, including water and sewer rents, if any, shall
be apportioned prorata as of the date of settlement. All real estate transfer
taxes shall split evenly between Buyer and Sellers. The drawing of the Special
Warranty Deed and all searches, title insurance and other conveyancing expenses
with respect to acquisition of
the Premises are to be paid for by the
Buyer.
(b) In the event that all or any portion of the Property has
been granted tax relief, including, without limitation, by reason of the
Pennsylvania Farmland and Forest and Assessment Act of 1974, 72 Pa. C.S.A.
55490.1 et.seg or Act 515, 16 P.S. 11941 et. Seg. as amanded, Sellers shall be
responsible for payment of and shall deposit in escrow with the title company at
settlement hereunder, the estimated pro-rata portion of all taxes, penalties,
interest and related costs assessed or to be assessed against the property due
to termination of such relief before or after settlement attributable to any
time period prior to conveyance ofthe property to Buyer. The provisions hereof
shall survive settlement under this Agreement.
9. Items include in Sale; Condition of Premises: risk
of Loss
All improvements, trees, shrubbery, plants and topsoil (excluding crops
now or subsequently planted) now in or on the Premises are to become the
property of the Buyer and are included in the sale. Except as noted, Sellers
shall not remove any of the foregoing items, engage in any excavation or
construction upon the premises, deposit any materials of any kind upon the
premises, or in any way change the character of the premises after the date of
this Agreement and pending settlement hereunder. Sellers shall maintain all
improvements, if any, on the premises in their presentcondition, normal wear and
tear excepted. Seller may permit continued, normal farming operations between
the date hereof and settlement.
10. Notices, etc.
(a) The Sellers represent and warrant to the Buyer that at the
date of this Agreement to the best of seller's knowledge no notice of any kind
(including, but not limited to, notice of violation under the local building,
health or fire codes, notice to connect to public sewer or to water main, or
notice of assessment or reassessment for any reason) has been issued by any of
the public authorities relating to the premises and that no ordinance has been
ennacted authorizing new public improvements. Buyer agrees to comply with all
notices affecttng the premises and with all ordinances authorizing new public
improvements, issued or enacted between the date hereof and the date of
settlement; provide that;
(i) Sellers shall promptly notify Buyer in
writing upon receipt of any such notices, enclosing. a copy
of the notice with such notification to Buyer; and
(ii) in the event that this Agreement is
terminated by Buyer for any reason permitted under the Agreement, without
settlement, Sellers shall reimburse Buyer for amounts actually required to be
expended by Buyer to comply with such notices (exclusive of amounts contributed
or paid by Buyer in connection with the processing or securing of Buyer's
application for Approvals and permits under paragraph 12 or to meet any
governmental conditions or exactions required for Buyer's proposed development
of the premises, as opposed to asseasments or notices relating to, or arising
from ownership of the premises generally).
(b) The Sellers further represent and warrant to the Buyer that, as
0(pound) the date hereof, to the best of sellers' knowledge, neither the sellers
nor anyone acting on tbe seller's behalf has received any notice or
communication from any governmental unit or other body having the power of
eminent domain indicating that the Premises, or any portion thereof, will or may
condemned. In the event that any notice or communication respecting condemnation
is received by the sellers after the date of this agreement, the Sellers shall
promptly notify the Buyer in writing, and the Buyer, shall have the option,
exerciseable within thirty (30) days after the receipt of such notice from the
Sellers, of proceeding hereunder or of having all monies returned to the Buyer,
and in the latter event, this agreement shall become null and void and there
shall be no further liability on either or the parties hereto. If Buyer makes
final settlement, the sellers shall give the Buyer full opportnity, with the
cooperation of the sellers, to contest each qovernmental action or to initiate
participate in such proceedings as the Buyer may deem necessary or desirable to
protect the Buyer's interests, and (provided that settlement takes place
hereunder) the entire condemnation proceeds or award allcable to the premises
shall belong and be paid to
the Buyer, without any claim thereto being asserted by the
sellers.
11. Studies by Buyer: The Project
Commencing with the date of this Agreement, Buyer may, during
the term of this agreement, proceed to conduct and secure soil tests,
enqineering and enviromental plans, surveys and studies, market analyes,
evaluation for financing purposes, title reports or searches, utilities
investigation, and such other reports and/or studies as the Buyer may, in
Buyer's sole discretion, desire with respect to the subdivision, development and
use of the premises for a 130,000 square foot or larger retail shoppinq center.
It is Buyer's intention to have parcels 33-4-64.1 and 33-4-64.2 rezoned to
planned commercial (or in the alternative a Variance granted for shopping center
use), and to develop the premises not less than 130,000 square foot retail
shopping center (hereinafter be referred to as the "project"). If Buyer fails to
purchase the premises for any reason other than a breach hereof by Sellers,
Buyer shall deliver to seller ccpies of all plans, studies. tests, surveys and
other materials relating to the premises theretofor obtained by Buyer.
12. Governmental Approvals and Permits.
(a) After signing of this agreement, Buyer shall, at the
Buyer's sole expense, dilligently proceed to obtain, final, unapplealed, and
unappealable for,, and on terms satisfactory to Burer, the following (which are
collectively called Approvals and permits:
(i) Rezoning of Parcesl 33-4-64.1 and 33-4-
64.2 to Planned Comercial to permit retain shopping center use thereon (or
variance for shopping center use).
(ii) Municpal subdivision and land development
approval from Uwchlan Township for subdivision and land development of the
Premises for the project in accordance with a plan (the Plan), which shall be
formulated and may be modifiend by Buyer in Buyer's sole discretion, provided
that such plan shall reflect at least minumun square footage required for the
Project and, provided further that such
plan shall provide designs that comply with the applicable Township Ordinance
limitations on design unless those limitations are waived by the municipal body
or bodies having jurisdiction;
(iii) Any such variances, special exeptions, or similar or
disimilar zoning approvals (exclusive of any rezoning other than that allowed
under 12 (a) (i)), ans may be reuired in connection with Buyer's proposed
project;
(iv) All other necessary governmental permits
and approvals for construction of the project, including but not limited to any
such approvals as may be required from the U.S Army Corps of Engineers and/or
the Pennsylvania Department of Environmental Resouces and Chester County Health
Department approval of the sewage planning module for the Premises; any required
highway occupancy permits or approvals from the Pennsylvania Department of
Enviromental Resources; and the building permit; and
(v) All easements and rights of way reqiired
for installation, connection, use and maintenance of any
utilities contempleated for the Project; and
(vi) Adequate confirmation of availability of
water, sewer and any other utility service of any utilities contemplated for the
Project. Adequate confirmation of sewer capacity must be obtained within neinety
(90) days from the dae hereof.
(b) Buyer's obligation under this Agreement to purchase the
Premises is subject to the following conditions (any one of which may be waived
in whole or in part by Buyer at or prior to settlement):
(i) No governnental or quasi-governemtnal
agency or instrumentality shall, as a condition to the issuance of any
Governmental Approval or Permit, require Buyer to:
(A) Pay or incur any fees or expenses
other than routine or normal filing and processing fees;
(B) Make or pay for any improvments not
shown on the Plan submitted by Buyer to the Township for
approval except for on-site improvements or adjacent road improvements whihc are
directly related to the Buyer's develoopment shown on the Plan and are required
by applicable laws, ordinences or regulations;
(C) Convey any part of the premises or
create an easement upon any part of the Premises, excetp to
the extent shown on the Plan submitted by Buyer to the
Township for approval; and
(ii) The process of obtaining approvals and
permits shall progress in a manner which in Buyer's judgment will permit all
Approvals and Permits to the obtained within the Contingency Period.
(iii) The Approvats and permits must be in
form and substance satisfactory to permit the Buyer's
proposed Project financing.
(c) in the event the Buyer, depite its due diliqence, is
unable to obtain,by the end of (ten (10) months from the date of Sellers
execution of this Agreement, (which ten month period, plus any permitted
extension thereof shall be deemed the Contingency Period), all necessary
Approvals and Permits,in final, unappealed and unapplealable form, then the
Buyer may either: (i0 proceed with the purchase of the Premises without
abatement of the Purchase price: (ii) elect to extend the contingency period for
a period of up to sixty (60)) additional days (the Initial Extension Period); or
(iii) terminate this Agreement, in which event, there shall be no further
liability of either of the parties hereto.
(d) In the event that Buyer, despite its due diligence, is
unable to obtain, by the end of the initial Extension Period or any further
Extension Period (as defined below), all Necessary Approvals and Permits, in
final, unapplealed and unappealable form, then the Buyer may either; (i) proceed
with the purchase at the premises without abatement of the purchase price; (ii)
elect to extend the Contingency period for an additional month, (each such
extension being a Further Extension Period or (iii) therminate this Agreement,
in which event, there shall be no further liability of either of the parties
hereto.
(e) For each Further Extension Perida, Buyer shall pay an
extension fee, which shall not be a credit against the purchase price, of Ten
Thousand Dollars ($10,000.00), non refundable, directly to sellers, in advance
of the commencement of said Further Extension Period. The maximum number of
Further Extension Peridds that Buyer may elect shall be six (6).
(f) During the Contingency Period, Buyter shall be permitted
to defenxd any appeal of any approval obtained by Buyer. Any other court
proceeding broght by Buyer, relating to the approvals, shall require the written
consent of Seller.
13. Cooperation by Parties.
(a) The sellers, at no expense to Sellers, shall at all times
cooperate fully with the Buyer in connection with obtaining all Approval(s) and
permit(s). Such cooperation shall include, but not be limited to, the execution
of all applications and other documents reasonably required by the Buyer. Buyer
shall provide sellers with copies of all submissions to and correspondence with
Uwchlan Township relating to approval of the Project and will, if requested by
sellers, meet periodically with sellers to review the status of the approval
process. From time to time upon sellers' request, after submitting of Buyer's
its initial application(s) for subdivision approval, Buyer shall submit a
written report to Sellers regarding the status, and any change therein, of the
process of obtaining the Governmental Approvals and Permits. The cost of any off
site or on site improvements for the approval of Buyer's plans shall be borne
solely by Buyer.
(b) Sellers hereby assign and grant to Buyer the right to
review, copy, cite and use any and all surveye, plans, studies, tests and
reports herefore made or secured by Sellers with respect to the Premises and its
development. Sellers shall make copies of all such items in Sellers' possession
available to Buyer for those purposes and shall authorize the preparers of any
such items not in Sellers possession to release copies or the same to Buyer, at
Buyer's expense for reproducton costs, if any.
14. Access to the Premises. While this Agreement
remains if effect, the Buyer and the Buyer's representatives shall be given
access to the premises by the Sellers ata such reasonable times and from time to
time as the Buyer may desire to make inspections tests, surveys, borings and
studies as to the contemplated use of the premises by the Buyer, including, but
not limited to, such access as the Buyer may desire for the purpose of obtaining
the Approvals and Permits provided, however, that the Buyer shall restore the
Premises to its prior condition upon completion of such inspections, tests,
surveys, etc., and hold the Sellers harmless from any all mechanics liens or
similar charges which may affect the Premises as a consequence of such work.
Buyer shall indemnify Sellers from any claim, loss, liability or damage
resulting or arising from Buyer's use of or access to the Premises under this
paragraph. and shall, on request or sellers, provide sellers with proof of
insurance certifying that Buyer and seller are co-insureds again such liability.
15. Hazardous Waste
(a) Sellers hereby represent and warrant to Buyer, that none
of the Premises has ever been used by Sellers, or to the best Sellers'
knowledge, by any previous owners and/or operators, to refine produce, store,
handle, transfer, process, transport, generate, manufacture. treat or dispose of
hazardous substances or hazardous wastes, as those terms are defined under
applicable Federal and State laws, so as to result in cantarmination of the
premises. and the Premises shall not be so used during the term of the
Agreement. Contamination for purposes of this section ahall mean the presence of
hazardous substances or hazardous wastes at the premises, or arising from the
premises, which may require remediation under any applicaable federal or 5tate
law, or any other fedsral, state, or local governmental law, ordinance or
regulation.
(b) Sellers represent that Sellers are familiar with the
ground area of the entire premises and has no reason to know or suspect that any
such substances or wastes are present on the premises, whether by reason of:
odors emanating from the water or ground; discolorization of soil or water on or
under the Premises; the existence of any tanks, containers, refuse or other
materials visible in whole or part above or below the ground; or any other facts
or circumstances whatsoever. Sellers hereby agree to fully cooperate with Buyer
in any site investigations conducted on behalf of Buyer prior to Settlement.
(c) Buyer may cause any reputable environmental consultant or
engineer to condct an environmental investigation of
the Premises. In the event that any hazardous waste or hazardous substance are
discovered, Buyer shall have the option, to terminate this Agreement. If any
such waste or substances are discovered prior to settlement, Buyer shall retain
the option, to terminate this Agreement or to proceed to settlement and, if the
cost of removal and clean-up is $100,000.00 or less, receive a credit against
the Purchase Price, the amount which any reputable environmental consultant
retained by Buyer estimates to represent the cost of removal and clean-up in
accordance with the law. Buyer shall provide Seller with the option of
contracting for the removal and clean-up, delaying Settlement for up to ninety
(90) days to permit the completion thereof. If Seller desires to avail
themselves of this option they shall so notify Buyer in writing within fifteen
(15) days of Seller's receipt from Buyer of notice of the existence of the
substances discovered and the estimated cost of clean-up. If Sellers undertake
the clean-up of the Property, Sellers shall provide to Buyers at the completion
thereof a certification, satisfactory in form and substance to Buyer's lender,
from a qualified professional certifying to the successful completion of such
removal and clean-up. If Buyer finds any such material on the Premises, Buyer
agrees to notify Sellers immediately and, within the disclosure requirements, if
any, placed on Buyer by law, shall not otherwise disclose the discovery of such
material without Seller's prior approval which shall not be unreasonably
withheld.
16. Further Representations and Warranties of Sellers.
Sellers, to induce Buyer to enter into this Agreement and to
complete the purchase hereunder, represent and warrant to Buyers
that:
(a) There are no known violations of any federal, state,
county or municipal law, ordinances, order, regulation or requirement affecting
any portion of the Premises, and no written notice of any such violation has
been issued by any governmental authority. There is no action, suit or
proceeding pending or threatened against or affecting Sellers or the Premises or
any portion thereof or relating to or arising out of the ownership of the
Premises, in any court or before or by any federal, state, county or municipal
department, commission, board, bureau or agency or other governmental
instrumentality.
(b) Prior to settlement hereunder, Sellers will continue to
make full disclosure to Buyer of all facts, conditions and obligations, oral and
written, bearing upon the representations and warranties set forth in paragraphs
10 and 16(a) and known to Sellers.
(C) Tax Map Parcels 33-4-64.1 and 33-4-64.2 are presently
zoned residential, while Parcel 33-4-64 is zoned Planned Commercial
10
(d) Certain of the parcels are subject to unrecorded
restrictions on certain uses which restrictions expire September 30, 1997.
(e) Parcel 33-4-64.2 is the subject to a month to month lease
and has two underground fuel oil storage tanks on that parcel.
17. Conditions of Buyer's Obligation. The obligation of Buyer under
this Agreement to purchase the Premises from Seller is subject to the
satisfaction at the time of settlement of each of the following conditions (any
of which may be waived in whole or in part by Buyer at or prior to settlement):
(a) All of the representations and warranties by Sellers set
forth in this Agreement shall be true and correct at and as of the date of
settlement in all respects as though such representations and warranties were
made at and as of the date of settlement.
(b) No representations, statement or warranty by Sellers
contained in this Agreement or in any exhibit attached hereto contains or will
contain any untrue statement or omits or will omit a material fact necessary to
make the statement of fact therein recited not misleading.
(C) At settlement Sellers shall deliver to buyer a non-foreign
person affidavit duly executed by Buyer as required under Internal Revenue Code
Section 1445.
(d) Buyer shall have been issued all Approvals and Permits (as
defined and in form described, in Paragraph 12 hereof).
(e) The completion of a satisfactory Phase I ( and, if
necessary for Buyer's lender, a satisfactory Phase II) environmental audit of
the property to be performed by a party authorized by the Buyer. Notice of any
objection to the Phase I environmental audit must be provided to the Sellers
within one hundred twenty (120) days from the signing of this Agreement.
18. Right to Terminate. If, at any time prior to settlement hereunder,
despite the exercise of due diligence by Buyer, it appears to Buyer that any of
the conditions specified in this Agreement cannot be satisfied, Buyer shall have
the right, in its sole discretion, to terminate this Agreement and receive a
return of its Deposit Monies, with interest by giving written notice to Sellers.
19. Default. In the event of a material failure by the Buyer
to comply with all the terms of this Agreement on the part of the
11
Buyer to be kept and performed, all Deposit Monies and all interest accrued
thereon shall be retained to Sellers as liquidated damages for such failure, as
the Sellers' sole remedy, and the Sellers and Buyer shall be released from all
liability and this agreement shall be null and void.
20. Real Estate Commission. Any real estate or
brokerage commission due in connection with the transaction
shall be paid by Sellers. Buyer represents and warrants to
Sellers that it has had no communication or dealings,
regarding the Premises, with any agent other than Porter and
Painter Realtors.
21. Notices. All notices, requests and other communications under this
Agreement shall be in writing and shall be delivered in person or given by (I)
registered or certified mail, return receipt requested, or (ii) recognized
overnight delivery service providing positive tracking of items (for example,
Federal Express), addressed as set forth in the first paragraph of this
Agreement, or to such other address of which Sellers or Buyer shall have given
notice as herein provided.
All such notices, requests and other communications shall be deemed to
have been sufficiently given for all purposes hereof only upon receipt by the
party to whom such notice is sent, buy may be given by either party's attorney
or agent on its behalf.
22. Successors and Assigns. This agreement shall be binding upon the
parties hereto and their respective successors, heirs, executors, administrators
and assigns, however, this agreement shall not be assigned by Buyer without the
prior written consent of sellers unless such assignment is to an entity related
to Buyer, such as a parent, subsidiary or brother or sister corporation or an
entity having at least twenty five percent common ownership with Buyer, in which
event the prior written consent of sellers shall not be required.
23. Entire Agreement; Amendment. This Agreement
constitutes the entire understanding between the parties
hereto; all prior negotiations and agreements with respect
to the subject matter hereof are merged herein and
superseded hereby.
This Agreement may be amended or varied in any of its terms only by a
written instrument signed by both parties hereto. Neither party shall record
this Agreement without the written consent of the other.
24. Governing Law. This Agreement shall be construed
and interpreted in accordance with the laws and ordinances
of the Commonwealth of Pennsylvania.
25. Miscellaneous.
(a) All of the representations and warranties
contained in this Agreement shall survive settlement.
(b) In the event that for any reason one or more of the
provisions of this Agreement or their application to any person or circumstances
shall be held to be invalid, illegal, or unenforceable in any respect or to any
extent, such provisions shall nevertheless remain valid, legal and enforceable
in all other respects and to such extent as may be permissible. In addition, any
such invalidity, illegality, or unenforceability shall not affect and other
provisions of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
(C) A Real Estate recovery Fund exists to reimburse any
persons who have obtained a final civil judgment against a Pennsylvania real
estate licensee owning to fraud, misrepresentation, or deceit in a rel estate
transaction and who have been unable to collect this judgment after exhausting
all legal and equitable remedies. For complete details about Fraud, call (717)
783-3658.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby and in consideration of the mutual covenants contained herein, have
caused this Agreement to be duly executed as of the day and year first above
written.
WITNESS: SELLERS:
/s/ K. G. Porter, Jr. /s/ George H. Ruark
George H. Ruark
/s/ K. G. Porter, Jr. /s/ Barbara A. Ruark
Barbara A. Ruark
ATTEST: BUYER:
MONTGOMERY REALTY GROWTH FUND, INC.
/S/ Lori P. Meacham By: C. Morroney
Pres.
AMENDMENT TO AGREEMENT OF SALE
THIS AMENDMENT TO THE AGREEMENT OF SALE is made this 15th day of August, 1995,
by and between GEORGE H. RUARK and BARBARA A. RUARK, individuals ("Sellers") and
the MONTGOMERY REALTY GROWTH FUND, INC., a Pennsylvania corporation ("Buyer").
W I T N S S E T H:
1. The Aforesaid Agreement (the "Agreement") is hereby
amended by adding the following to the end of paragraph 4
(a) (I) thereof:
If the letter of credit provided hereunder is for a term less than the
full term of the Agreement, Buyer shall, within ten (10) days prior to
the date of expiration of the letter of credit, if said letter of
credit is not substituted prior to said time by a letter of credit in
similar amount and with similar terms extending the term of said letter
of credit beyond its then existing termination date, then Buyer shall
deposit the full face amount of the letter of credit, in cash, with the
Escrow Agent (as defined in paragraph 5 of the Agreement) and such
amount shall be held by such Escrow Agent pursuant to the terms of
paragraph 5 and the remaining terms of this Agreement.
THIS AMENDMENT is executed this 15th day of August.
WITNESS: SELLERS:
/s/ K. G. Porter, Jr. /s/ George H. Ruark
/s/ K. G. Porter, Jr. /s/ Barbara A. Ruark
ATTEST: BUYER:
MONTGOMERY REALTY GROWTH FUND, INC.
/s/Lori P. Meacham By: /s/ Charles T. Morroney
President
March 7, 1996
John E. Good, Esquire
331 West Miner Street
West Chester, PA 19382
VIA TELECOPIER: 344-9381
& FIRST CLASS MAIL
RE: RUARK - MONTGOMERY GROUP AGREEMENT OF SALE
Dear John:
Enclosed please find a revised Exhibit "B" to the Agreement of Sale.
You will note that the objection regarding the driveway encroachment has been
deleted. I have also corrected a typographical error that appeared in item 8 of
the prior version.
Feel free to call if you have any questions.
Sincerely,
/s/ Wendy W. McLean
/wwM:jem
enclosure
cc: Mr. Ronald Cappello
Mr. Kenneth Porter
EXHIBIT "B"
ACCEPTABLE TITLE EXCEPTIONS
1. Public right-of-way of Milford Road
2. Deed Book 203, Page 828
3. Record Book 1421, Page 404
4. Deed book 489, Page 209
5. Record Book 921, Page 573
6. Record Book 509, Page 429
7. Record Book 921, Page 562 and 568
8. Plan Book 42, Page 43
9. Plan Book 7520-7527 George H. Ruark and Barbara A. Ruark
10 Milford Road
Lionville, Pennsylvania 19341
March 20, 1996
CERTIFIED MAIL, RETURN RECEIPT REQUESTED
Penn National Gaming, Inc.
825 Berkshire Boulevard
Wyomissing, Pennsylvania 19610
Re: Agreement of Sale dated July 31, 1995 between George M. Ruark and
Barbara A. Ruark and Montgomery Realty Growth Fund, Inc.
Ladies and Gentlemen:
We have entered into an Agreement of Sale dated July 31, 1995
with Montgomery Realty Growth Fund, Inc. ("Buyer"), as amended by an Amendment
to Agreement of Sale dated August 15, 1995 (as amended, the "Agreement")
pursuant to which we have agreed to sell to Buyer three parcels of real property
located in Uwchlan Township, Chester County, Pennsylvania, which are described
more fully in the Agreement (the "Property"). It is our understanding that Buyer
now desires to assign to you its rights in the Property and the Agreement, and
you desire to accept such assignment. As a condition to your acceptance of the
assignment by Buyer, you have required, and we have agreed to deliver, this
certification and agreement by the undersigned.
We certify to Penn National Gaming, Inc. that:
i. We consent to the assignment to you by Buyer of all of its right, title and
interest in and to the Property and the Agreement, and, unless you notify us
that you have elected to terminate your agreement with Buyer to accept the
assignment, we agree to perform our obligations under the Agreement for your
benefit as if you were the party originally designated as the"Buyer"
thereunder;
ii.The Agreement is in full force and effect and has not been modified, assigned
or supplemented, and Buyer has not terminated or delivered any notices
purporting to terminate the Agreement;
iii. We have no knowledge of any defaults under the Agreement, and as of the
date of this certification, there are defenses to our performance under the
Agreement;
iv. The Purchase Price, as defined in the Agreement, for the Property is
$90,000 per net acre of the Property. Buyer has paid to the escrow agent named
in the Agreement the sum
of $100,000, in the form of a letter of credit (the "Deposit"). If the buyer
under the Agreement replaces the letter of credit with cash in the amount of
$100,000, the cash deposit will be credited towards the purchase price at
closing;
v. The Contingency Period, as defined in Section 12 of the Agreement, expires
on May 31, 1996. The Initial Extension Period, as defined in Section of the
Agreement, expires on July 30, 1996. After the Initial Extension Period expires,
you have six (6) additional Further Extension Periods, as defined in Section 12
of the Agreement, of one month each, the last of which expires on January 29,
1997. If you do not obtain the Approvals and Permits, as defined in Section 12
of the Agreement, on or before the expiration of the Contingency Period, or, if
you so elect, the Initial Extension Period or any Further
Extension Period, or if any of the other conditions set forth in Section 17 of
the Agreement are not satisfied before closing, you shall have the right to
terminate the Agreement and receive a refund of the Deposit and all interest
accrued thereon;
vi. We understand that you intend to develop the Property so that all or a
portion of the building or buildings that you will construct will be used as a
restaurant and off-track wagering facility (the "New Project"). We agree that
the development of the Property for the New Project does not violate the
obligation of the "Buyer" under the Agreement to develop the Property for the
Project, as described in Section 11 of the Agreement. We also agree that, for
the purposes of Section 12 of the Agreement, the Approvals and Permits that you
will seek to obtain will be those that are necessary and appropriate for
development of the New Project; and
vii. As of the date of this certification, we have not received any notices of
(I) violation of any applicable federal, state or local laws or ordinances,
(ii) any assessments or special assessments affecting the Property or (iii) any
eminent domain proceedings, or threat of eminent domain proceedings, affecting
any part of the Property.
viii. If you do not elect to terminate your agreement with the Buyer to accept
the assignment, we agree to release the Deposit, or to direct the escrow agent
to release the Deposit, to the Buyer so long as you replace the Deposit with
cash or a letter of credit in the amount of the Deposit.
ix. Title to the Property shall be conveyed subject to the matters set forth on
Schedule B-II of that certain commitment to issue title insurance issued by
Fidelity National Title Insurance Company of Pennsylvania (the "Commitment"),
Commitment Number 770-10130, as endorsed by an Endorsement to the Commitment
dated March 19, 1996.
Please execute this letter in the space provided below to
evidence your intent to be bound by Paragraph 9 above.
Very truly yours,
/s/ George H. Ruark
George H. Ruark
/s/ Barbara A. Ruark
Barbara A. Ruark
PENN NATIONAL GAMING, INC.
By: P. M. Carlino Chrm.
Name/Title:________________
5
1,000
3-MOS
DEC-31-1996
JAN-01-1996
MAR-31-1996
10,592
0
1,430
0
0
13,286
22,938
7,010
31,373
7,862
0
0
0
44
22,423
31,373
14,560
14,560
11,122
11,122
1,399
0
12
2,093
854
1,239
0
0
0
1,239
.28
.28
