CASTLE SENIOR LIVING, LLC,
Seller,
and
EDISON SCHOOLS INC.,
Purchaser.
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CONTRACT OF SALE
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January 11, 2000
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Premises:
1280-1285 Fifth Avenue
Manhattan Block 1615, Lot 1
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TABLE OF CONTENTS
Article Page
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1. Definitions.................................................................................... 1
2. Agreement to Sell and Purchase the Premises.................................................... 4
3. Purchase Price................................................................................. 5
4. Permitted Exceptions........................................................................... 5
5. Closing........................................................................................ 6
6. Apportionments................................................................................. 8
7. Documents to be Delivered at the Closing....................................................... 9
8. Premises Conveyed As Is; Other Representations and
Warranties of Seller........................................................................... 11
9. Representations, Warranties and Covenants of Purchaser......................................... 13
10. Conditions to Seller's Obligation to Close Title............................................... 15
11. Conditions to Purchaser's Obligation to Close Title............................................ 15
12. Risk of Loss................................................................................... 16
13. Matters Affecting the Premises Until Closing................................................... 17
14. Title to the Premises.......................................................................... 18
15. Brokers, etc................................................................................... 20
16. Termination of Agreement; Default.............................................................. 21
17. Expenses of the Transaction.................................................................... 23
18. Notices........................................................................................ 24
19. Further Assurances............................................................................. 25
20. Governing Law.................................................................................. 25
21. Entire Agreement; No Third Party Beneficiary, etc.............................................. 26
22. Waivers; Extensions............................................................................ 26
23. Construction; Severability..................................................................... 26
24. Assignment..................................................................................... 27
25. Counterparts................................................................................... 27
26. No Recording................................................................................... 27
27. Confidentiality................................................................................ 27
28. Attorneys' Fees................................................................................ 27
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CONTRACT OF SALE
THIS AGREEMENT (this "Agreement") is made as of the 11th day
of January, 2000, by and between CASTLE SENIOR LIVING, LLC, a Delaware limited
liability company, with an office at 405 Cedar Lane, Teaneck, New Jersey 07666
("Seller"), and EDISON SCHOOLS INC., a Delaware corporation with an office at
521 Fifth Avenue, 15th Floor, New York, NY 10175 ("Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
Seller is the owner of the Land (as hereinafter defined)
located at and known as 1280-1285 Fifth Avenue, New York, New York, together
with the improvements located thereon (the "Improvements"; the Land and
Improvements are herein collectively referred to as the "Premises") which is
more particularly described in and is the subject of this Agreement.
Seller desires to sell and convey to Purchaser, the Premises,
and Purchaser desires to purchase the same from Seller, subject to and upon all
of the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual undertakings in this Agreement, the parties hereto agree as follows:
1. DEFINITIONS.
1.1 Wherever used in this Agreement, the following terms shall
have the meanings set forth in this Article l unless the context of this
Agreement clearly requires another interpretation:
"Affiliate" - shall mean with respect to a particular person
or entity, any other person or entity which, directly or indirectly controls, is
controlled by or is under common control with the named person or entity.
"Business Day" - shall mean any day other than a Saturday, a
Sunday or a day on which national banking associations are authorized or
required to close.
"Closing" - shall mean the closing of the sale of the Premises
by Seller to Purchaser provided for in Article 5.
"control" - shall mean ownership of 50% or more of the voting
stock, membership interests or partnership interests of an entity, or the power
to direct the
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management, operations and policies of a person or entity, whether through
ownership interest, contract or otherwise.
"Exhibits" - shall mean the exhibits attached to this
Agreement, each of which shall be deemed to form part of this Agreement whether
or not so stated in this Agreement.
"Governmental Authorities" - shall mean all agencies, bureaus,
departments and officials of federal, state, county, municipal and local
governments and public authorities having or claiming jurisdiction over the
Premises or any part thereof, or over Seller or Purchaser with respect to this
Agreement or the transactions contemplated herein.
"Impositions" - shall mean all real estate and personal
property taxes, general and special assessments, water and sewer charges,
license fees and other similar fees and charges assessed or imposed by
Governmental Authorities upon the Premises.
"knowledge" or "notice" - shall mean actual knowledge of or
notice received by Stanley Diamond, Chairman of Seller who has direct
responsibility for management of the Premises or Seller's investment therein,
without independent investigation as to such matters.
"Improvements" - shall have the meaning ascribed thereto on
page 1 of this Agreement.
"In Rem Parcels" - shall mean Block 1615, Lots 5, 7, 66 and
68.
"Interest Rate" - shall mean the rate of 4% per annum.
"Leases" - shall mean all leases, licenses, concessions and
other forms of agreement, written or oral, however denominated, granting to any
party or parties the right of use or occupancy of any portion of the Premises,
and all renewals, modifications, amendments, guaranties and other agreements
affecting the same.
"Legal Requirements" - shall mean all statutes, laws,
ordinances, rules, regulations, executive orders and requirements of all
Governmental Authorities which are applicable to the Premises or any part
thereof or the use or manner of use thereof or construction thereon (including,
without limitation, building codes and restrictions), or to the owners, Tenants
or occupants thereof in connection with such ownership, occupancy or use.
"Other Agreements" - shall mean all contracts, agreements and
documents pertaining to the Premises to which Seller or any Affiliate of Seller
is a party or by which Seller or any Affiliate of Seller is bound, and shall
include without
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limitation all union contracts, service contracts, construction contracts,
management, development and leasing agreements, brokerage agreements, zoning lot
merger agreements, restrictive agreements and utility agreements, but shall
exclude the Leases. The documents comprising the Other Agreements are listed on
Exhibit D.
"Permissible Use" - shall mean a school, museum, offices,
and/or such other use or uses which do not (x) prevent, materially interfere
with, or impose any additional restrictions, requirements, conditions or
limitations upon, Seller's ability to use the Premises for residential or
community facility purposes (including, without limitation, assisted living
facilities) with retail space or (y) reduce the available floor area ratio for
the Premises from that existing on the date hereof.
"Permitted Exceptions" - shall mean those items specified in
Article 4 and Exhibit B, and all other matters affecting title to the Premises
which are hereafter accepted in writing by Purchaser, treated in accordance with
the terms of this Agreement, or waived by Purchaser in writing.
"Purchaser" - shall have the meaning ascribed thereto on page
1 of this Agreement.
"Recording Office" - shall mean the Office of the Register of
the City of New York, New York County.
"Seller" - shall have the meaning ascribed thereto on page 1
of this Agreement.
"Significant Taking" - shall mean any taking by condemnation
or eminent domain other than (x) a taking in connection with a street widening
or (y) a taking of a de minimis portion of the Premises.
"Tenants" - shall mean the tenants, licensees, concessionaires
or other users or occupants under Leases.
"Title Company" - shall mean Commonwealth Land Title Insurance
Corporation or such other reputable title insurance company as may be selected
by Purchaser.
"Violations" - shall mean material violations of Legal
Requirements existing with respect to the Premises.
"Zoning Approvals" - shall mean issuance to the extent
required under applicable zoning law, by the applicable Governmental Authorities
of a final, non-appealable zoning variance, special permits or rezoning of the
Land and the In Rem Parcels to permit the use thereof for a Permissible Use.
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1.2 The following additional terms, wherever used in
this Agreement, shall have the respective meanings specified in the Articles or
Sections of this Agreement set forth below after such terms:
Terms Sections
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"Adjustment Point" Article 6
"Closing Date" Section 5.1
"CTIC" Section 14.1
"Deed" Section 7.1.1
"Deposit" Section 3.1.2
"Fence Agreement" Exhibit D
"First Additional Deposit" Section 5.3
"First Extension Option" Section 5.3
"In Rem Sale Approvals" Section 5.3
"Land" Section 2.1.1
"Premises" Section 2.1
"Purchase Price" Article 3
"Second Additional Deposit" Section 5.4
"Second Extension Option" Section 5.4
"Study" Section 13.3
1.3 Except as otherwise specifically indicated, all
references in this Agreement to Articles or Sections refer to Articles or
Sections of this Agreement, and all references to Exhibits refer to Exhibits
attached hereto. The words "herein," "hereof," "hereinafter," and words and
phrases of similar import refer to this Agreement as a whole and not to any
particular Section or Article.
2. AGREEMENT TO SELL AND PURCHASE THE PREMISES.
2.1 Upon and subject to the terms and conditions of
this Agreement, Seller agrees to sell and convey to Purchaser and Purchaser
agrees to purchase from Seller, the premises (the "Premises"), which consists of
the following:
2.1.1 the land more particularly described on Exhibit
A annexed hereto, together with, all and singular, the tenements, hereditaments,
easements, appurtenances and rights belonging or in any way appertaining
thereto, and the reversions and the remainders thereof (the "Land");
2.1.2 the Improvements; and
2.1.3 all right, title and interest, if any,
of Seller in and to all of the following (collectively, "Appurtenances"):
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2.1.3.1 land lying in the bed of
any street, highway, road, or avenue, open or proposed, public or private, in
front of or adjoining the Land.
2.1.3.2 rights of way, highways,
public places, easements, appendages, appurtenances, sidewalks, alleys, strips
and gores of land adjoining or appurtenant to the Land which are now or
hereafter used in connection with the Premises.
3. PURCHASE PRICE.
3.1 The purchase price (the "Purchase Price") payable
by Purchaser to Seller for the Premises shall be TEN MILLION DOLLARS
($10,000,000.00), subject to adjustment as provided in Article 6, which shall be
payable as set forth below:
3.1.1 ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000.00) by good check drawn by Purchaser subject to collection
or official bank check, in either case drawn on a bank which is a member of the
New York Clearing House Association, to be paid to Seller upon execution and
delivery by Seller and Purchaser of this Agreement;
3.1.2 FIVE HUNDRED THOUSAND DOLLARS
($500,000.00) by good check drawn by Purchaser subject to collection or official
bank check, in either case drawn on a bank which is a member of the New York
Clearing House Association, payable to the order of Seller, or by wire transfer
of immediately available federal funds to Seller's account to be designated by
notice given to Purchaser at least 2 Business Days prior to the date such
payment is due; (such sum, together with the sum payable pursuant to Section
3.1.1, is herein collectively referred to as the "Deposit"), to be paid to
Seller on or prior to February 11, 2000; and
3.1.3 EIGHT MILLION DOLLARS ($8,000,000.00)
(less, to the extent paid pursuant to Sections 5.3 and 5.4 hereof, the amount of
the First Additional Deposit and the Second Additional Deposit), representing
the balance of the Purchase Price, to Seller, by wire transfer of immediately
available federal funds to an account of Seller to be designated by notice given
to Purchaser at least 2 Business Days prior to the Closing, or at Seller's
option by unendorsed certified check drawn on a bank which is a member of The
New York Clearing House Association, at the Closing.
4. PERMITTED EXCEPTIONS.
4.1 The Premises are sold and are to be conveyed
subject to the following matters ("Permitted Exceptions"):
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4.1.1 the matters set forth in Exhibit B
annexed hereto and made a part hereof;
4.1.2 liens for Impositions which are not
due and payable as of the Closing Date or which are apportioned in accordance
with Article 6;
4.1.3 any state of facts a physical
inspection of the Premises would show provided the same do not prevent
construction of improvements on the Premises for the purposes contemplated in
the definition of "Zoning Approvals" in Section 1.1 of this Agreement and the
same do not render title unmarketable;
4.1.4 zoning, subdivision, environmental,
building and all other Legal Requirements applicable to the ownership, use or
development of, or the right to maintain or operate, the Premises, presently
existing or enacted prior to the Closing;
4.1.5 Violations of which notice has been
issued prior to the date hereof, subject to apportionment of fines and/or
penalties levied in connection therewith as set forth in Section 14.1; and
Violations of which notice is first issued between the date hereof and the
Closing, subject to Seller's obligations set forth in Section 13.2;
4.1.6 consents by any former owner of the
Premises for the erection of any structure or structures on, under or above any
streets, highways, roads or avenues which the Premises may abut; and
4.1.7 lis pendens and notices of
commencement of action against Seller (or which affect Seller's interest in the
Premises) which relate to this Agreement or the transactions contemplated hereby
or which arise out of or in connection with any actions taken by Purchaser, its
employees, agents or contractors, and any unpaid franchise taxes of Seller,
provided that the Title Company shall provide affirmative insurance reasonably
satisfactory to Purchaser insuring against the collection of such unpaid
franchise taxes out of the Premises.
5. CLOSING.
5.1 The Closing shall be held at 10:00 a.m. local
time on July 11, 2000 (as the same may be adjourned or advanced pursuant to the
terms of this Agreement, the "Closing Date"), at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York, New York, or
on such other date, or at such other time and place, which may be agreed upon by
the parties. Purchaser and Seller hereby authorize their respective counsel to
execute and deliver in the names of Purchaser and Seller any agreement(s)
confirming an accelerated or deferred Closing Date or changed place of Closing
agreed to by the parties.
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5.2 At the Closing, the parties shall deliver and
accept all executed documents and instruments and take all other action required
of them pursuant to this Agreement, unless otherwise provided in this Agreement.
5.3 Purchaser shall have the option (the "First
Extension Option") to adjourn the Closing Date if, on or before June 29, 2000
(TIME BEING OF THE ESSENCE of such date), all of the following shall occur: (i)
Purchaser shall have been unable, notwithstanding the exercise of commercially
reasonable efforts, to obtain (a) the Zoning Approvals and (b) all approvals
(including, without limitation, execution and delivery of a contract of sale for
the In Rem Parcels, and receipt of final non- appealable approvals under the New
York City Uniform Land Use Review Procedure) (collectively, the "In Rem Sale
Approvals") necessary for the City of New York to authorize disposition of the
In Rem Parcels to Purchaser; (ii) Purchaser shall pay the sum of ONE MILLION
DOLLARS ($1,000,000.00) (the "First Additional Deposit") by good check drawn by
Purchaser subject to collection or official bank check, in either case drawn on
a bank which is a member of the New York Clearing House Association, payable to
the order of Seller, or by wire transfer of immediately available federal funds
to Seller's account; and (iii) Purchaser shall notify Seller in writing of the
occurrence of the matters referred to in this Section 5.3 and of the exercise by
Purchaser of the First Extension Option. Upon the exercise of the First
Extension Option, the Closing Date shall be adjourned to January 11, 2001. Upon
the payment of the First Additional Deposit, the term "Deposit" shall be deemed
to include the First Additional Deposit.
5.4 Purchaser shall have the option (the "Second
Extension Option") to adjourn the Closing Date if, on or before December 28,
2000 (TIME BEING OF THE ESSENCE of such date), all of the following shall occur:
(i) Purchaser shall have been unable, notwithstanding the exercise of
commercially reasonable efforts, to obtain (a) the Zoning Approvals and (b) the
In Rem Sale Approvals; (ii) Purchaser shall pay the sum of FIVE HUNDRED THOUSAND
DOLLARS ($500,000.00) (the "Second Additional Deposit") by good check drawn by
Purchaser subject to collection or official bank check, in either case drawn on
a bank which is a member of the New York Clearing House Association, payable to
the order of Seller, or by wire transfer of immediately available federal funds
to Seller's account; and (iii) Purchaser shall notify Seller in writing of the
occurrence of the matters referred to in this Section 5.4 and of the exercise by
Purchaser of the Second Extension Option. Upon the exercise of the Second
Extension Option, the Closing Date shall be adjourned to April 11, 2001. Upon
the payment of the Second Additional Deposit, the term "Deposit" shall be deemed
to include the Second Additional Deposit.
5.5 TIME SHALL BE OF THE ESSENCE to Purchaser's and
Seller's obligation to close title on the Closing Date, subject only to (a) in
the case of Purchaser, the First Extension Option and the Second Extension
Option, (b) in the case of Seller, Seller's rights to extend or adjourn the
Closing as set forth in Article 14, and (c) the right of either party to adjourn
the Closing for one or more periods not to
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exceed, with respect to each party, 15 Business Days in the aggregate. Purchaser
shall have the right to accelerate the Closing Date to a date which is earlier
than the then-scheduled Closing Date by giving Seller a notice of acceleration,
which notice shall set forth a date for the Closing which is not earlier than 30
days following the date of such notice and which notice shall state that
Purchaser has waived the conditions set forth in Section 11.1.4; Seller's
obligation to close title on the Closing Date as so accelerated shall be
subject, nevertheless, to Seller's rights to extend or adjourn as provided in
clauses (b) and (c) of the preceding sentence of this Section 5.5. Nothing
contained in this Article 5 shall be construed as impairing or abrogating any
right granted elsewhere in this Agreement to either party unilaterally to extend
the Closing Date.
6. APPORTIONMENTS.
6.1 At the Closing (except where a later date is
specifically provided for in this Article), the parties shall adjust the items
set forth below as of 11:59 P.M. on the day preceding the Closing Date (the
"Adjustment Point"), and the net amount thereof shall be paid by Purchaser to
Seller, or credited by Seller to Purchaser against the balance of the Purchase
Price, as the case may be, at the Closing. At the Closing, the following items
shall be apportioned between the parties hereto as of the Adjustment Point, with
Seller to be obligated for amounts apportioned to the period through and
including the Adjustment Point and Purchaser to be obligated for amounts
apportioned to the period following the Adjustment Point:
6.1.1 Impositions payable by Seller in
respect of the Premises on the basis of the fiscal year or fiscal years for
which the same are imposed, whether or not yet due and payable as of the Closing
Date. In the case of special assessments payable in installments, the
installment for the fiscal year in which the Adjustment Point occurs will be
apportioned as provided above.
6.1.2 Water and sewer charges, if any,
payable by Seller on the basis of the period or periods for which the same are
payable. If there are water meters on the Premises or any portion thereof Seller
shall furnish readings to a date not more than thirty (30) days prior to the
Closing Date, and the unfixed meter charges and the unfixed sewer charges, if
any, based thereon for the intervening time shall be apportioned on the basis of
such last readings.
6.1.3 Fees and charges payable pursuant to
the Fence Agreement.
6.1.4 Any other items of income or expense
of the Premises which, in accordance with generally accepted accounting
principles and business practices, should be apportioned between Seller and
Purchaser.
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6.2 Seller will deliver to Purchaser prior to the
Closing a copy of a proposed adjustment statement, showing all adjustments to be
made at the Closing. If Purchaser agrees with the figures set forth in such
proposed adjustment statement, Purchaser shall notify Seller that Purchaser will
execute and return counterparts of such adjustment statement at the Closing;
otherwise the parties shall seek immediately to reconcile any difference. To the
extent that there is an error or omission in any of the adjustments made and the
same is discovered following the Closing, the parties agree to rectify the same
as promptly as possible following such discovery.
6.3 The provisions of this Article 6 shall survive
the Closing.
7. DOCUMENTS TO BE DELIVERED AT THE CLOSING.
7.1 At or prior to the Closing, Seller will deliver
or cause to be delivered to Purchaser each of the instruments and documents
listed in this Section 7.1, executed and acknowledged where appropriate, but
none of the documents shall be deemed delivered or any other action taken until
all Closing deliveries and actions are complete:
7.1.1 A bargain and sale deed without
covenant against grantor's acts (the "Deed"), in proper statutory form for
recording, conveying the fee simple title to the Premises from Seller to
Purchaser subject only to the Permitted Exceptions, in the form of Exhibit C.
7.1.2 An affidavit that Seller is not a
"foreign person" within the meaning of Section 1445 of the Internal Revenue
Code.
7.1.3 Counterparts of the adjustment
statement showing all adjustments in respect of the Purchase Price to be made at
the Closing.
7.1.4 All transfer tax and other tax
returns, if any, which Seller is required by law to execute and acknowledge and
to deliver, either individually or together with Purchaser, to any Governmental
Authority as a result of the sale, together with checks made payable to the
appropriate Governmental Authority in the required amounts.
7.1.5 A certificate of Seller that the
representations and warranties of Seller set forth in Section 8.3 hereof, are
true, correct and complete in all material respects as of the Closing Date,
subject to changes between the date hereof and the Closing Date in accordance
with the provisions of Article 13. Notwithstanding the foregoing, those
representations which are expressly stated to be made as of the date hereof will
not be redated as of the Closing Date, and (x) Purchaser shall have no claim
against Seller hereunder if any such representations cease to be true between
the date hereof and the Closing Date, and (y) it shall not be a condition to
Purchaser's
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obligation to close title on the Closing Date that any such representations
continue to be true as of the Closing Date.
7.1.6 A copy of the resolutions of Seller,
certified by the secretary or an assistant secretary of such party, which
authorize (i) the transactions contemplated by this Agreement, and (ii) the
execution of the documents, instruments and agreements to be executed and
delivered by Seller, together with an incumbency certificate of Seller setting
forth the name(s) and title(s) of the person(s) executing and delivering such
documents, instruments and agreements on behalf of Seller.
7.1.7 A copy of the filed certificate of
formation of Seller, certified by the Secretary of State of Delaware, a
certificate of qualification to do business in the State of New York, together
with a certificate of subsistence for Seller from the appropriate officers of
the States of Delaware and New York, dated within thirty (30) days of the
Closing Date.
7.1.8 An assignment to Purchaser of all of
Seller's right, title and interest in, to and under the Fence Agreement.
7.1.9 Such customary affidavit as may be
reasonably required by the Title Company in connection with the issuance to
Purchaser of the owner's policy, provided that such affidavit does not impose on
Seller any material liabilities not assumed by it under this Agreement (it being
agreed that an affidavit in customary form which is required to remove the
standard pre-printed exceptions for tenants in possession and inchoate liens in
respect of work performed by Seller will not be deemed to impose material
liabilities on Seller); and a customary indemnity by Seller in favor of the
Title Company as may be reasonably required by the Title Company in connection
with omission of exceptions for liens of possible unpaid New York State
franchise taxes of Seller and inchoate municipal liens.
7.1.10 All other instruments and documents,
if any, to be executed, acknowledged and delivered by Seller pursuant to any of
the other provisions of this Agreement.
7.2 At or prior to the Closing, Purchaser will
deliver or cause to be delivered to Seller or such other parties indicated below
each of the payments, documents and instruments listed in this Section 7.2, such
instruments and documents to be executed and acknowledged where appropriate, but
none of the documents shall be deemed delivered or any other action taken until
all Closing deliveries and actions are complete:
7.2.1 The balance of the Purchase Price as
set forth in subsection 3.1.2 hereof, together with any other sums which are
payable to Seller at the Closing.
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7.2.2 Counterparts of each of the
instruments and documents listed in subsections 7.1.3 and 7.1.4.
7.2.3 A copy of the resolutions of the Board
of Directors of Purchaser, certified to by the secretary or an assistant
secretary of Purchaser, which authorize (i) the transactions contemplated by
this Agreement, and (ii) the execution of the documents, instruments and
agreements to be executed and delivered by Purchaser by the person executing and
delivering the same on behalf of Purchaser, together with an incumbency
certificate of Purchaser setting forth the name(s) and title(s) of the person(s)
executing and delivering such documents, instruments and agreements on behalf of
Purchaser.
7.2.4 A certificate of Purchaser that the
representations and warranties of Purchaser set forth in Section 8.2 and Article
9 hereof are true, correct and complete as of the Closing Date.
7.2.5 An acceptance of assignment and
assumption by Purchaser of all of Seller's obligations under the Fence
Agreement.
7.2.6 All other instruments and documents,
if any, to be executed, acknowledged and delivered by Purchaser pursuant to any
of the other provisions of this Agreement.
8. PREMISES CONVEYED AS IS; OTHER REPRESENTATIONS AND
WARRANTIES OF SELLER.
8.1 Purchaser acknowledges that, except as expressly
set forth in this Agreement and in the documents and instruments delivered at
the Closing, neither Seller nor any agent or representative or purported agent
or representative of Seller has made, and Seller is not liable for or bound in
any manner by, any express or implied warranties, guaranties, promises,
statements, inducements, representations or information pertaining to the
Premises or any part thereof, the physical condition, environmental matters,
zoning, income, expenses or operation thereof, the uses which can be made of the
same or any other matter or thing with respect thereto, including, without
limitation, any existing or prospective Leases or Other Agreements. Without
limiting the foregoing, the Purchaser acknowledges and agrees that, except as
expressly set forth in this Agreement and in the documents and instruments
delivered at the Closing, Seller is not liable for or bound by (and Purchaser
has not relied upon) any verbal or written statements, representations, real
estate brokers' "set-ups" or any other information respecting the Premises
furnished by Seller or any broker, employee, agent, consultant or other person
representing or purportedly representing Seller.
8.2 Purchaser represents that it has inspected,
examined and investigated (or has waived, inspection, examination and
investigation of) the Premises, the physical and environmental conditions
thereof, the uses thereof, zoning
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matters, the Fence Agreement, and the books and records kept by Seller in
connection therewith to its satisfaction, that it has independently
investigated, analyzed and appraised (or has waived investigation, analysis and
appraisal of) the value and the profitability thereof and that, unless otherwise
expressly provided in this Agreement, it is purchasing the Premises "as is" at
the date of this Agreement, subject to reasonable wear and tear and changes
between the date hereof and the Closing Date in accordance with the provisions
of Article 13.
8.3 Seller hereby represents and warrants to
Purchaser as follows:
8.3.1 Seller is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware; it has the power, right, authority and legal capacity to
execute and deliver this Agreement and the other documents, instruments,
certificates and agreements required to be executed and delivered by it
hereunder and to enter into and perform the transactions contemplated hereby.
8.3.2 All resolutions, authorizations and
other actions required to be taken by or on the part of the partners of Seller
which are necessary to approve or authorize the execution of this Agreement by
Seller and the consummation of the transactions contemplated herein have been
obtained and taken.
8.3.3 Neither the entry into nor the
performance of this Agreement by Seller will (i) violate, conflict with, result
in a breach under, or constitute a default under, Seller's organizational
documents or any indenture, contract, permit, judgment, decree or order to which
Seller is a party or by which Seller is bound, or (ii) require the consent of
any third party other than as has already been obtained or is otherwise
specifically treated in this Agreement.
8.3.4 Seller is not a "foreign person"
within the meaning of Section 1445 of the Internal Revenue Code.
8.3.5 No Leases affect the Premises.
8.3.6 No Other Agreements affect the
Premises other than the Fence Agreement.
8.3.7 As of the date hereof, no
condemnation, eminent domain or similar proceeding in which Seller has been
served with process or of which Seller is otherwise aware is pending with
respect to all or any part of the Premises, and Seller has no knowledge that any
such proceeding is threatened or contemplated.
8.3.8 Seller has no knowledge of the
existence of any consents of the nature referred to in Section 4.1.6.
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8.3.9 Seller has no right, title or interest
in or to the In Rem Parcels.
8.3.10 Seller has received no reports
related to hazardous substances or environmental laws as the same affect the
Premises or the In Rem Parcels other than (i) the Phase I Environmental Site
Assessment Report, dated August 1997, prepared by E.A.I., Inc. (a copy of which
has previously been delivered to Purchaser), and (ii) the report, dated June 17,
1999, and the subsoil investigation plans, dated December 4, 1998 and May 20,
1000, prepared by Soil Mechanics Drilling Corp. (copies of which have previously
been delivered to Purchaser).
8.3.11 As of the date hereof, Seller has no
knowledge of the existence of any Violations which have not been discharged or
otherwise satisfied.
8.3.12 As of the date hereof, no litigation
is pending or, to Seller's knowledge, threatened affecting the Premises.
8.3.13 As of the date hereof, Seller is not
the subject of any voluntary proceedings in bankruptcy or insolvency and, to
Seller's knowledge, Seller is not the subject of any involuntary proceedings in
bankruptcy or insolvency.
8.4 All representations and warranties made herein by
Seller which are based on Seller's knowledge or which refer to notices received
by Seller are made, and are hereby acknowledged by Purchaser to be made, without
independent investigation regarding the facts contained therein except as
otherwise expressly provided herein.
8.5 The representations and warranties of Purchaser
set forth in Sections 8.1 and 8.2 hereof, and the representations and warranties
of Seller set forth in subsections 8.3.1 through 8.3.4 hereof shall survive the
Closing without limitation as to time. The representations and warranties of
Seller set forth in subsections 8.3.5 through 8.3.13 shall survive the Closing
for a period of twelve (12) months.
8.6 Claims by Purchaser following the Closing based
on a breach of a warranty or representation shall be made by written notice to
Seller within twelve (12) months following the Closing. Each such notice shall
set forth in reasonable detail the nature of the claim or claims and the
provision of this Agreement claimed to be breached thereby. In the event that
Seller and Purchaser are unable to agree upon the resolution of any such claim,
Purchaser shall institute legal proceedings in respect thereof against Seller
within six (6) months following the date of Purchaser's written notice to
Seller. If Purchaser fails in any case to give written notice to Seller of any
such claim or to institute legal proceedings in respect of any such unresolved
claim within the time period as aforesaid, then such claim or claims shall be
deemed waived and shall lapse. Seller shall not be liable to Purchaser, nor
shall the Purchaser make a
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claim in any legal proceedings, for the first $50,000 of any damages suffered by
Purchaser in the aggregate on account of any breaches of representation or
warranty by Seller hereunder.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
9.1 Purchaser hereby represents and warrants to
Seller as follows:
9.1.1 Purchaser is a corporation duly
organized and validly existing under the laws of the State of Delaware;
Purchaser is authorized to do business in the State of New York; it has the
power, right, authority and legal capacity to execute and deliver this Agreement
and the other documents, instruments, certificates and agreements required to be
executed and delivered by it hereunder and to enter into and perform the
transactions contemplated hereby.
9.1.2 All consents, authorizations and other
actions required to be taken by or on the part of Purchaser which are necessary
to approve or authorize the execution of this Agreement by Purchaser and
consummation of the transactions contemplated herein have been obtained and
taken.
9.1.3 Neither the entry into nor the
performance of this Agreement by Purchaser will (i) violate, conflict with,
result in a breach under, or constitute a default under, any corporate charter,
certificate of incorporation, by-law, statute, regulatory restriction,
indenture, contract, permit, judgment, decree or order to which Purchaser is a
party or by which Purchaser is bound, or (ii) require the consent of any
Governmental Authority or other third party other than as has already been
obtained or is otherwise specifically treated in this Agreement.
9.1.4 Purchaser is not the subject of any
voluntary proceedings in bankruptcy or insolvency and, to Purchaser's knowledge,
Purchaser is not the subject of any involuntary proceedings in bankruptcy or
insolvency.
9.2 Purchaser covenants to use commercially
reasonable efforts to obtain from applicable Governmental Authorities: (i) the
Zoning Approvals; and (ii) the In Rem Sale Approvals. Purchaser shall notify
Seller of the making of any applications, the filing of any requests, and the
sending or receipt of any correspondence or other communications (including,
without limitation, drafts of any of the aforementioned which are to be
submitted to any Governmental Authority) in connection with such approvals,
shall deliver to Seller (x) at least five (5) days before filing with the
applicable Governmental Authorities copies of all such applications (including
amendments thereto and drafts, as aforesaid) related thereto, and (y)
simultaneously with the delivery to the applicable Governmental Authorities
copies of all requests, correspondence and other documentation, and shall at all
times keep Seller apprised as to the status of the approval processes. In no
event shall Purchaser make,
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submit or deliver any application or amendment thereto to any Governmental
Authority (A) which does not constitute a Permissible Use, or (B) which shall
not have theretofore been reviewed and approved by Seller to the extent
reasonably necessary to determine whether the same complies with the
requirements of this Agreement. Seller agrees to execute such documents as may
be reasonably requested by Purchaser and otherwise reasonably cooperate with
Purchaser to enable Purchaser to obtain the Zoning Approvals and the In Rem Sale
Approvals; provided Purchaser shall, upon demand, reimburse Seller for all
reasonable out-of-pocket costs and expenses (including reasonable attorneys'
fees and disbursements), up to an aggregate sum of $25,000.00, incurred or to be
incurred by Seller in connection with the review or execution of such documents,
the review of Purchaser's submissions in connection with obtaining such
approvals, or the other matters contemplated by this Section 9.2 to the extent
necessary to determine compliance with this Section 9.2. Purchaser shall pay the
expenses of its own counsel in preparing and negotiating such documents, and
shall pay the entire costs of filing any such documents with Governmental
Authorities. In connection with any such approvals (but subject to Article 27),
Purchaser may deliver to the applicable Governmental Authorities a photocopy of
this Agreement with the Purchase Price and the amount of all deposits deleted
therefrom.
9.3 Purchaser covenants to pay each installment of
the Deposit in the manner and on the dates specified in Sections 3.1.1 and
3.1.2.
9.4 The representations and warranties of Purchaser
set forth in Section 9.1 shall survive the Closing without limitation as to
time.
10. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE TITLE.
10.1 The obligation of Seller to close title under
this Agreement is expressly conditioned upon the fulfillment by and as of the
Closing Date of each of the conditions listed below; provided that Seller, at
its election, may waive all or any of such conditions; provided, further, that
if any of such conditions are not fulfilled or waived, Seller may terminate this
Agreement and Article 16 shall govern:
10.1.1 Purchaser shall have paid to Seller
the balance of the Purchase Price as provided in Article 3 hereof, less any
credits granted to Purchaser and together with other amounts payable by
Purchaser to Seller, if any, pursuant to the terms of this Agreement.
10.1.2 Purchaser shall have delivered or
caused to be delivered at Closing all documents and executed counterparts of
documents and instruments required by this Agreement to be delivered by
Purchaser and shall have taken all other action and fulfilled all other
conditions required of Purchaser under this Agreement.
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10.1.3 All representations and warranties of
Purchaser set forth in Sections 8.1 and 8.2 and Article 9 shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of such date.
11. CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE TITLE.
11.1 The obligation of Purchaser to close title under
this Agreement is conditioned upon the fulfillment by and as of the Closing Date
of each of the conditions listed below; provided that Purchaser, at its
election, may waive all or any of such conditions; provided, further, that if
any of such conditions are not fulfilled or waived, Purchaser may terminate this
Agreement and Article 16 shall govern:
11.1.1 Seller shall have executed and
delivered or caused to be executed and delivered at or prior to Closing all of
the documents and instruments required by this Agreement to be delivered by
Seller and shall have taken all other action and fulfilled all other conditions
required of Seller under this Agreement.
11.1.2 The representations and warranties of
Seller set forth in Section 8.3 shall be true and correct in all material
respects on and as of the Closing Date as if made on and as of such date,
subject, however, to changes between the date hereof and the Closing Date in
accordance with the provisions of Article 13. Notwithstanding the foregoing, it
shall not be a condition to Purchaser's obligation to close title on the Closing
Date that any representations which are expressly stated to be made as of the
date hereof continue to be true as of the Closing Date.
11.1.3 Seller shall have performed its
covenants set forth in Section 13.4(iv) or 13.4(v) or, if Seller shall have
breached such covenants, such breach shall not have irreparably harmed the
process for Purchaser to obtain the In Rem Sale Approvals or the Zoning
Approvals.
11.1.4 Purchaser shall have obtained the
Zoning Approvals and the In Rem Sale Approvals.
12. RISK OF LOSS.
12.1 If, prior to the Closing Date, a
Significant Taking of the Premises shall occur, or the Premises is the subject
of a pending Significant Taking in which title to the Premises has not yet
vested in the condemnor, Seller shall notify Purchaser of such fact. Purchaser
shall have the option to terminate this Agreement upon notice to Seller given
not later than thirty (30) days after the giving of Seller's notice. If this
Agreement is terminated as aforesaid, the Deposit (together with interest
thereon at the Interest Rate from the date the Deposit or each installment
thereof is paid to Seller until the date so refunded to Purchaser) shall be
returned to Purchaser and thereafter neither Seller nor Purchaser shall have any
further rights or obligations to the
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other hereunder except with respect to those obligations hereunder which
expressly survive termination.
12.2 In the case of fire or other casualty causing
damage to the Improvements, Seller shall not be obligated to repair such damage
or destruction but (x) Seller shall assign and turn over to Purchaser all of the
insurance proceeds net of reasonable collection costs (or, if such have not been
awarded, all of its right, title and interest therein) payable with respect to
such fire or other casualty and (y) the parties shall proceed to Closing
pursuant to the terms hereof without modification of the terms of this
Agreement.
12.3 In case of a taking, if Purchaser does not
timely elect to terminate this Agreement as aforesaid, or if a taking which is
not a Significant Taking shall occur, there shall be no abatement of the
Purchase Price and, after deducting or providing for an allocation or
reimbursement to Seller of Seller's reasonable costs and expenses incurred in
collecting any award, Seller shall assign all remaining awards or any rights to
collect awards to Purchaser on the Closing Date.
12.4 Purchaser and Seller each hereby waive the New
York Vendor and Purchaser Risk Act (GOL Section 5-1311) and agree that the
provisions of this Article 12 shall govern the respective rights and obligations
of Purchaser and Seller with respect to the subject matter of this Article 12.
13. MATTERS AFFECTING THE PREMISES UNTIL CLOSING.
13.1 Seller agrees, between the date of this
Agreement and the Closing Date, to (i) maintain the Premises in accordance with
the current practices of Seller, and (ii) to make no alterations, additions or
improvements thereto (except as may be required to protect life or safety of
persons or property, to properly secure the Premises, or in connection with the
Fence Agreement), except as otherwise specifically provided in this Agreement.
13.2 Seller shall notify Purchaser of any of the
following matters which occur between the date of this Agreement and the Closing
Date: (i) notices of Violations affecting the Premises received by Seller, (ii)
litigation commenced by Seller, or litigation of which Seller has received
notice commenced against Seller, in either case with respect to the Premises,
(iii) notices of condemnation proceedings against all or any portion of the
Premises received by Seller, and (iv) casualty losses to the Premises. Seller
agrees to cure, prior to Closing, any Violation of which notice is first issued
between the date hereof and the Closing Date the existence of which prevents or
would prevent issuance of a building permit.
13.3 Between the date hereof and the Closing Date,
Purchaser and its authorized representatives, agents and employees shall have
the right, from time to time, upon reasonable advance notice to Seller, to enter
upon and pass through the
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Premises during normal business hours to examine and inspect the same. Purchaser
shall have the right, at its own risk, cost and expense, in each case upon
reasonable prior notice to Seller and with Seller having the right to have a
representative present, to enter, or cause its agents or representatives to
enter, upon the Premises for the purpose of making inspections, investigations
and/or studies of the Premises, including environmental, soil and geological
tests (each, a "Study"). Purchaser covenants and agrees to supply Seller with
the results of any Study and copies of any report or document created in
connection with any Study promptly after receipt thereof. During the course of
any such entry Purchaser shall not cause, and shall not suffer or permit to
occur, any damage or injury to the Premises or any part thereof, and Purchaser
shall not, and shall not suffer or permit to occur, any material interference
with the management or operation of the Premises. If as a result of any entry or
activities conducted on the Premises by Purchaser or any of its agents,
contractors, consultants or other representatives the Premises sustain any
damage or injury, Purchaser shall pay to Seller on demand the cost of repairing
all such damage and injury, which obligation shall survive the termination of
this Agreement. In addition, Purchaser shall indemnify Seller from and against
all claims of third parties resulting from any such entry on the Premises by
Purchaser or any of its agents, contractors, consultants or other
representatives, or any Study or other activities conducted in or on the
Premises by them, or any of them, together with all expenses incurred by Seller
by reason thereof including, without limitation, reasonable attorneys' fees and
disbursements, which obligation shall survive the Closing or the termination of
this Agreement. Purchaser shall cause its contractors, agents or representatives
performing any Study to maintain policies of insurance in amounts customary for
the scope of work to be performed at the Premises and to deliver to Seller
certificates of insurance naming Seller as an additional insured under such
policies. In the event of any discrepancy between information contained in the
Exhibits and information in the underlying documents identified in the Exhibits
which are made available to Purchaser, the information contained in the
documents shall be deemed to control and to be known to Purchaser. Purchaser
agrees that it shall not interfere with Seller's operation of the Premises as
provided herein prior to the Closing Date.
13.4 Between the date hereof and the Closing Date,
(i) Seller shall maintain all insurance customarily maintained by Seller on the
Premises in full force and effect, (ii) Seller shall not without the prior
written consent of Purchaser enter into any new Other Agreements for the
Premises except those which can be canceled prior to Closing, (iii) Seller shall
not without the prior written consent of Purchaser enter into any new Lease for
the Premises except one that can be canceled prior to Closing, (iv) Seller shall
not acquire or make any application to acquire or take any action in an effort
to acquire the In Rem Parcels, and (v) Seller shall not file for any zoning
changes or similar approvals with respect to the Premises or the In Rem Parcels
or oppose or interfere with Purchaser's application made in compliance with
Section 9.2.
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13.5 Seller shall have the right, at any time and
from time to time, to file applications for the reduction of the assessed
valuation of the Premises and/or to institute certiorari proceedings to review
such assessed valuations for tax years commencing prior to the Closing Date (as
the same may be extended). Seller shall have sole control over such proceedings
until the Closing. After the Closing, Seller shall control the proceedings
relevant to any tax years commencing prior to the closing and Purchaser shall
control the proceedings any subsequent tax years. Such control shall include the
right to withdraw, compromise and/or settle any such proceeding and to take,
conduct, withdraw and/or settle appeals, and the non- controlling party consents
thereto. Any tax savings or refund for any year or years prior to the tax year
in which the Closing occurs shall belong to the Seller. Any tax savings or
refund for the tax year in which the Closing occurs shall be prorated between
Seller and Purchaser (based on the number of days of ownership during such tax
year) after deducting all fees and expenses relevant to the proceeding,
including legal fees. Purchaser will cooperate with Seller in facilitating the
settlement of any tax proceeding and/or the collecting of any amount of any tax
refund. The provisions of this Section 13.5 shall survive the Closing.
14. TITLE TO THE PREMISES.
14.1 Purchaser has ordered and shall deliver to
Seller within 20 days following the date hereof a copy of an owner's title
commitment with respect to the Premises issued by the Title Company. If such
title commitment shall show that title to the Premises is subject to matters
other than the Permitted Exceptions, Seller shall be entitled to adjourn the
Closing for one or more periods not to exceed ninety (90) days in the aggregate
from the Closing Date (as the same may have been extended) for the purpose of
causing title to be conveyed subject only to Permitted Exceptions. If additional
matters affecting title to the Premises become known following the delivery of
such title commitment to Seller, Seller shall be entitled to adjourn the Closing
for one or more periods not to exceed ninety (90) days in the aggregate from the
date to which the Closing Date had previously been extended, if any, for the
purpose of causing title to be conveyed subject only to the Permitted
Exceptions. If, at the end of the applicable of the above periods, Seller shall
be unable to convey title to the Premises subject only to the Permitted
Exceptions, either party may terminate this Agreement by notice to the other
party delivered at or prior to the Closing Date as so extended, in which event
this Agreement shall be terminated and of no further force or effect and neither
party shall have any obligations of any nature to the other hereunder or by
reason hereof, except that Seller shall return to Purchaser the Deposit
(together with interest thereon at the Interest Rate from the date the Deposit
or each installment thereof is paid to Seller until the date so refunded to
Purchaser), and except as to those obligations hereunder that are specifically
stated to survive such termination. Seller shall be under no obligation to take
any steps or to institute or prosecute any action or proceedings, or expend any
sums of money or effort to remove from title to the Premises any defect,
encumbrance or objection to title whether or not the remedying of the defect,
encumbrance or objection to title is within Seller's control; provided,
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however, that Seller shall be responsible to discharge or cause the Title
Company to omit as exceptions, (x) any liens or encumbrances which do not
constitute Permitted Exceptions, which liens or encumbrances arise on account of
obligations voluntarily and intentionally undertaken or actions voluntarily
performed by Seller or (y) any judgment liens which can be discharged solely by
the payment of a sum of money which does not exceed, in the aggregate, for all
such judgment liens, $50,000.00; provided further, however, Seller's obligation
to discharge or cause the Title Company to omit as exceptions any such liens or
encumbrances shall be deemed satisfied if Chicago Title Insurance Company
("CTIC") agrees to issue to Purchaser an owner's title insurance policy which
(x) omits as exceptions any such liens or encumbrances and (y) otherwise
complies with the requirements of this Article 14. Seller may use any part of
the Purchase Price to discharge the same, provided that Seller shall deliver to
Purchaser or the Title Company at the Closing instruments in recordable form
sufficient for the Title Company to discharge such liens and encumbrances of
record. Except for Seller's failure to discharge or cause the Title Company or
CTIC to omit as exceptions such liens or encumbrances as aforesaid, Seller shall
not be deemed in default of this Agreement, and Purchaser shall not be entitled
to damages of any kind by reason of the failure of Seller, for any reason
whatsoever, to convey title to the Premises in accordance with the provisions of
this Agreement, nor shall Purchaser in such circumstances be entitled to
specific performance of this Agreement. The existence of any Violations or fines
and/or penalties associated therewith shall not be an objection to title;
provided, however, that (i) with respect to Violations, if any, of which notice
has been issued prior to the date hereof, Purchaser shall be responsible to pay
or discharge the first $50,000.00 in fines and/or penalties levied in connection
with such Violations, and Seller shall be responsible to pay or discharge any
additional fines and/or penalties levied in connection with such Violations up
to a maximum aggregate amount of $50,000.00 and (ii) with respect to Violations
of which notice is first issued between the date hereof and the Closing, Seller
shall be obligated to cure the same if so required under Section 13.2.
14.2 Purchaser, at its election, evidenced by notice
given to Seller at any time prior to, or within five (5) Business Days
following, notice from Seller to terminate this Agreement pursuant to Section
14.1, but in any event on or before 10 A.M. on the Closing Date, may in writing
accept such title as Seller can convey, without reduction of the Purchase Price
or any credit or allowance on account thereof or any claim against Seller by
reason thereof.
14.3 If at the Closing the Premises is subject to any
matter encumbering title thereto other than matters which Seller is obligated to
discharge under Section 14.1 or Permitted Exceptions, such matter shall not be
deemed grounds for termination of this Agreement or any other remedy if the
Title Company or CTIC will affirmatively insure against enforcement of such
matter against the Premises by endorsement reasonably satisfactory to Purchaser,
at Seller's expense, if any. Except as set forth in Section 14.1, nothing in
this Section 14.3 shall be deemed to create any obligation on the part of Seller
to satisfy or to cause the Title Company or CTIC to
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issue affirmative insurance over any such liens, encumbrances or matters
affecting title which are not Permitted Exceptions.
14.4 The acceptance of the Deed by Purchaser from
Seller shall be deemed full performance on the part of Seller of all of its
obligations under this Agreement (including all promises, agreements,
conditions, representations and warranties), except as to any such obligation
which is specifically stated in this Agreement to survive the Closing or is
expressly contained in the documents delivered at Closing.
14.5 Notwithstanding anything herein to the contrary,
Purchaser acknowledges the existence of record of that certain Agreement,
between The City of New York and East Harlem Block Nursery, Inc., dated March
30, 1984, recorded in the Office of the City Register for New York County on
October 19, 1984 in Reel 841, Page 849, a copy of which has heretofore been
delivered to Purchaser. Purchaser agrees that the such Agreement shall not be
deemed an objection to title if the Title Company (or, if the Title Company
refuses to do so, CTIC) shall omit the same as an exception.
15. BROKERS, ETC.
15.1 Seller warrants and represents to Purchaser that
neither Seller nor any Affiliate of Seller has dealt with any broker, finder or
like agent who might claim a commission or fee in connection with the
transactions contemplated in this Agreement or on account of introducing the
parties, the preparation or submission of brochures, the negotiation or
execution of this Agreement or the Closing of the transactions contemplated
herein. Seller agrees to indemnify and hold harmless Purchaser and its
successors and assigns from and against any and all claims, losses, liabilities
and expenses, including without limitation reasonable attorneys' fees,
disbursements and charges, arising out of any claim or demand for commissions or
other compensation for bringing about this transaction by any broker, finder or
similar agent or party who claims to have dealt with Seller or any affiliate
thereof in connection with this transaction.
15.2 Purchaser warrants and represents to Seller that
neither Purchaser, nor any Affiliate of Purchaser, has dealt with any broker,
finder or like agent who might claim a commission or fee in connection with the
transactions contemplated in this Agreement or on account of introducing the
parties, the preparation or submission of brochures, the negotiation or
execution of this Agreement or the closing of the transactions contemplated
herein other than Pacheco & Lugo (Carmen Pacheco) (the "Broker"), whose
compensation, if any, Purchaser agrees to pay pursuant to a separate agreement.
Purchaser agrees to indemnify and hold harmless Seller and its successors and
assigns from and against any and all claims, losses, liabilities and expenses,
including without limitation reasonable attorneys' fees, disbursements and
charges, arising out of any claim or demand for commissions or
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other compensation for bringing about this transaction by the Broker or any
other broker, finder or similar agent or party who claims to have dealt with
Purchaser or any affiliate thereof in connection with this transaction.
15.3 The provisions of this Article 15 shall survive
the Closing or termination of this Agreement.
16. TERMINATION OF AGREEMENT; DEFAULT.
16.1 If this Agreement shall terminate or be
terminated (i) by mutual consent of Seller or Purchaser, (ii) pursuant to the
express provisions of Sections 12.1 or 14.1, or (iii) because one or more
conditions to Purchaser's obligation to close title as set forth in Article 11
(other than Section 11.1.4, which shall not entitle Purchaser to terminate this
Agreement) shall fail to be fulfilled or waived by Purchaser, and such failure
is not due to the default by Purchaser of its obligations hereunder, then upon
such termination (A) at Seller's option, Purchaser shall assign and transfer to
Seller all of Purchaser's right, title and interest in and to the In Rem
Parcels(to the extent assignable and, if Purchaser shall theretofore have
acquired title to the In Rem Parcels, Purchaser shall transfer same to Seller
upon the same terms as Purchaser acquired the same and Seller shall pay
Purchaser its actual, out-of-pocket cost to acquire same), and (B) Seller shall
return to Purchaser the Deposit (together with interest thereon at the Interest
Rate from the date the Deposit or each installment thereof is paid to Seller
until the date so refunded to Purchaser). Except for the foregoing, and for
those obligations hereunder that are specifically stated to survive termination
hereof, following the termination of this Agreement neither party shall have any
obligations of any nature to the other hereunder or by reason hereof.
16.2 If at the Closing Date either (i) the conditions
to the obligation of Seller to close title as set forth in Article 10 hereof
have not been fulfilled on account of the default of Purchaser hereunder, and
such conditions have not been waived by Seller, and the Closing shall not occur,
or (ii) this Agreement shall terminate or be terminated because one or more
conditions to Purchaser's obligation to close title as set forth in Section
11.1.4 shall not have been fulfilled and such condition shall not have been
waived by Purchaser, or if Purchaser shall breach any covenant set forth in
Section 9.2, then and in any such event (A) at Seller's option, Purchaser shall
assign and transfer to Seller all of Purchaser's right, title and interest in
and to the In Rem Parcels (to the extent assignable and, if Purchaser shall
theretofore have acquired title to the In Rem Parcels, Purchaser shall transfer
same to Seller upon the same terms as Purchaser acquired the same and Seller
shall pay Purchaser its actual, out-of-pocket cost to acquire same), and (B)
Seller shall be entitled, as its sole remedy (other than the right to seek
specific performance of Purchaser's obligations set forth in clause (A) of this
Section 16.2 and in clause (A) of Section 16.1, and the right to payment of
attorneys' fees, as provided in Article 28), to retain the Deposit as liquidated
damages for loss of a bargain and not as a penalty. Purchaser and Seller agree
that such liquidated damages are based in part upon the following damages which
Seller shall
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suffer on account of a default by Purchaser and the failure of the Closing to
occur, which damages Purchaser and Seller agree are incapable of an exact
determination of amount: the removal of the Premises from the real estate market
during the period of this Agreement and the loss of the possibility of obtaining
a new purchaser during such time at a higher amount; the possibility of being
unable to find a new purchaser for the amount of the Purchase Price after
Purchaser's default; various restrictions related to the management and
maintenance of the Premises during the period of this Agreement, including
without limitation restrictions against entering into new Leases; and the
inconvenience of relisting the Premises for lease and/or sale. PURCHASER
EXPRESSLY ACKNOWLEDGES AND AGREES THAT THE DEPOSIT (INCLUDING, TO THE EXTENT
PAID, THE FIRST ADDITIONAL DEPOSIT AND THE SECOND ADDITIONAL DEPOSIT) SHALL BE
NON-REFUNDABLE AND SHALL BE RETAINED BY SELLER EXCEPT TO THE EXTENT EXPRESSLY
PROVIDED IN SECTION 16.1 HEREOF. THE PROVISIONS OF THIS AGREEMENT REGARDING
NON-REFUNDABILITY OF THE DEPOSIT (INCLUDING, TO THE EXTENT PAID, THE FIRST
ADDITIONAL DEPOSIT AND THE SECOND ADDITIONAL DEPOSIT) CONSTITUTE A MATERIAL
INDUCEMENT TO SELLER TO ENTER INTO THIS AGREEMENT AND PURCHASER ACKNOWLEDGES
THAT, ABSENT SUCH PROVISIONS, SELLER WOULD NOT HAVE ENTERED INTO THIS AGREEMENT.
PURCHASER SHALL HAVE NO INTEREST IN OR CLAIM TO REFUND OF ALL OR ANY PORTION OF
THE DEPOSIT (INCLUDING, TO THE EXTENT PAID, THE FIRST ADDITIONAL DEPOSIT AND THE
SECOND ADDITIONAL DEPOSIT) EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN SECTION
16.1 HEREOF.
PURCHASER'S INITIALS
16.3 If at the Closing Date the conditions to the
obligation of Purchaser to close title as set forth in Article 11 hereof have
not been fulfilled on account of the willful default of Seller hereunder, and
such conditions have not been waived by Purchaser, and the Closing shall not
occur, then Purchaser shall be entitled to seek specific performance of Seller's
obligations under this Agreement. If Seller shall willfully default under its
obligations hereunder, then Purchaser shall be entitled to seek to enjoin such
willful default of Seller and, if such final, non-appealable injunctive relief
is granted against Seller then, provided Purchaser timely deposits into escrow
with Seller's attorneys the amount of the First Additional Deposit or the Second
Additional Deposit, as applicable, the date by which the First Extension Option
or the Second Extension Option are required to be exercised and the Closing Date
(as theretofore extended) shall be extended by a period equal to the number of
days from the date such breach commenced until such judgment is issued.
Purchaser hereby waives any right to sue Seller for damages (including, without
limitation, consequential and punitive damages, but excluding (i) its right to
the payment of attorneys' fees as provided in Article 28 and (ii) the right to
seek actual damages (but not consequential or punitive damages) upon the
issuance of a final, non-appealable judgment finding that
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Seller has committed fraud or intentional waste)) for any default hereunder. No
partner, officer, or member of Seller shall have any personal liability,
directly or indirectly, to Purchaser hereunder, and Purchaser, for itself and
its successors and assigns, hereby waives all rights to proceed directly and
personally against any partner, officer, or member of Seller or against any
assets of any such partner, officer, or member under or in connection with this
Agreement.
16.4 The provisions of this Article 16 shall survive
the termination of this Agreement.
17. EXPENSES OF THE TRANSACTION.
17.1 Seller shall pay the New York State Real Estate
Transfer Tax, New York City Real Property Transfer Tax and the New York City
Real Property Transfer Tax Return Filing Fee, and any other like taxes or
charges imposed by Governmental Authorities on the transfer of the Premises.
Seller shall pay all recording and filing fees and charges in connection with
satisfaction of any liens or encumbrances to be removed or satisfied by Seller
pursuant to Section 14.1. Purchaser shall pay all other recording and filing
fees and charges in connection with such transfer.
17.2 Purchaser and Seller shall each execute,
acknowledge and deliver at the Closing all affidavits, returns and supporting
documentation required by Governmental Authorities in connection with the New
York State Real Estate Transfer Tax, the New York City Real Property Transfer
Tax and any sales (including bulk sales) or use taxes.
17.3 Seller shall deliver to the Title Company at
Closing certified checks in the respective amounts of the New York State Real
Estate Transfer Tax and New York City Real Property Transfer Tax payable by
Seller pursuant to the terms of Section 17.1, payable to the order of the
appropriate governmental officer; provided that Seller may direct that Purchaser
deliver such checks directly to the Title Company and the amount of such checks
shall be credited against the balance of the Purchase Price due to Seller.
17.4 Purchaser shall pay all title insurance and
survey charges in connection with the transfer of the Premises.
17.5 Each party shall pay the fees, charges and
disbursements of its own counsel, accountants and other advisors in connection
with the negotiation and preparation of this Agreement and the Closing.
17.6 The provisions of this Article 17 shall survive
the Closing (or, with respect to Sections 17.4 and 17.5, the termination) of
this Agreement.
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18. NOTICES.
Except as otherwise provided in this Agreement, all notices,
demands, requests, consents, approvals or other communications which are
required or permitted to be given under this Agreement or which either party
desires to give with respect to this Agreement shall be in writing and shall be
deemed to have been properly given or served if (i) delivered by hand, (ii) sent
by telecopy with the original sent by first-class mail, postage prepaid, (iii)
sent by registered or certified mail, postage prepaid, return receipt requested,
or (iv) sent by reputable overnight courier service for next Business Day
delivery with requirement of signed receipt upon delivery, in each case
addressed to the party to be notified as follows (or to such other address as
such party shall have specified at least ten (10) days prior thereto by like
notice):
if to Seller, to:
Castle Senior Living, LLC
405 Cedar Lane
Teaneck, New Jersey 07666
Attention: Stanley Diamond, Esq.
Telecopier: (201) 836-5577
with a copy at the same time to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Meredith J. Kane, Esq.
Telecopier (212) 373-2322
if to Purchaser, to:
Edison Schools Inc.
521 Fifth Avenue, 15th Floor
New York, New York 10175
Attention: David A. Graff, Esq.,
Deputy General Counsel
Telecopier: (212) 419-1868
with a copy at the same time to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166
Attention: Joanne Franzel, Esq.
Telecopier: (212) 351-4035
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Notices shall be deemed given when delivered by hand, or if delivered by
telecopy when telecopied (provided, however, notices delivered by telecopy on a
day which is not a Business Day or after 5:00 p.m. on a Business Day shall be
deemed given on the next Business Day), or if delivered only by mail, three (3)
days after mailing or one (1) Business Day after deposit with an overnight
courier service, in each case with failure to accept delivery to constitute
delivery for purposes hereof.
19. FURTHER ASSURANCES.
19.1 Each of Seller and Purchaser agrees, at any time
and from time to time after the Closing, to execute, acknowledge, where
appropriate, and deliver such further instruments and documents and to take such
other action as the other party may reasonably request in order to carry out the
intents and purposes of this Agreement, provided that (i) such request is made
by notice given within two (2) years of the Closing Date and (ii) the documents
requested to be delivered or actions requested to be taken impose no additional
liability on the party delivering or taking the same than is imposed under this
Agreement or in the documents delivered at the Closing. If required by the party
receiving the request, the party making the request will bear the reasonable
cost involved.
19.2 The provisions of this Article 19 shall survive
the Closing.
20. GOVERNING LAW.
20.1 This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of New York applicable to
contracts negotiated, executed and to be performed wholly within such State.
20.2 Each party hereto acknowledges that it was
represented by counsel in connection with this Agreement and the transactions
contemplated herein, that it and its counsel reviewed and participated in the
preparation and negotiation of this Agreement and the documents and instruments
to be delivered hereunder, and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement or the documents and instruments to be
delivered hereunder.
21. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARY, ETC.
This Agreement, including all Exhibits, constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior understandings, if any, with respect thereto. The parties
have made no representations with respect to the subject matter of this
Agreement and have given no warranties with respect to the subject matter hereof
except as expressly provided herein and/or expressly provided in the documents
delivered at Closing. This Agreement may not be modified, changed, supplemented
or terminated, nor may any obligations hereunder be
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waived, except by written instrument signed by the party to be charged or by its
agent duly authorized in writing or as otherwise expressly permitted herein. The
parties do not intend to confer any benefit hereunder on any person, firm or
corporation other than the parties hereto. The provisions of this Article 21
shall survive the Closing or termination of this Agreement.
22. WAIVERS; EXTENSIONS.
No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
or of any other agreement or provision herein contained. No extension of time
for performance of any obligation or act shall be deemed an extension of the
time for performance of any other obligations or acts. The provisions of this
Article 22 shall survive the Closing or termination of this Agreement.
23. CONSTRUCTION; SEVERABILITY.
Headings at the beginning of each Article and Section are not
a part of this Agreement. Whenever required by the context of this Agreement,
the singular shall include the plural and the masculine shall include the
feminine and vice versa. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if both parties had prepared the
same. All Exhibits and Schedules referred to in this Agreement are attached and
incorporated herein by reference, and any capitalized term used in any Exhibit
which is not defined in such Exhibit shall have the meaning attributed to such
term in the body of this Agreement. In the event the date on which Purchaser or
Seller is required to take any action under the terms of this Agreement is not a
Business Day, the action shall be taken on the next succeeding Business Day. If
any provision of this Agreement shall be deemed invalid, it shall be deemed
severed from this Agreement and the remainder of this Agreement shall be
interpreted as if such invalid provision had not been contained herein.
24. ASSIGNMENT.
Purchaser shall not have the right, without the prior written
consent of Seller, which may be withheld or granted in Seller's sole discretion,
to assign this Agreement or its rights hereunder, in whole or in part, to any
other person; provided, however, Purchaser may upon 5 Business Days' notice to
Seller (a) at any time assign this Agreement to a for-profit corporation or
other for-profit business entity controlled by Purchaser or (b) a not-for-profit
entity formed for the purpose of owning the Premises or (c) simultaneously with
the Closing, assign this Agreement or designate another entity to take title to
the Premises, provided no assignment or designation pursuant to any provision of
this Article 24 shall effect a release of Purchaser named herein (i.e., Edison
Schools Inc.) from any of its obligations hereunder; provided, however, that the
liability of the Purchaser named herein shall not be greater than it
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would have been had Purchaser not so assigned this Agreement (other than any
increased liability caused by the acts of such assignee or the making of the
assignment).
25. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which
(or any combination of which, signed by all of the parties) shall be deemed an
original, but all of which, taken together, shall constitute one and the same
instrument.
26. NO RECORDING.
The parties agree that neither this Agreement nor any
memorandum or notice thereof shall be recorded.
27. CONFIDENTIALITY.
Seller agrees that it will treat as confidential the drafts of
documents submitted by Purchaser to Seller pursuant to Section 9.2 hereof until
such documents are submitted to the applicable Governmental Authority, other
than disclosure to Seller's attorneys, accountants and consultants, if any, and
except as may be required or compelled by law. Neither party shall issue any
press release or other publicity regarding the transaction contemplated by this
Agreement without the consent of the other party. If this Agreement is
terminated or the Closing does not otherwise occur, Purchaser shall redeliver to
Seller all materials with respect to the Premises furnished to it by or at the
behest of Seller and shall destroy all copies thereof and notes relating thereto
and certify to Seller in writing that it has done so. The provisions of this
Article 27 shall survive the termination of this Agreement.
28. ATTORNEYS' FEES.
In connection with any litigation, including appellate
proceedings, initiated by a party hereto against the other party hereto and
arising out of this Agreement, the party adjudicated to be the substantially
prevailing party shall be entitled to recover reasonable attorneys' fees and
disbursements from the other party. The provisions of this Article 28 shall
survive the Closing or any termination of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day and year first above written.
SELLER:
CASTLE SENIOR LIVING, LLC
By: /s/ Stanley Diamond
-----------------------------------------------
Name: Stanley Diamond
Title: Chairman
EIN: 22-3542422
PURCHASER:
EDISON SCHOOLS INC.
By: /s/ Adam Feild
-----------------------------------------------
Name: Adam Feild
Title: Senior Vice President, Finance
EIN: 13-3915075
32
SCHEDULE OF EXHIBITS
Exhibit A Description of the Property
Exhibit B Permitted Exceptions
Exhibit C Form of Deed
Exhibit D Other Agreements
33
EXHIBIT A
LEGAL DESCRIPTION
PARCEL I
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City and State of New York, bounded
and described as follows:
BEGINNING at the corner formed by the intersection of the easterly side of 5th
Avenue with the northerly side on East 109th Street;
RUNNING THENCE Northerly along the easterly side of 5th Avenue seventy-nine feet
eight inches;
THENCE Easterly parallel with 109th Street and part of the distance through a
party wall one hundred feet;
THENCE Southerly parallel with 5th Avenue seventy-nine feet eight inches to the
northerly side of 109th Street; and
THENCE Westerly along the northerly side of 109th Street one hundred feet to the
point or place of BEGINNING.
PARCEL II
ALL that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City and State of New York, bounded
and described as follows:
BEGINNING at the corner formed by the intersection of the easterly side of 5th
Avenue and the southerly side of a public street or square legally opened on
3/18/89 pursuant to Chapter 421 of the Laws of 1886 and now or formerly called
Frawley Square;
RUNNING THENCE Easterly along the southerly side of said street or square,
100 feet;
THENCE Southerly parallel with Fifth Avenue, 21 feet 3 inches, more or less to
the northerly side of the property conveyed by Peace Company, Inc. to Milton
Shubert by deed dated 1/21/49 and recorded 1/25/49 in Liber 4607, Cp. 492 in the
Office of the Register of the City of New York in New York County;
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2
RUNNING THENCE Westerly parallel with 109th Street and through a party wall and
along the northerly side of land conveyed to Milton Shubert by deed above
mentioned, 100 feet to the easterly side of Fifth Avenue; and
THENCE Northerly along the easterly side of Fifth Avenue, 21 feet 3 inches, more
or less to the point or place of BEGINNING.
35
EXHIBIT B
PERMITTED ENCUMBRANCES
1. Present and future zoning laws, ordinances, resolutions,
orders and regulations of all municipal, county, state or federal governments
having jurisdiction over the Premises and the use of improvements thereon.
2. All covenants, restrictions, easements, encumbrances and
agreements of records.
3. The state of facts disclosed on the survey of the Premises,
dated July 13, 1999, prepared by Harwood Surveying P.C.
4. Such state of facts as a current, accurate survey of the
Premises would disclose, provided the same do not prevent construction of
improvements on the Premises for the purposes contemplated in the definition of
"Zoning Approvals" in Section 1.1 of this Agreement and provided the same do not
render title unmarketable.
5. (a) The lien of all unpaid assessments encumbering the
Premises on the date of this Agreement, and installments thereof, due and
payable on or after the Closing Date, and (b) the lien of all unpaid assessments
which first encumber the Premises subsequent to the date of this Agreement, and
installments thereof, whether due and payable prior to, on or after the Closing
Date.
6. All liens and encumbrances resulting from any activities
undertaken by Purchaser or its contractors or agents.
7. Rights, if any, of any utility company to construct and/or
maintain lines, pipes, wires, cables, poles, conducts and distributions boxes
and equipment in, over, under, and/or upon the Premises or any portion thereof,
provided the same do not render title unmarketable.
8. Variations between record line and retaining walls;
encroachments of adjoining premises upon the Premises, provided the same do not
render title unmarketable.
9. Variations between the description contained in Exhibit A
and the tax map description of the Premises.
10. Right, lack or right or restricted right of any owner of
the Premises to construct and/or maintain any vault or vaulted area in or under
the sidewalks abutting the Premises; any licensing statute, ordinance or
regulation and the terms of any license pertaining thereto; and any fees for
vault space which may thereafter be assessed.
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11. The printed exclusions from coverage listed in any title
commitment issued by the Title Company.
37
EXHIBIT C
BARGAIN AND SALE DEED
WITHOUT COVENANT AGAINST GRANTOR'S ACTS
THIS INDENTURE, made the _____ day of _______________, 2000,
between CASTLE SENIOR LIVING, LLC, a Delaware limited liability company, having
an office at 405 Cedar Lane, Teaneck, New Jersey 07666 ("Grantor"), and EDISON
SCHOOLS INC., a Delaware corporation, having an office at 521 Fifth Avenue, 15th
Floor, New York, New York 10175 ("Grantee").
W I T N E S S E T H :
Grantor, in consideration of ten dollars and other valuable
consideration paid by Grantee, the receipt and sufficiency of which are hereby
acknowledged, does hereby grant and release unto Grantee, the heirs or
successors and assigns of Grantee forever, all that certain plot, piece or
parcel of land, with the buildings and improvements thereon erected, situate,
lying and being in the Borough of Manhattan, City, County and State of New York,
and more particularly described on Exhibit A attached hereto and made a part
hereof.
TOGETHER with all right, title and interest, if any, of
Grantor in and to any streets and roads abutting the above described premises to
the center lines thereof; together with the appurtenances and all the estate and
rights of Grantor in and to said premises; TO HAVE AND TO HOLD the premises
herein granted unto Grantee, the heirs or successors and assigns of Grantee
forever.
And Grantor, in compliance with Section 13 of the Lien Law,
covenants that Grantor will receive the consideration for this conveyance and
will hold the right to receive such consideration as a trust fund to be applied
first for the purpose of paying the cost of improvement and will apply the same
first to the payment of the cost of the improvement before using any part of the
total of the same for any other purpose.
IN WITNESS WHEREOF, Grantor has duly executed this deed the
day and year first above written.
IN PRESENCE OF: CASTLE SENIOR LIVING, LLC
By:
----------------------------- --------------------------------
Print Name: Name: Stanley Diamond
Title: Chairman
38
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of _________ in the year 2000, before me,
the undersigned, a notary public in and for said State, personally
appeared Stanley Diamond personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.
-----------------------------------
Notary Public
39
Exhibit A
Premises
PARCEL I
ALL that certain plot, piece or parcel of land, situate, lying and being
in the Borough of Manhattan, County of New York, City and State of New
York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the easterly side of
5th Avenue with the northerly side on East 109th Street;
RUNNING THENCE Northerly along the easterly side of 5th Avenue
seventy-nine feet eight inches;
THENCE Easterly parallel with 109th Street and part of the distance
through a party wall one hundred feet;
THENCE Southerly parallel with 5th Avenue seventy-nine feet eight inches
to the northerly side of 109th Street; and
THENCE Westerly along the northerly side of 109th Street one hundred feet
to the point or place of BEGINNING.
PARCEL II
ALL that certain plot, piece or parcel of land, situate, lying and being
in the Borough of Manhattan, County of New York, City and State of New
York, bounded and described as follows:
BEGINNING at the corner formed by the intersection of the easterly side of
5th Avenue and the southerly side of a public street or square legally
opened on 3/18/89 pursuant to Chapter 421 of the Laws of 1886 and now or
formerly called Frawley Square;
RUNNING THENCE Easterly along the southerly side of said street or square,
100 feet;
THENCE Southerly parallel with Fifth Avenue, 21 feet 3 inches, more or
less to the northerly side of the property conveyed by Peace Company, Inc.
to Milton Shubert by deed dated 1/21/49 and recorded 1/25/49 in Liber
4607, Cp. 492 in the Office of the Register of the City of New York in New
York County;
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2
RUNNING THENCE Westerly parallel with 109th Street and through a party
wall and along the northerly side of land conveyed to Milton Shubert by
deed above mentioned, 100 feet to the easterly side of Fifth Avenue; and
THENCE Northerly along the easterly side of Fifth Avenue, 21 feet 3
inches, more or less to the point or place of BEGINNING.
41
BARGAIN AND SALE DEED
WITHOUT COVENANT AGAINST GRANTOR'S ACTS
-------------------------------------------------
CASTLE SENOR LIVING, LLC,
Grantor
TO
EDISON SCHOOLS INC.,
Grantee
-------------------------------------------------
Section:
Block: 1615
Lot: 1
County/Town: New York
State: New York
Record and Return to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166
Attention: Joanne Franzel, Esq.
42
EXHIBIT D
OTHER AGREEMENT
Agreement dated August 20, 1999, between Regional
Scaffolding & Hoisting Co., Inc. and Castle Senior Living, LLC.