PURCHASE AGREEMENT
This
PURCHASE AND SALE AGREEMENT (including the Exhibits and
Schedules attached hereto, this “Agreement”) is
made and entered into as of June 19, 2008 by and among
Oregano’s Real Estate Holdings LLC, a Delaware limited
liability company (“
Buyer ”),
Mark S. Russell (“
Russell ”)
and City Surf Management Group, LLC, an Arizona limited liability
company (“
Seller ”).
Capitalized terms used in this Agreement are defined or otherwise
referenced in Article 11 of this Agreement.
W
I T N E S S E T H:
WHEREAS,
Russell owns 100% of the ownership interest in
Seller;
WHEREAS,
the Seller owns, or will at Closing own, all of the
Property;
WHEREAS,
concurrently with the execution and delivery of this Agreement
and as a condition and further inducement to Buyer’s
willingness to enter into this Agreement, Russell has
delivered to Buyer an executed copy of the Merger Agreement;
and
WHEREAS,
Seller desires to sell, convey, transfer, assign and deliver
to Buyer, and Buyer desires to purchase and accept from
Seller, all of the Property, all as herein provided and on the
terms and conditions hereinafter set forth.
NOW,
THEREFORE, BE IT RESOLVED, that, in consideration of the
mutual representations, warranties, covenants and agreements
and subject to the conditions herein contained, the parties
hereto agree as follows:
ARTICLE
1
PURCHASE AND SALE
Section
1.1
The Property .
Seller agrees to sell to Buyer and Buyer agrees to purchase from
Seller, in accordance with this Agreement, all Seller’s
right, title and interest in and to the following property
(collectively the “
Property ”):
(a)
All
that certain real property and improvements described as
follows: (i) the real property, having the address of
4900 E. Speedway Road, Tucson, Arizona ,
as more specifically described in the attached Exhibit A-1,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
and all easements and rights appurtenant to such real property (all
such real property, buildings, structures, improvements, machinery,
fixtures, equipment, easements and rights are collectively the
“
Tucson Real Property ”);
(ii) the real property, having the address of
328 N. Gilbert Road, Gilbert, Arizona ,
as more specifically described in the attached Exhibit A-2,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
and all easements and rights appurtenant to such real property (all
such real property, buildings, structures, improvements, machinery,
fixtures, equipment, easements and rights are collectively the
“
Gilbert Real Property ”);
(iii) the real property, having the address of
1130 S. Dobson Road, Mesa, Arizona ,
as more specifically described in the attached Exhibit A-3,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
and all easements and rights appurtenant to such real property (all
such real property, buildings, structures, improvements, machinery,
fixtures, equipment, easements and rights are collectively the
“
Mesa Real Property ”);
(iv) the real property, having the address of
523 W. University, Tempe, Arizona ,
as more specifically described in the attached Exhibit A-4,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
and all easements and rights appurtenant to such real property (all
such real property, buildings, structures, improvements, machinery,
fixtures, equipment, easements and rights are collectively the
“
Tempe Real Property ”);
(v) the real property, having the address of
1008 E. Camelback Road, Phoenix, Arizona
,
as more specifically described in the attached Exhibit A-5,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
and all easements and rights appurtenant to such real property (all
such real property, buildings, structures, improvements, machinery,
fixtures, equipment, easements and rights are collectively the
“
Camelback Real Property ”);
(vi) the real property, having the address of
2620 E. Baseline Road, Phoenix, Arizona
, as more specifically described in the attached Exhibit A-6,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
and all easements and rights appurtenant to such real property (all
such real property, buildings, structures, improvements, machinery,
fixtures, equipment, easements and rights are collectively the
“
Baseline Real Property ”);
and (vii) the leasehold interest in the real property located
at
605 W. Riordan Road, Flagstaff, Arizona
, as more specifically described in the attached Exhibit A-7,
together with all buildings, structures, improvements, machinery,
fixtures and equipment affixed or attached to such real property
(all such leasehold interest in the real property, buildings,
structures, improvements, machinery, fixtures, equipment, easements
and rights are collectively the “
Flagstaff Property ”).
The Tucson Real Property, the Gilbert Real Property, the Mesa Real
Property, the Tempe Real Property, the Camelback Real Property, the
Baseline Real Property, the Tempe Real Property and the Flagstaff
Property are hereinafter collectively referred to as the
“
Real Property ”.
(b)
Seller’s
interest in all tangible and intangible personal property
associated with the Real Property (the “
Personal Property ”);
(c)
Seller’s
interest in all material contracts, leases, agreements,
warranties, guaranties and other understandings, commitments
and obligations of any kind, whether written or oral to which
any of the Real Property may be bound, subject or affected
(the “
Contracts ”)
described in Exhibit C attached hereto; and
(d)
Seller’s
interest in all building permits, certificates of occupancy
and other certificates, permits, authorizations, filings,
notices licenses and approvals of or with Governmental
Entities (the “
Permits ”).
ARTICLE
2
SALE AND PURCHASE
Section
2.1
Sale and Purchase .
Seller agrees to and shall sell, convey, transfer, assign and
deliver to Buyer at the Closing, free and clear of all liens,
pledges, encumbrances, obligations, charges, mortgages, claims and
equitable interests of every kind, nature and description
whatsoever (collectively, “
Liens ”)
(other than the Permitted Liens), and Buyer agrees to and shall
purchase and accept from Seller, on the terms and subject to the
conditions set forth in this Agreement, all Seller’s right,
title, and interest in the Property.
Section
2.2
Purchase Price .
The consideration for the Property is an amount, as adjusted
pursuant to the terms of this Agreement (the “
Purchase Price ”),
equal to: (i) Nine Million Two Hundred Twenty One Thousand U.S.
dollars ($9,221,000),
plus (ii)
the Real Estate Adjustment Amount, if any;
provided ,
however ,
pursuant to and in accordance with Section 1.4(d) of the Merger
Agreement, if it is determined that there is a Negative Cash Merger
Consideration Amount, then (x) a portion of the Purchase Price
equal to the Negative Cash Merger Consideration Amount shall be
payable in Parent Common Stock, and an amount of Parent Common
Stock with a value equal to the Negative Cash Merger Consideration
Amount that would otherwise have been included in the Preliminary
Parent Stock Consideration shall instead be applied towards payment
of such portion of the Purchase Price and (y) the cash that would
otherwise have been paid in respect of the portion of the Purchase
Price paid in shares of Parent Common Stock shall be applied to the
payment of the
Preliminary
Cash Merger Consideration. For the purpose of determining the value
of Parent Common Stock pursuant to this Section 2.2, a share of
Parent Common Stock shall be valued at the average daily closing
price of a share of Parent Common Stock quoted on the
Over-the-Counter Bulletin Board for the five trading days ending on
the second Business Day prior to the first public announcement
pertaining to the Merger Agreement. Buyer shall deliver by wire
transfer of immediately available funds to Escrow Agent the Closing
Purchase Price at the Closing. The Purchase Price for the Property
is allocated to each individual Property as set forth on Schedule
2.2. Notwithstanding anything contained herein to the contrary,
capitalized terms used in this Section 2.2 and not otherwise
defined in this Agreement shall have the meanings ascribed to them
in the Merger Agreement.
Section
2.3
Real Estate Adjustment Amount .
(a)
The
provisions of this Section 2.3 shall survive the Closing.
Subject to Article 9, as additional consideration for the
Property and as part of the Purchase Price, Seller may be
entitled to the Real Estate Adjustment Amount, as described in
this Section 2.3, from Buyer on the third anniversary after
the Closing Date, subject, however, to all terms and
conditions of this Section 2.3.
(b)
Within
twenty (20) business days after the third anniversary of the
Closing Date, Buyer shall appoint an independent nationally
recognized third party appraiser (mutually agreed upon by
Buyer and Seller) (the “
Appraiser ”).
The procedures to calculate the fair market value of the Real
Property shall be determined by the Appraiser. The parties hereto
acknowledge and agree that the Appraiser’s decision shall be
set forth in a written statement delivered to Buyer and Seller, and
shall be final, conclusive and binding upon all parties, and shall
constitute an arbitral award upon which a judgment may be entered
by any court of competent jurisdiction.
(c)
If
the Appraiser determines that the appraised value of the Real
Property is greater than the Purchase Price paid at Closing
(the “
Real Estate Adjustment Amount ”)
then Buyer shall distribute the Real Estate Adjustment Amount to
Seller within ten (10) days of the Appraiser’s final
determination (such distribution payable in cash or Parent Common
Stock based upon Seller’s election) (the “
Real Estate Payment Date ”).
For the purpose of determining the value of Parent Common Stock
pursuant to this Section 2.3, a share of Parent Common Stock shall
be valued at the average daily closing price of a share of Parent
Common Stock quoted on a national securities exchange of the United
States for the five trading days prior to the Real Estate Payment
Date.
Section
2.4
Total Holdback Amount; Payment of Total Holdback Amount
(a)
To
secure the indemnification obligations of Russell and Seller
set forth in Article 9 hereof, at the Closing, the Total
Holdback Amount shall be withheld by Buyer (on behalf of
Russell) to be held during the period commencing on the
Closing Date and ending on the Final Holdback Payment Date.
The Total Holdback Amount shall be distributed to Russell in
accordance with, and subject to the limitations of this
Agreement.
(b)
Subject
to Section 9, within five (5) business days following the
First Holdback Payment Date, Buyer shall pay or caused to be
paid to Seller the Initial Holdback Amount, if any, by wire
transfer or delivery of other immediately available
funds.
(c)
Subject
to Section 9, within five (5) business days following the
final determination of all claims to which the First Holdback
Reserve Relates (the “
Final Holdback Payment Date ”),
Buyer shall pay or caused to be paid to Seller the Remaining
Holdback Amount, if any, by wire transfer or delivery of other
immediately available funds.
ARTICLE
3
COMPLETION OF SALE
Section
3.1
Place and Date .
The purchase and sale of the Property shall be completed in
accordance with Article 10 hereof (the “
Closing ”).
The closing of the sale, conveyance, transfer, assignment and
delivery, and purchase and acceptance, of the Property in
accordance with Article 10 shall take place at the offices of First
American Title Company, 2425 E. Camelback Road, Suite 300, Phoenix,
Arizona (“
Title Company ”),
Neil Moffett (“
Escrow Agent ”)
at 12 p.m. (local time), on August 15, 2008;
provided ,
however ,
that if any of the conditions to Closing set forth herein have not
been satisfied (or waived) by the date hereof (other than those to
be satisfied at the Closing), then the Closing shall take place on
a subsequent date not later than two business days following the
satisfaction or waiver of such conditions or a subsequent date as
may be mutually agreed upon by the parties (unless this Agreement
is earlier terminated pursuant to
Section
10.5 or Section 5.3). Throughout this Agreement, such event is
referred to as the “
Closing ”
and such date and time are referred to as the “
Closing Date ”.
ARTICLE
4
TITLE TO THE PROPERTY
Section
4.1
Real Property .
Seller shall convey good and marketable fee simple absolute title
to the Real Property to Buyer, by a duly executed and acknowledged
Special Warranty Deeds (each a “
Deed ”)
for each of the properties described in Section 1.1(a) of this
Agreement (other than Flagstaff Property which will be conveyed as
provided in Section 4.3) in the form and
substance set forth in Exhibit E attached hereto
, free and clear of all Liens, except only the following (the
“
Permitted Liens ”):
(a) the Permitted Liens applicable to each individual property
and (b) any matters shown on the survey furnished to Buyer in
accordance with this Agreement and approved by Buyer pursuant to
Sections 5.4 and 5.5 of this Agreement.
Section
4.2
Personal Property .
Seller shall transfer good title to the Personal Property, if any,
to Buyer, by a duly executed Bill of Sale (the “
Bill of Sale ”)
in form
and substance reasonably satisfactory to Buyer ,
free and clear of all Liens (other
than Permitted Liens) .
Section
4.3
Contracts .
Seller shall assign Seller’s interest in the Contracts to
Buyer, by a duly executed Assignment of Contracts (the
“
Assignment of Contracts ”)
in form and
substance reasonably satisfactory to Buyer, free and clear of all
Liens (other than Permitted Liens) .
Section
4.4
Permits .
Seller shall assign Seller’s interest in the Permits to
Buyer, by a duly executed Assignment of Permits (the “
Assignment of Permits ”)
in
form and substance reasonably satisfactory to Buyer
,
free and clear of all Liens (other
than Permitted Liens) .
ARTICLE
5
REVIEW OF THE PROPERTY
Section
5.1
Delivery of Documents .
Seller has delivered to Buyer the following documents insofar as
any thereof have heretofore been prepared by, for or at the request
of Seller or are in the possession of or control of
Seller:
(a)
Copies
of all of the Contracts;
(b)
Copies
of all of the Permits;
(c)
Copies
of all architectural, engineering and other drawings, plans
and specifications for the buildings, structures,
improvements, machinery, fixtures and equipment included in
the Real Property;
(d)
Copies
of all reports, studies, investigations, appraisals and other
materials concerning the design, construction, condition or
status of the Real Property or any of the buildings,
structures, improvements, machinery, fixtures or equipment
included in the Real Property, or any system, element or
component thereof, or any past or present Release or
threatened Release of any Hazardous Substances in, on, under
or within the Real Property or any other real property in the
vicinity of the Real Property, or the compliance of the Real
Property with Environmental Laws; and
(e)
Copies
of all environmental impact reports, negative declarations,
environmental impact certifications, and zoning, land use or
development agreements relating to the Real Property
(collectively the “
Real Estate Documents ”).
Notwithstanding
anything contained herein to the contrary, Seller will
immediately deliver or cause to be delivered to Buyer any Real
Estate Documents that come into its possession after the
execution of this Agreement.
Section
5.2
Access for Review .
From the date of this Agreement until the Closing, Seller shall
provide Buyer and Buyer’s representatives with access to the
Real Property, the Personal Property, all drawings, plans and
specifications for the Real Property, all engineering and other
reports and studies relating to the Real Property, all files and
correspondence relating to the Real Property, and all financial and
accounting books and records relating to the ownership, management,
operation, maintenance or repair of the Real Property at all
reasonable times to make such studies, inspections, tests
(including subsurface tests, borings, samplings and measurements),
copies and verifications as Buyer, in Buyer’s discretion,
considers reasonably necessary or desirable in the circumstances.
However, Buyer will: (i) not unreasonably interfere with the
operation or use of the Property; (ii) not discuss the Transaction
with any employee on the Property, (iii) be liable to Seller for,
and will indemnify, defend and hold Seller harmless for, from and
against, any claim, loss, liability, expense, damage or injury
caused by Buyer’s activities on the Property (except with
respect to an pre-existing condition, which is merely discovered by
Buyer); and (iv) will promptly return the Property to substantially
the same condition as it was immediately prior to Buyer’s
entry onto the Property, with these obligations to survive
termination of this Agreement.
Section
5.3
Property Approval Period .
Until thirty (30) days after the date of this Agreement, (the
“
Property Approval Period ”),
Buyer shall have the right to review and investigate the physical
and environmental condition of the Property, the income and
expenses of the Property, the character, quality, value and general
utility of the Property, the zoning, land use, environmental and
building requirements and restrictions applicable to the Property,
the state of title to the Real Property, and any other factors or
matters relevant to Buyer’s decision to purchase the
Property. Buyer may determine whether or not the Property is
acceptable to Buyer within the Property Approval Period. If, during
the Property Approval Period, Buyer determines that the Property is
not acceptable for any reason whatsoever, Buyer shall have the
right, by giving notice to Seller on or before the last day of the
Property Approval Period, to terminate this Agreement. If Buyer
exercises the right to terminate this Agreement in accordance with
this section 5.3, this Agreement shall terminate as of the
date such termination notice is given by Buyer If Buyer does not
exercise the right to terminate this Agreement in accordance with
this section 5.3, this Agreement shall continue in full force
and effect, and Buyer shall have no further right to terminate this
Agreement except pursuant to section 10.5.
Section
5.4
Survey .
On or before June 12, 2008, Seller shall, at the expense of Seller
deliver to Buyer all existing surveys in Seller’s possession
or control with respect to each property constituting the Real
Property prepared by a licensed land surveyor or a registered civil
engineer. Buyer has the right to cause a separate survey of each
property constituting the Real Property to be prepared by a
licensed land surveyor or a registered civil engineer. Each such
survey shall comply with the current minimum standard detail
requirements for land title surveys established by the American
Land Title Association and the American Congress on Surveying and
Mapping, shall contain the legal description of the applicable
property, shall include the surveyor’s or engineer’s
certification (in form and substance satisfactory to Buyer) to
Buyer and the Title Company and any lender designated by Buyer,
signed by the surveyor or engineer, that the survey correctly shows
the applicable property on the basis of a field survey and in
accordance with the current minimum standard detail requirements
for land title surveys established by the American Land Title
Association and the American Congress on Surveying and Mapping, and
shall otherwise be in form and substance satisfactory to
Buyer.
Section
5.5
Title and Survey Review .
Within ten (10) business days after the date of this Agreement,
Title Company will provide to Seller and Buyer a commitment to
issue an ALTA owner’s (or leasehold) policy of title
insurance for each Real Property. Prior to the last day of the
Property Approval Period (the “
Title Review Date ”),
Buyer shall furnish Seller with a written statement of objections,
if any, to the title to the Real Property, including, without
limitation, any objections to any matter shown on any of the
Surveys (collectively, “
Objections ”).
In the event the Title Company amends or updates any of the
Preliminary Reports after the Title Review Date or any of the
Surveys is updated after the Title Review Date (each, a
“
Title Report Update ”
or a “
Survey Update ,”
as applicable), Buyer shall furnish Seller with a written statement
of Objections to any matter first raised in a Title Report Update
or Survey Update (unless such matter was caused by Buyer or its
inspections or tests which will be Permitted Liens) within three
(3) business days after Buyer’s receipt of such Title Report
Update or Survey Update (each, a “
Title Update Review Period ”).
Should Buyer fail to notify Seller in writing of any Objections in
the Preliminary Report prior to the Title Review Date, or to any
matter first disclosed in a Title Report Update or Survey Update
prior to the Title Update Review Period, as applicable, Buyer shall
be deemed to have approved such matters, which shall be considered
to be Permitted Liens.
(a)
If
Seller receives a notice of Objection in accordance with this
Section 5.5 (
“Buyer’s Notice ”),
Seller shall have the right, but not the obligation, by giving
written notice to Buyer within five (5) business days after receipt
of Buyer’s Notice (“
Seller’s Response Period ”),
to elect to cure any such matter on or before the Closing Date
(
“Seller’s Response ”),
and may extend the Closing Date for up to fifteen (15) business
days to allow such cure. If Seller does not give any Seller’s
Response, Seller shall be deemed to have elected not to cure any
such matters. Notwithstanding the foregoing, on or before the
Closing Date, Seller shall in any event be obligated to cure those
Objections (i) that are mortgage or deed of trust liens or
security interests against any of the Real Property created by
Seller, other than taxes and assessments not yet delinquent or
(ii) that have been voluntarily placed against any of the Real
Property by Seller after the date of this Agreement and that are
not otherwise permitted pursuant to the provisions hereof. The
items in the immediately preceding sentence are hereinafter
collectively referred to as the “
Mandatory Objections ”.
(b)
If
Seller elects (or is deemed to have elected) not to cure any
Objections raised in any Buyer’s Notice timely delivered
by Buyer to Seller pursuant to Section 5.5(a) above, or if
Seller notifies Buyer that it elects to cure any such
Objection but then does not for any reason effect such cure on
or before the Closing Date, as it may be extended hereunder,
then Buyer, as its sole and exclusive remedy, shall have the
option of terminating this Agreement by delivering written
notice thereof to Seller within five (5) business days after
(as applicable) (i) its receipt of Seller’s
Response stating that Seller will not cure any such Objection,
or (ii) the expiration of Seller’s Response Period
if Seller does not deliver a Seller’s Response, or
(iii) Seller’s failure to cure by the Closing Date
(as it may be extended hereunder) any Objection which Seller
has previously elected to cure pursuant to a Seller’s
Response. In the event of such a termination, the Deposit
shall be returned to Buyer, and neither party shall have any
further rights or obligations hereunder except as expressly
provided in this Agreement. If no such termination notice is
timely received by Seller hereunder, Buyer shall be deemed to
have waived all such Objections, in which event those
Objections shall become Permitted Liens. If the Closing is not
consummated for any reason other than Seller’s default
hereunder, Seller and Buyer each shall be responsible for
one-half of any title or escrow cancellation charges. Nothing
herein will release Seller from its obligations to release or
satisfy the Mandatory Objections nor will Buyer ever be deemed
to have waived or accepted the Mandatory Objections unless
Buyer does so expressly in a written notice delivered to
Seller in accordance with the provisions regarding notice in
this Agreement.
ARTICLE
6
REPRESENTATIONS AND WARRANTIES
Section
6.1
Seller and Russell .
In order to induce Buyer to enter into this Agreement and to
consummate the transactions contemplated hereunder, each of Seller
and Russell make the following representations and
warranties:
(a)
Organization, Power and Authority of Seller .
(i) Seller is a limited liability company duly organized, existing
and in good standing under the laws of the State of Arizona and has
all requisite limited liability company power and authority to own
and operate its properties and assets and to carry on its business
as presently conducted and is qualified to do business and is in
good standing as a foreign corporation (to the extent such concepts
are applicable) in each jurisdiction where the ownership or
operation of its properties or conduct of its business requires
such qualification, except for such failures as would not
(individually or in the aggregate) be reasonably likely to have a
Material Adverse Effect. Seller has full limited liability company
power and authority and all licenses, permits and authorizations
necessary to carry on its business, to own and use the properties
it owns or leases, to enter into and perform this Agreement, and to
perform the obligations required to be performed hereunder and
thereunder. Russell has all requisite power and authority as sole
member of Seller to enter into this Agreement, to perform the
obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by Russell and, assuming the due
authorization, execution and delivery thereof by the other parties
hereto, constitutes the legal and binding obligation of Russell,
enforceable against Russell in accordance with its terms, except as
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity.
(b)
Validity and Enforceability; No Violatio n.
This Agreement has been duly executed and delivered by Seller and
constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or similar laws
relating to or affecting creditors’ rights generally or by
general equitable principles (whether considered in a proceeding in
equity or at law). Seller has the absolute and unrestricted right,
power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement. Neither the execution
and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (a) conflict with or violate
any
provision
of any law, statute, judgment, decree, order, ordinance, rule or
regulation of any supranational, national, state, municipal, local
or foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other governmental authority
or instrumentality, or any quasi-governmental or private body
exercising any Tax, regulatory or governmental or
quasi-governmental authority (each, a “
Governmental Entity ”)
which
is applicable to, binding upon or enforceable against Seller or
Russell or requires any filing or authorization under any Legal
Requirement
, (b)
result in any breach of or default under any mortgage, contract,
agreement, indenture, will, trust or other instrument which is
binding upon or enforceable against Seller or Russell , (c) except
as set forth on
Schedule 6.1(b) ,
require Seller or Russell to obtain any consent, approval or action
of, or make any filing with or the giving of notice to, any
association, business trust, company, corporation, estate, firm,
individual, joint stock company, joint venture, limited liability
company, limited liability partnership, partnership, trust,
unincorporated association, unincorporated organization, union or
other entity or Governmental Entity (each, a “
Person ”).
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will conflict
with, violate or result in the breach of any of the provisions of
the Seller’s certificate of formation and limited liability
company agreement (collectively referred to herein as
“
Charter Documents ”),
as amended and currently in effect.
(c)
No Leases .
Except as set forth on
Schedule 6.1(c) ,
there are no Persons leasing, using or occupying the Real Property
or any part thereof.
(d)
Personal Property .
To
the extent Seller owns any Personal Property relating to the
ownership, management, operation, maintenance or repair of the Real
Property, it is free from defects, has been maintained in
accordance with normal industry practice, is in good operating
condition and repair (subject to normal wear and tear) and is
suitable for the purposes for which it presently is used and
presently proposed to be used. In the event it is determined that
Seller owns any Personal Property, Seller will promptly transfer or
cause to be transferred such Personal Property to Oregano’s
Pizza Bistro, Inc., or its successor and assigns at the Closing or
promptly thereafter if such ownership is discovered following the
Closing. The foregoing obligation to transfer any Personal Property
shall survive the Closing.
(e)
Contracts, Permits and Personal Property .
To Seller’s knowledge, Exhibit C attached hereto
contains in all material respects an accurate and complete list of
all presently effective contracts, agreements, warranties and
guaranties relating to the leasing, advertising, promotion, design,
construction, ownership, management, operation, maintenance or
repair of the Real Property. Seller has good title to the Personal
Property, the Contracts and the Permits, free and clear of all
Liens. To Seller’s knowledge, all of the copies of the
documents delivered to Buyer pursuant to section 5.1 hereof
are in all material respects accurate and complete copies of all
originals of the documents described in section 5.1
hereof.
(f)
[Reserved] .
(g)
Real Property .
During the period of Seller’s ownership of the Real Property,
except as set forth on
Schedule 6.1(g)(i) attached
hereto, the Real Property has at all times been managed, operated,
maintained and repaired by Seller according to its current business
practices. To Seller’s knowledge, except as set forth
on
Schedule 6.1(g)(ii) attached
hereto, there are no defects or deficiencies in the design,
construction, fabrication, manufacture or installation of the Real
Property or any part thereof or any system, element or component
thereof. To Seller’s knowledge, except as set forth on
Schedule 6.1(g)(iv) attached
hereto, all systems, elements and components of the Property
(including all machinery, fixtures and equipment, the roof,
foundation and structural elements, and the elevator, mechanical,
electrical and life safety systems) are in good working order and
repair and sound operating condition (subject to normal wear and
tear). Seller has received no notice of any kind from any insurance
broker, agent or underwriter that any noninsurable condition exists
in, on or about the Real Property or any part thereof. To
Seller’s knowledge, the Real Property and every part thereof
and the use and occupancy of the Real Property are in full
compliance with all Legal Requirements applicable to the Real
Property. To Seller’s knowledge, the use of the Real Property
or any portion thereof does not violate or conflict with any
conditions, covenants or restrictions applicable thereto or the
terms and provisions of any contractual obligations relating
thereto. Seller has received no notice (whether written or oral),
citation or other claim alleging any violation of any Legal
Requirement, covenant, condition or restriction. To Seller’s
knowledge, the material Permits have been duly and validly issued,
are in full force and effect, and are all of the certificates,
permits, licenses and approvals that are required by Legal
Requirements to own, operate, use and occupy the Real Property as
it is presently owned, operated, used and occupied. To
Seller’s knowledge, except as set forth on
Schedule 6.1(g)(v) attached
hereto, Seller has fully performed, satisfied and discharged all of
the obligations, requirements and conditions imposed on the Real
Property by the material Permits. To Seller’s knowledge,
except as set forth on
Schedule 6.1(g)(vi) attached
hereto, there has occurred no default under, or violation of, any
such material Permit, which has not been cured, and each such
material Permit is in full force and effect. To Seller’s
knowledge, the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated by
this Agreement, will not result in a violation of or default under
and will not cause the revocation or cancellation of any such
material Permit. Seller has not received any communication or
otherwise has knowledge of any facts which have, or reasonably
should have, led it to believe that any of the material Permits are
not currently in good standing.
(h)
Environmental Matters .
Except as otherwise set forth in
Schedule 6.1(h)(i) attached
hereto, no Hazardous Substances are present in, on or under the
Real Property or any nearby real property which could migrate to
the Real Property and there is no present Release or threatened
Release of any Hazardous Substances in, on or under the Real
Property, except for those Hazardous Substances that are being
stored and handled either in de minimus quantities or in compliance
with applicable Environmental Laws. Seller has never used the Real
Property or any part thereof, and has never permitted any person to
use the Real Property or any part thereof, for the production,
processing, manufacture, generation, treatment, handling or
disposal of any Hazardous Substances. To Seller’s knowledge,
except as otherwise set forth in
Schedule 6.1(h)(ii) attached
hereto, none of the Real Property contains any underground storage
tanks, asbestos-containing material, lead-based paint, or
polychlorinated biphenyls in violation of any Environmental Law or
that would reasonably be expected to result in liability under any
Environmental Law. To Seller’s knowledge, except as set forth
on
Schedule 6.1(h)(iii) attached
hereto, the Real Property and every part thereof, and all
operations and activities therein and thereon and the use and
occupancy thereof, comply in all material respects with all
applicable Environmental Laws, and neither Seller nor any Person
using or occupying the Real Property or any part thereof is
violating any Environmental Laws. To Seller’s
knowledge, Seller has all material certificates, permits, licenses
and approvals required by all applicable Environmental Laws for the
use and occupancy of, and all operations and activities in, the
Real Property. To Seller’s knowledge, Seller is in material
compliance with all such certificates, permits, licenses and
approvals, and all such certificates, permits, licenses and
approvals were duly issued and are in full force and effect. To
Seller’s knowledge, except as set forth on
Schedule 6.1(h)(iv) attached
hereto, no Proceeding of any kind relating to any past or present
Release or threatened Release of any Hazardous Substances in, on or
under the Real Property or any past or present violation of any
Environmental Laws at the Real Property has been made or commenced,
or is pending, or, to the Seller’s knowledge, is being
threatened or contemplated by any Person.
(i)
No Litigation .
(A) There is no civil, criminal or administrative suit, action,
claim, proceeding, arbitration, investigation, review or inquiry
pending or, to Russell’s or Seller’s knowledge,
threatened against or affecting the Seller relating to the Real
Property, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding against
or affecting the Seller relating to the Real Property (the
foregoing collectively referred to as “
Proceedings ”).
To Seller’s knowledge, no event has occurred or circumstance
exists which could reasonably be expected to give rise to or serve
as a valid basis for the commencement of any Proceeding by or
against the Seller relating to the Real Property. To Seller’s
knowledge, there is no general plan, land use or zoning action or
proceeding of any kind, or general or special assessment action or
proceeding of any kind, or condemnation or eminent domain action or
proceeding of any kind pending or threatened or being contemplated
with respect to the Real Property or any part thereof. (B) Except
as set forth on
Schedule 6.1(i)(B) hereto,
there is no civil, criminal or administrative suit, action,
proceeding, arbitration, investigation, review or inquiry pending
or, to Russell’s knowledge, threatened against or affecting
Russell or any of his properties or rights, nor is there any
judgment, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against or affecting Russell or
any of his properties or rights which would have a Material Adverse
Effect or prevent, impair or materially delay the ability of
Russell to consummate the transactions contemplated by this
Agreement.
(j)
Tax Matters .
(i)
There
is no legal or administrative action or proceeding pending to
contest or appeal the amount of real property Taxes or
assessments levied against the Real Property or any part
thereof or the assessed value of the Real Property or any part
thereof for real property Tax purposes. To Seller’s
knowledge, no supplemental real property Taxes have been or
will be levied against or assessed with respect to the Real
Property or any part thereof based on any new construction or
other event or occurrence relating to the Real Property before
the date of this Agreement (other than normal annual
reassessments of real property taxes), except any such
supplemental real property Taxes that are due and payable have
been paid in full and discharged.
(k)
Utilities .
To Seller’s knowledge, except as set forth on
Schedule 6.1(k) attached
hereto, all water, sewer, gas, electric, steam, telephone and
drainage facilities and all other utilities required by Legal
Requirement or reasonably necessary or proper and usual for the
current operation, use and occupancy of the Real Property are
installed to the boundary lines of the Real Property, are connected
with valid permits.
(l)
FIRPTA .
Neither Russell nor Seller is a “foreign person” within
the meaning of Code Section 1445.
(m)
Brokers and Finders .
Except as set forth on
Schedule 6.1(m) attached
hereto, Seller has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage, finders’ fees,
agent’s commissions or any similar charges in connection with
this Agreement or any transactions contemplated hereby.
Seller
shall bear the cost of
