Exhibit 10.1
AGREEMENT FOR PURCHASE AND SALE OF
BUSINESS AND ASSETS OF TENNESSEE RESTAURANT
CONCEPTS.
This agreement is made on the day
and dates shown below and by and between Tennessee Restaurant
Concepts., hereinafter referred to as Seller, and Tennessee
Entertainment Concepts, Inc., a Tennessee Corporation, referred to
as Buyer.
WHEREAS, Seller a Tennessee
Corporation, desires to sell all of the business and assets of
Tennessee Restaurant Concepts., consisting of all furniture, tables
and chairs, furnishings, hot tubs, sound systems, lighting systems,
bar and kitchen equipment, coolers, inventory as of date of closing
or possession, which ever may come first, and all of which is
contained in or located at PT’s Showclub, 3918 Winchester,
Memphis, TN, and
WHEREAS. Seller desires to sell to
the extent permitted by law any, and all licenses and permits.
And
WHEREAS, Buyer desires to purchase
all of the afore mentioned assets of Tennessee Restaurant Concepts,
Inc. Seller, including the right to operate an Adult Entertainment
Establishment at 3918 Winchester, Memphis, Tennessee, insofar as is
permitted by existing City of Memphis Ordinances.
IT IS AGREED AS FOLLOWS:
1. Subject to the following terms
and conditions of this Agreement, Seller shall sell, convey,
transfer and assign and deliver to the buyer all of the Assets of
Seller, as shown on the attached Exhibit “A”, and
including the right to operate an Adult Entertainment Establishment
at 3918 Winchester, Memphis, Tennessee, insofar as permitted by
state and city law, for the total sum of Five Hundred Thousand
Dollars ($500,000.00) paid at closing as set forth below. Buyer is
not purchasing the name “PT’s Showclub” nor any
rights thereto and agrees remove all signage or other items which
contain that mark or name within six months of the closing
date.
2. Seller shall in further
consideration and as a condition precedent to Buyer’s
obligations hereunder, cause the property known as 3918 Winchester,
Memphis, Tennessee, hereinafter referred to as the Real Estate, to
be sold to the Buyer through VCG Real Estate Holding Company,
subject to the terms and conditions set forth on the purchase
contract, which is attached hereto as Exhibit “B”. The
closing of the purchase of the Real Estate shall take place at the
same time as the closing of the purchase of the assets or such
other date as the parties may agree. The purchase price of the real
estate will be One Million One Hundred Thousand Dollars
(1,100,000.00). Buyer agrees not to allow the first mortgage on the
property to exceed Six Hundred Thousand Dollars ($600,000.00) until
the second mortgage securing the note held by VCG Real Estate
Holding Company is retired.
3. Buyer shall pay VCG Real Estate
Holding Company the sum of One Million One Hundred Thousand Dollars
($1,100,000.00) at closing for the Real Estate and to Seller the
sum of Five Hundred Thousand Dollars for the Business and Assets at
closing. This will be paid in the following manner (1) Buyer will
pay to Seller cash in the sum of Four Hundred Thousand Dollars
($400,000.00), including the deposit already paid, (2) A wraparound
note secured by a wraparound deed of trust in the principle sum of
$1,100,000.00 due to VCG Real Estate Holding Company and (3) A One
Hundred Thousand Dollars ($100,000.00) Note due to Seller. The
$100,000.00 Note shall be secured by a UCC-1 Financing Statement
and Security Agreement filed as against the Assets. The $100,000.00
Note shall also be personally guaranteed and cross-collateralized
against the Real Estate in the Wraparound Deed of Trust which
$600,000.00 of the wrap note shall be paid in full within 6 months
of the date of execution of this document. The balance of the
Wrapnote will at all times be secured by a second mortgage on the
property, subject to subordination as set forth above, with 7%
interest amortized over 30 years with a balloon payment in 5 years.
Buyer agrees to provide financial statements to VCG Real Estate
Holding Company sufficient to satisfy VCG Real Estate Holding
Company of buyer’s ability to pay the note.
4. Buyer confirms by the execution
of this agreement that it has visually and physically inspected the
premises at 3918 Winchester and that the items listed on Exhibit
“A”, fairly and reasonably reflects those items listed
therein as being on the premises on the day and date of closing.
Buyer asserts that the purchase price and the allocation of the
funds for the real estate and the assets of Tennessee Restaurant
Concepts represent fair value for each and were negotiated at arms
length. Buyer also agrees to close on the purchase of the Assets
and the Real Estate within 24 hours of the approval for a liquor
license from the City of Memphis Alcohol Commission.
5. Seller makes no representations
or warranties regarding the condition or character of any of the
listed assets and such are sold AS IS and WHERE IS. It is
acknowledged that the Buyer has inspected the equipment and has
knowingly made a decision to purchase said assets without any
warranties or representations by the Seller as to the condition,
merchantability, or fitness for particular purpose of use.
Provided, however, Seller warrants that the said assets shall be in
as good working condition as of the date of possession.
6. Seller warrants that it has tile
sole and lawful right and title to sell such assets; that there are
no known judgments or tax liens on said assets; and that there are
no known encumbrances, attachments, liens or levies existing as of
the date of execution of this agreement. Provided, however, that in
the event such encumbrances do exist, the Seller shall hold the
Buyer harmless from any such liens, encumbrances, attachments or
levies arising out of Seller’s possession, ownership or use
of said assets prior to the sale herein.
7. Seller does not warrant or
guarantee that the State of Tennessee or the City of Memphis
Tennessee will always permit the right to operate an Adult
Entertainment Establishment at 3918 Winchester, Memphis, Tennessee,
although Seller does represent that the said location is and has
been an Adult Entertainment location since 1981 and that such has
been zoned and grandfathered into existing zoning ordinances;
further, Seller represents that he knows of no City or State zoning
ordinance or statute that would prohibit buyer from continuing to
operate an
