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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 Adult Entertainment Establishment at that
location.
8. Buyer acknowledges that it
has not relied on any representation or warranties of either the
Seller,
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