PURCHASE AND SALE AGREEMENT FOR CERTAIN ASSETS

 

 

 

                                                                  Exhibit 10 (l)

 

 

                 PURCHASE AND SALE AGREEMENT FOR CERTAIN ASSETS

                 ----------------------------------------------

 

         THIS PURCHASE AND SALE AGREEMENT FOR CERTAIN ASSETS (this   "Agreement")

is entered   into this ___ day of May,   2004,   by and among   BAYSHORE   RESTAURANT

MANAGEMENT   CORP.,   a Florida   corporation   ("Bayshore"),   MONTY'S IN THE GROVE,

INC.,   a Florida   corporation,   f/k/a,   Terremark   Stone Crabs,   Inc.   ("Monty's

Upstairs"),   and   HOCUS-POCUS,    INC.,   a   Florida   corporation   ("Hocus-Pocus")

(Bayshore,   Upstairs and   Hocus-Pocus   are   sometimes   collectively   referred to

herein as, "Seller"),   and BAYSHORE   LANDINGS,   LLC, a Florida limited liability

company   ("Landings"),   its successors   and/or assigns and HMG BAYSHORE,   LLC, a

Florida   limited   liability   company ("HMG",   its successors   and/or assigns and

together with Landings,   collectively,   "Buyer").   The "Effective   Date" of this

Agreement,   shall be the day in which the last of Seller,   Buyer or any   joinder

party signs this Agreement and a fully executed copy delivered to Buyer.

 

                                    RECITALS:

 

         A. The City of Miami,   Florida, a municipal corporation of the State of

Florida (the "City"),   entered into that certain Lease   Agreement   with Bayshore

Properties,   Inc.   ("BPI")   dated   September   20, 1985 (the "Lease") for certain

premises   described on Exhibit "A",   attached hereto and made a part hereof (the

"Leased Premises").

 

         B. BPI   assigned all of its rights and   obligations   under the Lease to

Grove Marina Market,   Ltd., a Florida limited   partnership   ("Master Tenant") by

virtue of that certain   Assignment   of Lease dated March 16, 1986,   that certain

Acceptance   of   Assignment   of Lease,   dated March 14,   1986,   and that   certain

Consent by and between the City and BPI dated March 13, 1986 (the Lease together

with   the   foregoing   agreements   is   collectively   referred   to as the   "Master

Lease").   Pursuant to the terms of the Master   Lease Master   Tenant   constructed

certain improvements on the Leased Premises   (collectively,   the "Improvements")

including   but not   limited to   approximately   20,000   rentable   square   feet of

office/retail space ("Retail Space");   approximately 20,000 rentable square feet

of restaurant space located on the second floor of the Retail Space ("Restaurant

Space");   and approximately   15,000 rentable square feet of space comprising the

raw bar ("Raw Bar   Space") and   approximately   3.7 acres of   submerged   land and

approximately   132 dock   slips   comprising   the   marina   portion   of the   Leased

Premises (the "Marina Space").

 

         C. Master Tenant   entered into that certain   Sublease dated as of March

14,   1986 (the   "Original   Sublease")   with   Marina   Restaurant,   Ltd.   ("Master

Subtenant"),   under which Master Subtenant subleased the entire Leased Premises.

The   Original   Lease was   subsequently   amended   by that   certain   Amendment   to

Sublease dated as of June 30, 1986 and that certain Second Amendment to Sublease

(the Original   Sublease as modified by the foregoing   amendments is collectively

referred to herein as the "Master Sublease").

 

         D. Master   Tenant,   Master   Subtenant and   Bayshore,   entered into that

certain   Assignment of Sublease effective as of March 1, 1991 whereby the Master

Sublease was assigned by Master   Subtenant to Bayshore,   as subtenant.   Bayshore

desires to assign to Buyer all of its rights under the Master   Sublease and sell

its ownership of the   Improvements to Buyer pursuant to the terms and conditions

contained in this Agreement.

 

 

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         E.   Subsequent to the   assignment   of the Master   Sublease to Bayshore,

Bayshore entered into an agreement with Monty's to operate the Raw Bar Space and

in   connection   therewith   Monty's owns certain   equipment,   inventory and other

personal   property   that it desires to sell to Buyer   pursuant   to the terms and

conditions contained in this Agreement.

 

         F. The Restaurant Space was further   subleased by Bayshore to Terremark

Stone Crabs,   Inc., (now known as Monty's in the Grove, Inc., and defined herein

as "Monty's   Upstairs"),   pursuant to that   certain   Sub-Lease   Agreement   dated

effective as of April 28, 1991 (the   "Upstairs   Restaurant   Sublease").   Monty's

Upstairs and Bayshore desire to assign to Buyer all of their   respective   rights

under the Upstairs   Restaurant   Sublease.   Monty's Upstairs currently operates a

restaurant   in the   Restaurant   Space and in connection   therewith   owns certain

equipment,   inventory   and other   personal   property   that it desires to sell to

Buyer pursuant to the terms and conditions contained in this Agreement.

 

         G. Master Tenant has leased certain submerged land contained within the

Leased Premises from the Trustees of the Internal   Improvement   Fund ("TIIF") by

virtue of Sovereign   Submerged Land Lease No.   130288206 (the "Tenant   Submerged

Land   Lease")   and   Seller   has the   right   to use the   Submerged   Land   and the

improvements   constructed thereon by virtue of the terms of the Master Lease. By

its joinder to this   Agreement,   Master Tenant shall assign its rights under the

Tenant Submerged Land Lease and its ownership of the improvements constructed on

the land demised therein to Buyer pursuant to the terms and conditions contained

in this Agreement.

 

         H.   The   City is in the   process   of   leasing   certain   submerged   land

contained   within   the   Leased   Premises   from   TIIF by   virtue   of a   sovereign

submerged   land lease ("City   Submerged Land Lease") and Seller has the right to

use the submerged   land   referenced   therein by virtue of the Master Lease.   The

remaining   portion of the submerged land within the Leased   Premises is owned by

the City and the Seller   has the right to use it by virtue of the Master   Lease.

(The Tenant Submerged Land Lease and the City Submerged Land Lease are sometimes

collectively   referred to herein as the "Submerged Land Lease"). The Seller owns

certain improvements within the area demised under the City Submerged Land Lease

and shall transfer its ownership of such improvements to Buyer.

 

         I.   Hocus-Pocus is the current   registered   owner of the trademarks and

service marks commonly known as "Monty Trainer's," Monty's Stone Crab," "Monty's

Conch,"   "Monty's" and Monty's Marina,   together with certain other   trademarks,

trade secrets, unique features,   concepts,   designs operating procedures recipes

and materials used in connection with the Restaurant Space and the Raw Bar Space

(collectively, the "Trademarks and Other Rights"). Hocus-Pocus desires to permit

Buyer   to use the   Trademarks   and   Other   Rights   on a   non-exclusive   basis in

connection   with its   business   operations   at the Project   (as   defined   below)

pursuant to the terms and conditions and conditions contained in this Agreement.

 

         J. Buyer   desires to purchase all of Seller's   rights to use the Leased

Premises,   own the Improvements,   own certain personalty used in connection with

and operate two restaurants,   a marina and retail and office facility located at

the Leased   Premises and use the Trademarks and Other Rights on a non- exclusive

basis (collectively, the "Project"). Seller desires to sell and

 

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assign to Buyer the assets of the Project pursuant to the terms and conditions

contained in this Agreement.

 

         NOW   THEREFORE,   in   consideration   of the mutual   covenants   set forth

herein and other good and valuable consideration, the receipt and sufficiency of

which are hereby acknowledged, the parties hereto hereby agree as follows:

 

         1. Sole and Purchase.   Upon the terms and subject to the conditions set

forth in this Agreement, Seller (and/or each individual party comprising Seller,

as appropriate) shall sell, transfer,   convey,   assign and deliver to Buyer, and

Buyer shall   purchase and acquire   from Seller   (and/or   each   individual   party

comprising   Seller,   as   appropriate),   free and clear of all liens,   ~ pledges,

mortgages,   charges and encumbrances of any nature whatsoever, at the Closing on

the Closing Date (as such terms are defined below), all of Seller's right, title

and   interest   in   and to   the   following   assets   (collectively   the   "Acquired

Assets"):

 

                   1.1 The Master Sublease, Master Lease, the Upstairs Restaurant

Sublease,   the Tenant   Submerged   Land Lease and the City   Submerged   Land Lease

(collectively,   the "Master Lease   Agreements") to be conveyed at the Closing by

assignment   of   Seller's   interest   in the   Master   Lease   Agreements   and by an

assignment   of Master   Tenant's   interest   in the   Master   Lease and the   Tenant

Submerged Land Lease;

 

                  1.2 Any and all   Improvements   located   on,   in or   about   the

Leased Premises (including, but not limited to the buildings, awnings, walkways,

docks,   piers,   fences,   chickee huts, signage and light fixtures located in the

Retail Space, the Raw Bar Space, the Restaurant Space and the Marina Space);

 

                  1.3 All tangible personal property of any kind owned by Seller

and located on,   attached to or used in connection   with the Project   and/or the

Improvements, including, but not limited to, all furniture, fixtures, equipment,

appliances,   tools, kitchen and bar supplies, food and liquor inventory, linens,

glassware,   menus, recipes, signage,   silverware, pots and pans, carts, cleaning

supplies and materials,   telephone   numbers and exchanges,   computers,   computer

software, menus, signs and other tangible personalty, all to the extent owned by

Seller,   located at the Leased Premises and used in connection with the Project,

some   of   which   are    specifically    listed   in   Exhibit   "C"   attached   hereto

(collectively the "Personalty");

 

                  1.4 Any and all leases, licenses,   concessionaire's agreements

and all other similar agreements   relating to the use or occupancy of the Retail

Space, the Marina Space or any other portion of the Project   (collectively,   the

"Tenant   Leases"),   and all security   deposits and other similar deposits if any

("Tenant Security"), made by licensees, tenants,   concessionaires or other users

at the Project (collectively, the "Tenants") under such Tenant Leases;

 

                  1.5   If   and   to   the    extent    transferable,     any   and   all

governmental    licenses    and   permits   for   the    operation    of   the   Property

(collectively,   the "Operating Permits"),   including but not limited to the 4COP

SRX Liquor   License No. BEV 2300929   ("Liquor   License")   used at the Restaurant

Space and the Raw Bar Space;

 

 

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                  1 .6 Any and all of Seller's rights,   easements,   licenses and

privileges at the Leased Premises or appertaining to the Project; and

 

                  1 .7 Any and all of the leases and the   maintenance,   service,

advertising   and   other   like   contracts   and   agreements   with   respect   to the

operation of the Project   listed in Exhibit "C" attached to this   Agreement (the

"Operating   Contracts");   unless Buyer provides   written notice to Seller during

the Due   Diligence   Period   that it does not elect to assume   certain   Operating

Contracts then Buyer shall only acquire the Operating Contracts it so elects.

 

         2. Purchase   Price.   The Purchase Price for which Seller agrees to sell

and   assign   the   Acquired   Assets to Buyer,   and which   Buyer   agrees to pay to

Seller,   subject to the terms and conditions   hereof and subject to adjustments,

credits and prorations as hereinafter provided, is Thirteen Million Five Hundred

Thousand   and   No/100   Dollars   ($13,500,000.00)   (the   "Purchase   Price").   The

Purchase   Price   shall   be paid in   accordance   with   the   following   terms   and

conditions:

 

                  2.1   One   Hundred   Thirty-Five   Thousand   and   No/100   Dollars

($135,000.00)   (the   "Initial   Escrow   Deposit")   will be deposited   with Bilzin

Sumberg Baena Price & Axelrod LLP ("Escrow   Agent") within two (2) business days

after the Effective Date;

 

                  2.2 In the event   that this   Agreement   is not   terminated   by

Buyer on or before the   expiration   of the Due   Diligence   Period (as defined in

Section 4 below), on the first business day thereafter,   Buyer shall deposit and

additional Three Hundred   Sixty-Five and No/100   ($365,000.00)   (the "Additional

Escrow Deposit") with Escrow Agent (once the Additional   Escrow Deposit is made,

the Initial Escrow Deposit and the Additional Escrow Deposit shall   collectively

be referred to as, the "Escrow Deposit"). After the Additional Escrow Deposit is

made, the Escrow Deposit shall be non-refundable   to Buyer,   except in the event

of a Seller   default or failure of a   condition   precedent   in Section 3.1 , but

shall be applicable   against the Purchase   Price at Closing.   The Initial Escrow

Deposit and if paid the Additional   Escrow Deposit shall be held by Escrow Agent

in accordance with the provisions set forth in Exhibit "B" attached   hereto.   In

the event that Buyer   terminates   this   Agreement on or before the expiration of

the Due   Diligence   Period   or fails to timely   deliver   the   Additional   Escrow

Deposit,   the Initial Escrow Deposit shall be refunded to Buyer by Escrow Agent,

and thereafter the parties to this Agreement shall have no other   obligations to

each   other,   except for this   obligations   that   expressly   survive   such early

termination.

 

                  2.3   The   balance   of   the   Purchase   Price,   subject   to   the

prorations set forth in Section 10, shall be paid by Buyer at Closing.

 

         3 . Buyer's   Conditions   Precedent to Closing.   Buyer's   obligation   to

purchase   the Acquired   Assets   pursuant to this   Agreement   shall be subject to

unconditional   completion   of   the   following   (collectively,    the   "Conditions

Precedent");

 

                  3.1 Seller   obtaining a   memorandum   of   understanding   and/or

estoppel   letter(s),   in form and   content   acceptable   to   Buyer,   by and among

Seller,   Buyer, the City and Master Tenant   containing,   among other things, the

following provisions: (i) all required approvals by the

 

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City, the Trustees of the Internal   Improvement Fund ("TIIF") and any applicable

governmental authority to the Assignment of the Master Lease Documents to Buyer;

(ii) conceptual approval by the City and any applicable   governmental   authority

of the   proposed   conversion   of a portion of the   Restaurant   Space into office

space and the   expansion   of a portion of   Restaurant   Space to include a second

floor   outdoor   eating area and bar (such   conceptual   approval does not include

formal   site plan   approval   and/or the   issuance of   building   permits),   (iii)

certification by the City, TIIF and any applicable   governmental   authority that

all   obligations of the Master Tenant under the Master Lease have been met as of

the Closing Date, and that no additional liabilities under the Master Lease that

accrued   before   the   Closing   Date   shall   be the   obligation   of   Buyer;   (iv)

certification   by the Master   Tenant and any other   applicable   person or entity

that all obligations of Master   Subtenant and Bayshore under the Master Sublease

have been met as of the Closing Date, and that no additional   liabilities   under

the Master Sublease that accrued before the Closing Date shall be the obligation

of Buyer; (v) confirmation from the City, TIIF and the Master Tenant that, as of

the Closing Date, no default   exists under any of the Master Lease   Documents or

with the   passage   of time or the   giving of   notice   would   constitute   default

thereunder;   and   (vi)   a   general   consent   by   the   City   and   any   applicable

governmental authority of the assignment of the other Acquired Assets to Buyer.

 

                  3.2 A certification   by Buyer that the Personalty   remains on,

attached   to or   available   for   Buyer's use in   connection   with the   continued

operation of the Project as of the Closing Date.

 

                  3.3 Delivery of all of the Seller's Closing Documents (defined

below).

 

                  3.4 The City, TIIF and any applicable   governmental   authority

shall have:   (i) executed and   delivered the City   Submerged   Land Lease and any

necessary amendments thereto to provide for a term of no less than 10 years, the

legal description of the City Submerged Land Lease shall, at a minimum, describe

the land upon which the current   docks are located and (ii) the Buyer shall have

the express   right to use the submerged   land demised   under the City   Submerged

Land Lease and any deed or other restriction preventing the same shall have been

waived.   The Tenant   Submerged   Land Lease shall have been assigned to Buyer and

all necessary governmental consents and/or approvals shall have been obtained.

 

                  3.5 Buyer shall have received   appropriate   approvals from the

applicable governmental   authorities to transfer the Liquor License to Buyer. In

the event   Buyer   fails to obtain   such   approvals   but is   confident   that such

approvals   will be   forthcoming,   Buyer shall close provided that the applicable

Seller agrees to enter into a concession   agreement   whereby the Seller   holding

the Liquor   License   sells liquor at the Project at no   additional   charge until

such   time as the   Liquor   License   is   transferred   to Buyer.   Buyer   shall use

diligent efforts to obtain such approvals prior to Closing.

 

                  3.6 All   representations and warranties of Seller contained in

this Agreement   shall be true and correct as of the Closing Date in all material

respects.

 

                  3.7 Seller shall have obtained from the "New Shareholders" as

defined in that certain Second Amendment to   Shareholders'   Agreement of Monty's

Holdings, Inc. ("Holdings")

 

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dated August 27, 2003 among Stephen J. Kneapler,   Manuel A. Diaz, Robert Licero,

Ralph Velocci,   Daniel J. Long,   Rolando Delgado,   Julissa Caso Delgado,   Emilio

Sauma,   Hayment Sauma, Frank Torres,   Jacqueline   Torres,   Eduardo J. Garcea and

Aradelyses Garcea, a binding payoff letter which upon payment of such sums shall

satisfy   any   and   all   claims   and/or   disputes   arising   amongst   any   of   the

shareholders   of Holdings and/or   Holdings,   consent to the sale of the Acquired

Assets to Buyer,   release   all   claims of each New   Shareholder,   and   provide a

general   release,   substantially   in the form of the estoppel letter and general

release   attached   hereto as Exhibit "F"   ("Estoppel   and   Release").   The fully

executed   Estoppel and Release   shall be obtained by Seller within 15 days after

the Effective Date ("Estoppel and Release   Delivery Date") and copies   delivered

to Buyer.   The original   executed   Release(s)   shall be held in escrow by Escrow

Agent.   At Closing the Escrow Agent shall pay the New   Shareholders   the amounts

set forth in the Estoppel(s)   from the Closing proceeds and deliver the Releases

to the parties being released therein.

 

         4. Title and Due Diligence Period.

 

                  4.1 Due   Diligence   Period.   Buyer   shall have until 5:00 p.m.

(Eastern   time) on the   thirtieth   (30th) day following the Estoppel and Release

Delivery Date (the "Due Diligence   Period") within which to inspect the Project.

Seller shall allow Buyer and its agents   reasonable access to the Project during

normal business hours to conduct such review as Buyer deems appropriate.   Within

three (3) business days after the Effective Date,   Seller shall deliver to Buyer

all documents,   records and other information   relating to the Project which are

in Seller's possession, including, but not limited to:

 

                  4.1.1   The   Master   Lease   Documents   and   the   Tenant   Leases

(including any and all amendments,   assignments,   memoranda or other   agreements

related   thereto   (i.e.   the waiver(s) of the deed   restriction(s)   by TIIF with

respect to the use of the submerged land by a private entity and the calculation

of all fees and or payments due in connection with such waiver(s));

 

                  4.1.2 A list of all Tenants,   with terms of the Tenant   Leases

(the "Rent Roll") including amount of rent, the amount of the security   deposit,

if any, whether a brokerage   commission,   if any, is due and the duration of the

lease.

 

                  4.1.3 Copies of all Trademarks and Other Rights;

 

                  4.1.4 A video tape containing the Personalty not expressly set

forth on the attached Exhibit "C"

 

                  4.1.5   Copies   of the   inventory   lists   for   the   Raw Bar and

Restaurant for March 2004 and April 2004;

 

                  4.1.6   Copies   of   all   Operating   Permits,    certificates   of

occupancy,   licenses, permits and other governmental approvals used by Seller in

connection   with its business   operations at the Project or the   construction of

any improvements at the Project;

 

 

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                  4.1.7 Copies of all Operating Contracts and similar agreements

currently affecting the Leased Premises and/ or the Project;

 

                  4.1.8   A list of all of   Seller's   employees   together   with a

description of their work duties, experience and current compensation;

 

                  4.1.9   Copies   of   all   surveys,    plans   and   specifications,

engineering,    environmental,    property   condition   and   similar   type   reports

regarding the Leased Premises and/ or the Project;

 

                  4.1.10 Copies of all settlement   agreements and correspondence

with the Florida   Department   of Revenue and the   Internal   Revenue   Service and

other   taxing    authorities    concerning   any   delinquent   tax   payments   and/or

settlement agreements or payment plans with respect thereto.

 

In the event the   foregoing   information   is not   timely   delivered   Buyer in an

orderly fashion, the Due Diligence Period shall be extended one day for each day

the Seller is late in delivering the same.

 

                  4.2 Inspection   Rights.   Buyer's right of inspection   shall be

subject to the rights of Tenants under the Tenant Leases.   Seller shall have the

right to be present at any or all inspections but Seller's   unavailability shall

not delay such   inspections.   Buyer shall be entitled to contact Tenants without

the   consent of Seller.   Buyer shall be   responsible   for   restoring   the Leased

Premises   or any   portion   thereof   to the   condition   in which it was   prior to

Buyer's   inspection   and for repairing any damage   thereto   resulting   from such

inspections    performed   by   Buyer,    its   agents,    engineers   or    inspectors.

Notwithstanding   anything to the   contrary   contained in this   Agreement,   Buyer

shall   indemnify   and hold Seller   harmless from and against any and all losses,

costs, damages,   liabilities and other expenses (including,   without limitation,

attorneys'   fees incurred in connection   therewith)   arising out of or resulting

from Buyer's inspections as provided for herein.   Within seven (7) days prior to

the expiration of the Due Diligence Period Seller shall obtain on Buyer's behalf

and deliver to Buyer, estoppel letters in form and content reasonably acceptable

to Buyer,   from all Tenants at the Project   for any Retail   Space,   for any slip

users   that   are   associated   with   any   Leases   for the   Retail   Space   and any

additional estoppel letters required by any lender of Buyer.

 

                  4.3 Termination Right. Buyer shall have the right to terminate

this Agreement for any reason whatsoever in its sole and absolute   discretion on

or prior to the expiration of the Due Diligence   Period by delivering   notice to

Seller during the Due Diligence   Period,   whereupon the Escrow   Deposit shall be

returned to Buyer,   and then   neither   party   shall have any   further   rights or

obligations   under this   Agreement.   Buyer's   failure to deposit the   Additional

Escrow   Deposit   with the Escrow   Agent on or before the   expiration   of the Due

Diligence   Period as   provided   for in   Section 2 shall   also   serve as   Buyer's

election to terminate the   Agreement.   In the event Buyer does not terminate the

Agreement,   the Buyer,   its agents and employees shall have access to the Leased

Premises and Project through Closing for inspection purposes. . 7

 

                  4.4   Evidence of Title.   Seller   shall,   within three (3) days

after the date of this   Agreement,   deliver to Buyer a copy of an existing title

insurance   policy for the Leased   Premises   and a survey.   Seller shall at least

five (5) business   days prior to the   expiration   of the Due   Diligence   Period,

deliver to Buyer a current ALTA Survey dated within 90 days of the Closing Date,

certified to the Escrow Agent,   Title Insurer (as defined below),   Buyer and any

lender selected by Buyer (the "Survey"). Buyer shall, prior to the expiration of

the Due Diligence   Period,   obtain a current title insurance   commitment for the

Leased Premises from a nationally recognized title insurance company,   issued by

and through   the Escrow   Agent (the "Title   Insurer").   If the Title   Commitment

discloses   exceptions that are objectionable to Buyer, then Buyer shall have ten

(10) days after its receipt of the Title   Commitment and the Survey within which

to notify Seller of any such exceptions to title to which Buyer objects.   If any

such exceptions to title arise between the date of the Title   Commitment and the

Closing,   Buyer   shall   have five (5) days   after its   receipt of notice of same

within   which   to   notify   Seller   of any   such   exception   to title to which it

objects.   Any such exceptions not objected to by Buyer as aforesaid shall become

Permitted   Exceptions.   If Buyer objects to any such exceptions to title, Seller

shall have until   Closing (but in any event at least   fifteen (15) days after it

receives notice of Buyer's objection(s)) to remove such exceptions as instructed

by the Title Insurer. As of the Closing Date, if Seller fails to remove any such

exceptions or cure any of Buyer's title   objections,   Buyer may, as its sole and

exclusive   remedy,   terminate   this Agreement and obtain a return of the Initial

Escrow Deposit. If Buyer does not elect to terminate this Agreement, Buyer shall

consummate   the Closing and accept a leasehold   interest in the Leased   Premises

subject to all such exceptions to title (in which event,   all such exceptions to

title shall be deemed "Permitted Exceptions"). If the Title Commitment shows any

pending liens against the Project,   Seller shall pay the amount of such liens at

or prior to Closing.   In addition,   Seller shall cure all outstanding   financial

obligations relating to the Acquired Assets,   including, but not limited to, any

mortgage or other liability,   delinquent taxes (of any kind),   employee wages or

related   expenses,   equipment lease   liabilities,   shareholder   suits or related

claims,   or any   other   item   contained   on Part 1 of   Schedule   B of the   title

commitment on or before Closing.   All such liens and encumbrances   shall be paid

through escrow at Closing.   Notwithstanding the foregoing,   nothing contained in

this Section 4.4 shall limit   Buyer's right to terminate   this   Agreement in its

sole discretion in accordance with and pursuant to the provisions of Section 4.3

hereof.

 

         5. "AS-IS" Condition.   Except as expressly provided for herein,   Seller

is selling the Acquired Assets in their respective "As-Is"   condition,   however,

Seller agrees that on or after the Effective Date Seller shall not remove any of

the Acquired Assets from the Leased Premises   without the written consent of the

Buyer,   except for routine   consumption of inventory and the replacement of like

Personalty in the normal course of Seller's business operations.

 

         6. Seller's   Covenants.   Seller,   jointly and severally,   agrees to the

following:

 

                  6.1 Seller's   Pre-Closing   Covenants.   From the Effective Date

until the Closing Date, Seller shall operate, maintain and manage the Project in

substantially   the   same   manner   as it is   presently   being   operated   (but   in

compliance with all applicable laws and governmental regulations),   such that at

the Closing Date the Acquired Assets shall be in substantially the same physical

condition as on the date hereof,   normal wear and tear, damage or destruction by

fire or

 

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other   casualty or damage   caused by Buyer during the Due   Diligence   Period and

consumption of inventory in the normal course of business excepted.

 

                  6.1.1 Seller shall continue in effect all applicable insurance

coverage for the Project existing as of the Effective Date, and Seller shall not

enter into any new agreements   except those,   which are   cancelable   upon thirty

days' prior written notice.

 

                  6.1.2   Seller shall not take any action that would make any of

Seller's representations and warranties herein untrue or incorrect. Seller shall

notify Buyer promptly if Seller   becomes aware of any   transaction or occurrence

prior to the Closing   which would make any   representation   and warranty made by

Seller   herein   untrue or incorrect in any   material   respect.   Seller shall not

modify or   terminate,   or waive or release any rights,   exercise   any options or

grant any   consents   under the Leases,   the   Operating   Contracts   or   Operating

Permits.

 

                  6.1.3   Seller   shall   not   modify   or   terminate,   or waive or

release any rights,   exercise any options or grant any consents under the Tenant

Leases.   Seller   shall   not   enter   into any new   lease or   other   agreement   or

arrangement   that   would or could   remain   binding on Buyer   after the   Closing;

except that the Seller shall have the right,   prior to the Closing,   to continue

(and shall   continue)   to enter into   licenses   with boat   owners for boat slips

provided the term is 30 days or less and the terms and conditions thereof are at

market rates and   substantially   the same as (or more   favorable to Seller than)

the boat slip   licenses   that   have   been   entered   into by   Seller   within   the

three-month period immediately prior to the date hereof.

 

                   6.1.4   Seller shall keep all   Operating   Permits in full force

and renew any of the same which expire   prior to the Closing.   In the event that

any Operating Permit is suspended or revoked,   Seller will promptly notify Buyer

of that fact,   and, if such suspension or revocation is based on the actions (or

inaction)   of   Seller,   Seller,   at its sole   expense,   shall   use   commercially

reasonable   efforts to have such Operating Permit reinstated   without limitation

or condition.

 

                  6.1.5   Seller   shall   maintain   at   the   Property   normal   and

customary   quantities of supplies for the use,   operation and maintenance of the

Property.   Seller   shall   maintain   the   Inventory   in the Raw Bar   Space to the

standards   necessary   to   continue   the routine   operation   of the Raw Bar Space

without interruption.

 

                  6.1.6   Seller   shall   perform   and   observe   in   all   material

respects   all of the   covenants   and   conditions   required to be   performed   and

observed by them under the Master Lease   Documents,   the Leases,   the   Operating

Contracts,   and Operating   Permits and shall promptly deliver to Buyer copies of

any notices given or received by any Seller to or from any other party thereto.

 

                  6.1.7   Seller   shall pay for when due all   goods and   supplies

delivered   to, and   services   performed   at, the   Leased   Premises   prior to the

Closing Date.

 

                  6.1.8 Seller shall pay all brokerage commissions in connection

with   the   current   term   of   all   Leases   and   any   expansions,   modifications,

amendments, renewals or

 

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extensions   to the Leases   that are due and payable   prior to the Closing   Date.

Seller shall not apply any Lease Security to cure a default by a tenant,   unless

such application is permitted thereunder and such tenant either has vacated, or,

with Buyer's prior written consent,   has been evicted or dispossessed   from, the

Project.

 

                  6.1.9   Seller   shall   not   alter   the   Project   except to make

necessary   non-structural   repairs to the   Project.   Seller shall not perform or

permit any excavation, construction or removal of any improvements upon or about

the Project.

 

                  6.1.10   Seller   shall pay when due all sales   taxes,   employee

taxes and other payments due to any governmental authority.

 

                  6.2 Seller's Post-Closing Covenants.

 

                  6.2.1   Seller   shall,   jointly and   severally,   remain   solely

liable for all liabilities   related to the Leased Premises,   the Project and the

Acquired   Assets   accruing on or before the Closing Date   regardless   as to when

Seller is notified or becomes aware of such liabilities. Except for the Acquired

Assets, Buyer does not assume, and shall not in any manner become responsible or

liable for, and Seller, jointly and severally, shall retain, pay, discharge, and

perform in full,   all other debts,   obligations   or liabilities of Seller of any

nature   whatsoever,   whether known or unknown,   fixed,   contingent or otherwise,

including,   without   limitation,   any debts,   obligations   or other   liabilities

directly or indirectly   arising out of, or resulting   from, the Seller's   lease,

ownership or use of the Leased Premises,   the Acquired Assets and/or the Project

prior to the Closing Date. Seller, jointly and severally,   also agree to pay:(i)

for all sales tax; (ii) all income tax,   withholding   tax,   payroll tax,   Social

Security tax,   unemployment tax and other tax of any employees of Seller arising

prior to the Closing Date;   (iii) all workers'   compensation and other insurance

premiums due with respect to the employees of Seller for the period ending as of

the   Closing   Date,   (iv) real   estate   taxes and   assessments   (even if charged

subsequent   to Closing but   applicable   to the time period   prior to the Closing

Date);   and (v) all other costs and   expenses   incurred by Seller in   connection

with the use of the Leased   Premises,   the ownership of the Acquired   Assets and

the   operation   of   the   Project    prior   to   or   on   the   Closing    Date.    The

indemnification   provisions   of   this   Section   6.2.1   shall   expressly   survive

Closing.

 

                  6.2.2 For as long as the Master   Lease is in   effect,   none of

Seller,   Monty's   Holdings,   Inc. or any of their   respective   principals   shall

operate, own or control any raw bar type restaurant or casual seafood restaurant

within a two mile radius of the Project.

 

         7.   Representations and Warranties of Seller.   Seller hereby represents

and covenants to Buyer that each of the following representations and warranties

is true and correct as of the Effective Date and shall be true and correct as of

the Closing   Date in all   material   respects.   Each of the   representations   and

warranties contained herein shall survive the Closing.

 

                  7.1 Authority.   Each of the entities comprising Seller: (i) is

an entity,   duly formed validly   existing and in good standing under the laws of

the State of Florida,   and (ii) has full and   absolute   power and   authority   to

enter into this Agreement and all documents to be delivered pursuant hereto, and

to assume and perform all of their respective obligations

 

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hereunder.   The execution and delivery of this Agreement and the   performance by

the each of the   entities   comprising   Seller   of their   respective   obligations

hereunder:   (i) has been duly authorized by all requisite   action and no further

action of approval is required to consummate the   transactions   herein;   (ii) do

not and will not cause any of the entities   comprising Seller to be in violation

of any law,   ordinance,   order or requirement or of any agreement or contract to

which each or any of the entities   comprising Seller is a party. The undersigned

individual(s)   is/are   authorized   to sign   on   behalf   of each of the   entities

comprising Seller and no additional signatures are required to bind Seller. This

Agreement constitutes, and such other documents will each constitute, the legal,

valid and binding   obligations of Seller,   enforceable in accordance   with their

respective terms.

 

                  7.2 Legal Action Against Seller. Except as expressly disclosed

on Schedule 7.2, there are no judgments,   orders, or decrees of any kind against

Seller unpaid or   unsatisfied   of record,   nor any legal   action,   suit or other

legal or   administrative   proceeding   pending before any court or administrative

agency relating to the Leased Premises,   the Acquired Assets or the Project, nor

are   there any   threatened   legal   action,   suit or other   legal   administrative

proceeding relating to the Leased Premises,   the Acquired Assets or the Project.

If there are any insurance claims or lawsuits (hereinafter a "Claim") handled by

Seller's insurance company, a list of such claims shall be provided by Seller to

Buyer within 3 business days of the Effective Date of this Agreement. Otherwise,

Seller has received no other notice of any Claim or action against Seller or any

entity comprising   Seller that affects the Leased Premises,   the Acquired Assets

or the Project.

 

                  7.3 Intellectual   Property.   Hocus-Pocus is the legal owner of

the   Trademarks   and Other Rights,   such   Trademarks   and Other Rights are fully

assignable,   on a   non-exclusive   basis,   and   there   are no other   intellectual

property,   trade or service   marks that are   currently   used at or in connection

with the current business operations at the Project.

 

                  7.4 Liens.   Except as   expressly   disclosed   on Schedule   7.4,

there are no claims for   labor,   services,   profit or   materials   furnished   for

constructing,   repairing or improving the same,   nor does Seller   anticipate any

such claims,   except in the normal   course of Seller's   business,   which will be

paid as of the Closing Date. Sellers have good and marketable title (a leasehold

right with respect to the Leased Premises) to all of the Acquired   Assets,   free

and clear of all   mortgages,   liens,   pledges,   charges or   encumbrances   of any

nature whatsoever, except for those certain first and second leasehold mortgages

in favor of Ocean Bank.

 

                  7.5 Hazardous   Materials.   To the best of Seller's   knowledge,

(i) the Leased Premises is not in violation of any law, rule, order, regulation,

ordinance   or other legal   requirement   pertaining   to or imposing   liability or

standards   of conduct   concerning   environmental   regulation,   contamination   or

clean-up,   including,   but   not   limited   to,   the   Comprehensive   Environmental

Response, Compensation and Liability Act, the Resource Conservation and Recovery

Act,   the   Emergency   Planning   and   Community   Right-to-Know   Act of 1986,   the

Hazardous Substances Transportation Act, the Solid Waste Disposal Act, the Clean

Water Act, the Clean Air Act, the Toxic Substance Control Act, the Safe Drinking

Water Act,   the   Occupational   Safety and Health Act, any state   super-lien   and

environmental clean-up statutes and all amendments to and regulations in respect

of the foregoing laws (collectively,

 

                                       11

 

 

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"Environmental Laws"); (ii) the Leased Premises is not subject to any private or

governmental lien or judicial or administrative   notice of violation,   action or

inquiry,   investigation or claim relating to hazardous,   toxic, dangerous and/or

regulated substances,   wastes,   materials, raw materials which include hazardous

constituents,   pollutants   or   contaminants,   including,   but   not   limited   to,

asbestos, asbestos containing materials,   petroleum,   tremolite,   anthlophylite,

actinolite,   polychlorinated   biphenyls,   solvents,   and any other substances or

materials which are included under or regulated by   Environmental   Laws or which

are considered by scientific   opinion to be otherwise   dangerous in terms of the

health,   safety and welfare of humans   (collectively,   "Hazardous   Substances");

(iii) no Hazardous Substances are or have been discharged,   generated,   treated,

disposed of or stored on, incorporated in, or removed or transported from any of

the Leased   Premises in   violation   of   Environmental   Laws;   (iv) no   Hazardous

Substances   are present in, on or under any of the Leased   Premises,   except for

substances   commonly used in the operation and   maintenance of the Project which

have been and are used, stored and disposed of in accordance with   Environmental

Laws; and (v) no underground storage tanks exist in the Leased Premises.

 

                  7.6 Tenant Leases.   Seller   represents that each of the Tenant

Leases is in full force and effect in accordance with its terms and has not been

modified,   amended or extended except as set forth therein, and is assignable by

the Seller to the Buyer without the need for the consent of any party.   The Rent

Roll is true and correct in all   material   aspects   and there are no   additional

leases   or   other   occupancy   agreements   affecting   the   Project   that   are not

contained on the Rent Roll.   Unless noted otherwise set forth on Schedule 7.6 by

Seller,   none of the Tenants are in default (beyond any applicable   grace period

provided   by such   Tenant   Lease)   in the   payment   of any   rent due   under   its

respective   Tenant Lease or, to the Seller's   knowledge,   in the   performance or

observance   of any   substantially   material   covenant or   condition   to be kept,

observed or   performed   by it under its Lease.   Seller has fully   performed   (or

shall on the Closing Date) all of Seller's material obligations under the Tenant

Lease that are required to be performed and all tenant improvement   construction

work   completed   by   Seller   has been   accepted   by the   tenants.   No   brokerage

commission   or   other   compensation   is due or   payable   to   any   person,   firm,

corporation   or other entity with respect to or on account of any of the Leases,

or any renewals thereof.

 

                  7.7   Operating   and    Financial    Statements.    The   operating

statements   to be provided to Buyer for January   2004,   February   2004 and March

2004 and all financial statements delivered to Buyer were prepared in accordance

with   generally   acceptable   accounting   principles    consistently   applied   and

accurately   and   completely   reflect the   revenue,   expenses   add income for the

Leased   Premises   for   the   periods   covered   thereby,   and the   amount   of each

individual   item of revenue and expense set forth therein is true and correct in

all material aspects.

 

                  7.8   Insurance.   Seller   has in full   force and   effect   fire,

extended risk   liability   insurance and windstorm   policies   covering the Leased

Premises,   the   Acquired   Assets and the Project for the full   replacement   cost

thereof.   Seller has not received from any insurance company carrying   insurance

or that has carried insurance on the Leased Premises, the Acquired Assets and/or

the   Project any notice of defect or   inadequacy   in   connection   with it or its

operation. Seller

 

 

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does not self-insure any portion of the Leased Premises,   the Acquired Assets or

the Project. Seller maintains proper flood insurance coverage.

 

                  7.9   Licenses   and   Permits.   All   required    certificates   of

occupancy,   Operating Permits,   authorizations   and approvals   necessary for the

operation of the Project have been validly   issued and are in good   standing and

shall remain so as of the Closing Date.   All charges and fees for such have been

paid in full through the Closing Date.

 

                  7.10 Taxes.   Except as expressly   disclosed on Schedule   7.10,

Seller has received no written   notice that the Project or any portion   thereof,

is subject to any special taxes, assessments or benefit charges except those, if

any, which are of record in the Public Records of Miami-Dade County, Florida nor

has Seller received notice of intention of any governmental   authority to impose

any such special   taxes,   assessments   or benefit   charges.   Except as expressly

disclosed   on   Schedule   7.10,   the Seller has paid in full all:   (i) ad valorem

property   taxes and other   assessments   levied on their   respective   assets   and

properties;   (ii) excise taxes;   (iii) franchise   taxes;   (iv) license fees; (v)

personal property taxes; (vi) sales and use taxes ; (vii) payroll and employment

taxes;   and (viii) and income   taxes which have become due and payable as of the

Closing   Date.   Seller   shall   remedy all   outstanding   tax matters on or before

Closing.

 

                  7.11 Inventories.   The inventories of Seller to be acquired by

Buyer,   shall consist of items of quality and quantity usable or saleable in the

normal course of its business and the values at which Seller's   inventories   are

carried reflect the normal inventory valuation policy of the Seller.

 

                  7.12 Employees.   As of the Closing Date, Seller shall not have

any employees employed at the Project ("Seller's Employees"). On or prior to the

Closing Date,   Seller shall pay all Seller's   Employees such amounts as shall be

due and owing to them for their services   through and including the Closing Date

and all Seller's Employees shall remove their personal property from the Project

as of the Closing Date. None of the entities   comprising Seller are party to any

collective-bargaining     agreement.     There    are    no    union    organizational

representation   efforts   underway or any unfair labor practice claims pending or

threatened, nor any existing labor strikes, slowdowns,   disputes,   grievances or

disturbances.

 

                  7.13 No Material Omissions.   Neither this Agreement (including

the Schedules and Exhibits) nor any other   certificate,   statement,   d