You are here: Agreements > Real Estate Purchase and Sale Agreement > REAL ESTATE PURCHASE AGREEMENT ("AGREEMENT")

Try our advanced search >>
CLAUSES Search Contract Clauses >>
Browse Contract Clause Library>>

Real Estate Purchase Agreement ("agreement")

Real Estate Purchase and Sale Agreement

Legal Documents
You are currently viewing:

 This Real Estate Purchase and Sale Agreement involves

RICKS CABARET INTERNATIONAL INC | Fourth Street Partnership | RCI Holdings, Inc | VCG Real Estate Holdings, Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Governing Law: Minnesota     Date: 3/24/2011
Industry: Restaurants     Sector: Services

join now
50 of the Top 250 law firms use our Products every day




THIS REAL ESTATE PURCHASE AGREEMENT is made and entered into as of the ____ day of _______________, 2011 (“ Effective Date ”), by and between Fourth Street Partnership, LLLP, a Minnesota limited liability limited partnership (" Seller ") and RCI Holdings, Inc., a Texas corporation, and / or its successors and assigns (" Purchaser ").


In consideration of the covenants and agreements contained herein, the parties agree as follows:



Property to be Purchased / Asset Purchase Concurrent.




Subject to compliance with the terms and conditions of this Agreement, Seller shall sell to Purchaser and Purchaser shall purchase from Seller the following (collectively the " Property "):




The real property located at 115 South Fourth Street, City of Minneapolis, County of Hennepin, State of Minnesota, legally described in Exhibit A attached hereto consisting of approximately 11,600 square feet of space, together with all easements, tenements, hereditaments, and appurtenances belonging thereto (the " Real Property ") and all buildings, structures, fixtures, and other improvements erected or placed on said Real Property (the " Improvements ").




All permits, licenses, warranties, contract rights and intangibles affecting the Real Property and Improvements which are to be assigned to Purchaser pursuant to this Agreement.




All existing surveys, blue prints, drawings, plans and specifications (including, without limitation, structural, HVAC, mechanical and plumbing plans and specifications) and other documentation for or with respect to the Property or any part thereof; all construction drawings, soil tests, environmental reports and appraisals and related reliance letters as more specifically set forth herein; and all available correspondence with other third parties concerning the Property.




All supplies, tools, machinery, equipment, appliances, and fixtures owned by Seller and located in the Improvements or on site at the Real Property and used in connection with the maintenance and operation of said Real Property or the Improvements (the "Personal Property").




RCI Dining Services MN (4 th Street), Inc., a Minnesota corporation and an affiliated entity of Purchaser (“ RCI Dining ”), Classic Affairs, Inc., a Minnesota corporation (“ Classic ”), and VCG Holding Corp., a Colorado corporation (“ VCGH ”), are parties to that certain Asset Purchase Agreement of even date herewith (the “ Asset Purchase Agreement ”) whereby RCI Dining has agreed to purchase from Classic and VCGH substantially all the assets owned by Classic and VCGH associated or used in connection with the operation of Schiek’s Palace Royale, an adult entertainment business serving alcoholic beverages operating at the Property under the terms of the Lease, as that term is defined in the Asset Purchase Agreement.  Purchaser’s consummation of the transaction contemplated herein is explicitly subject to and conditioned upon the closing of the transaction contemplated in the Asset Purchase Agreement.








Seller warrants that, on or before the Closing Date, Seller shall cancel and terminate the Lease so that Purchaser shall take title to the Property free and clear of the Lease.



Purchase Price .  The purchase price for the Property (" Purchase Price ") shall be Three Million Two Hundred Fifty Thousand and 00/100 Dollars ($3,250,000.00) payable (subject to prorations, reductions and credits as provided below) by wire transfer on the Closing Date.



Title to Be Delivered .  Seller agrees to convey good, marketable, insurable, fee simple title in the Property to Purchaser subject only to such exceptions to title as are permitted according to this Agreement.




As soon hereafter as reasonably possible and in any event within 10 days of the date hereof, the following shall occur:




Purchaser shall request, at Seller's expense, a commitment for an ALTA Form B extended coverage owner's title insurance policy (the " Commitment ") issued by Stewart Title Guaranty Company (“ Title Company ”) wherein said Title Company agrees to issue to Purchaser upon the recording of the deed and other conveyance documents referred to herein an ALTA Form B Owner's Title Insurance Policy (the " Title Policy ") in the full amount of the Purchase Price, with a zoning endorsement, so-called owner's extended coverage endorsement, and any other endorsements reasonably requested by Purchaser.  The Commitment will be accompanied by copies of all recorded documents affecting the Property.  At Closing, Seller shall pay the premium associated with issuance of the Title Commitment to Purchaser or directly to Title Company at Purchaser’s direction.




Purchaser shall request, at Seller's expense, a current "as built" survey of the Property (the " Survey ") prepared by a duly licensed land surveyor in the State of Minnesota, which survey shall be prepared in accordance with the Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys jointly adopted by the American Land Title Association and American Congress on Surveying and Mapping in 1992, shall delineate the boundary lines of the Real Property and the location of the Improvements thereon, together with setbacks, physical encroachments from or on the Real Property, easements and rights of way, and all other matters affecting the Real Property.  The Survey shall be certified to Purchaser and the Title Company, and shall be sufficient to cause the Title Company to delete any exception for survey matters from the Title Policy.  In the event that the Survey shows any matters adversely affecting title, such matters shall be deemed “Objections” for purposes of this Section.



- 2 -





Purchaser shall have twenty (20) days after receipt of the Title Commitment and the Survey to render objections to the Commitment and Survey in writing to Seller (the “ Objections ”).  Any items reflected on the Title Commitment or the Survey which are not objected to by Purchaser within such period shall be deemed " Permitted Exceptions."


Seller shall have twenty (20) days from the date it receives the Objections to have the same removed or satisfied.  Seller shall use commercially reasonable efforts to cause such Objections to be removed or satisfied.  If Seller is unable to remove the Objections within that time frame, after using commercially reasonable efforts to do so, Purchaser may, at its sole option hereunder, at any time prior to the Closing Date, either (a) terminate this Agreement by written notice to Seller, without any liability on its part, and receive a refund of any amounts paid to Seller hereunder, or (b) take title subject to such Objections, in which event such Objections shall be deemed Permitted Exceptions.



Delivery of Documents Upon Execution .  Seller shall deliver to Purchaser within five (5) business days of full execution and delivery of this Agreement, all of the following (the " Property Data "):




The Lease and copies of any other leases pertaining to the Property, if any, lease amendments, lease guaranties, and correspondence and / or letter agreements related to the Lease or any other leases affecting the Property.




Copies of any and all plans and specifications for the Property in Seller's possession or reasonably available to Seller, including, but not limited to, site plans, building layouts and floorplans, and seating and space layout plans.




Copies of all service contracts or agreements in effect at the Property (the “ Service Contracts ”).




Copies of all licenses, permits, warranties and guarantees, including construction, structural, mechanical and occupancy certificates, affecting the Real Property and Improvements.




Copies of Seller's current insurance certificates relating to the Property and copies of all information relating to the insurance loss history of the Property during Seller's ownership of the Property.




Copies of any existing surveys of the Property in Seller's possession or reasonably available to Seller.




Copies of any and all utility, grading, street development and other plans and specifications for the Property in Seller's possession or reasonably available to Seller.



- 3 -





Copies of any soil test borings, environmental studies or any other documentation pertaining to the physical condition of the Real Property or the Improvements in Seller's possession or reasonably available to Seller, and reliance letters to Purchaser from the contractor’s conducting such boring, studies and evaluations.




Copies of the most recent real estate tax bills for the Property and any subsequent notices of reassessment.




Copies of all bids, proposals, and construction contracts in connection with any work performed at the Property within the twelve (12) months prior to the Effective Date.




Copies of all warranties on major components of the Improvements and on the Personal Property.




Copies of all documents, correspondence and agreements relating to ingress and egress to the Property and all signage located on the Property.




A copy of any engineering or construction condition survey performed on the Property.




To the extent that the same is in Seller's possession or control, a copy of any existing appraisal of the Property.




A listing and explanation of any pending litigation pertaining to Seller or the Property.




A description of any factor known to Seller that might change the current use of the Property (eminent domain, street widening, fire, easements, reciprocal parking or occupancy agreements, change in access, contingencies, etc.).




Copies of any existing ADA reports or plans to meet compliance requirements with respect to the Property.




A copy of any notices received by Seller from any governing authorities with respect to the Property, including, but not limited to, all correspondence with the City of Minneapolis regarding the occupancy and condition of the Property, and code compliance issues at the Property.




Copies of all documents evidencing any mortgage financing.




Any other information relating to the Property reasonably requested by Purchaser.



Inspections .  Purchaser, its counsel, accountants, agents, property inspectors, and other representatives, shall have access to the Property and all parts thereof, as well as to all Property Data items referred to in Section 4 from the Effective Date for a period of sixty days (60) days from the Effective Date (" Inspection Period ") for the following (collectively, the “ Inspections ”):



- 4 -



a.            Property Inspections.   Purchaser and its agents and representatives shall have the right, subject to the provisions of this Section, to enter upon the Property during the Inspection Period for any purpose whatsoever, including inspecting, surveying, engineering, test boring, performance of environmental tests and such other work as Purchaser shall consider appropriate to ascertain the physical condition of the Property (collectively the " Inspections ").  Purchaser shall give Seller not less than 24 hours advance notice of any Inspection for which Purchaser or Purchaser’s representatives will enter the Property.  Seller shall be entitled to have a representative accompany Purchaser's representatives.  Purchaser shall indemnify and hold Seller harmless from any damage or destruction of the Property or physical injuries occurring as a result of Purchaser's acts while conducting Inspections.


b.            Governmental Approvals.          During the Inspection Period, Purchaser shall have the right to make inquiries of governmental agencies, utility companies and other third parties, and to make such feasibility studies and analyses as it considers necessary and appropriate, in its sole discretion, to satisfy itself as to all zoning, use, and code compliance matters related to the Property.  In addition, during the Inspection Period, Purchaser shall satisfy itself as to its ability to obtain all applicable permits and approvals for Purchaser’s continued use of the Property as an adult entertainment business serving alcoholic beverages.  Seller shall reasonably cooperate with Purchaser’s Inspections and Purchaser’s efforts to confirm and secure related permits and approvals.  Purchaser’s independent inquiry as to these matters shall have no effect on Seller’s warranties and representations and Seller and Purchaser acknowledge that, in addition to its Inspections, Purchaser is relying on Seller’s warranties and representations contained herein as a inducement for Purchaser to purchase the Property.



Damage to Property, Eminent Domain .




Damage to Property.   If, at any time on or before the Closing Date, all or any portion of the Property is damaged, destroyed or rendered inoperative (collectively, the " Damage "), by fire, flood, natural elements or other causes beyond Seller's control, then the following shall apply:




If the Damage is not Material, Purchaser shall proceed to close and purchase the Property as diminished by such Damage, subject to a reduction in the Purchase Price equal to the full estimated cost of repairing and/or replacing the Damage or if the Damage is covered by insurance an assignment of proceeds and credit as set forth in Section 6(a)(ii).




If the Damage is Material, then Purchaser, may elect either (A) to terminate this Agreement by written notice to Seller given at or prior to the Closing and neither party hereto shall have any further rights against or obligations to the other under this Agreement; or (B) to agree to close and deduct from the Purchase Price the full estimate cost of repairing and/or replacing the Damage or if the Damage is covered by Insurance an assignment of proceeds and credit as set forth in Section 6(a)(iii).



- 5 -





If the Damage is covered by insurance, the Purchaser shall have the right to elect to close the purchase of the Property in its condition (with respect to the Damage covered by insurance) on the Closing Date and to take an assignment of the Seller's insurance proceeds, in which event Seller shall assign such insurance proceeds to the Purchaser on the Closing Date, shall permit Purchaser to conduct any remaining settlement or other negotiations with the Seller's insurance carrier as to the amount of proceeds payable on account of the Damage and shall give Purchaser a credit against the Purchase Price equal to the deductible amount, if any, under Seller's insurance policy, in lieu of any other deduction from the Purchase Price provided in this Section 6(a).




For the purposes of this Section 6(a), Damage shall be deemed to be " Material " if (A) the cost of repairing such Damage equals or exceeds $5,000, or (B) the operation of the Property is adversely affected by the Damage.




Eminent Domain .  If prior to the Closing Date, all or any portion of the Property is taken by, or made subject to, condemnation, eminent domain or other governmental acquisition proceedings, then Purchaser, at its sole option, may elect either:




to terminate this Agreement by written notice to Seller given at or prior to the Closing and neither party hereto shall have any further rights against or obligations to the other under this Agreement; or




to agree to close and deduct from the Purchase Price an amount equal to any sum paid to Seller for such governmental acquisition or in the event Seller has not yet received such sums, Seller shall assign, transfer and set over to Purchaser all of Seller's right, title and interest in and to any awards which may in the future be made on account of such governmental acquisition.



Operation of Property Prior to Closing .  Until the Closing Date, Seller shall have the full responsibility for the continued operation of the Property.  Prior to the Closing Date:




Seller shall not cause any new liens, contracts or encumbrances to be created by Seller against the Property, except Service Contracts which may be cancelled on or before the Closing Date.




Seller shall continue to operate, repair, and maintain the Property in substantially the same manner as it has prior to the date of this Agreement.




Seller shall not enter into any new leases without Purchaser's written consent, which consent may be withheld for any reason.



- 6 -





Seller shall maintain all necessary permits an authorizations to operate an adult entertainment business serving alcoholic beverages at the Property, including its sexually oriented business permit and license.



Representations of Seller .  In order to induce Purchaser to enter into this Agreement and purchase the Property, Seller hereby represents to Purchaser as follows:




Seller (i) is a Minnesota limited liability limited partnership, duly organized, validly existing, and in good standing under the laws of the State of Minnesota, and (ii) is duly qualified to transact business and is in good standing in all jurisdictions where its ownership, lease, or operation of the Property or the conduct of its business requires such qualification.




There is no action in condemnation, eminent domain or public taking proceedings now pending or to the best of Seller's knowledge contemplated against the Real Property.




Seller has a good and marketable fee simple title interest to the Real Property and, no person or entity has any right, title, or interest in or to the Real Property or any portion thereof except those to be disclosed in the Title Commitment and the Survey.




Seller has the capacity and full power and has obtained all requisite authorizations to enter into and carry out this Agreement and the transactions contemplated hereby, and neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will constitute a default or an event which with notice or the passage of time or both would constitute a default under, or violation or breach of, any indenture, license, lease, franchise, mortgage, deed of trust, or other instrument or agreement to which Seller is a party or by which Seller or the Property may be bound.




No real property tax or special assessment with respect to the Property is delinquent, and Seller has received no notice of any pending special assessments with respect to the Property.




There is no suit, action, or arbitration, or legal, administrative, or other proceeding or governmental investigation, formal or informal, pending or threatened which adversely affects the Property in a material manner or which adversely affects Seller's ability to perform its obligations hereunder.




The Property will as of the Closing Date be free and clear of all liens, security interests, encumbrances, leases or other restrictions or objections to title except as permitted by this Agreement.




Payment has been made for all labor or materials which have been furnished to the Property by Seller, or such payment will be made prior to the Closing Date so that no lien for labor or materials rendered can be asserted against the Property.



- 7 -





Other than the tenant under the Lease, there are no tenants of the Property or parties with rights to possession of the Property.




To the best of Seller’s knowledge, except as may be disclosed herein, there are no wells or underground storage tanks now located on the Property.




Seller has received no notices of any violation or applicable building, zoning, health or safety laws, ordinances or regulations with respect to the Property which have not been cured.




The Property Data to be delivered to Purchaser pursuant to Section 4 hereof is and shall be true, correct and accurate.




Inclusive of the Service Contracts, if any, there are no agreements or contracts affecting the Property which may not be terminated prior to the Closing Date.




To the best of Seller’s knowledge, the Property, its current use, and all prior uses comply with and have at all times complied with, and Seller is not in violation of and has not violated, in connection with its ownership, use, maintenance or operation of the Property and the conduct of the business related thereto, any applicable federal, state, county or local statues, laws, regulations, rules, ordinances, codes, standards, orders, licenses and permits of any governmental authorities relating to environmental matters (being hereinafter collectively referred to as the "Environmental Laws"), including by way of illustration and not by way of limitation (A) the Clean Air Act, the Federal Water Pollution Control Act of 1972, the Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Toxic Substances Control Act, or the Minnesota Environmental Response and Liability Act, (including any amendments or extensions thereof and any rules, regulations, standards or guidelines issued pursuant to any of said Environmental Laws), and (B) all other applicable environmental standards or requirements.  Without limiting the generality of the foregoing:




Neither Seller, its agents, employees and independent contractors nor any tenant has operated the Property for the purpose of receiving, handling, using, storing, treatment, transporting or disposing of petroleum products or any Hazardous Material as defined in said Environmental Laws, other toxic, dangerous or hazardous chemicals, materials, substances, pollutants

continue to document