EXHIBIT 10.12
AGREEMENT TO PURCHASE/SELL REAL ESTATE
[1902 N. Black Canyon Freeway, Phoenix, Arizona]
The parties to this Agreement are: SACRED GROUND RESOURCES, L.L.C., an
Arizona limited liability company, hereinafter referred to as the "Seller," and
VCG REAL ESTATE HOLDINGS, INC., a Colorado corporation authorized to do business
in Arizona, hereinafter referred to as the "Buyer."
RECITALS
WHEREAS, SACRED GROUND RESOURCES, L.L.C., is the owner of the real property
and improvements located at 1902 N. Black Canyon Highway/Freeway, Phoenix,
Maricopa County, Arizona; This real estate and its improvements are hereinafter
referred to as the "Property." The Property is more fully and completely
described in the attached Exhibit A. The contents of Exhibit A are incorporated
into this Agreement by this reference. Where there is a discrepancy between
Exhibit A and the street address of the Property, Exhibit A shall govern; and,
WHEREAS, the Seller desires and intends to sell, and the Buyer desires and
intends to purchase the Property together with certain personal property as
described on Exhibit B (the "Personal Property"), all on the terms and
conditions set out below; and,
WHEREAS, EPICUREAN ENTERPRISES, L.L.C., is an Arizona L.L.C. that is to be
wholly owned at closing by Xxxxxx Xxxxxxxxx, and that is currently occupying the
Property and using the Property as a "bar" and an "adult live entertainment
establishment," as defined by the Phoenix City Code and Phoenix Zoning
Ordinances, and,
WHEREAS, the Buyer seeks to purchase real estate where a bar and adult live
entertainment establishment in the form of striptease, and so-called topless
entertainment, are permissible and currently lawful and available uses under the
laws of the jurisdiction where such real estate is situated, and,
WHEREAS, the Seller has represented to the Buyer that the Property is, and
will be at any closing of this transaction, zoned and currently lawful and
available for use as "bar" and an "adult live entertainment" establishment as
those terms are defined and used in the Phoenix Zoning Ordinances, and,
WHEREAS, the Buyer and Seller intend and desire that the Agreement and
transaction set out below be conditioned and contingent on the simultaneous
closing of a separate transaction between EPICUREAN ENTERPRISES, L.L.C. and VCG
HOLDING CORP., whereby VCG HOLDING
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CORP. purchases one hundred percent (100%) of the membership interests in
EPICUREAN ENTERPRISES, L.L.C. (the "Epicurean Agreement"). The assets of
Epicurean Enterprises, L.L.C. include a certain Arizona Series 6 Liquor License
No. 06070572.
NOW, in furtherance of the above intents of the Buyer and the Seller, the
parties agree, covenant and represent as follows and execute the following
Agreement:
1. AGREEMENT TO SELL AND PURCHASE: The Seller agrees to sell to the Buyer, and
the Buyer agrees to purchase from the Seller, the Property and the Personal
Property on the terms and conditions set out here below.
2. INCORPORATION OF RECITALS AND EXHIBITS: The Recitals above and the Exhibits
referred to in this Agreement, and attached to this Agreement, are
incorporated into this Agreement by reference here.
3. DATE OF AGREEMENT: The Date of this Agreement is the date the Agreement
becomes fully executed by both Buyer and Seller.
4. OBJECT OF AGREEMENT: The object of this Agreement is the purchase/sale of the
Property as more completely and accurately described in attached Exhibit A
and the purchase/sale of the Personal Property as more completely and
accurately described in attached Exhibit B.
5. TIME FOR EXECUTING AGREEMENT/FAX COPY: This Agreement is VOID if not mutually
and fully executed by the Buyer and Seller by March 6, 2003, at 5:00 p.m.,
and in the hands of Xxxx Xxxxxx and Xxxxxx Xxxxxxxxx. A fax copy of a fully
executed Agreement is acceptable to satisfy this provision.
6. BINDING EFFECT OF SIGNATURE ON DOCUMENT TRANSMITTED VIA FAX: Buyer or
Seller's signature as appearing in or upon a facsimile transmission of this
Agreement, pursuant to Section 5 above, shall have the legal effect of an
original signature.
7. CONDITION OF THE PROPERTY: The Buyer is purchasing the Property and the
Personal Property in their current physical condition. Buyer acknowledges and
agrees that, except as otherwise represented or specified herein, neither
Seller, nor Seller's members, employees, attorneys, or agents have made any
representation or warranties regarding the physical condition or value of the
Property upon which the
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Buyer has relied in entering into this Agreement.
8. PURCHASE PRICE: The agreed Purchase Price of the Property is THREE MILLION
EIGHT HUNDRED THOUSAND ($3,800,000.00) DOLLARS.
9. PAYMENT OF PURCHASE PRICE: The Purchase Price shall be paid by the Buyer to
the Seller as follows:
(i) Two Hundred Ninety Thousand and No/100 Dollars ($290,000.00) as a
Down Payment/Xxxxxxx Money within two days of Buyer signing this
Agreement. This $290,000.00 is to be paid into escrow with
Transnation Title Insurance Company (the "Title Company") in
Phoenix, Arizona, to the ATTENTION of: Xxx Hanipel. The Title
Company shall act as escrow/closing agent in this sale. In the
event this transaction is consummated in accordance with the
intent of this Agreement, this $290,000.00 Down Payment shall be
applied to the aggregate Purchase Price and paid to Seller at
Closing (as used in this Agreement, "Closing" shall be as defined
below in Section 11).
(ii) One Million One Hundred Ten Thousand and No/100 Dollars
($1,110,000.00) Dollars in the form of a cashier's check at
Closing, plus or minus "adjustments and prorations" as described
below.
(iii) The balance of the Purchase Price, Two Million Four Hundred
Thousand ($2,400,000.00) Dollars, is to be paid per the terms and
conditions of a Promissory Note secured by a Deed of Trust,
Security Agreement and Financing Statement, each containing terms
reasonably satisfactory to Buyer and Seller.
10.ALLOCATION OF PURCHASE PRICE: The Purchase Price is allocated as follows:
(i) Real Estate $_____________.00
(ii) Personal Property $_____________.00
There is no goodwill involved in this purchase.
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11.CLOSING: Closing shall occur in Phoenix, Arizona, at the offices of the
Title Company within five (5) business days following the satisfaction of the
conditions set forth in Section 14 of this Agreement, or the waiver by Buyer
and Seller of such conditions.
12.INSTRUMENT OF CONVEYANCE: Seller shall convey fee simple title to Buyer by
means of a Special Warranty Deed.
13.DOCUMENTS TO BE EXECUTED AT CLOSING: Special Warranty Deed, Xxxx of Sale for
the Personal Property, Promissory Note, Deed of Trust, Financing Statement
executed by Buyer, Financing Statements executed by Buyer and by VCG HOLDING
CORP., respectively, securing Buyer's obligations under the Promissory Note,
Non-Foreign Affidavit, and any other document reasonably required by the
title insurer, Buyer or Seller.
14.CONDITIONS OF THIS AGREEMENT: The obligation of Buyer to consummate and
close this transaction is conditioned on the following occurring at or before
Closing (the "Conditions"). The Buyer or Seller, as applicable, can waive any
of the Conditions contained herein for their benefit.
14.1 Buyer Conditions.
(i) Seller providing Buyer, within ten (10) day of mutual execution
of this Agreement, a title commitment report from the Title
Company, naming Buyer as the proposed insured, and which proposes
to insure the Property for $3,800,000.
(ii) At closing the Seller shall convey to the Buyer a fee simple
interest in the Property, subject only to:
a) The Deed of Trust securing payment of the above
referenced Promissory Note.
b) Those interests/restrictions/exceptions or conditions
set out within a preliminary commitment of title
insurance issued by the Title Company proposing to
insure Buyer's title interest in the Property in the
amount of $3.8 Million Dollars (the "Title Commitment")
subject only to those exceptions to title and
encumbrances, easements and interests in the Property
that have been approved by the Buyer.
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Buyer shall have ten (10) days following receipt of the
Title Commitment to give notice to Seller that it
approves or reasonably disapproves the matters set
forth therein, failing which Buyer shall be deemed to
have approved such matters. Any matters contained in
the Title Commitment which are deemed approved by Buyer
are hereinafter referred to as the "Permitted
Exceptions". If Buyer gives notice of its reasonable
disapproval of any matter contained in the Title
Commitment, Seller shall have a reasonable time to
correct such matter to the Buyer's reasonable
satisfaction, failing which, this Agreement shall be
terminated and have no further force or effect and the
provisions of Section 15 shall apply.
(iii) At Closing the Buyer shall receive, in its name a standard
owner's title insurance policy in the amount of the Purchase
Price subject only to the Permitted Exceptions, or an extended
owner's title policy if Buyer pays an additional amount to the
Title Company for such coverage.
(iv) At Closing the Seller shall convey the Personal Property to Buyer
by means of a Xxxx of Sale subject only to a security interest
for the benefit of Seller as evidenced by a Security Agreement
executed by Buyer.
(v) As of Closing, the conduct by VCG Holding Corp. or Epicurean
Enterpirses, L.L.C. of a "bar" and an "adult live entertainment
establishment", as those terms are defined by the Phoenix City
Code and Phoenix Zoning Code, shall be lawful and currently
"Permitted Uses" of the Property per City of Phoenix Code and the
Phoenix Zoning Ordinances.
(vi) Prior to Closing, Xxxxxx Xxxxxxxxx, [who is or will be the sole
Member of Seller and EPICUREAN ENTERPRISES, L.L.C. as of the time
of Closing, and who personally benefits by this transaction]
individually, and on behalf of the Seller and
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EPICUREAN ENTERPRISES, L.L.C., has agreed to indemnify the Buyer
for any losses or damages suffered by the Buyer as a result of
any Seller misrepresentations, fraud, or Seller caused
performance failures related to this Agreement.
(vii) The Buyer or VCG Holding Corp. have acquired, to their reasonable
satisfaction, all final permits, licenses, and approvals from all
regulatory bodies or agencies required to permit these persons or
entities to lease, own, use, and operate the Property or business
at 0000 X. Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx as a "bar" and
an "adult live entertainment" establishment, as those terms are
defined by Arizona law and the Phoenix City Code/Phoenix Zoning
Ordinances.
(viii) As of Closing the Property is free of any hazardous or toxic
materials or contaminants that would have been used or released
by the Seller during the course of Seller's operation of an adult
live entertainment establishment and that:
a) Impair the value of the Property in Buyer's hands.
b) Subject the Buyer to a legal obligation to cleanse,
treat or detoxify any portion of the Property prior to
resale.
(ix) That the City of Phoenix has responded to the registration of
the Property submitted by Buyer, Epicurean Enterprises, L.L.C. or
VCG Holding Corp. pursuant to Section 701(e) of the Phoenix
Zoning Ordinances with a declaration that Buyer or VCG Holding
Corp.'s use of the Property as a "bar" and "adult live
entertainment establishment" is not challenged by the City of
Phoenix or any competing adult business land user.
(x) That, subject to the provisions of Section 25(viii), the Buyer,
in its own name or under the name of Epicurean Enterprises,
L.L.C., or VCG Holding Corp., its owners, officers, agents or
employees, are authorized by the Seller to interact with
regulatory authorities to acquire a written acknowledgement or
commitment that the Property may, as of the time of Close or
Buyer's inquiry, be lawfully used as a bar and adult live
entertainment establishment per Phoenix law.
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(xi) Confirmation that 0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx is not within
1000 feet of another adult use.
14.2 Seller Conditions.
(i) At Closing the Title Company/Escrow Agent shall release to Seller
the sum of One Million Four Hundred Thousand and N0/100 Dollars
($1,400,000.00) plus any amount owed Seller by Buyer pursuant to
the provisions of Section 17(ii) of this Agreement and less any
amounts due from Seller to Buyer or the Title Company/Escrow
Agent pursuant to Sections 20 and 22 of this Agreement.
(ii) At Closing the Buyer shall convey to the Seller a fully executed
original of the Promissory Note.
(iii) At Closing the Buyer shall convey to the Seller (a) a Deed of
Trust fully securing the Promissory Note and other than the fault
of Buyer containing terms reasonably satisfactory to Seller and
Buyer, together with (b) security agreements and financing
statements covering (i) all of the personal property sold
herewith (ii) and all of the assets of Epicurean Enterprises,
L.L.C., including, without limitation Liquor License No.
06070572, all of which shall secure payment of the Promissory
Note.
15.ESCROW INSTRUCTIONS: Transnation Title Insurance Company, as Escrowee for
this transaction is instructed:
In the event the Buyer or the Seller are notified prior to closing that the
Property is determined by the City of Phoenix as being ineligible or
contested, for any reason other than the fault of Buyer, to be used as a
"bar" or "adult live entertainment establishment," as these terms in
quotations are defined by Phoenix Zoning Ordinances, than this transaction
shall be terminated and the Title Company shall immediately refund to the
Buyer all of the money deposited with it by the Buyer.
In the event this transaction has not closed within 120 days of the mutual
execution by Buyer and Seller of this Agreement, and the reason for not
closing is not related to the City of Phoenix determining the Property's
ineligibility, for any reason, to be used as a "bar" or "adult live
entertainment establishment," as these terms in quotes are defined by
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Phoenix Zoning Ordinances, then the down payment referenced above is to be
distributed between the parties as follows:
1. $90,000.00 is to be distributed to the Seller as compensation for Buyer.
tying up the Seller's Property.
2. Any expenses of the Property to be paid by Buyer pursuant to Section
17(ii) of this Agreement which are then due and unpaid shall be paid out
of the Down Payment/Xxxxxxx Money.
3. The remainder of the Down Payment/Xxxxxxx Money is to be returned to the
Buyer less costs and expenses of Transnation Title Insurance Company.
Agreed and acknowledged:
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxxxxxx
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For Buyer For Seller
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For Transnation Title Insurance Company
16.INDEMNITY AND OFFSET AGREEMENT: The circumstances surrounding this
transaction are that, simultaneous with the purchase of the Property there is
to be a purchase of 100% of the membership interest of Xxxxxx Xxxxxxxxx in
Epicurean Enterprises, L.L.C. Epicurean Enterprises, L.L.C. is the owner of
the business and the Arizona liquor license currently situated at 0000 X.
Xxxxx Xxxxxx Xxxxxxx. Xxxxxx Xxxxxxxxx is also, or will be at the time of
Closing, the owner of a 100% membership interest in Sacred Ground Resources,
L.L.C., the Seller here. The 100% sale of Epicurean Enterprises, L.L.C. will
financially benefit Xxxxxx Xxxxxxxxx. Because of these circumstances, and as
an inducement to Buyer to enter this transaction, the Seller and Xxxxxx
Xxxxxxxxx are agreed as follows:
(i) Buyer shall have the right to offset its Promissory Note
obligations to Seller, or Sellers heirs or assigns, when and as
they become due:
a) Against any loss, damage or expense that either Buyer
or VCG Holding Corp. suffer as a result of any damage,
claim, lawsuit, or loss arising, in whole or in part,
from Seller's misrepresentation or fraud in this
Agreement or Xxxxxx Xxxxxxxxx'x fraud or
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misrepresentation in the Agreement to Purchase 100% of
Xxxxxx Xxxxxxxxx'x Membership Interest in Epicurean
Enterprises, L.L.C.
b) Any loss, damage or expense arising from a citation,
claim or suit against Epicurean Enterprises, L.L.C.
that arose during the period prior to the Closing.
(ii) Seller agrees to indemnify Purchaser with respect to Sections
16(i)(a) & (b) above via an offset to the Promissory Note,
provided that the Buyer fully complies with the following
conditions:
a) Buyer shall give the Seller prompt written notice of
any claim, etc., for which Buyer intends to exercise
its right of offset;
b) Along with such written notice Buyer shall provide
Seller with copies of documents reasonably sufficient
to identify the nature and amount of the claim together
with such other documents in Buyer's possession or
control which assist Seller in defending against such
damage, claim, lawsuit, or loss;
c) Buyer, upon Seller's request, and upon Buyer's approval
(which shall not be unreasonably withheld) shall permit
Seller to participate and control the defense of any
litigated claim, as long as such defense does not
materially prejudice Buyer's interest or cost Buyer or
VCG Holding Corp. any money which is not reimbursed to
Buyer by Seller; and,
d) Buyer shall not begin exercising its right of offset
until the Seller's defense of any such claim is
concluded, as long as such defense does not materially
prejudice Buyer's interests or Buyer is suffering a
financial loss which is not reimbursed to Buyer by
Seller as a result of any such claim.
(iii) Miscellaneous: The provisions of this Agreement shall be binding
upon and shall be enforceable by the parties and their respective
successors, assigns and personal representatives. This Agreement
may only be amended or modified by a subsequent written
instrument signed by all parties.
17.MAINTENANCE OF USE OF PROPERTY AS A PHOENIX "ADULT LIVE ENTERTAINMENT"
ESTABLISHMENT: Buyer has informed the
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Seller that Buyer's sole intended use of the Property is as a leasehold to
VCG HOLDING CORP. (or in the event that the Arizona Department of Liquor
Licenses and Control has disapproved VCG Holding Corp. as a licensee, then a
suitable nominee of Buyer) that will use the Property to house so-called
"adult live entertainment" business(es). Without the right at the time of
Closing to so use the Property, the Buyer would have no use for the Property
or an interest in the assets of Epicurean Enterprises, L.L.C. For this
Agreement to close, the Buyer and VCG Holding Corp. must, at the time of
Closing, be permitted under the Phoenix City Code and Zoning Ordinances and
Title 4 of the Arizona Revised Statutes, to open and operate a "bar" and an
"adult live entertainment" establishment, Because of these circumstances the
Buyer's and Seller agree that:
(i) From and after the date of this Agreement until Closing Seller
will cause Epicurean Enterprises, LLC to use its best faith
efforts to maintain the use of the Property as an "adult live
entertainment" establishment per the City of Phoenix Code and
Zoning Ordinances.
(ii) Seller's agreement to cause Epicurean Enterprises, L.L.C. to
continue the adult live entertainment nature of the business
conducted on the Property does benefit Buyer in the event of a
closing of this Agreement. Therefore, Buyer agrees to reimburse
Epicurean Enterprises, L.L.C. and Seller for the cost of
maintaining the bar and adult entertainment establishment use of
the Property. Pursuant to this subsection, Buyer agrees to
reimburse Seller and Epicurean Enterprises, L.L.C. for all costs
associated with the ownership, operation and maintenance of the
Property and the "bar" and "adult live entertainment" business
conducted thereon, except for income taxes and mortgage payments,
from and including January 1, 2003 until the time of Closing or
earlier termination of this Agreement. Any monies paid pursuant
to this provision shall not be credited against the Purchase
Price. Notwithstanding any of the foregoing, if it is determined
that the Property does not qualify as of closing, for any reason,
to be used as a "bar" or an "adult live entertainment
establishment" as those terms are defined by the Phoenix Zoning
Ordinances, then no reimbursement under this subparagraph shall
be due from the Buyer to the Seller.
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18.RISK OF LOSS: Risk of loss transfers from Seller to Buyer at Closing.
19.CASUALTY LOSS OR CONDEMNATION: In the event of casualty loss or condemnation
threat/proceeding of a material portion of the Property prior to Closing,
this Agreement may be terminated at Buyer's reasonable discretion.
21.SURVEY: Seller shall provide Buyer a copy of the Survey of the Property dated
1996 and conducted by Superior Surveying Services.
22.TITLE INSURANCE/CLOSING COSTS: The Buyer and Seller agree to divide equally
the costs of a standard owner's policy of title insurance and the charges and
fees of the escrow agent. All other costs are to be divided between the
parties pursuant to the local customs of title companies in Phoenix, Arizona.
If Buyer desires to obtain an extended policy of title insurance, Buyer shall
pay any additional costs for such extended policy. Expenses related to the
Property inspections and studies are to be borne by the Buyer.
23.BROKERAGE: The parties agree that neither party has used a broker for this
sale.
24.SELLER'S REPRESENTATIONS: The Seller represents and agrees that:
(i) Seller is the sole and exclusive owner of the Property.
(ii) The Seller has lawful authority to enter into a transaction to
sell the Property.
(iii) The Seller has appointed Xxxxxx Xxxxxxxxx to execute all the
documents, including any Deed, required to accomplish the intents
of this Agreement.
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(iv) At the time of Closing, Xxxxxx Xxxxxxxxx will be the sole Member
of SACRED GROUND RESOURCES, L.L.C.
(v) Xxxxxx Xxxxxxxxx is a single person.
(vi) The Property is currently zoned A-1.
(vii) The Property is currently being used, and Seller or Epicurean
Enterprises, L.L.C. will continue to use the Property until
Closing as a "bar" and an "adult live entertainment
establishment" as these business classifications or descriptions
are defined in the Phoenix Zoning Ordinances, so long as Buyer
reimburses the Seller and/or Epicurean Enterprises, L.L.C. for
all of the costs of exhibiting adult live entertainment with the
character and frequency required to maintain the adult live
entertainment establishment use.
(viii) There are no legal, equitable, or beneficial interests in the
Property actually known to Seller other than as will be disclosed
prior to Closing in the Title Commitment and any amendments
thereto.
(ix) The Seller will convey the Property to the Buyer via a SPECIAL
WARRANTY DEED.
(x) Seller has no actual knowledge or reason to believe there are any
contaminants such as lead or asbestos in the building on the
Property, or that there are any latent subsurface conditions at
the Property that indicate the presence of hazardous waste,
contaminants, toxic chemicals, or conditions that would render
the Property subsurface unstable.
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(xi) All of the construction or demolition work performed at the
Property during Seller's ownership has been performed in
compliance with all applicable law and regulations
(xii) Seller has disclosed in writing to Buyer, within five (5) days of
the mutual execution of this Agreement, all conditions, patent
and latent, of which it is actually aware, that are dangerous,
hazardous, toxic or hidden, and which would expose Buyer, its
employees, agents, invitees, vendors, tenants, or tenants
employees, agents, invitees or vendors to liability, injury, or
adversely effect the value of the Property.
(xiii) There are currently no liens, mechanics or materialmens liens,
encumbrances, or claims of any sort against the Property known to
Seller and Seller will not cause any to attach prior to Closing.
(xiv) There are currently no lawsuits or pending/outstanding claims
against or related to the Property or SACRED GROUND RESOURCES,
L.L.C., and the Seller is unaware of any person or entity
contemplating any such claims.
(xv) Seller has no notice of any existing or intended condemnation
proceedings related to the Property.
(xvi) The Property is not adjacent to any proposed light rail system.
(xvii) At the time of Closing there will be no mortgages, leases,
contracts or tenancies related to the Property, except the
agreement for trash pickup with Paradise Waste Services and the
agreement with Xxxx Lime for the use of "soda guns" for as long
as Seller purchases "soda" from Xxxx Lime.
(xviii) Seller has consulted its' own counsel with respect to this
Agreement.
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(xix) Seller is aware the Buyer is relying on these Representations,
and that these Representations survive the closing of this
sale-purchase transaction.
25.BUYER'S REPRESENTATIONS AND ACKNOWLEDGMENTS: The Buyer represents and
warrants that:
(i) Buyer has the full power and authority to enter into and perform
this Agreement in accordance with its terms and the persons
acting for and on behalf of the Buyer each have the necessary
authority to execute documents and otherwise consummate this
transaction.
(ii) The Buyer is not prohibited from consummating the transactions
contemplated by this Agreement by any law, rule, regulation,
instrument, agreement, order or judgment.
(iii) Buyer has consulted its own counsel respecting the terms and
conditions of this Agreement.
(iv) Buyer has at the present time and will have at the time of
Closing and at all times thereafter until the Promissory Note is
paid in full the financial ability and/or creditworthiness to
purchase the Property at the above referenced Purchase Price and
terms.
(v) Buyer is a Colorado corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado and
is properly qualified to do business in the State of Arizona.
(vi) Buyer has:
1. Visually inspected the Property, and the exterior and
interior of structural improvement on the Property, and
waives any claim against Seller that might be based
upon a defect or deficiency in the Property or its
improvement that could be discerned by Buyer's visual
exam of the Property.
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2. Buyer has done no inspection for contaminants such as
asbestos or lead existing in unlawful amounts on the
Property, but is relying on Seller's representations
that Seller has no actual knowledge, without having
conducted any investigation or inquiry, of any such
conditions. Buyer understands that Seller has done no
independent investigations and made no independent
inquiry into such matters.
3. Buyer has familiarized itself with the sections of
A.R.S., Title 4, and the Phoenix City Codes and
Ordinances applicable to the use of the Property as a
"bar" and "adult live entertainment" as those terms are
defined by the Phoenix Zoning Ordinances.
4. Buyer has done no independent investigation respecting
the title to the Property other than that it will
examine the Title Commitment Report and the Survey of
the Property to be ordered by Buyer.
5. Buyer is not relying solely on its visual inspection of
the Property, review of the Title Commitment Report
applicable to the Property, or review of A.R.S. Title 4
and Phoenix laws applicable to the operation of a bar
and an adult live entertainment establishment. Rather,
the Buyer is also relying on all of the representations
herein of the Seller respecting some of these issues.
6. Buyer is satisfied with respect to the probable risk,
worth and potential of the Property and has relied upon
its own judgment and the
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Representations of the Seller, Epicurean Enterprises,
L.L.C., and Xxxxxx Xxxxxxxxx, in entering into and
consummating this purchase and sale. Buyer acknowledges
that neither Seller, Xxx Xxxxxxxxx nor Epicurean
Enterprises L.L.C. have made any express or implied
representations or warranties as to the value of the
Property.
7. Nothing contained in this subsection 24(vi) is intended
in any way to negate or obviate the conditions to
Closing set forth in subsection 14.1 or the
Representations of the Seller in Section 23, or the
provisions contained in Section 27.
(vii) Buyer represents and warrants that following the Closing it and
its successors or assigns, if any, will continue to use the
Property as an "adult live entertainment" establishment, as that
term is defined in the City of Phoenix Zoning Code and
Ordinances, in a manner that is consistent with all applicable
statutes, regulations and ordinances issued or enforced by any
governmental body, department or agency, including, without
limitation, the Code of the City of Phoenix and the Phoenix City
Zoning Ordinance such that there is no probability or imminent
danger that the Property will lose its lawful and available use
for a "bar" and "adult live entertainment."
(viii) Neither Buyer, nor VCG Holding Corp., nor any of their respective
officers, directors, employees, or agents will, at any time prior
to the Closing, (i) submit any written registrations,
applications, emails, letters, memorandum, or any other written
documents or materials to any governmental or quasi-governmental
entity or agency in the State of Arizona unless such written
material has been approved, in its entirety, by Xxxxxx Xxxxxxxxx,
in his sole and absolute discretion, nor (ii) meet with or
conduct any telephonic conference or telephone call with any
person or persons in any governmental or quasi-governmental
entity or agency in the State of Arizona unless the subject
matter of such meeting or discussions and the approach to be
taken have first been discussed with, and approved by, Xxxxxx
Xxxxxxxxx, in his sole and absolute discretion, and Xxxxxx
Xxxxxxxxx is then present during any such meeting or discussion,
whether by phone or in person.
00.XXXXXXXXXXXX RELATED DOCUMENTS TO BE PROVIDED BY THE SELLER TO THE BUYER: The
Seller agrees to provide to the Buyer, prior to closing, all drawings,
blueprints, and as built documents related to 1902 N. Black Canyon Highway,
Phoenix, Maricopa County, Arizona, that are in its possession or that of its
attorney.
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27.PRE-CLOSING INSPECTIONS - BUYER'S ACCESS TO PROPERTY AND BUYER RESPONSIBILITY
FOR DAMAGE OR CLAIMS ARISING FROM SITE INSPECTION(S). Buyer shall have access
to the Property prior to Closing to conduct whatever inspections and analysis
Buyer deems appropriate. Buyer agrees to reimburse, indemnify and hold the
Seller harmless for, from and against any liability, claims [including
workers compensation claims], injuries, damages, losses, and property damage,
created or caused by Buyer, or Buyer's agents, employees, architects,
designers, independent contractors, invitees, affiliates or related entities
arising out of, directly or indirectly, such on site inspections or otherwise
arising out of the presence of any of them upon the Property, and Buyer
agrees to repair any damage or alteration in the Property's features or
structures caused by said inspections.
28.DUE DILIGENCE INSPECTIONS - WAIVER OF CLAIMS AND RIGHT TO TERMINATE.
Notwithstanding anything else contained in this Agreement to the contrary,
Buyer and Seller agree that Buyer shall have until the earlier of (i)
forty-five (45) days following the mutual execution of this Agreement, or
(ii) Closing (the "Due Diligence Period"), to conduct whatever property
inspections, physical tests, and any other inquiries Buyer deems necessary or
advisable to confirm or determine the physical condition of the Property and
the improvements located thereon and the value of Epicurean Enterprises,
L.L.C. If, as a result of information first discovered during the conduct of
this due diligence, Buyer reasonably disapproves of the condition of the
Property or any of the improvements located thereon, then the Buyer shall
have the right to terminate this Agreement and Seller and Escrow Agent shall
promptly return to Buyer any monies received from Buyer, less any amounts
necessary to correct any damages to the Property or the improvements located
thereon caused by Buyer or Buyer's, agents, employees, or independent
contractors. If Buyer does not give written notice of its disapproval of the
condition of the Property or the improvements located thereon during the Due
Diligence Period, then Buyer shall have no further claims or causes of action
against Seller arising out of, or relating in any manner to, these matters,
and shall be deemed to have waived all such claims or causes of action
relating to the condition of the Property or the improvements located
thereon.
29.ASSIGNMENT OF WARRANTIES AND CONTRACTS: The Seller agrees to assign to the
Buyer all warranty rights and interests it has, if any, in all improvements
and systems situated on the Property, including but not limited to parking
lot, perimeter fence systems, security systems, sign systems, pole sign
structural or illumination systems, parking lot illumination systems,
landscaping, beverage dispensing, point of purchase systems, and sound
systems.
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30.BUYER TO ESTABLISH ITS OWN ACCOUNTS: Buyer agrees to be responsible for
establishing its own utility and insurance accounts at the time of Closing,
or as soon thereafter as is practicable, and further agrees it has no
interest in any utility deposit accounts of the Seller.
31.BUYER AND SELLER COOPERATION: Buyer and Seller agree to execute any and all
documents [which do not conflict with the Seller or Buyer's representations
or intents herein], which are reasonably required by Buyer, Seller, the Title
Company, or third parties to further the intents of this Agreement.
32.APPLICABLE LAW, VENUE: This Agreement is to be performed in Phoenix, Arizona.
This Agreement shall be governed by the internal substantive laws of the
State of Arizona (without reference to choice of law principles) and, to the
extent they preempt the laws of such state, the laws of the United States. In
the event any litigation is commenced relating to this Agreement, the parties
hereby irrevocably submit to the process, jurisdiction and venue of the
courts of the State of Arizona, in and for the County of Maricopa, for the
purpose of suit, action or other proceedings arising out of or relating to
this Agreement and any such action shall be commenced only in such courts.
33.INDEPENDENT COUNSEL AND ATTORNEYS FEES: Each party agrees it is represented
by independent counsel of its choice. Each party agrees it shall be
responsible for its own attorney's fees in connection with this Agreement.
34.DOCUMENTS, REPORTS OR INFORMATION RELATED TO THE PROPERTY IN THE POSSESSION
OF SELLER, ITS AGENTS OR ATTORNEY: The Seller agrees to provide the Buyer
with the following documents within ten (10) days following the mutual
execution of this Agreement, to the extent they are currently in the actual
possession of Seller:
(i) Drawings, blueprints, "as built" documents related to 0000 X.
Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx Xxxxxx, Arizona.
(ii) Copies of casualty insurance policy (policies) applicable to the
Property during the past five (5) year period.
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(iii) 2000, 2001, 2002 and 2003 Property Tax Statements.
(iv) Any Soils Tests/Environmental Studies or Reports referring to
Property.
(v) Termite/Pest Inspections.
(vi) Reports of ordinance or state law violations at the Property
within the past five years.
35.MEDIATION: In the event of a dispute between the parties concerning the
subject matter of this Agreement the parties agree first to attempt to
informally mediate their dispute prior to instituting any litigation.
36.THE FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT: The Foreign Investment in
Real Property Tax Act ["FIRPTA"], IRC 1445, requires that every purchaser of
U.S. real estate must, unless an exemption applies, deduct and withhold from
the Seller's proceeds ten percent (10%) of the gross sales price. The primary
exemption that might be applicable to this sale are: (a) Seller provides the
Buyer-Purchaser with an affidavit under penalty of perjury, that Seller is
not a "foreign person," as defined in FIRPTA. Seller and Buyer-Purchaser
agree to execute and deliver as appropriate, any instrument, affidavit or
statement, and to perform any acts reasonably necessary to carry out the
provisions of FIRPTA and the regulations promulgated thereunder.
37.CONFIDENTIALTY: The BUYER and the SELLER agree to keep the terms and timing
related to this Agreement confidential to the extent legally permissible.
38.FEES AND EXPENSES: Except as otherwise provided herein, the parties hereto
shall bear their own costs and expenses incurred in connection with this
transaction.
39.ASSIGNMENT. The benefits and burdens of this Agreement are personal in nature
and no party shall assign this Agreement or any of its rights and obligations
hereunder without the prior written consent of the other party.
40.SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, legal representatives, successors
and permitted assigns.
41.NOTICES. Any notice, demand or request required or permitted to be given
under any provision of this Agreement shall be in writing and
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delivered personally or by certified or registered mail (with return receipt
requested, and postage prepaid) to the following address, or to such other
address as either party may request by notice in writing to the other party:
If to SELLER: Sacred Ground Resources, L.L.C.
c/o Xx. Xxxxxx Xxxxxxxxx
0000 X. Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
With a copy to: Xx. Xxxxx Xxxxxx
XXXXXX & SHORT, P.C.
00 X. Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attorney for Seller
If to BUYER: VCG Real Estate Holdings, Inc.
Attention: Xxxx Xxxxxx
0000 X. Xxxxx
Xxxxxx, Xxxxxxxx 00000
With a Copy to: Xxxxxxx Xx Xxxxxxxxxx, X.X.
00000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX. 00000
Attorney for Buyer
42.ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersedes any and all prior agreements, understanding, negotiations and
discussions between the parties and/or their counsel on the subject of this
Agreement or topic(s) related to this Agreement. No amendment, modification
or waiver of this Agreement shall be binding unless evidenced by an
instrument in writing signed by the BUYER and SELLER.
00.XXXXXXXXXXXX. The captions and headings of this Agreement are for convenience
and reference only, and shall not control or affect the meaning or
construction of this Agreement.
44.SEVERABILITY. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provision hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision had been omitted. The invalidity
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or unenforceability of any provision of this Agreement to any person or
circumstance shall not affect the validity or enforceability of such
provision as it may apply to any other persons or circumstances.
45.WAIVER. The failure in one or more instances of a party to insist upon
performance of any of the terms, conditions and covenants set forth in this
Agreement, or the failure of a party to exercise any right or privilege
conferred by this Agreement, shall not thereafter be construed thereafter as
waiving their right to insist upon performance of such terms, conditions or
covenants or the rights to exercise such privileges and rights, which shall
continue to remain in full force and effect as if no forbearance had
occurred.
46.ATTORNEYS FEES. Attorneys' Fees: If either party to this Agreement should
bring an action in any court of competent jurisdiction to enforce or obtain
an interpretation of this Agreement, the prevailing party in that litigation
shall be entitled to a judgment for the costs of the action and reasonable
attorneys' fees incurred in prelitigation efforts to resolve the issues
between the parties, investigation and research, as well as the attorneys
fees associated with actual action following its commencement, in addition to
any other relief granted by the court.
47.COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original instrument, but all of which
together will constitute for all purposes one and the same instrument.
48.FACSIMILE SIGNATURE. The parties agree a facsimile signature shall be as
effective as an original.
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49.SURVIVAL OF COVENANTS, REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION'S. All
covenants, representations and warranties made by any party to this Agreement
shall be deemed made for the purpose of inducing the other party to enter
into this Agreement. The representations and warranties made by either party
in this Agreement shall survive the Closing indefinitely.
50.DEFAULT UNDER THE AGREEMENT FOR SALE OF LLC MEMBERSHIP INTEREST: Any
pre-closing default under the agreement for the Sale of Xxxxxx Xxxxxxxxx'x
100% Membership Interest in Epicurean Enterprises, L.L.C. between Xxxxxx
Xxxxxxxxx ("Xxxxxxxxx"), as Seller, and VCG Holding Corp. of one hundred
percent (100%)of the membership interests in Epicurean Enterprises, L.L.C.
shall constitute a default under this Agreement. In the event there is a
default by VCG Holding Corp. under the agreement for the Sale of Xxxxxx
Xxxxxxxxx'x 100% Membership Interest in Epicurean Enterprises, L.L.C. which
is not timely cured prior to Closing, then this Agreement shall immediately
be deemed terminated.
51.GENERAL. All payments shall be in United States currency, wire transferred
funds or certified funds. In addition to the respective obligations required
to be performed under this Agreement, Seller and Buyer shall each perform, at
the close of Escrow or from time to time thereafter, such other acts, and
shall execute, acknowledge and/or deliver such other instruments, documents
and other materials, as may be reasonably required in order to consummate the
transaction described in this Agreement. It is understood and agreed that
this provision shall not be deemed to require either party to perform any of
the obligations of the other.
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52.TIME. Time is of the essence of this Agreement.
53.SELLER'S MAINTENANCE OF THE PROPERTY AS AN ADULT USE PRIOR TO CLOSING:
Notwithstanding anything to the contrary in this Agreement, Seller's
maintenance and control of the use(s) of Property prior to Closing, in the
capacity of landowner, or the owner of Epicurean Enterprises, L.L.C., are the
sole and exclusive endeavors and acts of the Seller. Seller agrees and
acknowledges that the Buyer has not and will not play any role in the
pre-closing:
(i) Maintenance or control of the Property or Property use(s).
(ii) Maintenance, control or direction of any employees, independent
contractors or entertainers working or appearing at the Property
prior to closing.
IN WITNESS WHEREOF, the parties have executed this Agreement for Purchase/Sale
of Real Estate as of the 5th day of March, 2003.
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"SELLER" "BUYER"
SACRED GROUND RESOURCES, L.L.C., VCG REAL ESTATE
An Arizona limited liability company HOLDINGS, INC.,
A Colorado corporation
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxx Xxxxxx
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By: Xxxxxx Xxxxxxxxx, Managing By: Xxxx Xxxxxx, President
and Authorized Member
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SALE OF XXXXXX XXXXXXXXX'X 100% MEMBERSHIP INTEREST IN
EPICUREAN ENTERPRISES, L.L.C.,
[An Arizona Limited Liability Company]
THIS SALE AGREEMENT FOR XXXXXX XXXXXXXXX'X 100% MEMBERSHIP INTEREST IN
EPICUREAN ENTERPRISES, L.L.C., hereinafter referred to as the "Agreement," is
made and entered into as of the 5th day of March 2003, by and between XXXXXX
XXXXXXXXX, an unmarried man, hereinafter referred to as the "Seller," and VCG
HOLDING CORP., hereinafter referred to as the "Buyer."
RECITALS
WHEREAS, the Seller is, or will be at the closing of this transaction (the
"Close" or "Closing"), the owner of a 100% membership interest in Epicurean
Enterprises, L.L.C., an Arizona limited liability company, doing business as El
Patron at 0000 X. Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx; and,
WHEREAS, the Seller intends and desires to sell, and the Buyer intends and
desires to purchase, all of Seller's 100% Membership Interest in Epicurean on
the terms and conditions hereinafter stated.
NOW, THEREFORE, in furtherance of the parties intents and desires, and in
consideration of the premises and mutual covenants, conditions and agreements
between the parties as hereinafter set forth, and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties agree as follows:
SECTION I
TERMS OF SALE
1.1 SALE OF MEMBERSHIP INTEREST: Seller shall sell to Buyer, and Buyer
shall purchase and acquire from Seller, free of all liabilities and
encumbrances, except those hereinafter expressly provided, and subject
to all the terms and conditions hereinafter set forth, all of the
right, title and interest of Seller in and to Epicurean, which will
equal one hundred percent (100%) of all membership interests in
Epicurean at the time of Close.
1.2 ASSETS OF EPICUREAN: The Assets of Epicurean include, but are not
limited to the following: A certain Arizona Series 6 Liquor License
# 06070572 and the inventory and liquor currently situated at 1902 N.
Black Canyon
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Freeway, Arizona; These assets are currently utilized in the operation
of an adult live entertainment establishment at 1902 N. Black Canyon
Freeway, Phoenix, Arizona. A more precise itemization of Epicurean's
assets that are included with this sale is set out in the attached
Schedule A.
1.3 EXCLUDED ASSETS: The following assets are excluded from this
membership interest sale and shall be transferred from Epicurean to
Xxxxxxxxx:
(i) All cash and amounts on deposit with financial institutions
at the time of closing.
(ii) All utility deposits of Epicurean existing at the time of
Closing.
(iii) All claims, rights and causes of action against third
parties accrued to Epicurean up to the moment of Closing.
(iv) All credit card receivables accrued to Epicurean up to the
time of Closing.
1.4 SIMULTANEOUS CLOSING CONDITIONS: This Agreement is conditioned on the
simultaneous closing of this Agreement and the Sale-Purchase Agreement
between Sacred Ground Resources, L.L.C., as Seller, and VCG Real
Estate Holdings, Inc., as Buyer, of that real estate and all its
improvements located at 1902 N. Black Canyon Freeway, Phoenix,
Arizona. This condition may not be waived by either Buyer or Seller.
1.5 TRADENAME: The Buyer will own the interest in the name "Epicurean
Enterprises," however, there is no other name, tradename or logo that
is a part of the assets involved in this sale.
1.6 MEMBERSHIP PURCHASE PRICE: The parties agree the Purchase Price for
all of the Seller's membership interest in Epicurean is One Hundred
Thousand ($100,000.00) Dollars. The parties agree the value associated
with the purchase of the above referenced Liquor License is
$75,000.00. The parties further agree this Purchase Price shall be
paid by the Buyer to the Seller as follows:
Deposit on Execution
of this Agreement $ 10,000.00
At Closing $ 90,000.00
[The above payments are to be made by cashier's check]
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1.7 INDEMNIFICATION: Seller agrees to indemnify Buyer and hold Buyer
harmless as to any expenses, damages, losses, or liabilities incurred
by Buyer as a direct result of claims, obligations, or liabilities
attempted to be enforced against Epicurean after Closing for an event,
act or omission that arose prior to Closing, or as a result of any
breach of any of Seller's representations or warranties contained in
this Agreement. To the extent Buyer is entitled to indemnification
under this Section, such right may be enforced by means of an offset
of such amount against amounts due under that certain promissory note
entered into by VCG Real Estate Holdings, Inc. as the maker for the
benefit of Sacred Ground Resources, L.L.C. as the holder in the
principal amount of Two Million Four Hundred Thousand and No/100
Dollars ($2,400,000.00).
1.8 TRANSFER EXPENSES: The Buyer agrees to pay any expenses associated
with any liquor license transfer or recording expenses or expenses
related to notices to the State of Epicurean's change of Members,
Agents or Officers.
1.9 CLOSING DATE: The Closing Date for this transaction is five (5) days
after complete satisfaction, or waiver by Buyer and Seller, of the
Conditions contained in Section 5.2 of this Agreement. Closing shall
occur at Transnation Title Insurance Company, 0000 Xxxx Xxxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxx (the "Escrow Agent"), or such other place as
the parties agree in writing.
1.10 BUYER POSSESSION OF THE ASSETS: Buyer's actual possession of the
Assets in Exhibit B shall occur simultaneous with Closing this
transaction and complete payment of the sums due at Closing pursuant
to this Agreement.
1.11 INCORPORATION OF EXHIBITS: The parties agree that all of the Exhibits
referenced in this Agreement shall be incorporated into this Agreement
and are as effective as integral and material parts of this Agreement.
SECTION II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller makes the following representations and warranties to Buyer. All
representations and warranties that are made are made to the best of Seller's
pre-closing knowledge and shall refer to the actual knowledge of Seller, as well
as the pre-closing officers and Members for Epicurean Enterprises, L.L.C. and
Xxxxxx Xxxxxxxxx. These representations and warranties shall survive the
Closing.
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2.1 ORGANIZATION: Seller represents and warrants that at the time of
Closing, he will be the sole owner of 100% of the membership interests
in Epicurean; that Epicurean is an Arizona limited liability company
and duly organized, validly existing and in good standing under the
laws of the State of Arizona, with all the requisite power and
authority to conduct its lawful business in the State of Arizona, and
otherwise to carry on an adult live entertainment establishment at
1902 North Black Canyon Freeway, Phoenix, Arizona, and otherwise to
carry on its operation and business as it is now being carried on at
such location.
2.2 ORGANIZATION AUTHORITY: The Seller has the necessary and requisite
power and capacity to enter into this Agreement.
2.3 NO VIOLATION OF ARTICLES OR OPERATING AGREEMENT: Neither the execution
and delivery of this Agreement by the Seller, nor the performance by
the Seller of his obligations hereunder, nor the consummation by him
of the transactions contemplated by this Agreement (a) Violates any
provision of the Articles of Organization or Operating Agreement of
Epicurean, nor (b) to the best of the Seller's knowledge, does it
violate any statute or law or any judgment, decree, order, regulation
or rule of any court or government authority to which the Seller or
Epicurean are subject, and which would have a material, adverse effect
on Epicurean or the Buyer as Epicurean's owner.
2.4 LITIGATION/CLAIMS: Seller has no actual knowledge of any litigation,
claims, arbitration, or administrative proceeding pending or
threatened against Epicurean or its assets, including its liquor
license.
2.5 KNOWLEDGE OF CURRENT VIOLATIONS/ADMINISTRATIVE ACTIONS INVOLVING
EPICUREAN: Epicurean is not in violation of any law, regulation,
consent order, order, judgment, injunction or decree against it the
effect of which would be materially adverse to the Epicurean ownership
in the hands of the Buyer.
2.6 NO WARRANTIES: Seller makes no warranty of fitness for use or
merchantability respecting the Assets set forth in Exhibit B. THIS
PROVISION DOES NOT APPLY TO EPICUREAN'S LIQUOR LICENSE, WHICH IS
WARRANTED BY SELLER TO BE CURRENT AND IN GOOD STANDING AND NOT SUBJECT
TO ANY ADVERSE OR EQUITABLE CLAIMS AND ALSO NOT SUBJECT TO ANY PENDING
ADMINISTRATIVE ACTIONS.
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2.7 SELLER'S REPRESENTATION RESPECTING THE USE OF THE EPICUREAN BUSINESS
PREMISE: The property located at 0000 X. Xxxxx Xxxxxx Xxxxxxx is an
"X-0" xxxxx Xxxxxxxx in Phoenix, and Epicurean has used these premises
since November 2, 1998 as a "bar" and "adult live entertainment
establishment," as those words in quotes are defined by the Phoenix
Zoning Ordinances.
2.8 DUTY TO COOPERATE. Seller and Seller's attorney will reasonably
cooperate with the Buyer and Buyer's attorney to determine
conclusively, prior to Closing, that the location of 1902 N. Black
Canyon Freeway may lawfully be currently used as a "bar" and "adult
live entertainment" establishment, as these terms are defined by the
Phoenix Zoning Ordinance.
2.9 SELLER'S REPRESENTATIONS RESPECTING TAX RETURNS. The Seller, as
Managing Member of Epicurean, will cause to be filed and paid in a
timely manner all applicable federal, state and local taxes related to
income received from Epicurean up to and through December 1, 2002.
Seller warrants that all tax returns filed or to be filed by or on
behalf of Xxxxxx Xxxxxxxxx, and related to income or loss from
Epicurean are, or will be, substantially accurate, and to the best of
Seller's knowledge will not result in any future claim against the
assets of Epicurean in Buyer's hands. Seller also warrants that no
examination of any of the tax returns of Xxxxxx Xxxxxxxxx is pending,
and that neither Epicurean or Xxxxxx Xxxxxxxxx has been notified by
any taxing authority of an intent to conduct an examination of any
such tax return. Seller further warrants that Xxxxxx Xxxxxxxxx is
responsible for and will timely pay all income tax liabilities of
Epicurean up to the date of Closing.
2.10 TITLE TO ASSETS: Seller warrants that as of the Closing Epicurean has
good, marketable unencumbered title to the Assets referred to herein
free and clear of all liens, claims and encumbrances.
2.11 CURRENT LEASE NOT IN DEFAULT: Seller warrants that neither he nor
Epicurean are currently, and at the time of the Closing will not be,
in default of any lease applicable to the Epicurean business premises.
2.12 REPRESENTATIONS CONCERNING ENTERTAINERS WHO HAVE APPEARED, OR ARE
APPEARING, AT EPICUREAN'S BUSINESS PREMISES: The Seller represents
that Epicurean:
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(i) Has always properly classified workers, lessees, licensees,
employees, and independent contractors for tax and minimum
wage payment purposes.
(ii) Has never, since the inception of the formal organizational
status of Epicurean, treated any topless performer appearing
on the Epicurean business premises as an employee of
Epicurean, or paid any employer's share of withholding tax
on the earnings of any such person.
(iii)Has never, since the inception of the formal organizational
status of Epicurean been the object of any claim or suit by
any person or government entity asserting failure to pay
minimum wage to any person or report income or tips of any
person.
(iv) The "Documents" included with this Agreement per Section 4.1
include every version of independent contractor, lease or
license agreement with any topless entertainer-performer who
has appeared or is appearing at Epicurean's business
premises.
2.13 REPRESENTATIONS RESPECTING CUSTOMERS AND EMPLOYEES: The Seller makes
no warranty or representation that the present customers of the
business will continue patronizing his business following the Buyer's
execution or closing of this Agreement, or that Epicurean's current
employees will continue to remain as employees of Epicurean after the
execution or Closing of this transaction.
2.14 INSURANCE: Epicurean maintained in full force and effect a policy of
general liability insurance until 2001, without any lapses in
coverage.
2.15 MEMBERSHIP OWNERSHIP: Seller's interest in Epicurean to be transferred
hereunder represents one hundred percent (100%) of all the equitable,
beneficial or legal interest in Epicurean Enterprises, L.L.C. There
are no other interests in Epicurean that are outstanding or promised,
and there are no options, warrants or debt instruments, nor any other
interest in Epicurean Enterprises, L.L.C. that at Closing shall be,
issued or outstanding.
2.16 TERMINATION OF LEASE. At the time of Closing, any lease with Epicurean
for the use of the property located at 0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxx shall be terminated by Seller and there
shall
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be no residual liability owed by or behalf of Epicurean related to
such lease.
2.17 COOPERATION. Xxxxxxxxx will promptly cooperate following the Closing
with respect to any reasonably required paperwork necessary to notify
and obtain approval by the Arizona Department of Liquor Licenses and
Control of a change of agent and control of Licensee.
2.18 LIQUOR LICENSE VALIDITY AND PRE-CLOSING CITATIONS: At the time of
closing the Liquor License will be valid and in good standing and free
of any pre-closing related violations. If there are violations that
are served on the Buyer after closing which are related to pre-closing
activity the Seller warrants and represents that he will pay the
defense or penalty for such violations. Damages to Buyer related to
pre-closing liquor license violations are subject to Offset as
referenced in Section 1.7.
SECTION THREE
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby covenants, represents and warrants to the Seller as
follows:
3.1 BUYER'S FINANCIAL ABILITY TO PURCHASE SELLER'S MEMBERSHIP INTEREST:
Buyer has, or has immediate access to, funds sufficient to purchase
the Seller's interest in Epicurean within the time periods, and within
the manner and at the amounts specified in this Agreement.
3.2 BINDING OBLIGATION OF BUYER: This Agreement is a legal, valid and
binding obligation of the Buyer and any person executing this
Agreement on behalf of Buyer represents and warrants that they have
the requisite authority to execute this Agreement on behalf of Buyer
and to bind Buyer to this Agreement.
3.3 QUALIFICATIONS TO HOLD AN ARIZONA LIQUOR LICENSE. Buyer is familiar
with Arizona liquor law regarding qualifications to hold an Arizona
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liquor license and Buyer reasonably believes it is qualified and
eligible to be a controlling person/entity of Arizona liquor license
#06070572.
3.4 NO VIOLATION: Neither the execution and delivery of this Agreement by
the Buyer, the performance by the Buyer of its obligations hereunder,
nor the consummation by him/it of the transactions contemplated by
this Agreement will (a) violate any provision of the Articles of
Incorporation or Bylaws of the Buyer, (b) to the best of the Buyer's
knowledge, violate any statute, law, regulation, or any judgment,
decree, order, regulation or rule of any court or government authority
to which the Buyer is subject, or (c) violate or constitute a breach
of any agreement to which the Buyer is subject.
3.5 CORRECTIONS TO IDENTIFY NEW MEMBER: Buyer will delete and correct
after Closing any materials or references it receives from third
parties showing Xxx Xxxxxxxxx as having any position or ownership of
Epicurean, and further agrees to not hold itself or Epicurean out,
after Closing, as having any connection with Xxxxxx Xxxxxxxxx other
than with respect to acts or omissions occurring prior to Closing.
3.6 LEGAL REPRESENTATION. Buyer has consulted its own counsel respecting
the terms and conditions of this Agreement.
3.7 LEGAL CAPACITY. Buyer is a Colorado corporation duly organized,
validly existing and in good standing under the laws of the State of
Colorado and is properly qualified and authorized to do business in
the State of Arizona.
3.8 DUE DILIGENCE. The Buyer has visually inspected the Property and is
familiar with A.R.S. Title 4, Chapter 6 of the Phoenix City Code, and
the Phoenix Zoning Ordinance provisions respecting bars and adult live
entertainment establishments. The Buyer specifically DOES NOT accept
as conclusive any representations of the Seller that the 1902 N. Black
Canyon property is in conformity with Phoenix law respecting
separation requirements for so called adult businesses. This
Agreement, as well as the aforementioned Real Estate Purchase
Agreement, are conditioned on a "bar" and an "adult live entertainment
establishment" being a lawful use of the 1902 N. Black Canyon property
at the time of Closing. In the event that at Closing a "bar" and an
"adult live entertainment" establishment is determined by Buyer to be
a lawful use of the 1902 N. Black Canyon property, then the Buyer will
be satisfied with respect to the probable risk, worth and potential of
the membership interests it is purchasing and will consummate this
purchase and sale. Neither Seller nor Epicurean Enterprises L.L.C.
have made any express or implied representations or warranties as to
the condition or value of Epicurean Enterprises L.L.C. Nothing
contained in this subsection is intended in any way to negate or
obviate any conditions to Closing or the
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Seller's Representations and warranties set forth in this Agreement.
Notwithstanding anything else contained herein, Buyer and Seller agree
that Buyer shall have until the earlier of (i) forty-five (45) days
following the mutual execution of this Agreement, or (ii) Closing (the
"Due Diligence Period"), to conduct whatever property inspections,
physical tests, and any other inquiries Buyer deems necessary or
advisable to confirm or determine the physical condition of the
Property and the improvements located thereon and the value of
Epicurean Enterprises, L.L.C. If, as a result of information first
discovered during the conduct of this due diligence, Buyer gives
notice that it reasonably disapproves of the condition of the Property
or any of the improvements located thereon, then the Buyer shall have
the right to terminate this Agreement and Seller and Escrow Agent
shall promptly return to Buyer any monies received from Buyer, less
any amounts necessary to correct any damages to the Property or the
improvements located thereon caused by Buyer or Buyer's, agents,
employees, or independent contractors. If Buyer does not give written
notice of its disapproval of the condition of the Property or the
improvements located thereon during the Due Diligence Period, then
Buyer shall have no further claims or causes of action against Seller
arising out of, or relating in any manner to, these matters, and shall
be deemed to have waived all such claims or causes of action relating
to the condition of the Property or the improvements located thereon.
3.9 CONTINUED USE. Following the Closing, Buyer and its successors or
assigns, if any, will continue to use the Property for a "bar" and an
"adult live entertainment" establishment and may use some portion of
the Property for a "sexually oriented business," as those terms are
defined in the City of Phoenix Code and Zoning Ordinances, in a manner
that is consistent with all applicable statutes, regulations and
ordinances issued or enforced by any governmental body, department or
agency, including, without limitation, the Code of the City of
Phoenix, Chapter 6 and Chapter 10, Art. XII, Sections 10-131 through
10-148, and will not act or fail to act, nor will it permit any of its
officers, directors, employees, agents, lessees, or independent
contractors to act or fail to act, in any manner which would result in
the inability to continue conducting any business on the Property
which constitutes an "adult live entertainment" use.
3.10 PROTECTION OF LIQUOR LICENSE. Following the Closing, the Buyer, its
officers, employees, agents, lessees, and independent contractors will
use their best faith efforts employing the highest standard of care to
prevent any act, failure to act or violation of any statute,
ordinance, regulation or code section of any governmental entity to
occur which would effect or jeopardize in any material way the
validity or value of Liquor License No. 06070572 or the ability of
Seller or Sacred Ground Resources L.L.C. to subsequently obtain a
Class 6 liquor license for the Property should Seller or Sacred
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Ground Resources L.L.C. at any time after the Closing be entitled to
conduct any business on the Property by virtue of a default by Buyer,
VCG Real Estate Holdings, Inc., or their successors or assigns.
3.11 SUBMITTAL ONLY WITH XXXXXXXXX APPROVAL. Neither Buyer, nor VCG Real
Estate Holdings, Inc., nor any of their respective officers,
directors, employees, or agents will, at any time prior to the
Closing, (i) submit any written registrations, applications, emails,
letters, memorandum, or any other written documents or materials to
any governmental or quasi-governmental entity or agency located in the
State of Arizona unless such written material has been approved, in
its entirety, by Xxxxxx Xxxxxxxxx, in his sole and absolute
discretion, nor (ii) meet with or conduct any telephonic conference
or telephone call with any person or persons in any governmental or
quasi-governmental entity or agency in the State of Arizona unless the
subject matter of such meeting or discussions and the approach to be
taken have first been discussed with, and approved by, Xxxxxx
Xxxxxxxxx, in his sole and absolute discretion, and Xxxxxx Xxxxxxxxx
is then present during any such meeting or discussion, whether by
phone or in person.
SECTION FOUR
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ADDITIONAL COVENANTS
4.1 DOCUMENTS ON AGREEMENT EXECUTION: On execution of this Agreement the
Buyer and Seller shall each receive a fully executed copy of this
Agreement, all Exhibits and Attachments to this Agreement including
the following Documents:
Document Number 1 Articles of Organization of Epicurean.
Document Number 2 Operating Agreement of Epicurean.
Document Number 3 Copy of all versions of independent
contractor agreements used with
entertainers at the Epicurean business
premises.
Document Number 4 All Books and Records of Epicurean,
including evidence of all required
regulatory filings, in the possession of
Seller or Seller's attorneys, and all
records required to be maintained by a
liquor licensee pursuant to Title 4 of the
Arizona Revised Statutes and any
regulations promulgated thereto.
Document Number 5 Copies of Epicurean casualty insurance
policies during the period from 1998 until
2001.
Document Number 6 Copies of all original licenses and permits
in the name of Epicurean Enterprises,
L.L.C. or referencing 0000 Xxxxx Xxxxx
Xxxxxx Xxxxxxx [including Liquor License
# 06070572], with the originals to be
provided to Seller at the Closing.
4.2 CLOSING DOCUMENTS. In addition to the above, at Closing Date the
Seller shall deliver to the Buyer the following:
(i) Any existing maintenance and/or warranty records related to
Assets conveyed by this Agreement.
(ii) Certified Minutes of Epicurean acknowledging the sale of the
100% membership interest of Xxxxxx Xxxxxxxxx to VCG Holding
Corp., a change of statutory
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and Liquor Agent, and accepting resignations of current
Officers and acknowledging this sale.
(iii)Completed Change of Agent notice as required by the Arizona
Department of Liquor Licenses prepared by Buyer and signed
by Seller.
(iv) A Change of Statutory Agent prepared by Buyer and signed by
Seller on behalf of Epicurean Enterprises, L.L.C.
(v) Any other document reasonably required by Buyer, Seller,
their attorneys, and any closing agent involved in this
transaction.
4.3 BUYER TO DELIVER TO SELLER: At Closing the Buyer shall deliver to the
Seller the following:
(i) Cashiers' check in the amount $90,000.00 payable to Xxxxxx
Xxxxxxxxx.
(ii) Financing statement and agreement together with an executed
UCC-1 securing with all of the current and future assets of
Epicurean the performance of the Real Estate Sale-Purchase
Agreement and the Promissory Note executed in connection
therewith.
SECTION FIVE
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5.1 SELLER'S MAINTENANCE OF USE OF PROPERTY AS A PHOENIX "ADULT LIVE
ENTERTAINMENT" ESTABLISHMENT: Buyer has informed the Seller that
Buyer's sole intended use of the 0000 X. Xxxxx Xxxxxx Xxxxxxx property
is as a "bar" and an "adult live entertainment establishment." Without
Buyer's right and ability at the time of closing to so use the
Property, the Buyer would have no use for the Property or the Seller's
interest in Epicurean. Therefore, for this Agreement to close the 0000
Xxxxx Xxxxxx Xxxxxxx property must, at the time of closing, be
permitted, under Phoenix Ordinances and Zoning Code, to open and
operate a "bar" and an "adult live entertainment establishment."
Because of these circumstances, the Buyer and Seller agree that:
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(i) Seller will maintain its use of the Property as an "adult
live entertainment' establishment per the Phoenix City Code
and Zoning Ordinance until the Closing, and,
(ii) Buyer will reimburse the Seller for the cost of exhibiting
at the Property live, topless adult entertainment with the
character and frequency required to maintain "adult live
entertainment" use status under the Phoenix City Code and
Zoning Ordinance. Any monies paid pursuant to this provision
shall not be credited against the Purchase Price.
5.2 CONDITIONS OF THIS SALE: In addition to the condition set forth in
Section 1.4 of this Agreement, the obligations of the Buyer to perform
hereunder are conditioned on the satisfaction of each of the following
(all or any part of which may be waived by both the Buyer and the
Seller, acting jointly) on or prior to the Closing Date:
(i) The Representations and Warranties of the Seller contained
in this Agreement shall be true and correct.
(ii) The approval by Buyer of any documents ancillary to this
Agreement.
(iii) As of Closing that a "bar" and an "adult live entertainment
establishment," as those terms are defined by the Phoenix
City Code and Zoning Ordinance, are all currently lawful
and
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"permitted uses" of the Property pursuant to the City of
Phoenix Ordinances, Phoenix Zoning Code and Arizona state
law.
(iv) That prior to Closing the Seller provide to Buyer's
attorney, Xxxxxxx Xx Xxxxxxxxxx, any and all records of
Epicurean in Seller's possession referring to:
a) Classification of topless entertainers who have
appeared or are appearing at Epicurean's business
premises; and,
b) Agreements between Epicurean and topless entertainers
who have appeared or are appearing at Epicurean's
business premises respecting their status with
Epicurean as "employees" or "independent contractors."
(v) That as of Closing the Buyer is permitted by law,
regulation, and/or license grant or transfer, to
immediately operate at the Property a "bar" and an "adult
live entertainment establishment" as those terms are
defined by the Phoenix City Code and Zoning Ordinance,
unless such use is prohibited or restricted as the result
of the direct or indirect acts or omissions of the Buyer,
its officers, directors, shareholders, employees, or
agents.
(vi) That prior to Closing, Xxxxxx Xxxxxxxxx, [who will be the
sole Member of EPICUREAN ENTERPRISES, L.L.C. at the time of
Closing] has agreed to indemnify the Buyer for any losses
or damages suffered by the Buyer as a result of any Seller
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misrepresentations, fraud, or Seller caused performance
failures related to this Agreement.
(vii) That the Buyer has acquired, to its reasonable
satisfaction, all final permits, licenses, and approvals
from all regulatory bodies or agencies required to permit
the Buyer to lease, own, use, and operate the Property or
business at 0000 X. Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx
as an "adult live entertainment" establishment, as that
quoted term is defined by Arizona law and the Phoenix City
Code and Zoning Ordinance.
In the event Buyer does not close the Agreement for the purchase of
the membership interest of Seller in Epicurean solely as the result of
any failure of any of the foregoing conditions, then any deposit paid
by Buyer toward the purchase of Seller's interest in Epicurean shall
be promptly returned to Buyer by written request to the closing
agent/escrowee of such deposit stating under oath that this Agreement
will not close because of a failure of one of the above conditions and
setting forth with specificity the condition which has failed and the
exact manner in which there has been a failure of that condition, and
the Escrowee shall honor this written request.
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SECTION SIX
MISCELLANEOUS
6.1 CONFIDENTIALTY: The Buyer and the Seller agree to keep the terms and
timing related to this Agreement confidential to the extent legally
permissible and practically possible.
6.2 COOPERATION: Buyer and Seller agree to reasonably cooperate with one
another to assure a smooth transition of the business license,
ownership and control from Seller to Buyer.
6.3 FURTHER ASSURANCES: Seller and Buyer jointly and severally agree to
use their best efforts to obtain any consents or approvals by any
third party or Government authority or agency which are required or
reasonably deemed desirable by Buyer in connection with the completion
of the transactions contemplated by this Agreement.
6.4 FEES AND EXPENSES: Except as otherwise provided herein, the parties
hereto shall bear their own costs and expenses incurred in connection
with this transaction.
6.5 BROKERAGE. The Buyer and Seller agree, represent and warrant that
there is NO brokerage obligation or relationship related to this
transaction.
6.6 NOTICES TO THIRD PARTIES, VENDORS. Following the Closing Date the
Seller will notify all persons-entities-government agencies and
regulatory authorities which had any business or regulatory
relationship with the Seller that the Seller has sold his interest in
Epicurean, and that the Seller is no longer involved in any business
at the 1902 N. Black Canyon Freeway, Phoenix, Arizona.
6.7 BULK SALES. The parties agree UCC Bulk Sales provisions are not
applicable.
6.8 ASSIGNMENT. The benefits and burdens of this Agreement are personal in
nature and no party, except as provided in Section 7.4, shall assign
this Agreement or any of its rights and obligations hereunder without
the prior written consent of the other party.
6.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, their heirs, legal
representatives, successors and permitted assigns.
6.10 PRESERVATION OF THE BUSINESS. Without purporting to make any
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commitment, Seller shall exercise all reasonable efforts to: (i)
preserve the present relationship of Epicurean with all persons having
business dealings with Epicurean; and, (ii) preserve and maintain in
force all licenses, permits, registrations, franchises, and other
similar rights applicable to up until Closing and to reasonably
accommodate the efforts and activities of Buyer to accomplish a change
of liquor agent, statutory agent, and transfer of a controlling
interest in Epicurean Enterprises, L.L.C. from Xxxxxx Xxxxxxxxx to
Buyer.
6.11 NOTICES. Any notice, demand or request required or permitted to be
given under any provision of this Agreement shall be in writing and
delivered personally or by certified or registered mail (with return
receipt requested, and postage prepaid) to the following address, or
to such other address as either party or their legal representative
may request by notice in writing to the other party:
If to Seller: Epicurean Enterprises, L.L.C.
c/o Xx. Xxxxxx Xxxxxxxxx
0000 X. Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
With a copy to: Xx. Xxxxx Xxxxxx
XXXXXX & SHORT, P.C.
00 X. Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attorney for Seller
If to Buyer: VCG HOLDING CORP.
Attn: Xxxxxxx Xxxxxx
0000 X. Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
With a Copy to: Xxxxxxx Xx Xxxxxxxxxx, X.X.
00000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX. 00000
Attorney for Buyer
6.12 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter
hereof, and supersedes any and all prior agreements, understanding,
negotiations and discussions between the parties and/or their counsel
on the subject of this Agreement or topic(s) related to this
Agreement. No amendment,
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modification or waiver of this Agreement shall be binding unless
evidenced by an instrument in writing signed by the Buyer and Seller.
6.13 CONSTRUCTION. The captions and headings of this Agreement are for
convenience and reference only, and shall not control or effect the
meaning or construction of this Agreement.
6.14 APPLICABLE LAW, VENUE: This Agreement is to be performed in Phoenix,
Arizona and shall be governed by the internal substantive laws of the
State of Arizona (without reference to choice of law principles) and,
to the extent they preempt the laws of such state, the laws of the
United States. In the event any litigation is commenced relating to
this Agreement, the parties hereby irrevocably submit to the process,
jurisdiction and venue of the courts of the State of Arizona, in and
for the County of Maricopa, for the purpose of suit, action or other
proceedings arising out of or relating to this Agreement and any such
action shall be commenced only in such courts.
6.15 SEVERABILITY. The invalidity or unenforceability of any provisions of
this Agreement shall not effect the validity or enforceability of any
other provision hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision had been
omitted. The invalidity or unenforceability of any provision of this
Agreement to any person or circumstance shall not affect the validity
or enforceability of such provision as it may apply to any other
persons or circumstances.
6.16 WAIVER. The failure in one or more instances of a party to insist upon
performance of any of the terms, conditions and covenants set forth in
this Agreement, or the failure of a party to exercise any right or
privilege conferred by this Agreement, shall not thereafter be
construed thereafter as waiving their right to insist upon performance
of such terms, conditions or covenants or the rights to exercise such
privileges and rights, which shall continue to remain in full force
and effect as if no forbearance had occurred.
6.17 ATTORNEYS FEES. If either party to this Agreement should bring an
action in any court of competent jurisdiction to enforce or obtain an
interpretation of this Agreement, the prevailing party in that
litigation shall be entitled to a judgment for the costs of the action
and reasonable attorneys' fees incurred in prelitigation efforts to
resolve the issues between the parties, investigation and research, as
well as the attorneys fees associated with actual action following its
commencement, in addition to any other relief granted by the court.
6.18 MEDIATION. In the event of a dispute between the parties concerning
the
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subject matter of this Agreement the parties agree to first to attempt
to informally mediate their dispute prior to instituting any
litigation.
6.19 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument,
but all of which together will constitute for all purposes one and the
same instrument.
6.20 FACSIMILE SIGNATURE. The parties agree a facsimile signature shall be
as effective as an original.
6.21 AGREEMENT NOT TO COMPETE. The Seller agrees that for a period of three
years after the Closing Date he will not, directly or indirectly, own
or have any interest in an adult oriented nightclub or bar within
three (3) miles of the Property. Buyer acknowledges that Seller has
unique skills and abilities to locate and qualify properties that may
be profitably used for adult entertainment purposes. In order to
induce Seller to locate and qualify such properties that are located
within the Phoenix Metropolitan area and to bring such properties to
the attention of VCG Real Estate Holdings, Inc., the entity from whom
Buyer will lease the property located at 0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Arizona, Buyer acknowledges and agrees that if
Seller locates any such property located within the Phoenix
Metropolitan area during the period of three (3) years following the
Closing, Seller will give VCG Real Estate Holdings, Inc. the first
right of refusal (the "First Right of Refusal") to purchase or lease
such property (the "Offered Property") upon such terms and at a
purchase/lease price and additional compensation to Xxxxxxxxx as are
satisfactory to Xxxxxxxxx in his sole discretion (the "Offered
Terms"). Buyer shall have a period of fifteen (15) days after being
provided, in writing, with the Offered Terms to exercise its First
Right of Refusal by entering into a binding letter of intent or
contract with Xxxxxxxxx or, at Xxxxxxxxx'x sole discretion, the owner
of such property, containing the Offered Terms. If Buyer does not
exercise its First Right of Refusal within such fifteen (15) day
period, then Xxxxxxxxx shall be free to offer the Offered Property to
any other person or entity upon terms no more favorable than the
Offered Terms and Buyer agrees that neither Buyer nor any person or
entity related in anyway to Buyer shall purchase or lease, or attempt
to purchase or lease, the Offered Property, or any interest therein,
for a period of five (5) years.
6.22 ASSISTANCE OF COUNSEL. Buyer states that it has had the assistance and
counsel of Xxxxxxx Xx Xxxxxxxxxx, Esq. in the review of the terms and
conditions of this Agreement; The Seller states that it has had the
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assistance of Xxxxx Xxxxxx, Esq. in the review of the terms and
conditions of this Agreement.
6.23 SURVIVAL OF COVENANTS, REPRESENTATIONS, WARRANTIES AND
INDEMNIFICATION'S. All covenants, representations and warranties made
by any party to this Agreement shall be deemed made for the purpose of
inducing the other party to enter into this Agreement. The
representations and warranties made by either party in this Agreement
shall survive the Closing indefinitely.
SECTION SEVEN
AGREEMENT TERMINATION, BREACH, FAILURE TO PERFORM,
DEFAULT AND LIQUIDATED DAMAGES
7.1 BUYER'S TERMINATION PRIOR TO CLOSING. If the Buyer terminates this
Agreement prior to Closing for a reason other than (i) the failure of
a Condition in this Agreement not subject to the provisions of Section
7.5 of this Agreement, (ii) Sacred Ground Resources, LLC.'s failure to
close the real estate transaction with VCG Real Estate Holdings, Inc.,
or (iii) a material change in the character of the assets involved in
this transaction or a material change in the real estate located at
1902 N. Black Canyon Freeway, Phoenix, Arizona, then, as a condition
precedent to such termination, Buyer shall pay Seller, as Seller's
liquidated damages (a) all of Seller's attorneys' fees (not to exceed
$20,000.00) incurred in the negotiation and drafting of documents
relating to the transaction contemplated by this Agreement and the
real estate purchase agreement by and between VCG Real Estate
Holdings, Inc., as the buyer, and Sacred Ground Resources L.L.C., as
the seller, and (ii) a sum equal to the mortgage payments paid by
Sacred Ground Resources L.L.C. for the Property for the months of
January, 2003 through the month in which Buyer elects to terminate and
pays these amounts, or (b) specific performance.
7.2 SELLER'S TERMINATION PRIOR TO CLOSING: If Seller terminates this
Agreement prior to Closing for any reason, including death, the Buyer
shall have the option of seeking, as a remedy for breach, either
specific performance of this Agreement, or recovering its attorney's
fees (not to exceed $5,000.00) incurred in the negotiation and
drafting of documents relating to the transaction contemplated by this
Agreement and the real estate purchase agreement by and between VCG
Real Estate Holdings, Inc., as the buyer, and Sacred Ground Resources
L.L.C., as the seller, as its liquidated damages from Seller.
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7.3 DEFAULT UNDER THE VCG HOLDING, INC. PURCHASE AGREEMENT: This
transaction shall be deemed terminated if the transaction between
Sacred Ground Resources, LLC and VCG Real Estate Holdings, Inc.,
respecting the sale-purchase of 0000 X. Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxx does not close simultaneous with the closing of this
transaction.
CHANGE IN CONTROLLING PERSON. Notwithstanding anything above to the
contrary, upon Closing the Buyer will notify the Arizona Department of
Liquor Licenses and Control within the statutory period allowed that
the controlling interest in Epicurean Enterprises has been acquired by
VCG HOLDING CORP. from Xxxxxx Xxxxxxxxx. If thereafter the Department
notifies the Buyer that VCG Holding Corp. or any of its owners,
shareholders or officers are is not acceptable as a controlling
person, the Buyer is free to convey its interest in Epicurean to
another party or entity who is acceptable to the Arizona Department of
Liquor Licenses and Control.
7.5 BUYER'S ACTS. Buyer agrees that it waives any condition contained in
this Agreement and Seller shall not be liable for the breach of any
covenant or representation contained herein, if the failure of such
condition or the breach of such covenant or representation is caused
or frustrated by the acts or omissions of the Buyer, its affiliates or
related entities, or the officers, directors, shareholders, members,
partners, agents, independent contractors, or employees of any of
them.
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IN WITNESS WHEREOF, the parties have executed this Agreement for the Sale
Of Xxxxxx Xxxxxxxxx'x 100% Membership Interest In Epicurean Enterprises,
L.L.C. as of the 5th day of March, 2003.
"SELLER" "BUYER"
VCG HOLDING CORP.
/s/ Xxxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxx
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Xxxxxx Xxxxxxxxx Xxxx Xxxxxx, CEO
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