Exhibit
10.1
EXECUTION
VERSION
ASSET PURCHASE
AGREEMENT
This
Asset Purchase Agreement (the “Agreement”) is made and entered into
this 10
th
day of
May, 2008, by and among Rick’s Cabaret International, Inc., a Texas corporation
(“Rick’s”), its wholly owned subsidiary, RCI Entertainment (Northwest Highway),
Inc., a Texas corporation (hereinafter the “Purchaser”), North by East
Entertainment, Ltd., a Texas limited partner (hereinafter the “Seller”) by and
through its General Partner, Northeast Platinum, L.L.C. doing business as
Platinum Club II, and John Auletta (“Auletta”)
WHEREAS,
Auletta owns 100% of
the limited partnership interest of the Seller and 100% of the membership
interest of Northeast Platinum, L.L.C., the general partner of the Seller;
and
WHEREAS
, the Seller presently
owns a business that operates an adult entertainment cabaret known as “Platinum
Club II” (the “Business” or “PLATINUM”) located at 2501 Northwest Highway,
Dallas, Texas 75220 (the “Real Property” or the “Premises”); and
WHEREAS
, Seller desires to
sell, transfer and convey all of the assets owned by it which are associated or
used in connection with the operation of PLATINUM to the Purchaser, on the terms
and conditions set forth herein; and
WHEREAS
, the Purchaser desires
to purchase the assets from Seller on the terms and conditions set forth herein;
and
NOW, THEREFORE
, in
consideration of the premises, the mutual covenants and agreements and the
respective representations and warranties herein contained, and on the terms and
subject to the conditions herein set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE
I
PURCHASE
AND SALE OF THE ASSETS
Section
1.1
Assets of Seller to be
Transferred to Purchaser
. On the Closing Date (as defined in
Section 4.1 hereof), and subject to the terms and conditions set forth in this
Agreement, Seller shall sell, convey, transfer and assign, or cause to be sold,
conveyed, transferred and assigned to Purchaser free and clear of all liens and
encumbrances, and Purchaser shall acquire all of the tangible and intangible
assets and personal property of every kind and description and wherever situated
of the business of PLATINUM from the Seller, including but not limited to, the
following personal property of the Seller:
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(i)
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all
of the tangible and intangible assets and personal properties of every
kind and description and wherever situated of the business of PLATINUM,
including, without limitation, inventories, furniture, fixtures, equipment
(including office and kitchen equipment), computers and software,
appliances, sign inserts, sound and lighting and telephone
systems not incorporated into the building, telephone numbers, and other
personal property of whatever kind and nature owned or leased by Seller,
installed, located, situated or used in, on, or about, or in connection
with the operation, use and enjoyment of the Premises and all other items
on the subject Premises and used in connection with the operation of
PLATINUM;
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(ii)
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all
of Seller's inventory of supplies, accessories and any and all other items
of personal property of whatever nature, sold by the Seller in the
operation of PLATINUM (the "Inventory"), provided that the
transfer of any alcoholic inventory shall be done in accordance with the
regulations of the TABC;
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(iii)
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all
supplies (other than Inventory) and other "consumable supplies" used in
connection with the operation of PLATINUM (the
"Supplies");
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(iv)
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all
of Seller's right, title, and interest, as lessee, of any and all
equipment leased by Seller and located at PLATINUM (the "Leased
Equipment");
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(v)
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all
right, title, and interest of Seller to the use of the telephone numbers
presently being used by the Business, including all rotary extensions
thereto, and all advertisements in the "Yellow Pages", "City Directory"
and other similar publications (the "Telephone Numbers") and after the
Closing, Purchaser shall assume all expenses for the Telephone Numbers and
advertising; and
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(vi)
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copies
of Seller's lists of suppliers compiled in connection with the operation
of PLATINUM which are requested by Purchaser (the
"Records").
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All of
the items set forth in this Section 1.1 are collectively referred to as the
“Purchased Assets”.
Section
1.2
Excluded
Assets
. Specifically excluded from the Purchased Assets are
the corporate seals, books, accounting records and records related to corporate
governance of the Seller, cash on hand at time of Closing, those assets listed
on Exhibit 1.2 hereto, and any and all necessary permits and authorizations
which are needed to conduct an adult entertainment business serving alcoholic
beverages at PLATINUM, which Purchaser acknowledges that it will need for such
purpose, including its sexually oriented business permit and license
(hereinafter collectively referred to as the “Excluded Assets”). In
the event that the parties agree to transfer the cash on hand at Closing from
the Seller to the Purchaser, then the Purchaser will agree to pay Seller for
such cash amount.
Notwithstanding
the foregoing, Seller agrees to cooperate with Purchaser by surrendering its
necessary permit to conduct an adult entertainment business upon closing of this
Agreement, receipt of the Purchase Price and issuance to Purchaser by the City
of Dallas its necessary permit to conduct an adult entertainment business on the
Premises. Similarly, Seller agrees to cooperate with Purchaser in
obtaining necessary licenses and permits to serve alcoholic beverages on the
premises, including the potential use of existing licenses and permits, if
appropriate, and by surrendering such licenses and permits necessary to serve
alcoholic beverages on the Premises upon Closing of this Agreement, receipt of
the Purchase Price and issuance to Purchaser of the necessary permits and
licenses necessary to serve alcoholic beverages on the Premises.
Section
1.3
Intent of the
Parties
. Although the Exhibits to this Agreement are intended
to be complete, in the event such Exhibits fail to contain the description of
any asset belonging to Seller which is used solely for the business of PLATINUM
at the Premises, such assets shall nonetheless be deemed transferred to
Purchaser at the Closing.
Asset
Purchase Agreement - Page 2
ARTICLE
II
NO
ASSUMPTION OF LIABILITIES
Section
2.1
Excluded
Liabilities
. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser shall have no obligation and is not
assuming, and Seller shall retain, pay, perform, defend and discharge all of the
liabilities and obligations of every kind whatsoever related or connected to the
Purchased Assets or the business of PLATINUM arising or accruing prior to the
Closing Date, whether disclosed or undisclosed, known or unknown on the Closing
Date, direct or indirect, absolute or contingent, secured or unsecured,
liquidated or unliquidated, accrued or otherwise, whether liabilities for taxes,
liabilities of creditors, liabilities arising under any profit sharing, pension
or other benefit under any plan of Seller, liabilities to any Governmental
Agency (as hereinafter defined) or third parties, liabilities assumed or
incurred by Seller by operation of law or otherwise (collectively, the “Excluded
Liabilities”), including, but not limited to, (i) contractual liabilities
arising from PLATINUM’S business or ownership of the Purchased Assets prior to
the Closing Date, and (ii) any taxes owing by Seller, whether occurring before
or after Closing and whether related to the business of PLATINUM, the Purchased
Assets or otherwise and any Liens on the Purchased Assets relating to any such
taxes.
Section
2.2
Taxes
. Seller
shall pay when due any sales, transfer, excise, or other taxes which may be
imposed in any jurisdiction in connection with or arising from the sale and
transfer of any of the Purchased Assets to Purchaser.
Section
2.3
Bulk Sales
Laws
. Seller acknowledges that any applicable provisions of
any tax clearance or bulk sales laws pertaining to the transactions contemplated
by this Agreement are being complied with and that Seller agrees to
indemnify and hold harmless Purchaser from and against any and all liabilities
arising out of or relating to any such tax clearance or bulk sales
law. Any such liability shall be an Excluded Liability.
ARTICLE
III
PURCHASE
PRICE FOR
THE
PURCHASED ASSETS
Section
3.1
Purchase
Price
. As consideration for the purchase of the Purchased
Assets, Purchaser shall pay to Seller, at Closing, $1,500,000.00, payable by
cashier’s check, certified funds or wire transfer. The $1,500,000.00
cash payment is referred to as the “Purchase Price”.
ARTICLE
IV
CLOSING
Section
4.1
The
Closing
. The closing of the transactions provided for in this
Agreement (the “Closing”) shall take place on the later of: (i) June 10, 2008;
or (ii) ten (10) days after the approval of Purchaser’s application for a
Sexually Oriented Business License by the City of Dallas and the transfer of all
other permits utilized to operate the Club to Purchaser or affiliates of
Purchaser (the “Closing Date”), provided however that in no event shall the
Closing Date be later than August 31, 2008. The parties hereto hereby
agree that the Closing Date shall be extended until August 31, 2008, if the
Purchaser determines, in its sole discretion, to extend the Closing Date if the
City of Dallas denies the initial transfer of the sexually oriented business and
the Purchaser elects to appeal that decision. The parties have agreed
further to close at the law offices of Quilling, Selander, Cummiskey &
Lownds, P.C., 2001 Bryan Street, Suite 1800, Dallas, Texas 75201, or at such
other place as agreed upon in writing among the parties hereto.
Asset
Purchase Agreement - Page 3
Section
4.2
Delivery and
Execution
. At the Closing: (a) the Seller shall deliver to
Purchaser all instruments of assignment and bills of sale necessary to transfer
to Purchaser good and marketable title to the Purchased Assets free and clear of
all liens, charges or encumbrances against delivery by Purchaser to the Seller
of payment in an amount equal to the Purchase Price of the Purchased Assets
being purchased by Purchaser in the manner set forth herein; (b) the Seller and
Purchaser shall deliver the various certificates, instruments and documents (and
shall take the required actions) referred to in Articles VII and VIII below; and
(c) the Related Transactions (as defined below) shall be consummated
concurrently with the Closing.
Section
4.3
Related
Transactions
. In addition to the purchase and sale of the
Purchased Assets, the following actions shall take place contemporaneously at
the Closing (collectively, the "Related Transactions"):
(i)
Covenant Not to
Compete
. At Closing, Auletta will enter into a five (5) year
covenant not to compete either directly of indirectly, with the adult nightclub
presently known as PLATINUM CLUB II by operating an establishment with an urban
theme that both serves liquor and provides live female nude or semi-nude adult
entertainment in Dallas County, Tarrant County, Texas, or any of the
adjacent counties thereto; provided, however, that any Non-Competition Agreement
will permit Auletta the right to own and/or operate an establishment without an
urban theme that both serves liquor and provides live female nude or semi-nude
adult entertainment in Dallas County, Texas, Tarrant County, Texas, or any of
the adjacent counties thereto.
(ii)
Real Estate Purchase and Sale
Agreement to Purchase Real Property.
RCI Holdings,
Inc., a Texas corporation (“RCI”) and WIRE WAY, LLC, a Texas limited liability
company (“Wire Way”) will enter into a REAL ESTATE PURCHASE AND SALE AGREEMENT
pursuant to which RCI will purchase the Real Property from Wire Way (the “Real
Estate Agreement”), pursuant to which the purchase and
sale of the Real Property shall be governed. A true and correct copy
of the Real Estate Agreement is attached hereto as Exhibit 4.3(ii).
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
OF
AULETTA AND THE SELLER
Auletta
and the Seller hereby represent and warrant to Purchaser and Rick’s as
follows:
Asset
Purchase Agreement - Page 4
Section
5.1
Organization, Good Standing
and Qualification.
The Seller (i) is an entity duly organized,
validly existing and in good standing under the laws of the state of Texas, (ii)
has all requisite power and authority to operate the Business, and (iii) is duly
qualified to transact business and is in good standing in Texas.
Section
5.2
Ownership of the Purchased
Assets
. Seller owns or will own at Closing, all of the
Purchased Assets free and clear of any liens, claims, equities, charges,
options, rights of first refusal, or encumbrances. Seller has the unrestricted
right and power to transfer, convey and deliver full ownership of the Purchased
Assets without the consent or agreement of any other person and without any
designation, declaration or filing with any governmental
authority. Upon the transfer of the Purchased Assets to Purchaser as
contemplated herein, Purchaser will receive good and valid title thereto, free
and clear of any liens, claims, equities, charges, options, rights of first
refusal, encumbrances or other restrictions.
Section
5.3
Authorization
. The
Seller has all requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. All action on the part of the
Seller necessary for the authorization, execution, delivery and performance of
this Agreement and all documents related to consummate the transactions
contemplated herein have been taken or will be taken prior to the Closing Date
by the Seller. This Agreement, when duly executed and delivered in accordance
with its terms, will constitute legal, valid and binding obligations of the
Seller enforceable against it in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization and other similar laws of
general application affecting creditors’ rights generally or by general
equitable principles.
Section
5.4
No Breaches;
Consents
. Except as set forth in Schedule 5.4, the execution,
delivery, and performance of this Agreement and the transactions contemplated
hereby by the Seller does not: (i) violate any provision of its
Articles of Organization or Regulations; (ii) conflict with, violate, or
constitute a breach of or a default under; (iii) result in the creation or
imposition of any lien, claim, or encumbrance of any kind upon the Purchased
Assets; or (iv) require any authorization, consent, approval, exemption, or
other action by or filing with any third party or Governmental Authority under
any provision of: (a) any applicable Legal Requirement; or (b) any
credit or loan agreement, promissory note, or any other agreement or instrument
to which the Seller is a party or by which the Purchased Assets may be bound or
affected. For purposes of this Agreement, "Governmental Authority"
means any foreign governmental authority, the United States of America, any
state of the United States, and any political subdivision of any of the
foregoing, and any agency, department, commission, board, bureau, court, or
similar entity, having jurisdiction over the parties hereto or their respective
assets or properties. For purposes of this Agreement, "Legal
Requirement" means any law, statute, injunction, decree, order or judgment (or
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority.
Section
5.5
Pending
Claims
. Except as set forth in Schedule 5.5, there is no known
claim, suit, arbitration, investigation, action or other proceeding, whether
judicial, administrative or otherwise, now pending or, to the best of the
Seller’s or Auletta’s knowledge, threatened before any court, arbitration,
administrative or regulatory body or any governmental agency which may result in
any judgment, order, award, decree, liability or other determination which will
or could reasonably be expected to have any effect upon the Seller, or the
business of PLATINUM or the operation of PLATINUM after the Closing Date, nor is
there any basis known to the Seller or Auletta for any such
action. No litigation is pending, or, to the Seller’s or Auletta’s
knowledge, threatened against the Seller, or the business of PLATINUM, or the
Purchased Assets which seeks to restrain or enjoin the execution and delivery of
this Agreement or any of the documents referred to herein or the consummation of
any of the transactions contemplated hereby. Seller is not subject to any
judicial injunction or mandate or any quasi-judicial or administrative order or
restriction directed to or against them which would affect the Seller or the
Business.
Asset
Purchase Agreement - Page 5
Section
5.6
Taxes
. The
Seller has timely and accurately prepared and filed all federal, state, foreign
and local tax returns and reports required to be filed prior to such dates and
have timely paid all taxes shown on such returns as owed for the periods of such
returns, including all sales taxes and withholding or other payroll related
taxes shown on such returns. The Seller is not delinquent in the
payment of any tax or governmental charge of any nature. Neither the
Seller nor Auletta has knowledge of any liability for any tax to be imposed by
any taxing authorities as of the date of this Agreement and as of the Closing
that is not adequately provided for. No assessments or notices of
deficiency or other communications have been received by the Seller with respect
to any tax return which has not been paid, discharged or fully reserved against
and no amendments or applications for refund have been filed or are planned with
respect to any such return. None of the federal, state, foreign and
local tax returns of the Seller have been audited by any taxing
authority. The Seller has no knowledge of any additional assessments,
adjustments or contingent tax liability (whether federal or state) of any nature
whatsoever, whether pending or threatened against the Seller for any period, nor
of any basis for any such assessment, adjustment or
contingency. There are no agreements between the Seller and any
taxing authority, including, without limitation, the Internal Revenue Service,
waiving or extending any statute of limitations with respect to any tax
return.
Section
5.7
Labor
Matters
. The Seller is not a party or otherwise subject to any
collective bargaining agreement with any labor union or
association. There are no discussions, negotiations, demands or
proposals that are pending or have been conducted or made with or by any labor
union or association, and there are not pending or threatened against the Seller
any labor disputes, strikes or work stoppages. To the best of
Seller’s and Auletta’s knowledge, the Seller is in compliance with all federal
and state laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and, to its knowledge, is not
engaged in any unfair labor practices.
Section
5.8
Compliance with
Laws
. The Seller is, and at all times prior to the date
hereof, has been in compliance with all statutes, orders, rules, ordinances and
regulations applicable to it or to the ownership of its assets or the operation
of its businesses, except for failures to be in compliance that would not have a
material adverse effect on the business, properties, condition (financial or
otherwise) or prospects of the Seller. The Seller has no basis to
expect, nor has it received any order or notice of any such violation or claim
of violation of any such statute, order, rule, ordinance or regulation by the
Seller.
Section
5.9
Title to Properties;
Encumbrances
. Seller has (or will have at Closing) good and
marketable title to all of the Purchased Assets, free and clear of all
mortgages, claims, liens, security interests, charges, leases, encumbrances and
other restrictions of any kind and nature.
Asset
Purchase Agreement - Page 6
Section
5.10
Contracts and
Leases
. Except as previously provided to Purchaser, the
Seller does not (i) have any leases of personal property relating to the
Purchased Assets, whether as lessor or lessee; (ii) have any contractual or
other obligations relating to the Purchased Assets, whether written or oral; and
(iii) have given any power of attorney to any person or organization for any
purpose relating to the Purchased Assets or the business of
PLATINUM. The Seller has previously provided to Purchaser or will
provide to Purchaser prior to the Closing Date each and every contract, lease or
other document relating to the Purchased Assets to which it is subject or is a
party or a beneficiary. To Seller’s knowledge, such contracts, leases
or other documents are valid and in full force and effect according to their
terms and constitute legal, valid and binding obligations of the Seller and the
other respective parties thereto and are enforceable in accordance with their
terms. Seller has no knowledge of any default or breach
under such contracts, leases or other documents or of any pending or threatened
claims under any such contracts, leases or other documents. Neither the
execution of this Agreement, nor the consummation of all or any of the
transactions contemplated under this Agreement, will constitute a breach or
default under any such contracts, leases (unless waived by Landlord) or other
documents which would have a material adverse effect on the Purchased
Assets.
Section
5.11
Insurance
Policies
. Copies
of all insurance policies maintained by the Seller relating to the operation of
PLATINUM has been delivered or made available to Purchaser. The
policies of insurance held by the Seller are in such amounts, and insure against
such losses and risks, as the Seller reasonably deems appropriate for its
property and business operations. All such insurance policies are in
full force and effect, and all premiums due thereon have been
paid. Valid policies for such insurance will be outstanding and duly
in force at all times prior to the Closing.
Section
5.12
Brokerage
Commission
. The Seller represents and warrants that there is
no broker and no brokerage commission associated with this asset sale and Seller
shall indemnify, defend and hold harmless Purchaser and Rick’s from
same.
Section
5.13
Disclosure
. No
representation or warranty of the Seller or Auletta contained in this Agreement
(including the exhibits and schedules hereto) contains any untrue statement or
omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
OF
PURCHASER AND RICK’S
Purchaser
and Rick’s hereby represent and warrant to the Seller as follows:
Section
6.1
Organization, Good Standing
and Qualification.
Purchaser and Rick’s (i) are
corporations duly organized, validly existing and in good standing
under the laws of the state of Texas; (ii) have all requisite power and
authority to carry on its business; and (iii) are duly qualified to transact
business and is in good standing in Texas.
Asset
Purchase Agreement - Page 7
Section
6.2
Authorization
. Purchaser
and Rick’s are corporations duly organized in the state of Texas and have full
power, capacity, and authority to enter into this Agreement and perform the
obligations contemplated hereby. All action on the part of Purchaser
and Rick’s necessary for the authorization, execution, delivery and performance
of this Agreement by Purchaser and Rick’s has been taken or will be taken prior
to the Closing Date. This Agreement, when duly executed and delivered
in accordance with its terms, will constitute legal, valid, and binding
obligations of Purchaser and Rick’s enforceable against each of them in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
and other similar laws affecting creditors' rights generally or by general
equitable principles.
Section
6.3
Consents
. No
permit, consent, approval or authorization of, or designation, declaration or
filing with, any governmental authority or any other person or entity is
required on the part of Purchaser or Rick’s in connection
with the execution and delivery by Purchaser and Rick’s of this
Agreement or the consummation and performance of the transactions contemplated
hereby other than as may be required under the federal securities
laws.
Section
6.4
No
Conflicts
. The execution and delivery of this Agreement by the
Purchaser and Rick’s does not, and the performance and consummation of the
transactions contemplated hereby by the Purchaser and Rick’s will not (i)
conflict with the articles of incorporation or bylaws of the Purchaser and
Rick’s; (ii) conflict with or result in a breach or violation of, or default
under, or give rise to any right of acceleration or termination of, any of the
terms, conditions or provisions of any note, bond, lease, license, agreement or
other instrument or obligation to which the Purchaser and Rick’s is a party or
by which the Purchaser and Rick’s assets or properties are bound; or (iii)
result in the creation of any encumbrance on any of the assets or properties of
the Purchaser or Rick’s.
Section
6.5
Brokerage
Commission
. No broker or finder has acted for the Purchaser or
Rick’s in connection with this Agreement or the transactions contemplated
hereby, and no person is entitled to any brokerage or finder’s fee or
compensation in respect thereof based in any way on agreements, arrangements or
understandings made by or on behalf of Purchaser and Rick’s.
Section
6.6
Disclosure
. No
representation or warranty of the Purchaser or Rick’s contained in this
Agreement (including the exhibits and schedules hereto) contains any untrue
statement or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE
VII
CONDITIONS
TO CLOSING OF
SELLER
AND AULETTA
Each
obligation of Seller and Auletta to be performed on the Closing Date shall be
subject to the satisfaction of each of the conditions stated in this Article
VII, except to the extent that such satisfaction is waived by Seller and Auletta
in writing.
Section
7.1
Representations and
Warranties Correct
. The representations and warranties made by
Purchaser and Rick’s contained in this Agreement shall be true and correct as of
the Closing Date.
Asset
Purchase Agreement - Page 8
Section
7.2
Covenants
. All
covenants, agreements and conditions contained in this Agreement to be performed
by Purchaser or Rick’s on or prior to the Closing Date shall have been performed
or complied with in all respects.
Section
7.3
Delivery of
Certificate
. Purchaser and Rick’s shall provide to Seller and
Auletta certificates, dated the Closing Date and signed by the President of
Purchaser and Rick’s to the effect set forth in Section 7.1 and 7.2 for the
purpose of verifying the accuracy of such representations and warranties and the
performance and satisfaction of such covenants and conditions.
Section
7.4
Payment of Purchase
Price
. Purchaser shall have tendered the Purchase Price for
the Purchased Assets as referenced in Section 3.1 to the Seller concurrently
with the Closing.
Section
7.5
Related
Transactions
. The Related Transactions set forth in Section
4.3 shall be consummated concurrently with the Closing.
Section
7.6
New Lease
Agreement
. Wire Way, the landlord under the existing Lease
Agreement on the Premises, shall have agreed to and shall have terminated the
lease with Seller upon Closing, receipt by Seller of the Purchase Price and the
issuance of a sexually oriented business permit to Purchaser and,
contemporaneously Wire Way and Purchaser shall execute a similar Lease Agreement
under which Purchaser as tenant shall pay $45,000.00 month to Wire Way as
Landlord.
Section
7.7
Corporate
Resolutions
. Purchaser and Rick’s shall provide corporate
resolutions of their Board of Directors which approve the transactions
contemplated herein and authorize the execution, delivery and performance of
this Agreement and the documents referred to herein to which it is or is to be a
party dated as of the Closing Date.
Section
7.8
Absence of
Proceedings
. No action, suit or proceeding by or before
any court or any governmental or regulatory authority shall have been commenced
and no investigation by any governmental or regulatory authority shall have been
commenced seeking to restrain, prevent or challenge the transactions
contemplated hereby against Purchaser or Rick’s.
CONDITIONS
TO CLOSING OF
PURCHASER
AND RICK’S
Each
obligation of Purchaser and Rick’s to be performed on the Closing Date shall be
subject to the satisfaction of each of the conditions stated in this Article
VIII, except to the extent that such satisfaction is waived by Purchaser and
Rick’s in writing.
Section
8.1
Representations and
Warranties Correct
. The representations and warranties made by
the Seller and Auletta shall be true and correct as of the Closing
Date.
Asset
Purchase Agreement - Page 9
Section
8.2
Covenants
. All
covenants, agreements and conditions contained in this Agreement to be performed
by the Seller and Auletta on or prior to the Closing Date shall have been
performed or complied with in all respects.
Section
8.3
Delivery of
Certificate
. Seller and Auletta shall provide to Purchaser and
Rick’s certificates, dated the Closing Date and signed by the General Partner of
Seller and Auletta to the effect set forth in Section 8.1 and 8.2 for the
purpose of verifying the accuracy of such representations and warranties and the
performance and satisfaction of such covenants and conditions.
Section
8.4
Delivery of Purchased
Assets
. The Seller shall have delivered to Purchaser all
instruments of assignment and bills of sale necessary to transfer to Purchaser
good and marketable title to the Purchased Assets.
Section
8.5
Corporate
Resolutions
. The Seller shall provide to Purchaser resolutions
of the Seller which approves all of the transactions contemplated herein and
authorizes the execution, delivery and performance of this Agreement and the
documents referred to herein to which it is or is to be a party dated as of the
Closing Date.
Section
8.6
Ownership of Purchased
Assets
. The Seller shall own not less than 100% of the
Purchased Assets which represent all of the assets, personal, tangible and
intangible that are required and material to the condition (financial or
otherwise), business, operations or prospects of PLATINUM.
Section
8.7
Related
Transactions
. The Related Transactions set forth in Section
4.3 shall be consummated concurrently with the Closing.
Section
8.8
Permits
. Purchaser
shall possess all necessary permits, zoning classifications and other
authorizations, whether city, county, state or federal, which may be needed to
conduct topless entertainment with the sale of alcoholic beverages on the
Premises and all such permits, zoning classifications and authorizations shall
be in good order, and, unless otherwise waived by the Purchaser and Rick’s,
without any administrative actions pending or concluded that may challenge or
present an obstacle to the continued performance of topless entertainment and
sale of alcoholic beverages at PLATINUM and the Certificate of Occupancy issued
by the City of Dallas which zones the Premises for an adult oriented business
shall be in full force and effect.
Section
8.9
No Assumption of
Liabilities
. Neither the Purchaser nor Rick’s shall assume any
liabilities as of the date of Closing.
Section
8.10
New
Lease Agreement
. Wire Way, the landlord under the existing
Lease Agreement on the Premises, shall have agreed to and shall have terminated
the lease with Seller upon Closing, receipt by Seller of the Purchase Price and
the issuance of a sexually oriented business permit to Purchaser and,
contemporaneously Wire Way and Purchaser shall execute a similar Lease Agreement
under which Purchaser as tenant shall pay $45,000.00 month to Wire Way as
Landlord.
Asset
Purchase Agreement - Page 10
Section
8.11
Satisfactory
Diligence
. Purchaser and Rick’s shall have concluded their due
diligence investigation of the Seller’s assets and shall be satisfied, in its
sole discretion, with the results thereof.
Section
8.12
Absence of
Proceedings
. No action, suit or proceeding by or before any
court or any governmental or regulatory authority shall have been commenced and
no investigation by any governmental or regulatory authority shall have been
commenced seeking to restrain, prevent or challenge the transactions
contemplated hereby or seeking judgments against the Seller, Auletta or any of
their assets.
Section
8.13
Board
Approval
. The Board of Directors of Purchaser and Rick’s shall
have approved all of the transactions contemplated hereby and shall have
authorized the execution, delivery and performance of all agreements and
documents referred to herein to which it is or is to be a party.
Section
8.14
Delivery
of Additional $15,000.00 to Seller.
Purchaser shall pay Seller
$15,000.00 for its role in D.A.F.E. and Purchaser shall substitute in for Seller
therein.
ARTICLE
IX
COVENANTS
OF THE SELLER AND AULETTA
Section
9.1
Stand
Still
. To induce Purchaser and Rick’s to proceed with this
Agreement, the Seller and Auletta agree that until the Closing Date or the
termination of this Agreement, no representative of the Seller or Auletta will
offer to sell or solicit any offer to purchase or engage in any discussions or
activities of any nature whatsoever, directly or indirectly, involving in any
manner the actual or potential sale, transfer, encumbrance, pledge,
collateralization or hypothecation of any of the Purchased
Assets. The Seller and Auletta hereby agree to advise the Purchaser
and Rick’s of any contact from any third party regarding the acquisition of the
Purchased Assets or other investment in the Seller, or of any contact which
would relate to the transactions contemplated by this Agreement.
Section
9.2
Access; Due
Diligence
. Between the date of this Agreement and the Closing
Date or the termination of this Agreement, Seller and Auletta shall permit the
Purchaser and Rick’s to make inspections of the Premises and Seller shall
discuss with the Purchaser and Rick’s and their authorized representatives the
assets of Seller and Auletta as the Purchaser and Rick’s may from time to time
reasonably want to discuss.
Section
9.3
Preservation of
Business
. Subsequent to the execution of this Agreement, and
prior to the Closing Date of this Agreement, the Seller will carry on its
business and operate the business of PLATINUM in substantially the same manner
as it has heretofore, consistent with past practices, and:
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(a)
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The
Seller shall perform in all material respects all of its obligations under
material contracts, leases and other documents relating to or affecting
any of its assets, property or its business or the business of
PLATINUM;
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Asset
Purchase Agreement - Page 11
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(b)
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The
Seller will not sell, lease, transfer or assign any of its assets,
tangible or intangible, other than inventory for a fair consideration, and
in the ordinary course of business;
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(c)
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The
Seller will operate its business and the business of PLATINUM in the
ordinary course and consistent with past practices so as to preserve its
business organization intact, to retain the services of its employees
and to preserve its goodwill and relationships with suppliers, creditors,
customers, and others having business relationships with
it;
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(d)
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The
Seller will not delay or postpone the payment of accounts payable and
other liabilities outside the ordinary course of business;
and
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(e) The
Seller will not agree to take any action described in this Section
9.3
ARTICLE
X
INDEMNIFICATION
Section
10.1
Indemnification from Seller
and Auletta
. Seller and Auletta hereby agree to and shall
indemnify, defend (with legal counsel reasonably acceptable to Purchaser and
Rick’s), and hold Purchaser and Rick’s, its officers, directors, shareholders,
employees, affiliates, agents, legal counsel, successors and assigns
(collectively, the "Purchaser Group") harmless at all times after the date of
this Agreement, from and against any and all actions, suits, claims, demands,
debts, liabilities, obligations, losses, damages, costs, expenses, penalties or
injury (including reasonable attorneys
=
fees and costs of any suit related thereto) suffered or incurred by any of the
Purchaser Group arising from: (a) any misrepresentation by, or breach of any
covenant, representation or warranty of the Seller or Auletta contained in this
Agreement, or any exhibit or other instrument furnished or to be furnished by
Seller or Auletta; (b) any nonfulfillment of any agreement on the part of Seller
or Auletta under this Agreement; (c) any liability or obligation due to any
third party by the Seller or the business of PLATINUM arising or incurred at or
prior to the Closing Date; (d) any suit, action or proceeding, against any of
the Purchaser Group which arises from or which is based upon or pertaining to
the conduct or the operation or liabilities of Seller or the business of
PLATINUM at or prior to the Closing Date.
Section
10.2
Indemnification from
Purchaser and Rick’s
. Purchaser and Rick’s agree to and shall
indemnify, defend (with legal counsel reasonably acceptable to the Seller) and
hold Auletta, Seller and its members, managers, employees, affiliates, agents,
legal counsel, successors and assigns (collectively, the "Seller Group")
harmless at all times after the date of the Agreement from and against any and
all actions, suits, claims, demands, debts, liabilities, obligations, losses,
damages, costs, expenses, penalties or injury (including reasonably attorney’s
fees and costs of any suit related thereto) suffered or incurred by
any of the Seller Group, arising from (a) any misrepresentation by, or breach of
any covenant, representation or warranty of Purchaser and Rick’s contained in
this Agreement or any exhibit, certificate, or other agreement or instrument
furnished or to be furnished by Purchaser and Rick’s hereunder; (b) any
nonfulfillment of any agreement on the part of Purchaser and Rick’s under this
Agreement; or (c) any suit, action or proceeding against any of the Seller Group
which arises from or which is based upon or pertaining to Purchaser’s conduct or
the operation of the business of PLATINUM subsequent to the Closing
Date.
Asset
Purchase Agreement - Page 12
Section
10.3
Defense of
Claims
. If any lawsuit enforcement action or any attempt to
collect on an alleged liability is filed against any party entitled to the
benefit of indemnity hereunder, written notice thereof shall be given to the
indemnifying party within ten (10) business days after receipt
of notice or other date by which action must be taken; provided that
the failure of any indemnified party to give timely notice shall not affect
rights to indemnification hereunder except to the extent that the indemnifying
party demonstrates damage caused by such failure. After such notice,
the indemnifying party shall be entitled, if it so elects, to take control of
the defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense; and such indemnified party shall cooperate in
all reasonable respects, at its cost, risk and expense, with the indemnifying
party and such attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost, participate in such investigation, trial
and defense of such lawsuit or action and any appeal arising therefrom, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party, except to the extent that (i) the employment thereof has been
specifically authorized by the indemnifying party in writing; (ii) the
indemnifying party has failed after a reasonable period of time to assume such
defense and to employ counsel; or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the indemnifying party and the position of such
indemnified party, in which case the indemnifying party shall be responsible for
the reasonable fees and expenses of no more than one such separate
counsel. The indemnifying party shall not, without the prior written
consent of the indemnified party, effect any settlement of any proceeding in
respect of which any indemnified party is a party and indemnity has been sought
hereunder unless such settlement of a claim, investigation, suit, or other
proceeding only involves a remedy for the payment of money by the indemnifying
party and includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
Section
10.4
Default of Indemnification
Obligation
. If an entity or individual having an
indemnification, defense and hold harmless obligation, as above provided, shall
fail to assume such obligation, then the party or entities or both, as the case
may be, to whom such indemnification, defense and hold harmless obligation is
due shall have the right, but not the obligation, to assume and maintain such
defense (including reasonable counsel fees and costs of any suit related
thereto) and to make any settlement or pay any judgment or verdict as the
individual or entities deem necessary or appropriate in such individuals or
entities absolute sole discretion and to charge the cost of any such settlement,
payment, expense and costs, including reasonable attorneys
=
fees, to the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.
Section
10.5
Survival of Representations
and Warranties
. The respective representations, warranties and
indemnities given by the parties to each other pursuant to this Agreement shall
survive the Closing for a period ending twenty-four (24) months from the Closing
Date (“Survival Date”). Notwithstanding anything to the contrary
contained herein, no claim for indemnification may be made against the party
required to indemnify (the “Indemnitor”) under this Agreement unless the party
entitled to indemnification (the “Indemnitee”) shall have given the Indemnitor
written notice of such claim as provided herein on or before the Survival
Date. Any claim for which notice has been given prior to the
expiration of the Survival Date shall not be barred hereunder.
Asset
Purchase Agreement - Page 13
ARTICLE
XI
MISCELLANEOUS
Section
11.1
Termination of
Agreement
. This Agreement shall terminate and be of no force
and effect and all other agreements executed herewith shall be of no force and
effect if: (i) the transactions contemplated by this Agreement,
including the sale of the Purchased Assets are not consummated on or before June
10, 2008, unless all of the parties hereto agree in writing to extend the
Agreement; or (ii) all of the parties agree in writing to terminate this
Agreement sooner.
Section
11.2
Amendment;
Waiver
. Neither this Agreement nor any provision hereof may be
amended, modified or supplemented unless in writing, executed by all the parties
hereto. Except as otherwise expressly provided herein, no waiver with
respect to this Agreement shall be enforceable unless in writing and signed by
the party against whom enforcement is sought. Except as otherwise
expressly provided herein, no failure to exercise, delay in exercising, or
single or partial exercise of any right, power or remedy by any party, and no
course of dealing between or among any of the parties, shall constitute a waiver
of, or shall preclude any other or further exercise of, any right, power or
remedy.
Section
11.3
Notices
. Any
notices or other communications required or permitted hereunder shall be
sufficiently given if in writing and delivered in person or sent by registered
or certified mail (return receipt requested) or nationally recognized overnight
delivery service, postage pre-paid, addressed as follows, or to such other
address has such party may notify to the other parties in writing:
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(a)
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If
to Seller or Auletta:
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Attn:
John Auletta
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1595
N. Central Expressway, Suite 100
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Richardson,
Texas 75080
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with
a copy to
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Arthur
Selander
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Quilling
Selander Cummiskey & Lownds, P.C.
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2001
Bryan Street, Suite 1800
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Dallas,
Texas 75201
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(b)
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If
to Purchaser or Rick’s:
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Rick’s
Cabaret International, Inc.
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Attn: Eric
Langan, President/CEO
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10959
Cutten Road
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Houston,
Texas 77066
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with
a copy to:
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Robert
D. Axelrod
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Axelrod,
Smith & Kirshbaum
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5300
Memorial Drive, Suite 700
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Houston,
Texas 77007
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Asset
Purchase Agreement - Page 14
A notice
or communication will be effective (i) if delivered in person or by overnight
courier, on the business day it is delivered; and (ii) if sent by registered or
certified mail, three (3) business days after dispatch.
Section
11.4
Severability
. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
Section
11.5
Assignment;
Successors and
Assigns
. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors and
permitted assigns of the parties hereto. No party hereto may assign
its rights or delegate its obligations under this Agreement without the prior
written consent of the other parties hereto, which consent will not be
unreasonably withheld.
Section
11.6
Public
Announcements
. The parties hereto agree that prior to
making any public announcement or statement with respect to the transactions
contemplated by this Agreement, the party desiring to make such public
announcement or statement shall consult with the other parties hereto and
exercise their best efforts to agree upon the text of a public announcement or
statement to be made by the party desiring to make such public announcement;
provided, however, that if any party hereto is required by law to make such
public announcement or statement, then such announcement or statement may be
made without the approval of the other parties.
Section
11.7
Entire
Agreement
. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof and thereof and
supersede and cancel all prior representations, alleged warranties, statements,
negotiations, undertakings, letters, acceptances, understandings, contracts and
communications, whether verbal or written among the parties hereto and thereto
or their respective agents with respect to or in connection with the subject
matter hereof.
Section
11.8
Choice of
Law
. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to principles of
conflict of laws. In any action between or among any of the parties,
whether arising out of this Agreement or otherwise, each of the parties
irrevocably consents to the exclusive jurisdiction and venue of the federal and
state courts located in Dallas County, Texas.
Section
11.9
Execution
. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original
thereof.
Asset
Purchase Agreement - Page 15
Section
11.10
Costs and
Expenses
. Each party shall pay their own respective
fees, costs and disbursements incurred in connection with this
Agreement.
Section
11.11
Section
Headings
. The section and subsection headings in this
Agreement are used solely for convenience of reference, do not constitute a part
of this Agreement, and shall not affect its interpretation.
Section
11.12
Attorney Review -
Construction
. In connection with the negotiation and drafting
of this Agreement, the parties represent and warrant to each other that they
have had the opportunity to be advised by attorneys of their own choice and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments hereto.
Section
11.13
No Third-Party
Beneficiaries
. Nothing in this Agreement will confer any third
party beneficiary or other rights upon any person or any entity that is not a
party to this Agreement.
Section
11.14
Validity
. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.
Section
11.15
Further
Assurances
. Each party covenants that at any time, and from
time to time, after the Closing Date, it will execute such additional
instruments and take such actions as may be reasonably be requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.
Section
11.16
Exhibits Not
Attached
. Any exhibits not attached hereto on the date of
execution of this Agreement shall be deemed to be and shall become a part of
this Agreement as if executed on the date hereof upon each of the parties
initialing and dating each such exhibit, upon their respective acceptance of its
terms, conditions and/or form.
Section
11.17
Gender
. All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter gender and the singular shall
include the plural and vice versa, wherever appropriate.
[SIGNATURES
APPEAR ON THE FOLLOWING PAGE.]
Asset
Purchase Agreement - Page 16
IN
WITNESS WHEREOF, the undersigned have executed this Stock Purchase Agreement to
become effective as of the date first set forth above.
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RICK’S
CABARET INTERNATIONAL, INC.
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/s/ Eric
Langan
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By: Eric
Langan, President
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Date:
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May 10,
2008
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RCI
ENTERTAINMENT (NORTHWEST HIGHWAY), INC.
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/s/ Eric
Langan
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By: Eric
Langan, President
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Date:
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May 10,
2008
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NORTH BY EAST ENTERTAINMENT,
LTD. BY NORTHEAST PLATINUM, LLC, ITS GENERAL
PARTNER
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Date:
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May 10,
2008
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/
s/ John
Auletta
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JOHN
AULETTA, SOLE MEMBER, of NORTHEAST PLATINUM, LLC
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Date:
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May 10,
2008
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/s/ John
Auletta
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JOHN
AULETTA, Individually
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Date:
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May 10,
2008
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Asset Purchase Agreement -
Page 17
Exhibit
10.2
REAL
ESTATE
PURCHASE
AND SALE AGREEMENT
BY
AND BETWEEN
WIRE
WAY, LLC,
a
Texas limited liability company
("
Seller
")
and
RCI
HOLDINGS, INC.,
a
Texas corporation
("
Purchaser
")
REAL ESTATE PURCHASE AND
SALE AGREEMENT
THIS REAL ESTATE PURCHASE AND SALE
AGREEMENT
(this "
Agreement
") is made
and entered into by and between WIRE WAY, LLC, a Texas limited liability company
("
Seller
"), and
RCI HOLDINGS, INC., a Texas corporation ("
Purchaser
"), pursuant
to the terms and conditions set forth herein.
W
I T N E S S E T H:
WHEREAS
, Seller is the owner
of a certain real property consisting of approximately 4.637± acres of land,
together with all rights, (excepting for mineral rights as set forth below) ,
title and interests of Seller in and to any and all improvements and
appurtenances exclusively belonging or pertaining thereto (the "
Property
") located at
10557 Wire Way, Dallas (the "
City
"), Dallas
County, Texas, which Property is more particularly described on
Exhibit
A
attached hereto and incorporated herein by reference; and
WHEREAS,
contemporaneously
with the execution of this Agreement, North by East Entertainment, Ltd., a Texas
limited partnership ("
North by East
"), is
entering into an agreement with RCI Entertainment (Northwest Highway), Inc., a
Texas corporation ("
RCI Entertainment
"),
a wholly owned subsidiary of Rick's Cabaret International, Inc., a Texas
corporation ("
Rick's
") for the sale
and purchase of the assets of the business more commonly known as "Platinum Club
II" that operates from and at the Property ("
Asset Purchase
Agreement
"); and
WHEREAS,
subject to and
simultaneously with the closing of the Asset Purchase Agreement, Seller will
enter into a lease with RCI Entertainment, as Tenant, for the Property, dated to
be effective as of the closing date, as defined in the Asset Purchase
Agreement (the "
Lease
") attached
hereto as
Exhibit
B
and incorporated herein by reference; and
WHEREAS
, subject to the
closing of the Asset Purchase Agreement, the execution and acceptance by Seller
of the Lease, and pursuant to the terms and provisions contained herein, Seller
desires to sell and convey to Purchaser and Purchaser desires to purchase the
Property.
NOW, THEREFORE
, for and in
consideration of the premises and mutual covenants and conditions contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE
I
PURCHASE
AND SALE
Section 1.01.
Purchase
and Sale
.
Pursuant to the
terms and provisions contained herein, Seller hereby agrees to sell, transfer
and convey by General Warranty Deed to Purchaser, and Purchaser hereby agrees to
purchase from Seller, the Property, free and clear of all liens and encumbrances
subject to any permitted exceptions mutually agreed to by the Parties (the
“Permitted Exceptions”). Seller hereby reserves from this sale, all right, title
and interest of Seller in and to the oil, gas and other non-surface minerals
under the Property; provided, neither Seller nor Seller’s heirs, successors,
lessees, assigns or grantees, shall ever use any portion of the surface of the
Property for the development of or exploration for the oil, gas and other
non-surface minerals reserved hereunder, any such use being expressly waived by
Seller for all purposes and for all times. The aforementioned General
Warranty Deed shall include a provision reserving from the sale all right, title
and interest of Seller in and to the oil, gas and other non-surface minerals
under the Property; provided, neither Seller nor Seller’s heirs, successors,
lessees, assigns or grantees, shall ever use any portion of the surface of the
Property for the development of or exploration for the oil, gas and other
non-surface minerals reserved hereunder, any such use being expressly waived by
Seller for all purposes and for all times.
Section 1.02.
Disclaimer
and Indemnity.
THE PROPERTY SHALL BE
CONVEYED AND TRANSFERRED TO PURCHASER “
AS IS, WHERE IS AND WITH ALL
FAULTS”.
EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLER SET FORTH IN ARTICLE V OF THIS AGREEMENT, SELLER DOES NOT
WARRANT OR MAKE ANY REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN, QUANTITY, QUALITY, LAYOUT, FOOTAGE,
PHYSICAL CONDITION, PERATION, COMPLIANCE WITH SPECIFICATIONS, ABSENCE OR LATENT
DEFECTS OR COMPLIANCE WITH LAWS AND REGULATIONS (INCLUDING, WITHOUT LIMITATION,
THOSE RELATING TO HEALTH, SAFETY AND THE ENVIRONMENT) OR ANY OTHER MATTER
AFFECTING THE PROPERTY AND SELLER SHALL BE UNDER NO OBLIGATION WHATSOEVER TO
UNDERTAKE ANY REPAIRS, ALTERATIONS OR OTHER WORK OF ANY KIND WITH RESPECT TO ANY
PORTION OF THE PROPERTY. FURTHER, PURCHASER SHALL INDEMNIFY, DEFEND
AND HOLD HARMLESS SELLER AND SELLER’S REPRESENTATIVES FROM AND AGAINST ANY
CLAIMS OR CAUSES OF ACTION ARISING OUT OF THE CONDITION OF THE PROPERTY BROUGHT
BY ANY OF PURCHASER’S SUCCESSORS OR ASSIGNS, OR ANY THIRD PARTY, AGAINST SELLER
OR SELLER’S REPRESENTATIVES. INFORMATION PROVIDED OR TO BE PROVIDED
BY SELLER IN RESPECT OF THE PROPERTY WAS OBTAINED FROM A VARIETY OF
SOURCES. SELLER HAS NOT MADE AN INDEPENDENT INVESTIGATION OF SUCH
INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ASSURACY OR COMPLETENESS
THEREOF. PURCHASER HEREBY ASSUMES ALL RISK AND LIABILITY RESULTING FROM THE
OWNERSHIP, USE, CONDITION, LOCATION, MAINTENANCE, REPAIR OR OPERATION OF THE
PROPERTY, WHICH PURCHASER WILL INSPECT AND ACCEPT “AS IS”. IN THIS
REGARD, PURCHASER ACKNOWLEDGES THAT (a) PURCHASER HAS NOT ENTERED INTO THIS
AGREEMENT IN RELIANCE UPON ANY INFORMATION GIVEN TO PURCHAWSER PRIOR TO THE DATE
OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, PROMOTIONAL MATERIALS OR
FINANCIAL DATA , (b) PURCHASER WILL MAKE ITS DECISION TO PURCHASE THE PROPERTY
BASED UPON PURCHASER’S OWN DUE DILIGENCE AND INVESTIGATIONS, (c) PURCHASER HAS
SUCH KNOWLEDGE AND EXPERIENCE IN REAL ESTATE INVESTIGATION TO EVALUATE THE
MERITS AND RISKS OF THE TRANSACTIONS PROVIDED IN THIS AGREEMENT, AND (d)
PURCHASER IS FINANCIALLY ABLE TO BEAR THE ECONOMIC RISK OF THE LOSS OF SUCH
INVESTMENT AND THE COST OF THE DUE DILIGENCE AND INVESTIGATIONS UNDER THIS
AGREEMENT. IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS
BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT THE PROPERTY IS SOLD BY
SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE
FOREGOING. Disclaimers similar to the foregoing in form satisfactory
to Seller as well as Seller’s reservation of the mineral estate shall be
inserted in any and all documents to be delivered by Seller to Purchaser at
Closing.
ARTICLE
II
PURCHASE
PRICE, EARNEST MONEY AND INDEPENDENT CONSIDERATION
Section 2.01.
Purchase
Price
. The purchase price (the "
Purchase Price
") to
be paid by Purchaser to Seller for the Property acquired pursuant to this
Agreement shall be Six Million and No/100 Dollars
($6,000,000.00). Except as otherwise set forth herein, the Purchase
Price shall be due and payable in cash at the Closing (as hereinafter defined)
of the Property.
Section 2.02.
Earnest
Money
.
Contemporaneously
with the execution of this Agreement, Purchaser shall deliver to Republic Title
of Texas, Inc., Attention: Mel Morgan, 2626 Howell, 10
th
Floor,
Dallas, Texas 75204
(the "
Title Company
"), the
amount of One Hundred Thousand Dollars ($100,000.00) (the "
Initial Earnest
Money
") in cash or immediately available funds. The Initial
Earnest Money is fully refundable until the later of June 10, 2008 or ten (10)
days after the approval of RCI Entertainment’s application for a sexually
oriented business license by the City of Dallas and the transfer of all other
permits utilized to operate Platinum Club II, (but in no event later than August
31, 2008) after which date it becomes non-refundable but will continue to be
held by the Title Company and shall be credited against the Purchase Price at
Closing.
Section 2.03.
Additional
Payments.
Subject to and
simultaneously with the closing of the Asset Purchase Agreement, Purchaser shall
pay to Seller, directly, the sum of One
Million Five Hundred
Thousand and No/100 Dollars ($1,500,000.00) in cash or immediately available
funds (the “Cash Payment”). This Cash Payment delivered to
Seller shall be immediately non-refundable. If this transaction
closes, the $1,500,000 Cash Payment delivered hereunder shall be credited
against the Purchase Price at Closing.
Section 2.04.
Additional
Earnest Money.
Commencing
on such date 60 days from the closing and funding of the Asset Purchase
Agreement and continuing each consecutive month thereafter until the Closing (as
hereinafter defined), Purchaser shall deliver as additional earnest
money ("
Additional
Earnest Money
") to the Title Company each month the amount of Two Hundred
Thousand and No/100 Dollars ($200,000.00) in cash or immediately available funds
until not later than the Closing. Any and all Additional Earnest
Money delivered to the Title Company shall be immediately
non-refundable. If this transaction closes, all Additional Earnest
Money delivered hereunder shall be credited against the Purchase Price at
Closing. In the event that Purchaser does not deliver any portion of
the Additional Earnest Money to Seller as set forth herein and such failure to
deliver continues for a period of five (5) business days thereafter, then this
Agreement may be terminated by either party as its sole remedy for such failure,
and no party shall thereafter have any further obligation to the other
hereunder.
ARTICLE
III
SURVEY,
TITLE BINDER, LEASES AND SOIL TESTS
Section 3.01.
Survey
and Title Binder
.
(a) Seller
and Purchaser acknowledge that Seller has delivered, or caused to be delivered,
to Purchaser a copy of an existing on-the-ground survey (the "
Survey
") of the
Property.
(b) Within
ten (10) days after the Date of Execution of this Agreement (as hereinafter
defined), Seller shall deliver or cause to be delivered to Purchaser, at
Seller's sole expense, at the address stated below, a copy of (i) a title
commitment (the "
Title
Binder
") addressed to Purchaser issued by the Title Company,
showing Purchaser and Seller as set forth in this Agreement, covering the
Property and binding the Title Company to issue to Purchaser at the Closing, on
behalf of
the Title
Company (or its underwriter), a Texas Owner's Policy of Title Insurance on the
standard form of policy prescribed by the Texas State Board of Insurance (the
"
Owner's Title
Policy
") in the aggregate amount of the Purchase Price for the Property
to be acquired by Purchaser pursuant hereto, and (ii) copies of any and all
instruments referred to in the Title Binder as constituting exceptions or
restrictions upon or matters affecting the title of Seller to the Property,
except that copies of any liens or any other matters which are to be released at
or before the Closing may be omitted (the "
Exception
Documents
").
(c) Seller
and Purchaser acknowledge that Seller has delivered, or caused to be delivered,
to Purchaser true, correct, complete and legible copies of any and all leases or
other conditions affecting or relating to the Property, whether such leases or
conditions are presently in written form, valid or recorded.
(d) Seller
and Purchaser acknowledge that Seller has delivered, or caused to be delivered,
to Purchaser a copy of the "as built" plans for the interior and exterior of the
building located on the Property.
(e) Seller
and Purchaser acknowledge that Seller has delivered, or caused to be delivered,
to Purchaser any and all soils and compaction tests (collectively, the "
Soils Tests
") and
environmental tests and reports (the "
Environmental
Reports
") performed by or on behalf of Seller or which Seller has in its
possession relating to the Property. Without in any way limiting or
diminishing Seller's obligation hereunder, Purchaser shall have the right, at
Purchaser's expense, to have the Seller's Soil Tests and Environmental Reports
updated and/or reissued to Purchaser.
Section 3.02.
Review of
Survey and Title Binder
.
In the event any
exceptions or reservations appear in the Title Binder or in the event the Survey
is unacceptable to Purchaser, Purchaser's sole and exclusive remedy shall be to
terminate this Agreement by written notice delivered to Seller on or before the
date which is ten (10) business days after the date of Purchaser's receipt of
all the items to be delivered referenced above in
Section 3.01 and the
Purchaser shall be entitled to immediately receive the return of the Initial
Earnest Money
. If Purchaser does not exercise its right to
terminate this Agreement in accordance with this
Section 3.02
, all
matters contained in or on, and all of Purchaser's objections to, the Title
Binder, Survey, Exception Documents and all other documents delivered hereunder
or otherwise obtained by Purchaser pursuant to or in connection with this
Agreement or the Property shall either be cured to the satisfaction of Purchaser
or waived by Purchaser at or prior to the closing of the Asset Purchase
Agreement. In the event that the Purchaser does not waive any
exceptions or reservations that appear, then Purchaser’s sole and exclusive
remedy shall be to terminate this Agreement by written notice delivered to
Seller and shall be entitled to immediately receive the return of the Initial
Earnest Money. Any matters to which Purchaser does not object or
which Purchaser waives or is deemed to have waived shall be "
Permitted
Exceptions
". If Purchaser terminates this Agreement as
provided in this
Section 3.02
, this
Agreement shall terminate and no party hereunder shall thereafter have any
further obligation to the other hereunder, except as otherwise provided
herein.
ARTICLE
IV
FEASIBILITY
STUDY AND INSPECTION
Section 4.01.
Feasibility
Study
.
(a) On or
before (i) ten (10) days after the approval of RCI Entertainment’s application
for sexually oriented business license by the City of Dallas and (ii) the
transfer of all other permits utilized to operate the Platinum Club II (but in
no event later than August 31, 2008), Purchaser may conduct its due diligence on
the Property, including but not limited to, studies or tests or to conduct an
engineering and/or economic feasibility study of the Property, which studies and
tests may have included, without limitation, financial and marketing analyses,
soil tests, topographical analysis, engineering studies, environmental studies
and tests and similar preliminary work. Purchaser hereby expressly waives the
right to any additional period of time for same.
(b) Notwithstanding
the foregoing, Purchaser shall indemnify and defend Seller and hold Seller
harmless from and against any and all claims, liabilities or damages to the
Property or against Seller caused by Purchaser's and/or Purchaser's authorized
agents', representatives' or employees' actions during the or as a result of any
inspection of the Property by such parties during such time period.
ARTICLE
V
REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS
Section 5.01.
Representations,
Warranties and Covenants of Seller
.
Seller
represents, warrants and covenants to Purchaser as follows:
(a)
Organization, Good Standing
and Qualification.
The Seller (i) is an entity duly organized,
validly existing and in good standing under the laws of the state of Texas, (ii)
has all requisite power and authority to operate its business, and (iii) is duly
qualified to transact business and is in good standing in Texas.
(b)
Ownership of the
Property
. As of the Closing, the Seller will be able to convey
the Property free and clear of any lien, claims, equities, charges, options,
rights of first refusal or encumbrances (save and except the Permitted
Exceptions) as evidenced by the title commitment for the Property to be issued
to Purchaser prior to the Closing and as evidenced by a title policy to be
provided to Purchaser at the time of Closing. Seller shall have at
Closing the unrestricted right and power to transfer, convey and deliver full
ownership of the Property without the consent or agreement of any other person
and without any designation, declaration or filing with any governmental
authority. Upon the transfer of the Property to the Purchaser as
contemplated herein, Purchaser will receive good and valid title thereto, free
and clear of any liens, claims, equities, charges, options, rights of first
refusal, encumbrances or other restrictions, subject to the agreed upon
Permitted Exceptions, if any.
(c)
Authorization
. The
Seller has all requisite corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. All action on the part of the
Seller necessary for the authorization, execution, delivery and performance of
this Agreement has been taken by the Seller. This Agreement, when duly executed
and delivered in accordance with its terms, will constitute legal, valid and
binding obligations of the Seller enforceable against it in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization and
other similar laws of general application affecting creditors’ rights generally
or by general equitable principles.
(d)
No Breaches;
Consents
. The execution, delivery, and performance of
this Agreement and the transactions contemplated hereby by the Seller does
not: (i) violate any provision of its Articles of Organization or
Regulations; (ii) conflict with, violate, or constitute a breach of or a default
under; (iii) result in the creation or imposition of any lien, claim, or
encumbrance of any kind upon the Property; or (iv) require any authorization,
consent, approval, exemption, or other action by or filing with any third party
or Governmental Authority under any provision of: (a) any applicable
Legal Requirement; or (b) any credit or loan agreement, promissory note, or any
other agreement or instrument to which the Seller is a party or by which the
Property may be bound or affected. For purposes of this Agreement,
"Governmental Authority" means any foreign governmental authority, the United
States of America, any state of the United States, and any political subdivision
of any of the foregoing, and any agency, department, commission, board, bureau,
court, or similar entity, having jurisdiction over the parties hereto or their
respective assets or properties. For purposes of this Agreement,
"Legal Requirement" means any law, statute, injunction, decree, order or
judgment (or interpretation of any of the foregoing) of, and the terms of any
license or permit issued by, any Governmental Authority.
(e)
Proceedings Relating to
Property
. There is no pending, or, to the best knowledge of
the Seller, judicial, municipal or administrative proceedings with respect to,
or in any manner affecting the Property or any portion thereof, including,
without limitation, proceedings for or involving tenant evictions, collections,
condemnations, eminent domain, alleged building code or zoning violations,
personal injuries or property damage alleged to have occurred on the Property or
by reason of the use and operation of the Property, or written notice of any
attachments, executions, assignments for the benefit of creditors,
receiverships, conservatorships or voluntary or involuntary proceedings in
bankruptcy or pursuant to any other debtor relief laws pending or threatened
against the Seller or the Property itself, or the taking of the Property for
public needs.
(f)
Public
Improvements
. The Seller has no knowledge of any existing or
proposed public improvements which involve or which may result in any charge
being levied or assessed against the Property or which will or could result in
the creation of any lien upon the Property or any part thereof.
(g)
Certificates
. To
the best knowledge of Seller, all certificates of occupancy, licenses, permits,
authorizations and approvals required by law or by any Governmental Authority
having jurisdiction over the Property have been obtained and are in full force
and effect.
(h)
Material
Defect
. The Seller has no knowledge of any material defects to
the Property which have not been disclosed in writing to Purchaser (except as
set forth in Exhibit C attached hereto and incorporated herein for all
purposes).
(i)
Flooding
. The
Seller has no knowledge of any flooding which has occurred on the
Property.
(j)
Environmental
. To
the best knowledge of Seller, the Property is not in violation of any state,
local or federal statutes, laws, regulations, ordinances, or rules pertaining to
health or the environment requirements affecting the Property and the Seller has
not received any citation, directive, letter or other communication, written or
oral, or any notice of any proceeding, claim or lawsuit relating to any
environmental issue at the Property; provided however, Seller has disclosed to
Purchaser that some or all of the Property was previously the location of a land
fill and used for such purposes. Seller expressly makes no
representation or warranty to Purchaser with respect to the soils, environmental
and ecological condition of the Property including, but not limited to, the
presence of any Hazardous Materials in, on or beneath the surface of the
Property or in the ground water or the surface water on, in, under or serving
the Property. Seller has produced a list of possible defects in the
Property as set forth on
Exhibit C
, attached
hereto.
(k)
Seller has disclosed that the mineral rights under the Property are not being
sold to Purchaser.
(l)
ALL REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT SHALL
SURVIVE THE CLOSING, SUBJECT TO ANY AND ALL APPLICABLE STATUTES OF LIMITATIONS
EXPIRY.
Section 5.02.
Representations,
Warranties and Covenants of Purchaser
.
To induce Seller
to enter into this Agreement and to sell the Property, Purchaser (and RCI
Entertainment, where applicable) represent(s), warrant(s) and covenant(s) to
Seller as follows:
(a) Purchaser
has full power to enter into this Agreement and to consummate the transactions
provided for herein, and neither entering into this Agreement, nor consummating
any of the transactions provided for herein, will result in or constitute a
violation or breach by Purchaser of any lien, deed of trust, agreement or other
instrument affecting the Property or to which Purchaser is a party or by which
Purchaser is bound.
(b) Purchaser
will comply with all applicable laws, ordinances, regulations, statutes, codes,
rules, orders, decrees, determinations, covenants and restrictions relating to
the Property and every part thereof including those promulgated or imposed by
any agency, department, commission, board, bureau or instrumentality of any
governmental authority of the United States, the State of Texas, the City, the
County of Dallas or any other local authority.
(c) Purchaser
and/or RCI Entertainment will maintain all permits, licenses and insurance
policies required to operate a club and timely comply with all terms and
conditions of the Lease, in accordance with the terms and conditions of the
Lease and any uncured default under the Lease by the Purchaser and/or RCI
Entertainment shall be a default of this Agreement. Upon the
occurrence of such uncured default, Seller may pursue any of the remedies set
forth in
Section
8.02
.
(d) Purchaser
understands and consents to the Seller’s reservation from this sale, all right,
title and interest of Seller in and to the oil, gas and other non-surface
minerals under the Property; provided, neither Seller nor Seller’s heirs,
successors, lessees, assigns or grantees, shall ever use any portion of the
surface of the Property for the development of or exploration for the oil, gas
and other non-surface minerals reserved hereunder, any such use being expressly
waived by Seller for all purposes and for all times.
(e) Prior
to Closing and funding of the purchase contemplated by this Agreement, neither
Purchaser nor RCI Entertainment, nor any of their parents, affiliates,
subsidiaries or related companies shall voluntarily surrender the sexually
oriented business license subsequent to its issuance to Purchaser or RCI
Entertainment by the City of Dallas for use at the Property, nor shall Purchaser
nor RCI Entertainment, nor any of their parent, affiliate, subsidiary or related
companies seek to move said license to a location within 1000 feet of the
Property, nor apply for an additional license within 1000 feet of the Property
as measured under the City of Dallas’ sexually oriented business
ordinance.
(f) ALL
REPRESENTATIONS AND WARRANTIES OF PURCHASER CONTAINED IN THIS AGREEMENT SHALL
SURVIVE THE CLOSING, SUBJECT TO ANY AND ALL APPLICABLE STATUTES OF LIMITATIONS
EXPIRY.
ARTICLE
VI
EMINENT
DOMAIN
Section 6.01.
Eminent
Domain
.
Without limiting
any of Purchaser's other rights set forth in this Agreement, if, prior to the
Closing, any portion of the Property shall be permanently taken or condemned or
transferred by agreement in lieu of condemnation for any public or quasi-public
use or purpose by any competent authority, Purchaser may, at its option, (a)
terminate this Agreement by written notice to Seller, in which event all monies
previously paid will be refunded and neither party shall thereafter have any
further obligations to the other hereunder, (b) acquire only that portion of the
Property which has not been taken, condemned or transferred, or (c) close the
acquisition of the Property as provided herein. If Purchaser elects
to close, despite said taking, condemnation or transfer, Seller shall assign to
Purchaser Seller's right, title and interest in and to any compensation award
resulting from said taking, condemnation or transfer.
ARTICLE
VII
CLOSING
Section 7.01.
Closing
Schedule
.
(a) The
closing of the purchase and sale of the Property to be conveyed under this
Agreement (the "
Closing
", and the
date of such Closing shall hereinafter be referred to as the "
Closing Date
") shall
be held at the offices of the Title Company on or before one year from the
closing of the Asset Purchase Agreement. Notwithstanding the
foregoing, the Purchaser shall have the right but not the obligation to complete
the purchase of the Property at any time subsequent to the closing of the Asset
Purchase Agreement by providing the Seller and the Title Company ten (10) days
written notice of its intention to close the acquisition of the
Property.
Section 7.02.
Delivery
of Documents and Purchase Price
.
(a) At the
Closing, Seller shall deliver to Purchaser the following (the "
Closing
Documents
"):
(i) a
general warranty deed in appropriate form to convey the Property to the
Purchaser free and clear of any liens or encumbrances (the "
Deed
") subject to any
agreed upon Permitted Exceptions;
(ii) an
Owner's Title Policy covering the Property in the full amount of the Purchase
Price to be paid therefor issued by the underwriter for the Title Company
pursuant to the Title Binder as provided herein;
(iii) any
and all such other documents and instruments as may be reasonably necessary to
effectuate the transfer of the Property as provided herein.
(b) At
the Closing, Purchaser shall deliver to Seller (i) the Purchase Price for the
Property less the Initial Earnest Money, the $1,500,000 Cash Payment and any
Additional Earnest Money in immediately available funds, either by wire transfer
or cashier’s check, and (ii) any and all such other documents and instruments as
may be reasonably necessary to effectuate the transfer of the Property and other
transactions as provided herein.
Section 7.03.
Proration
of Closing Costs and Expenses
.
(a) Ad valorem taxes for the
Property for the then current year shall be prorated at the Closing effective as
of the date of the Closing and shall be adjusted in cash to Purchaser at the
Closing. If the amount of taxes for the year in which the Closing
takes place is not known at the time of the Closing, the apportionment of the
taxes shall be upon the basis of the tax rate for the preceding year applied to
the latest assessed valuation;
provided
,
however
, that any
difference in ad valorem taxes for the year of sale actually paid by Purchaser
shall be adjusted between the parties upon receipt of written evidence of the
payment thereof.
(b) Seller
hereby agrees to pay and be responsible for the following Closing
costs:
(i) all
fees and premiums for the Title Binder and for the Owner's Title
Policy;
(ii) one-half
(
2
)
of the Title Company's escrow fees;
(iii) all
costs and expenses incurred by or on behalf of Seller including Seller's
attorney's fees; and
(iv) such
other incidental costs and fees provided herein to be paid by Seller or
otherwise customarily paid by sellers of property in Dallas County, Texas in
transactions of a similar nature to the transactions provided
herein.
(c) Purchaser
hereby agrees to pay and be responsible for the following Closing
costs:
(i)
all fees and premiums for a Mortgagee’s Title Policy, if any;
(ii) the
cost of recording the Deed to the Property;
(iii) one-half
(
2
)
of the Title Company's escrow fees;
(iv)
all costs and expenses incurred by or on behalf of Purchaser including
Purchaser's attorney's fees; and
(v)
such other incidental costs and fees provided herein to be paid by Purchaser or
otherwise customarily paid by purchasers of property in Dallas County, Texas in
transactions of a similar nature to the transactions provided
herein.
Section 7.04.
Texas
Property Code Section 5.010 Notice
.
NOTICE
REGARDING POSSIBLE
LIABILITY FOR ADDITIONAL
TAXES
If for
the current ad valorem tax year the taxable value of the land that is the
subject of this Agreement is determined by a special appraisal method that
allows for appraisal of the land at less than its market value, the person to
whom the land is transferred may not be allowed to qualify the land for that
special appraisal in a subsequent tax year and the land may then be appraised at
its full market value. In addition, the transfer of the land or a
subsequent change in the use of the land may result in the imposition of an
additional tax plus interest as a penalty for the transfer or the change in the
use of the land. The taxable value of the land and the applicable
method of appraisal for the current tax year is public information and may be
obtained from the tax appraisal district established for the county in which the
land is located.
ARTICLE
VIII
TERMINATION,
DEFAULT AND REMEDIES
Section 8.01.
Termination
.
If this Agreement
is terminated pursuant to any paragraph or provision hereof granting such power
or by the mutual written consent of the parties hereto, the parties shall
thereafter have no further obligation or liabilities to the other
hereunder. All monies held in escrow pursuant to this Agreement shall
be returned to the appropriate party as provided for in the relevant section
hereto.
Section 8.02.
Purchaser's
Default and Seller's Remedies
.
In the event
Purchaser fails to fulfill any of its obligations hereunder, including all
rental payments and obligations under the Lease, except as a result of Seller's
default hereunder or the termination of this Agreement pursuant to any provision
hereof, Seller shall have the sole right to terminate this Agreement and retain
ALL the Earnest Money, Additional Earnest Money and monthly payments made by
Purchaser, as liquidated damages for the breach of this Agreement.
Section 8.03.
Seller's
Default and Purchaser's Remedies
.
In the
event Seller fails to fulfill any of its obligations hereunder, except as a
result of Purchaser's default hereunder or the termination of this Agreement
pursuant to any provision hereof, Purchaser shall have the right to (a)
terminate this Agreement and receive the Initial Earnest Money, the Cash
Payment, Additional Earnest Money and monthly payments made by Purchaser, as
liquidated damages for the breach of this Agreement or (b) enforce
specific performance of this Agreement and require Seller to consummate the
sale, transfer and conveyance of the Property to the Purchaser in accordance
with the terms and conditions hereof.
ARTICLE
IX
COMMISSION
Section 9.01.
Commission
. Each
of the parties hereto hereby represents and warrants to the other parties that
no real estate commissions or finder's fees are due or payable as a result of or
in connection with this Agreement or the transactions contemplated herein to any
person or agency, and that each of the parties hereby agrees to indemnify the
other party and hold the other party harmless from and against any and all
claims for real estate commissions and/or finders fees occasioned by its
acts.
ARTICLE
X
MISCELLANEOUS
PROVISIONS
Section
10.01.
Date of
Agreement
.
The term "Date of
this Agreement" as used herein shall mean the date, whichever is latest, this
Agreement has been fully executed by Seller and Purchaser, as indicated by their
signatures below.
Section
10.02.
Date of
Performance
.
In the event the
Closing Date should fall on a legal holiday, Saturday or Sunday, such date shall
be extended to the next working day which is not a legal holiday, Saturday or
Sunday, and such next working day shall be considered to be the Closing
Date.
Section
10.03.
Notices
.
Any notices
or other communications required or permitted hereunder shall be sufficiently
given if in writing and delivered in person or sent by registered or certified
mail (return receipt requested) or nationally recognized overnight delivery
service, postage pre-paid, addressed as follows, or to such other address has
such party may notify to the other parties in writing:
|
If
to Purchaser:
|
Rick's
Cabaret International, Inc.
|
|
|
10959
Cutten Road
|
|
|
Houston,
Texas 77066
|
|
|
Attention: Eric
Langan
|
|
|
Telephone: (281)
397-6730
|
|
|
Facsimile: (281)
397-6765
|
|
|
|
|
|
|
|
with
a copy to:
|
Axelrod
Smith & Kirshbaum
|
|
|
5300
Memorial Drive, Suite 700
|
|
|
Houston,
Texas 77007
|
|
|
Attention:
Robert D. Axelrod
|
|
|
Telephone:
(713) 861-1996
|
|
|
Facsimile:
(713) 552-0202
|
|
|
|
|
If
to Seller:
|
Wire
Way, LLC
|
|
|
2300
Willow Bend
|
|
|
Plano,
Texas 75093
|
|
|
Attention:
George P. Kondos
|
|
|
Telephone:
(972) 231-9924
|
|
|
Facsimile:
(972) 231-8636
|
|
|
|
|
|
with
a copy to:
|
|
|
Quilling,
Selander, Cummiskey & Lownds, P.C.
|
|
|
2001
Bryan St., Suite 1800
|
|
|
Dallas,
Texas 75201
|
|
|
Attn:
Art Selander
|
|
|
Telephone:
(214) 871-2100
|
|
|
Facsimile:
(214) 871-2111
|
Any
address for notice may be changed by written notice so given.
Section
10.04.
Attorney's
Fees
.
If either party
shall be required to employ an attorney to enforce or defend the rights of such
party hereunder, the prevailing party shall be entitled to recover reasonable
attorney's fees incurred in connection therewith.
Section
10.05.
Survival
.
Any portion of
this Agreement not otherwise consummated at the Closing will not survive the
Closing as a continuing agreement by and between the parties
hereto.
Section 10.6.
Relationship
of the Parties
.
Nothing contained
herein is intended to create, nor shall it ever be construed to make, Seller and
Purchaser partners or joint venturers.
Section 10.7.
Compliance
with Section 6045(e) of the Tax Reform Act of 1986
.
The Title Company
hereby agrees to (a) timely file returns with the Internal Revenue Service, on
Form 1099-B or such other forms as instructed by the Internal Revenue Service,
showing the gross proceeds of each transaction contemplated hereunder, the
recipient thereof and such other information as the Internal Revenue Service may
by form or regulation require from time to time, and (b) furnish Seller and
Purchaser with a written statement showing the name and address of the Title
Company and the information shown on such returns with respect to each such
transaction. These returns shall be filed to ensure that the parties
to these transactions will be in compliance with Section 6045(e) of the Internal
Revenue Code of 1986, as amended from time to time, and as further set forth in
any regulations promulgated thereunder.
Section 10.8.
Sale
Offer
.
The execution of
this Agreement by Seller constitutes an offer to sell the
Property. Unless this Agreement is accepted by Purchaser and a fully
executed copy, along with the Initial Earnest Money, is delivered to the title
company on or before 5:00 p.m., May 12, 2008, the offer set forth in this
Agreement shall be automatically revoked and terminated.
Section 10.9.
Disclosures
.
Seller expressly
makes the disclosures set forth on the attached
Exhibit
C
incorporated herein by reference.
Section
10.10.
Location
of Flood Plain
.
Seller makes no
representation or warranty, express or implied, regarding the location of any
100 year flood plain or the impact of a 100 year flood plain on the
Property. Any costs or expenses associated with the revision of the
100 year flood plain or revision of the 100 year flood plain map, including (a)
administrative and filing expenses for obtaining a conditional letter of map
revision or letter of map revision, and (b) costs of construction to revise the
100 year flood plain, shall be borne solely and exclusively by Purchaser, and
Seller shall have no liability therefor.
Section
10.11.
Severability
.
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
Section
10.12.
Assignment;
Successors
and Assigns
.
Except as
otherwise provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors and permitted assigns of the parties
hereto. No party hereto may assign its rights or delegate its
obligations under this Agreement without the prior written consent of the other
parties hereto, which consent will not be unreasonably withheld.
Section
10.13.
Public
Announcements
.
The parties
hereto agree that prior to making any public announcement or statement with
respect to the transactions contemplated by this Agreement, the party desiring
to make such public announcement or statement shall consult with the other
parties hereto and exercise their best efforts to agree upon the text of a
public announcement or statement to be made by the party desiring to make such
public announcement; provided, however, that if any party hereto is required by
law to make such public announcement or statement, then such announcement or
statement may be made without the approval of the other
parties.
Section
10.14.
Entire
Agreement
.
This Agreement
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof and supersede and cancel all prior representations,
alleged warranties, statements, negotiations, undertakings, letters,
acceptances, understandings, contracts and communications, whether verbal or
written among the parties hereto and thereto or their respective agents with
respect to or in connection with the subject matter hereof.
Section
10.15.
Choice of
Law
.
This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Texas, without regard to principles of conflict of laws. In any
action between or among any of the parties, whether arising out of this
Agreement or otherwise, each of the parties irrevocably consents to the
exclusive jurisdiction and venue of the federal and state courts located in
Dallas County, Texas.
Section
10.16.
Execution
.
This Agreement
may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
Section
10.17.
Costs and
Expenses
.
Each party
shall pay their own respective fees, costs and disbursements incurred in
connection with this Agreement.
Section
10.18.
Section
Headings
.
The section and
subsection headings in this Agreement are used solely for convenience of
reference, do not constitute a part of this Agreement, and shall not affect its
interpretation.
Section
10.19.
Attorney
Review - Construction
.
In connection
with the negotiation and drafting of this Agreement, the parties represent and
warrant to each other that they have had the opportunity to be advised by
attorneys of their own choice and, therefore, the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments
hereto.
Section
10.20.
No
Third-Party Beneficiaries
.
Nothing in this
Agreement will confer any third party beneficiary or other rights upon any
person or any entity that is not a party to this Agreement.
Section
10.21. V
alidity
.
The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
[THE
BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
EXECUTED
on the dates stated
below:
|
SELLER
:
|
|
PURCHASER
:
|
|
|
|
|
|
WIRE
WAY, LLC,
|
|
RCI
HOLDINGS, INC.,
|
|
a
Texas limited liability company
|
|
a
Texas corporation
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
George P. Kondos
|
|
By:
|
/s/ Eric
Langan
|
|
|
George
P. Kondos, Manager
|
|
|
Eric
Langan, President
|
|
|
|
|
|
May
10, 2008
|
|
May
10, 2008
|
|
Date
of Execution
|
|
Date
of Execution
|
AGREED
AND ACKNOWLEDGED WITH
RESPECT
TO SECTION 5.02 ONLY BY:
RCI
ENTERTAINMENT (NORTHWEST HIGHWAY), INC.:
|
By:
|
/s/
Eric Langan
|
|
|
|
Eric
Langan, President
|
|
ACKNOWLEDGMENT
The
undersigned Title Company hereby acknowledges its receipt of an executed copy of
this Agreement and the Earnest Money provided herein (if any) and, further,
agrees to comply with and be bound by the terms and provisions of this
Agreement, including, without limitation, those terms relating to disposition of
the Earnest Money (if applicable) and compliance with Section 6045(e) of the
Internal Revenue Code of 1986, as amended from time to time, and as further set
forth in any Regulations or forms promulgated thereunder.
|
|
REPUBLIC
TITLE OF TEXAS, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/
Shelby Newton
|
|
|
Name:
|
Shelby
Newton
|
|
|
Title:
|
Escrow
Officer
|
|
|
Date:
|
May
12, 2008
|
|
|
Address:
|
2626
Howell, 10
th
Floor
|
|
|
|
Dallas,
Texas 75204
|
|
|
Telephone:
|
(214)
754-7782
|
|
|
Facsimile:
|
(214)
855-8898
|
|
|
Email:
|
|
16
