SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
to
SCHEDULE 13D
Under the Securities Exchange Act of 1934
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D and is filing this schedule because of 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. |_|
NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See 240,13d-7(b) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 765641-30 3 Page 2 of 6
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(1) Name of Reporting Person and IRS Identification No. of Above Person:
Eric Scott Langan
(2) Check the Appropriate Box if a Member of a Group (See Instructions).
(a) |X|
(b) |_|
(3) SEC Use Only
(4) Source of Funds (See Instructions)
OO
(5) Check if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e). |_|
(6) Citizenship or Place of Organization
U.S.A.
Number (7) Sole Voting Power
of 692,406
Shares
Bene-
ficially (8) Shared Voting Power
Owned 578,632
by
Each
Report- (9) Sole Dispositive Power
ing 442,406
Person
With:
(10) Shared Dispositive Power
578,632
(11) Aggregate Amount Owned by Each Reporting Person
1,036,038
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) |_|
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CUSIP No. 765641-30 3 Page 3 of 6
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(13) Percent of Class Represented by Amount in Row (11)
20.4%
(14) Type of Reporting Person
IN
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CUSIP No. 765641-30 3 Page 4 of 6
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ITEM 1 Security and Issuer
This statement is filed with respect to shares of common stock par value
$0.01 (the "Shares") of Rick's Cabaret International, Inc. (the "Company",
"Rick's" or the "Issuer"), whose address is 505 North Belt, Suite 630, Houston,
Texas 77060.
ITEM 2. Identity and Background
(a) Eric Scott Langan
(b) Business address: 505 North Belt, Suite 630, Houston, Texas
77060
(c) Director and President of Rick's, and Director and
President of Taurus Entertainment Companies, Inc.
("Taurus"). The address of Rick's and Taurus is 505 North
Belt, Suite 630, Houston, Texas 77060. Mr. Langan is also
the General Partner of E.S. Langan, L.P. at the same
address.
(d) No.
(e) No.
(f) U.S.A.
ITEM 3. Source and Amount of Funds or Other Consideration
On July 6, 2000, Rick's acquired the adult Internet web site
www.XXXPassword.com from Voice Media, Inc. Pursuant to an Asset Purchase
Agreement. Among the terms of the acquisition, Rick's issued 700,000 restricted
shares of its common stock to Voice Media, of which 250,000 shares will remain
in escrow until certain earnings benchmarks are achieved. As part of this
transaction, the 250,000 escrow shares are subject to a Voting Agreement,
whereby Mr. Langan has sole voting power over the 250,000 shares as long as
these 250,000 shares are in escrow.
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CUSIP No. 765641-30 3 Page 5 of 6
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ITEM 4. Purpose of Transaction
On July 6, 2000, Rick's issued 700,000 restricted shares of its common
stock to Voice Media, of which 250,000 shares will remain in escrow until
certain earnings benchmarks are achieved. As part of this transaction, the
250,000 escrow shares are subject to a Voting Agreement, to which Mr. Langan is
also a party, whereby Mr. Langan has sole voting power over the 250,000 shares
as long as these 250,000 shares are in escrow. The Escrow Agreement sets forth
the conditions under which the shares will be released to Voice Media, Inc. or
returned to Rick's for cancellation. The Voting Agreement sets forth that Eric
Langan has sole voting power for the 250,000 escrow shares.
Rick's and Voice Media, Inc. have entered into a Letter of Intent whereby
Rick's may acquire from Voice Media, Inc. a web site named www.Clubpix.com. If
this transaction is consummated on the conditions set forth in the Letter of
Intent, then Mr. Langan could acquire voting power over an additional 700,000
shares of Rick's common stock
(a) Mr. Langan may, from time to time, acquire additional securities of the
Company for investment purposes. In connection with Mr. Langan's position as
Director and President of Rick's, Mr. Langan may receive options to acquire
shares of common stock of Rick's. Mr. Langan could acquire voting power over
additional securities of the Company as a result of future acquisitions
(b) Mr. Langan has no present plans or proposals for an extraordinary
corporate transaction involving the Company.
(c) Mr. Langan has no present plans or proposals involving the sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries.
(d) Mr. Langan has plans to add Board members, but no plans or proposals to
change the term of directors.
(e) Mr. Langan has no present plans or proposals for material change in the
present capitalization or dividend policy of the Company.
(f) Mr. Langan has no present plans or proposals for a material change in
the Company's business or corporate structure.
(g) Mr. Langan has no present plans or proposals for changes in the
Company's charter or bylaws, or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Company by any
person.
(h) Mr. Langan has no present plans or proposals for causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association.
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(i) Mr. Langan has no present plans or proposals for a class of securities
of the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Act.
(j) Mr. Langan has no present plans or proposals for any actions similar to those enumerated above.
CUSIP No. 765641-30 3 Page 6 of 6
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ITEM 5. Interest in Securities of the Issuer
(a) Mr. Langan is the beneficial owner directly or indirectly of
1,036,038 Shares and which represents 20.4% of the class of
securities.
1,036,038
(b) Mr. Langan has sole voting power for 692,406 shares, and sole
dispositive power for 442,406 Shares.
Mr. Langan has shared voting and dispositive power for 578,632
Shares.
(c) None.
(d) Pursuant to the Escrow Agreement, dividends, if any, on the 250,000
escrow shares will be escrowed as well and dividends are subject to
the same terms as the escrow shares.
(e) Not applicable.
ITEM 6. Contract, Agreements, Understandings or Relationships with Respect
to Securities of the Issuer
On July 6, 2000, Rick's acquired the adult Internet web site
www.XXXPassword.com from Voice Media, Inc. Among the terms of the acquisition,
Rick's issued 700,000 restricted shares of its common stock to Voice Media, of
which 250,000 shares will remain in escrow until certain earnings benchmarks are
achieved. As part of this transaction, the 250,000 escrow shares are subject
to a Voting Agreement, whereby Mr. Langan has sole voting power over the 250,000
shares as long as these 250,000 shares are in escrow.
ITEM 7. Material to be Filed as Exhibits
10.1 Asset Purchase Agreement
10.2 Escrow Agreement
10.3 Voting Agreement
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct.
July 12, 2000 /s/ Eric Scott Langan --------------- Eric Scott Langan Date |
This Asset Purchase Agreement ("Agreement") is made this 6th day of July, 2000, by and between RCI INTERNET HOLDINGS, INC., a Texas corporation, ("RCI") with its principal place of business located at 505 North Belt, Suite 630, Houston, Texas 77060, RICK'S CABARET INTERNATIONAL, INC., a Texas corporation ("Rick's"), with its principal place of business located at 505 North Belt, Suite 630, Houston, Texas 77060, and VOICE MEDIA, INC., a Nevada corporation, whose address is 2533 North Carson Street, Suite 1091, Carson City, Nevada 89706 (the "Seller").
R E C I T A L S:
WHEREAS, the Seller is the owner of all of the tangible and intangible assets associated or used in connection with the operation of XXXpassword.com ("Password" or the "Site"); and
WHEREAS, Seller desires to sell and transfer all of the tangible and intangible assets associated or used in connection with the operation of Password; and
WHEREAS, RCI desires to acquire the assets of Seller, upon and subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements set forth herein and in reliance upon the representations and warranties contained herein, the parties hereto covenant and agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND PROPERTY
1.1.1 the goodwill associated with or used in connection with the operation or business of Password (the "Goodwill");
1.1.2 to the extent their transfer is permitted pursuant to the terms thereof, all advertising and traffic agreements, contracts, agreements, licenses, commitments, arrangements, instruments and understandings which relate to the business and operation of Password exclusively;
1.1.3 any and all copies of records in Seller's possession relating to or compiled in connection with its business and operation of Password which are requested by RCI (the "Records").
1.2 On the Closing Date (as defined in Article IV hereof), and subject to the terms and conditions set forth in this Agreement, the Seller agrees to transfer and assign to RCI, and RCI agrees to accept from Seller the following Intellectual Property which is used solely for the business of Password or are otherwise necessary for the ownership of Password (the "Intellectual Property"):
1.2.1 all proprietary rights held by Seller in the XXXPassword.com domain name (the "Domain Name");
1.2.2 all ownership rights held by Seller in the content and text, navigational devices, menu structures or arrangement, icons, operational instructions, scripts, commands, syntax, screen design and other designs and visual expressions contained on the Site, whether stored, encoded, recorded or written on disk, tape, film, memory device, paper or other media of any nature (the "Content"); and
1.2.3 all proprietary rights held by Seller in and to all trademarks and any applications therefor, tradenames and any applications therefor, tradedress, trademark registrations and any applications therefor, service marks, copyrights, copyright registrations and any applications therefor, slogans, logs, associated with or used in connection with the operation or business of Password exclusively, including all rights, title and interest in and to the following tradename and trademark XXXPassword and XXXPassword.com used in connection with the operation of the Site (the "Trademarks").
ARTICLE II
EXCLUDED LIABILITIES
RCI shall have no obligation and shall not assume or agree to pay, perform or discharge, nor shall RCI be directly or indirectly responsible or obligated for, any debts, obligations, contracts, fines, or penalties or liabilities of Seller, wherever or however incurred, except for liabilities subsequent to the date of Closing which are expressly assumed, and the assumption of refund liabilities and credit card chargebacks for sales made from the Password website. All personal property taxes on the Purchased Assets will be paid in full by the Seller for all years prior to the Closing and the taxes for year of Closing will be pro rated to the Closing Date. Further, RCI shall not assume or be responsible for any of the liabilities or obligations of Seller or with respect to the business prior to the Closing Date, including any fines or penalties levied against Seller by any third party, and further including, without limitation, the following:
ASSET PURCHASE AGREEMENT - PAGE 2
ARTICLE III
PURCHASE PRICE AND PAYMENT
(i) 700,000 restricted shares of Rick's Cabaret International, Inc. ("Rick's") common stock, par value $.01("Rick's Stock"), of which 250,000 shares are subject to that certain Escrow Agreement set forth in Section 4.2(ii) below; and
(ii) An Earn Out Amount of $380,000 plus either (1) $475,000 if the earnings before depreciation, amortization, interest and taxes ("EBITDA") of Password during the first full twelve-month period beginning on the Closing Date exceeds $800,000 but is less than $1,200,000 (but not otherwise) or (2) $925,000 if the EBITDA of Password during the first full twelve-month period beginning on the Closing Date exceeds $1,200,000.
ASSET PURCHASE AGREEMENT - PAGE 3
The Earn Out Amount shall be paid in monthly amounts equal only to 50% of
the Free Net Cash Flow (as defined below) of all Internet commerce generated by
Password during the 6 year period from the Closing Date. If 50% of the Free Net
Cash Flow of all Internet commerce generated by Password during the 6 year
period from the Closing Date is less than the Earn Out Amount, then the excess
of the Earn Out Amount shall not be paid. For purposes of this Agreement, the
term "Free Net Cash Flow" shall be defined as cash proceeds less variable costs,
overhead costs and payment of income taxes due. Cash Proceeds shall be the
aggregate amount of all cash received from, without limitation, cash sales,
credit or charge card sales, sales on open account or any combination of the
same and other such sources less refunds and customer credits. Variable Costs
shall be the aggregate amount of all charges or reduction of proceeds by the
credit card processor/merchant bank and the cost paid to webmasters as a
commission for traffic sent to the website. Without limitation, such
processor/merchant bank costs shall include discounts, fees, chargebacks, fines
and all other such costs. In the event that the third party processor/merchant
bank shall require a reserve fund, for the purposes of this Agreement, said fund
shall be considered a Variable Cost. To the extent reserve funds are recovered
from the credit card processor/merchant bank and available for distribution,
then such amount shall be deemed Cash Proceeds available for distribution.
Overhead Costs shall be the aggregate amount of all charges for third party
content licensing fees, bandwidth charges and the Management Fee as set forth in
Section 7 of the Management Agreement executed simultaneously herewith between
RCI and National Telemedia Corp., an affiliate of Seller, in the form attached
hereto as Exhibit "C". The parties hereto acknowledge that to the extent the
specific identification of third party content costs is impractical, they agree
to the allocation of the actual costs based on the percentage of Password sales
to the combined sales of all websites of Seller benefiting from such third party
content.
With respect to the payment of income taxes due, the parties agree to retain a reserve in an amount of the Cash Proceeds equal to 35%. In the event the federal tax liability for the corresponding fiscal year is determined to be less than the amount held in reserve, then such amount shall become available for distribution to the Seller and RCI.
Further, Seller agrees that to the extent there are any shortfalls to the Free Net Cash Flow in any given month that the Seller will pay such shortfall amount, in an amount not to exceed $50,000, and be reimbursed prior to any further distribution from the Free Net Cash Flow.
ARTICLE IV
THE CLOSING
ASSET PURCHASE AGREEMENT - PAGE 4
(i) Rick's and Seller shall enter into an Escrow Agreement pursuant to which 250,000 shares of Rick's Stock shall be delivered in the name of the Seller to be held and distributed by the Escrow Agent in accordance with the terms of the Escrow Agreement in the form attached hereto as Exhibit "A"; and
(ii) The Seller will enter into a Voting Agreement with Eric Langan, President and Chief Executive Officer of Rick's, pursuant to which the Seller will authorize Eric Langan to vote the 250,000 shares of Rick's Stock held in escrow during the time that the shares are held in escrow pursuant to the Voting Agreement in the form attached hereto as Exhibit "B".
(iii)RCI and National Telemedia, Corp., an affiliate of Seller, shall enter into a Management Agreement pursuant to which National Telemedia, Corp. will maintain, manage and operate the XXXPassword.com website in accordance with the terms of the Management Agreement in the form attached hereto as Exhibit "C".
(a) all instruments of assignment and bills of sale necessary to transfer to RCI good and marketable title to the Purchased Assets free and clear of all liens, charges or encumbrances;
(b) all documents necessary to transfer the domain name XXXPassword.com;
(c) officers certificate required by Section 9.2(c);
(d) resolutions of the Board of Directors as required by Section 9.2(d); and
(e) executed Escrow Agreement, Voting Agreement and Management Agreement as provided for in Section 4.2.
(a) officers certificate required by Section 9.1(c);
(b) resolutions of the Board of Directors as required by Section 9.1(d); and
(c) executed Escrow Agreement, Voting Agreement and Management Agreement as provided for in Section 4.2.
ASSET PURCHASE AGREEMENT - PAGE 5
(a) either (i) certificates evidencing 700,000 shares of Rick's common stock, duly executed for issuance by Rick's to Voice Media, of which 250,000 shares will be immediately placed in escrow with the Escrow Agent pursuant to the Escrow Agreement referred to in Section 4.2(ii) or (ii) letter of instructions from a duly authorized officer of Rick's to American Securities Transfer, Inc. (Rick's's transfer agent), instructing the transfer agent to duly issue stock certificates evidencing the shares of Common Stock of Rick's to Voice Media, all as contemplated by this Agreement, in form and substance satisfactory to counsel for the Stockholders;
(b) officers certificate required by Section 9.1(e); and
(c) resolutions of the Board of Directors as required by Section 9.1(f).
(d) executed Escrow Agreement, Voting Agreement and Management Agreement as provided for in Section 4.2.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller hereby represents and warrants to RCI and Rick's as follows:
ASSET PURCHASE AGREEMENT - PAGE 6
ASSET PURCHASE AGREEMENT - PAGE 7
ASSET PURCHASE AGREEMENT - PAGE 8
(a) Seller owns, has good and marketable title to, and has full right to use and transfer to RCI, all of the Intellectual Property free and clear of any material liens, mortgages, judgments, or other encumbrances of any kind, and no rights or licenses of any kind respecting the Intellectual Property have been granted to any third party. There are no outstanding, or, to the best knowledge of the Seller, threatened claims of infringement against Seller respecting the use of any of the Intellectual Property in connection with the operations or business of the Seller or Password and it has no knowledge of any trademark, service mark, trade name, assumed name, copyright, patent, trade secret, contractual or other rights of any third party which may be violated or infringed by the use of any of the Intellectual Property in connection with Seller's operations or business.
ASSET PURCHASE AGREEMENT - PAGE 9
(b) Seller warrants that Buyer shall have access to and the right to use the Content provided pursuant to this Agreement which is owned by Seller and Seller warrants that with respect to Content licensed from third parties, to Seller's best knowledge, Buyer shall have the right to access and use of such Content.
ASSET PURCHASE AGREEMENT - PAGE 10
Additionally, the Seller understands that any sale by the Seller of any of the common stock of Rick's received under this Agreement, will under current law, require either (a) the registration of the common stock of Rick's under the Act and applicable state securities acts; (b) compliance with Rule 144 of the Act; or (c) the availability of an exemption from the registration requirements of the Act and applicable state securities acts. The Seller hereby agrees to execute, deliver, furnish or otherwise provide to Rick's an opinion of counsel reasonably acceptable to Rick's prior to any subsequent transfer of the common stock of Rick's, that such transfer will not violate the registration requirements of the federal or state securities acts. The Seller further agrees to execute, deliver, furnish or otherwise provide to Rick's any documents or instruments as may be reasonably necessary or desirable in order to evidence and record the common stock of Rick's acquired hereby.
To assist in implementing the above provisions, the Seller hereby consents to the placement of the legend, or a substantially similar legend, set forth below, on all certificates representing ownership of the common stock of Rick's acquired hereby until the common stock of Rick's has been sold, transferred, or otherwise disposed of, pursuant to the requirements hereof. The legend shall read substantially as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACTS. THESE SECURITIES MUST BE ACQUIRED FOR INVESTMENT, ARE RESTRICTED AS TO TRANSFERABILITY, AND MAY NOT BE SOLD, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION AND QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM."
In addition, the Seller consents to Rick's placing a "stop transfer notation" in its corporate records concerning the transfer of the common stock of Rick's acquired by the Seller.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RCI
RCI hereby represents and warrants to Seller as follows:
ASSET PURCHASE AGREEMENT - PAGE 11
ASSET PURCHASE AGREEMENT - PAGE 12
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF RICK'S
Rick's hereby represents and warrants to Seller as follows:
ASSET PURCHASE AGREEMENT - PAGE 13
ARTICLE VIII
COVENANT OF VOICE MEDIA
Voice Media covenants and agrees that it shall continue to advertise, market, distribute and promote the Site consistent with its past practices, including the marketing and distribution of the Site through its use of the webmaster affiliate programs of the Seller.
ARTICLE IX
CONDITIONS TO CLOSING
(a) The representations and warranties of RCI and Rick's set forth in this Agreement shall be true and correct in all material respects on the Closing Date;
(b) RCI and Rick's shall have performed and complied with all agreements, obligations, covenants and conditions required by this Agreement to be performed or complied with on or prior to the Closing Date;
(c) The Seller shall have received a certificate, dated the Closing Date and signed by the President of RCI to the effect set forth in Section 9.1(a) and 9.1(b) for the purpose of verifying the accuracy of such representations and warranties and the performance and satisfaction of such covenants and conditions;
(d) The Seller shall have received corporate resolutions of the Board of Directors of RCI, certified by an officer of RCI, which 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;
ASSET PURCHASE AGREEMENT - PAGE 14
(e) The Seller shall have received a certificate, dated the Closing
Date and signed by the President of Rick's to the effect set forth in
Section 9.1(a) and 9.1(b) for the purpose of verifying the accuracy of such
representations and warranties and the performance and satisfaction of such
covenants and conditions;
(f) The Seller shall have received corporate resolutions of the Board of Directors of Rick's, certified by an officer of Rick's, which 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;
(g) The related transactions as set forth in Section 4.2 shall be consummated concurrently with the Closing;
(h) The Board of Directors of Rick's shall have appointed two additional directors to its Board of Directors as selected by Seller; and
(i) 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 RCI or Rick's.
(a) The representations and warranties of Seller set forth herein shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on the Closing Date;
(b) Seller shall have performed and complied with all agreements, obligations, covenants and conditions required by this Agreement to be performed or complied with by Seller on or prior to the Closing;
(c) RCI and Rick's shall have received a certificate, dated the Closing Date and signed by the President of the Seller to the effect set forth in Section 9.2(a) and 9.2(b) for the purpose of verifying the accuracy of such representations and warranties and the performance and satisfaction of such covenants and conditions;
(d) RCI and Rick's shall have received corporate resolutions of the Board of Directors of Seller, certified by an officer of Seller, which 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;
ASSET PURCHASE AGREEMENT - PAGE 15
(e) As of May 31, 2000, the (i) Gross Revenues of XXXPassword.com for the preceding full five (5) months shall exceed $1,250,000 and (ii) the EBITDA derived from XXXPassword.com for the five (5) month period, shall be in excess of $167,000;
(f) The related transactions set forth in Section 4.2 shall be consummated concurrently with the Closing; and
(g) Seller shall have delivered to RCI all instruments of assignment and bills of sale necessary to transfer to RCI good and marketable title to the Purchased Assets;
(h) 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 Seller.
ARTICLE X
INDEMNIFICATION
ASSET PURCHASE AGREEMENT - PAGE 16
misrepresentation by, or breach of any covenant or warranty of, RCI contained in this Agreement or any Exhibit, certificate, or other agreement or instrument furnished or to be furnished by RCI hereunder, or any claim by a third party (regardless of whether the claimant is ultimately successful), which if true, would be such a misrepresentation or breach; (b) any nonfulfillment of any agreement on the part of RCI under this Agreement, or from any misrepresentation in or omission from, any certificate or other agreement or instrument furnished or to be furnished to Seller hereunder; and (c) any suit, action, proceeding, claim or investigation against Seller which arises from or which is based upon or pertaining to RCI's conduct or operation of the business of RCI or RCI's ownership, possession or use of the Purchased Assets and employment of employees, and any other matter or state of facts relating to the transactions contemplated herein subsequent to Closing.
ASSET PURCHASE AGREEMENT - PAGE 17
ARTICLE XI
MISCELLANEOUS
(a) If to RCI and Rick's:
RCI Internet Holdings, Inc.
Mr. Eric Langan, President
505 North Belt, Suite 630 Houston, Texas 77060 Fax: (281) 820 1445 With a copy to: Robert D. Axelrod Axelrod, Smith & Kirshbaum 5300 Memorial Drive, Suite 700 Houston, Texas 77007 Fax: (713) 552-0202 (b) If to Seller to: Voice Media, Inc. Ron Levi, President |
2533 North Carson Street, Suite 1091
Carson City, Nevada 89706
Fax: (702) 883-2384
ASSET PURCHASE AGREEMENT - PAGE 18
With copies to: Howard Rosoff Rosoff, Schiffres & Barta Suite 1450 11755 Wilshire Blvd. Los Angeles, California 90025 Fax: (310) 478-1439 Guy Mizrachi c/o National Telemedia Corporation 5000 North Parkway Calabasas, Suite 205 Calabasas, California 91302 |
Fax: (818) 591-3434
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three days after being deposited in the mail, postage prepaid, sent certified mail, return receipt requested, if mailed; and the next day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
ASSET PURCHASE AGREEMENT - PAGE 19
ASSET PURCHASE AGREEMENT - PAGE 20
[[[SIGNATURES ON FOLLOWING PAGE]]]
ASSET PURCHASE AGREEMENT - PAGE 21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.
RCI INTERNET HOLDINGS, INC.
By: /s/ Eric Langan Eric Langan, President |
RICK'S CABARET INTERNATIONAL, INC.
By: /s/ Eric Langan Eric Langan, President |
VOICE MEDIA, INC.
By: /s/ Ron Levi Ron Levi, President |
ASSET PURCHASE AGREEMENT - PAGE 22
Exhibit 10.2
ESCROW AGREEMENT
This Escrow Agreement (hereinafter the "Escrow Agreement") is made and entered into this 6th day of July, 2000 by and among RICK'S CABARET INTERNATIONAL, INC., a Texas corporation ("Rick's"), and VOICE MEDIA, INC., a Nevada corporation (the "Shareholder"), Rick's and the Shareholder being collectively referred to as the "Parties" or individually referred to as a "Party", and ROBERT D. AXELROD, P.C., as the Escrow Agent ("Escrow Agent").
WHEREAS, RCI Internet Holdings, Inc., Rick's and the Shareholder have entered into an Asset Purchase Agreement ("Purchase Agreement") of even date herewith, pursuant to which the Shareholder has agreed to deposit in escrow 250,000 shares of the $.01 par value common stock of Rick's (the "Escrow Stock" or the "Escrow Shares"); and
WHEREAS, the Shareholder pursuant to the Purchase Agreement is conveying to RCI Internet Holdings, Inc., a wholly owned subsidiary of Rick's, certain tangible and intangible assets associated with and used in connection with the operation of an Internet website known as XXXPassword.com ("Password"); and
WHEREAS, in connection with the execution of the Purchase Agreement it is necessary to establish an escrow for the Escrow Stock; and
WHEREAS, the Parties desire that Robert D. Axelrod, P.C. serve as the Escrow Agent in connection with this Escrow Agreement.
THE DEFINED TERMS HEREIN HAVE THE SAME MEANING AS THE DEFINED TERMS IN THE Purchase Agreement of even date herewith by and among the Parties (THE "PURCHASE AGREEMENT").
NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants and obligations herein contained, the Parties agree hereto as follows:
a. Certificates representing the Escrow Stock (250,000 shares of common stock of Rick's);
b. Stock powers for the Escrow Shares, fully executed by the Shareholder covering the certificates delivered in escrow. The stock powers, along with the Escrow Stock, shall hereinafter be collectively referred to as the "Escrowed Documents."
c. The Shareholder, by the delivery of the 250,000 Escrow Shares to the Escrow Agent, does hereby acknowledge and represent that the Escrow Shares are owned, beneficially and of record, by the Shareholder, free and clear of any liens, claims, equities, charges, options, rights of first refusal or encumbrances and, further, acknowledges and represents that it has the unrestricted right and power to transfer, convey and deliver full ownership of the Escrow Shares without the consent, agreement or joinder of any other person and without any designation, declaration or filing with any governmental authority.
(a) Subject to Paragraph 2(f), below, release the Escrow Shares to the Shareholder upon receipt by the Escrow Agent of a written statement from the auditors of Rick's that the earnings before depreciation, amortization, interest and taxes ("EBITDA") of XXXPassword.com during the first full 12 months following the Closing Date (the "Escrow Period") equaled or exceeded $400,000 (the "Minimum Threshold"). Such written statement from the auditors of Rick's shall be provided to the Escrow Agent not later than five (5) days following submission to the Securities and Exchange Commission of Rick's appropriate reporting forms. In the event that the Escrow Agent receives a written statement from the auditors of Rick's that the EBITDA during the Escrow Period does not meet the Minimum Threshold, then the Escrow Agent shall release a number of shares of the Escrow Stock to the Shareholder at the end of the Escrow Period equal to 250,000 multiplied by a fraction, not to exceed one, the numerator of which is the actual EBITDA for the Escrow Period, as reflected in the written statement from the auditors of Rick's, and the denominator of which is $400,000.
(b) Subject to Paragraph 2(f), below, release the Escrow Shares to the Shareholder upon receipt by the Escrow Agent of a written statement from the auditors of Rick's that the EBITDA of XXXPassword.com, at any time during the first full 12 months following the Closing Date, equals or exceeds $400,000.
(c) Following release to the Shareholder pursuant to Paragraphs 2(a) or 2(b) as appropriate, any Escrow Stock remaining in Escrow shall be returned by the Escrow Agent to Rick's for cancellation.
(d) In the event that the shareholders of Rick's are requested to vote on any matter while any shares of Common Stock are held in Escrow, such shares of Common Stock shall be voted by Eric Langan or pursuant to the written instructions of Eric Langan.
(e) The term "Earnings before depreciation, amortization, interest and taxes" for purposes of this Escrow Agreement shall have the same definition contained in the Purchase Agreement.
ESCROW AGREEMENT - PAGE 2
(f) Upon receipt by the Escrow Agent of any written statement from the
auditors of Rick's pursuant to either Paragraph 2(a) or 2(b) above,
the Escrow Agent shall give written notice of such fact, together with
a copy of the written statement, to each of the Parties within three
(3) business days. If no objection is received by the Escrow Agent
from either of the Parties within five (5) business days following
such notification, the Escrow Agent shall release the Escrow Shares in
accordance with Paragraph 2(a) or 2(b), as the case may be. If an
objection is received within five (5) business days, the Escrow Agent
shall so notify each of the Parties of such fact. In such event the
Escrow Agent may, but shall not be required, to interplead the
Escrowed Documents with any court of competent jurisdiction in Harris
County, Texas. Attorney's fees and costs of court shall be borne by
the party losing any action brought to recover the Escrowed Documents.
4. The Shareholder hereby agrees that so long as the Escrow Stock is held in escrow pursuant to this Escrow Agreement, it will not take any action to cancel, sell, pledge, assign, dispose of or otherwise transfer the Escrow Stock, except as otherwise provided by this Escrow Agreement. If Rick's declares a cash dividend or stock dividend or if Rick's splits or subdivides its shares of common stock or issues any shares of its common stock in a reclassification then any cash dividend or stock dividend to which the Shareholder would be entitled shall be issued directly to the Escrow Agent to hold in escrow in accordance with the terms and conditions of this Escrow Agreement.
5. The Escrow Agent is hereby authorized to exchange the share certificates delivered to it for any number and any denomination of share certificates that the Escrow Agent, in its sole discretion, requires to enable it to release the Escrow Stock as required pursuant to this Escrow Agreement.
6. The Escrow Agent shall have no duties or obligations other than those specifically set forth herein or required by law. The acceptance by the Escrow Agent of its duties under this Escrow Agreement is subject to the terms and conditions hereof, which shall govern and control with respect to its rights, duties, liabilities and immunities.
ESCROW AGREEMENT - PAGE 3
7. Rick's and the Shareholder understand and agree that Escrow Agent is not a principal, participant, or beneficiary of the underlying transactions which necessitate this Escrow Agreement. The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in acting or refraining from acting on any instrument reasonably believed by it to be genuine and to have been signed or presented by the proper Party or Parties, their officers, representatives or agents. So long as the Escrow Agent has acted in good faith or on the advice of counsel or has not been guilty of willful misconduct, the Escrow Agent shall have no liability under, or duty to inquire beyond the terms and provisions of this Escrow Agreement, and it is agreed that its duties are purely ministerial in nature. Escrow Agent shall in no event be liable for any exemplary or consequential damages, the Parties understanding that this limitation is provided for in view of the fact that Escrow Agent will receive no compensation (other than reimbursement for expenses), for its services hereunder.
8. The Escrow Agent shall not be obligated to take any legal actions hereunder against any third party who is not a party to this Escrow Agreement which might, in the Escrow Agent's judgment, involve any expense or liability, unless the Escrow Agent shall have been furnished with reasonable indemnity.
9. The Escrow Agent is not bound in any way by any other contract or agreement between or among the Parties hereto whether or not the Escrow Agent has knowledge thereof of its terms and conditions and the Escrow Agent's only duty, liability and responsibility shall be to hold and deal with the Escrowed Documents as herein directed.
10. The Escrow Agent shall not be bound by any modification, amendment, termination, cancellation, rescission or supersession of this Escrow Agreement unless the same shall be in writing and signed by all of the other Parties hereto and, if its duties as Escrow Agent hereunder are affected thereby, unless it shall have given prior written consent thereto.
11. The Parties hereto each jointly and severally agree to indemnify the Escrow Agent against and hold the Escrow Agent harmless from anything which the Escrow Agent may do or refrain from doing in connection with its performance or non-performance as Escrow Agent under this Escrow Agreement and any and all losses, costs, damages, expenses, claims and reasonable attorneys' fees suffered or incurred by the Escrow Agent as a result of, in connection with or arising from or out of the acts of omissions of the Escrow Agent in performance of or pursuant to this Escrow Agreement, except such acts or omissions as may result from the Escrow Agent's willful misconduct.
ESCROW AGREEMENT - PAGE 4
12. In the event of any disagreement between Rick's and the Shareholder or any or either of them concerning this Escrow Agreement or between them, or demands being made in connection with the Escrow Stock, or in the event that the Escrow Agent is in doubt as to what action the Escrow Agent should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until:
a. the rights of Rick's and the Shareholder shall have been fully and finally adjudicated by a court of competent jurisdiction; or
b. all differences shall have been adjusted and all doubt resolved by agreement between Rick's and the Shareholder, and the Escrow Agent shall have been notified thereof in writing signed by all Parties.
13. Should Escrow Agent become involved in litigation in any manner whatsoever on account of this Escrow Agreement or the Escrow Stock, the Parties hereto (other than Escrow Agent), hereby bind and obligate themselves, their heirs, personal representatives, successors, assigns to pay Escrow Agent, in addition to any charge made hereunder for acting as Escrow Agent, reasonable attorneys' fees incurred by Escrow Agent, and any other disbursements, expenses, losses, costs and damages in connection with or resulting from such actions, unless such litigation is the direct result of the Escrow Agent's own willful misconduct.
14. The terms of these instructions are irrevocable by the undersigned unless such revocation is consented to in writing by each of Rick's and the Shareholder.
15. The terms herein shall be binding upon the Escrow Agent and its successors, and upon Rick's and the Shareholder.
16. The Escrow Agent may resign as escrow agent in respect of the Escrow Stock by giving written notice to Rick's and the Shareholder. The resignation of the Escrow Agent shall be effective, and the Escrow Agent shall cease to be bound by this Escrow Agreement, thirty (30) days following the date such notice of resignation is given.
Rick's and the Shareholder shall, before the effective date of the resignation of the Escrow Agent, appoint another escrow holder who shall be acceptable to them and that appointment, when made, shall be binding on them. Upon appointment by the new escrow holder, the Escrow Agent shall deliver the Escrowed Documents to the new escrow holder whereupon the Escrow Agent shall not be liable for the completion of any further acts pursuant to this Escrow Agreement. In the event that Rick's and the Shareholder do not appoint a new escrow holder prior to the expiration of the thirty (30) day period, the Escrow Agent shall be entitled to make application to a court of competent jurisdiction in the State of Texas to be relieved of the obligations upon it and/or to interplead the Escrowed Documents into such court and for directions with respect to the delivery of the Escrowed Documents. The Escrow Agent shall be entitled to act in accordance with the direction of the court without any further liability to any other Party whatsoever.
ESCROW AGREEMENT - PAGE 5
17. The Escrow Agent will not receive any compensation for the performance of its services in connection with this Escrow Agreement except for the reimbursement of any and all out-of-pocket expenses incurred by the Escrow Agent in connection with the performance of its services hereunder.
18. All notices and other communications provided for herein shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or overnight air courier guaranteeing next day delivery:
(a) If to Rick's:
Rick's Cabaret International Inc. Mr. Eric Langan, President
505 North Belt, Suite 630
Houston, Texas 77060
Fax: (281) 820 1445
With a copy to:
Robert D. Axelrod
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
Fax: (713) 552-0202
(b) If to Voice Media to:
Voice Media, Inc.
Ron Levi, President
2533 North Carson Street, Suite 1091
Carson City, Nevada 89706
Fax: (702) 883-2384
With copies to:
Howard Rosoff
Rosoff, Schiffres & Barta
Suite 1450
11755 Wilshire Blvd.
Los Angeles, California 90025
Fax: (310) 478-1439
Guy Mizrachi
c/o National Telemedia Corporation
5000 North Parkway Calabasas, Suite 205
Calabasas, California 91302
Fax: (818) 591-3434
(c) If to Escrow Agent to:
Robert D. Axelrod, P.C.
c/o Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
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ESCROW AGREEMENT - PAGE 6
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three days after being deposited in the mail, postage prepaid, sent certified mail, return receipt requested, if mailed; and the next day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
19. This Escrow Agreement shall be construed according to the laws of the State of Texas and the Parties submit themselves to the exclusive jurisdiction of the courts of the State of Texas in the event of any dispute.
20. This Escrow Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same.
21. The Escrow Agent and any stockholder, director, officer, partner or employee of the Escrow Agent may have a pecuniary interest in any transaction in which the Parties may be interested, or contract with or lend money to or otherwise act as fully and freely as though it were not Escrow Agent under this Agreement. In other words, this Escrow Agreement shall not prevent the Escrow Agent from performing any other activity which it would normally perform. Additionally, nothing herein shall preclude the Escrow Agent from acting in any other capacity for either of the Parties. SPECIFICALLY, THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE ESCROW AGENT AND EMPLOYEES OF THE ESCROW AGENT SERVE AS LEGAL COUNSEL TO RICK'S. THE PARTIES EXPRESSLY WAIVE ANY CONFLICT OF INTEREST WHICH MAY ARISE FROM SUCH LEGAL REPRESENTATION AND SERVING AS ESCROW AGENT HEREUNDER. FURTHER, THE SHAREHOLDER EXPRESSLY AGREES THAT SERVING AS ESCROW AGENT WILL IN NO WAY PRECLUDE ESCROW AGENT OR ANY EMPLOYEE OR PARTNER OF ESCROW AGENT FROM CONTINUING TO SERVE AS LEGAL COUNSEL TO RICK'S.
[SIGNATURES ON FOLLOWING PAGE]
ESCROW AGREEMENT - PAGE 7
IN WITNESS WHEREOF, the Parties hereto have executed this Escrow Agreement effective as of the day and year first above written.
RICK'S CABARET INTERNATIONAL, INC.
By: /s/ Eric Langan
Eric Langan, President
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SHAREHOLDER:
VOICE MEDIA, INC.
By: /s/ Ron Levi
Ron Levi, President
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ROBERT D. AXELROD, P.C., AS THE ESCROW AGENT
By: /s/ Robert D. Axelrod
Robert D. Axelrod, President
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ESCROW AGREEMENT - PAGE 8
Exhibit 10.3
VOTING AGREEMENT
AND
IRREVOCABLE PROXY
This Voting Agreement and Irrevocable Proxy (the "Voting Agreement") is made on the 6th day of July, 2000, by and among VOICE MEDIA, INC., a Nevada corporation ("Voice Media"), and ERIC LANGAN ("Langan").
WHEREAS, RCI Internet Holdings, Inc. ("RCI"), Rick's Cabaret International, Inc. ("Rick's") and Voice Media have entered into an Asset Purchase Agreement ("Purchase Agreement") of even date herewith pursuant to which Voice Media has agreed to grant to Langan certain voting rights with respect to 250,000 shares of Rick's common stock, $.01 par value, which have been issued simultaneously herewith pursuant to the terms and conditions of the Purchase Agreement and which are subject to an Escrow Agreement as provided for in the Purchase Agreement; and
WHEREAS, in connection with the execution of the Purchase Agreement it is necessary to establish and enter into this Voting Agreement; and
WHEREAS, as a material inducement to RCI and Rick's entering into the Purchase Agreement with Voice Media, it was agreed that Voice Media enter into this Voting Agreement with Langan.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and obligations herein contained and for other good and valuable consideration, the parties hereto agree as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A VOTING AGREEMENT AND IRREVOCABLE PROXY DATED EFFECTIVE AS OF JULY 6, 2000 ("AGREEMENT"), A COUNTERPART OF WHICH HAS BEEN DEPOSITED WITH THE COMPANY AT ITS PRINCIPAL OFFICE. THE COMPANY WILL FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL OFFICE."
VOTING AGREEMENT AND IRREVOCABLE PROXY - PAGE 2
(a) If to Eric Langan:
Mr. Eric Langan
505 North Belt, Suite 630
Houston, Texas 77060
Fax: (281) 820 1445
With a copy to:
Robert D. Axelrod
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
Fax: (713) 552-0202
(b) If to Voice Media to:
Voice Media, Inc.
Ron Levi, President
2533 North Carson Street, Suite 1091
Carson City, Nevada 89706
Fax: (702) 883-2384
With a copies to:
Howard Rosoff
Rosoff, Schiffres & Barta
Suite 1450
11755 Wilshire Blvd.
Los Angeles, California 90025
Fax: (310) 478-1439
Guy Mizrachi
c/o National Telemedia Corporation
5000 North Parkway Calabasas, Suite 205
Calabasas, California 91302
Fax: (818) 591-3434
(c) If to Rick's:
Rick's Cabaret International Inc.
Mr. Eric Langan, President
505 North Belt, Suite 630
Houston, Texas 77060
Fax: (281) 820 1445
VOTING AGREEMENT AND IRREVOCABLE PROXY - PAGE 3
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With a copy to:
Robert D. Axelrod
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
Fax: (713) 552-0202
All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three days after being deposited in the mail, postage prepaid, sent certified mail, return receipt requested, if mailed; and the next day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
VOTING AGREEMENT AND IRREVOCABLE PROXY - PAGE 4
[[[[SIGNATURES ON FOLLOWING PAGE]]]]
VOTING AGREEMENT AND IRREVOCABLE PROXY - PAGE 5
IN WITNESS WHEREOF, the Parties hereto have executed this Voting Agreement and Irrevocable Proxy effective as of the day and year first above written.
to this Voting Agreement and By: /s/ Ron Levi
Irrevocable Proxy Ron Levi, President
/s/ Eric Langan
Eric Langan, individually
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VOTING AGREEMENT AND IRREVOCABLE PROXY - PAGE 6