Texas
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001-13992
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76-0037324
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(State Or Other Jurisdiction of
Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
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ITEM 9.01
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FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit Number
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Description
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10.1
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Asset Purchase Agreement
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10.2
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Commercial Contract – Improved Property (with Adelphi)
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10.3
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Commercial Contract – Improved Property (with PNYX)
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99.1
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Press Release dated November 22, 2011
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RICK'S CABARET INTERNATIONAL, INC.
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Date: November 21, 2011
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By:
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/s/ Eric Langan
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Eric Langan
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President and Chief Executive Officer
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(i)
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RCI Stemmons shall pay or cause to be paid $1,400,000 to the Seller as consideration for the Green Star Shares pursuant to a promissory note (the “Green Star Note”) executed by RCI Stemmons;
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(ii)
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RCI Dining shall pay or cause to be paid $100,000 to the Seller as consideration for the Fine Dining Shares pursuant to a promissory note (the “Fine Dining Note”) executed by RCI Dining; and
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(iii)
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RCI Inwood shall pay or cause to be paid $500,000 to Seller as consideration for the Blue Star Shares pursuant to a promissory note (the “Blue Star Note”) executed by RCI Inwood,
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(a)
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Payments of interest only for months one (1) through twelve (12);
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(b)
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Thereafter, one hundred and nineteen (119) equal monthly installments of principal and interest, based upon a fifteen (15) year amortization schedule, with a balloon payment of all outstanding principal and interest due thereon on the one hundred and thirty second (132nd) month from the date of execution of the Blue Star Note, provided however, that the payee will have a one time right, effective the sixty-first (61st) month after the date of execution of the Blue Star Note, to adjust the existing interest rate from five and one-half percent (5.5%) to prime plus two and one-half percent (2.5%), but in no event to exceed nine percent (9%) per annum;
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(i)
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Sale of the Adelphi Real Property. At the Closing, Adelphi shall sell, transfer, convey and deliver by Special Warranty Deed, which will convey good and marketable title to the Adelphi Real Property to RCI Holdings, free and clear of liens, claims and encumbrances. As consideration for the purchase of the Adelphi Real Property, RCI Holdings shall pay to Adelphi at Closing (x) $300,000 by cashier’s check, certified funds or wire transfer and (y) $6,200,000 pursuant to a Secured Promissory Note (the “Adelphi Promissory Note”) executed by and obligating RCI Holdings, bearing interest, initially, at the rate of five and one-half percent (5.5%) per annum, the terms and conditions of which are as follows:
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(a)
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Payments of interest only for months one (1) through twelve (12);
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(b)
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Thereafter, one hundred and nineteen (119) equal monthly installments of principal and interest, based upon a fifteen (15) year amortization schedule, with a balloon payment of all outstanding principal and interest due thereon on the one hundred and thirty second (132nd) month from the date of execution of the Adelphi Promissory Note, provided however, that
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(1)
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The payee will have a one time right, effective the sixty-first (61st) month after the date of execution of the Adelphi Promissory Note, to adjust the existing interest rate from five and one-half percent (5.5%) to prime plus two and one-half percent (2.5%), but in no event to exceed nine percent (9%) per annum;
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(2)
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At the end of the forty-eighth (48th) month, the payee will have the right, with one hundred and eighty (180) days notice to the maker, to require a principal draw down payment of $500,000 (the “Initial Draw Down”); and
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(3)
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Thirty-six (36) months after the payment of the Initial Draw Down of principal, the payee will have the right, with one hundred and eighty (180) days notice to the maker, to require an additional principal draw down payment of $500,000.
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(ii)
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Adelphi and RCI Holdings shall execute the Real Estate Purchase Agreement, which will provide for the terms and conditions for the conveyance of good and marketable title of the Adelphi Real Property, which Real Estate Purchase Agreement will be submitted to a title company mutually acceptable to RCI Holdings and Adelphi contemporaneously with the execution of this Agreement.
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(iii)
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Sale of the PNYX Real Property. At the Closing, PNYX shall sell, transfer, convey and deliver by Special Warranty Deed, which will convey good and marketable title to the PNYX Real Property to RCI Holdings, free and clear of liens, claims and encumbrances. As consideration for the purchase of the PNYX Real Property, RCI Holdings shall pay to PNYX at Closing (x) $1,200,000 by cashier’s check, certified funds, or wire transfer and (y) $2,300,000 pursuant to a Promissory Note (the “PNYX Promissory Note”) executed by and obligating RCI Holdings, bearing interest, initially, at the rate of five and one-half percent (5.5%) per annum, the terms and conditions of which are as follows:
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(a)
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Payments of interest only for months one (1) through twelve (12);
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(b)
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Thereafter, one hundred and nineteen (119) equal monthly installments of principal and interest, based upon a fifteen (15) year amortization schedule, with a balloon payment of all outstanding principal and interest due thereon on the one hundred and thirty second (132nd) month from the date of execution of the PNYX Promissory Note, provided however, that
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(1)
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The payee will have a one time right, effective the sixty-first (61st) month after the date of execution of the PNYX Promissory Note to adjust the existing interest rate from five and one-half percent (5.5%) to prime plus two and one-half percent (2.5%), but in no event to exceed nine percent (9%) per annum;
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(2)
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At the end of the forty-eighth (48th) month, the payee will have the right, with one hundred and eighty (180) days notice to the maker, to require a principal draw down payment of $500,000 (the “Initial Draw Down”); and
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(3)
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Thirty-six (36) months after the payment of the Initial Draw Down of principal, the payee will have the right, with one hundred and eighty (180) days notice to the maker, to require an additional principal draw down payment of $500,000.
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(iv)
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PNYX and RCI Holdings shall execute the Real Estate Purchase Agreement, which will provide for the terms and conditions for the conveyance of good and marketable title of the PNYX Real Property, which Real Estate Purchase Agreement will be submitted to a title company mutually acceptable to RCI Holdings and PNYX contemporaneously with the execution of this Agreement.
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(v)
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Covenant Not to Compete. As partial consideration for the Purchasers entering into this Agreement, the Seller shall enter into a Non-Competition Agreement pursuant to the terms of which the Seller will agree for a period of five (5) years not to compete, either directly or indirectly, with the Purchasers, Green Star, Fine Dining, Blue Star or any of their affiliates, by owning, participating or operating an establishment featuring live female nude or semi-nude adult entertainment, whether serving alcoholic beverages or not, within Dallas County and all contiguous counties thereto. A copy of the form of Non-Competition Agreement is attached hereto as Exhibit 2.3(v).
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(vi)
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Termination of Existing Lease Agreements. Any lease agreements relating to the Adelphi Real Property and/or the PNYX Real Property will be terminated at Closing. All rights of Lessor under any such lease agreements shall remain Lessor’s sole property and likewise all liabilities under any such lease agreements shall remain Lessor’s sole obligation.
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Section 3.1.
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Organization, Good Standing and Qualification.
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(a)
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None of the Companies will authorize, declare, pay or effect any dividends or liquidate or distribute any common stock or other equity interest or undertake any direct or indirect redemption, purchase or other acquisition of any equity interest;
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(b)
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None of the Companies will make any changes in its condition (financial or otherwise), liabilities, assets, or business or in any of its business relationships, including relationships with suppliers or customers, that, when considered individually or in the aggregate, might reasonably be expected to have a material adverse effect on it;
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(c)
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None of the Companies will increase the salary or other compensation payable or to become payable by it to any employee, or the declaration, payment, or commitment or obligation of any kind for the payment by it of a bonus or other additional salary or compensation to any such person except in the normal course of business, consistent with its past practices;
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(d)
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None of the Companies will sell, lease, transfer or assign any of their assets, tangible or intangible, other than inventory for a fair consideration, in the ordinary course of business;
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(e)
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None of the Companies will accelerate, terminate, modify or cancel any agreement, contract, lease or license (or series of related agreements, contracts, leases and licenses) involving more than $5,000, either individually or in the aggregate, to which it is a party, absent the consent of the respective Purchaser;
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(f)
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None of the Companies will make any loans to any person or entity, or guarantee any loan, absent the consent of the Purchasers;
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(g)
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None of the Companies will waive or release any right or claim held by it, absent the consent of the Purchasers;
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(h)
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Each of the Companies will operate its business in the ordinary course and consistent with past practices so as to preserve its business organization intact, to retain the services of their employees and to preserve their goodwill and relationships with suppliers, creditors, customers, and others having business relationships with them;
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(i)
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None of the Companies will issue any note, bond or other debt security or create, incur or assume, or guarantee any indebtedness for borrowed money or capitalized lease obligations;
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(j)
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None of the Companies will delay or postpone the payment of accounts payable and other liabilities outside the ordinary course of business;
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(k)
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None of the Companies will make any loan to, enter into an employment agreement with, or enter into any other transaction with, any of its directors, officers, and employees;
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(l)
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None of the Companies will make any change in any method, practice, or principle of accounting involving its business or assets;
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(m)
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None of the Companies will issue, sell or otherwise dispose of any of its capital stock or create, sell or dispose of any options, rights, conversion rights or other agreements or commitments of any kind relating to the issuance, sale or disposition of any of its equity interests;
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(n)
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None of the Companies will reclassify, split up or otherwise change any of its common stock or capital structure;
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(o)
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None of the Companies will be a party to any merger, consolidation or other business combination; and
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(p)
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Each of the Companies 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 Silver City.
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Section 10.1
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Tax Covenants.
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(a)
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If to the Seller:
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Thanasi Mantas
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7203 John Carpenter Freeway
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Dallas, Texas 75247
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with a copy to:
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Roger Albright
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3301 Elm Street
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Dallas, Texas 75226-2562
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(b)
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If to Green Star,
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Green Star, Inc.
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Fine Dining or
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Fine Dining Club, Inc.
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Blue Star:
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Blue Star Entertainment, Inc.
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Attn: Thanasi Mantas, President
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7203 John Carpenter Freeway
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Dallas, Texas 75247
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with a copy to:
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Roger Albright
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3301 Elm Street
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Dallas, Texas 75266-2562
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(c)
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If to Adelphi or PNYX:
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7203 John Carpenter Freeway
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Dallas, Texas 75247
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With copy to:
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Roger Albright
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3301 Elm Street
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Dallas, Texas 75226-2562
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(d)
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If to RCI Stemmons,
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RCI Dining Services (Stemmons), Inc.
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RCI Inwood or
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RCI Dining Services (Inwood), Inc.
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RCI Dining:
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RCI Dining Services (Stemmons 2), Inc.
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Attn: Eric Langan, President
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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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RCI DINING SERVICES (STEMMONS), INC.
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/s/ Eric Langan
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By: Eric Langan, President
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RCI DINING SERVICES (INWOOD), INC.
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/s/ Eric Langan
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By: Eric Langan, President
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RCI DINING SERVICES (STEMMONS 2), INC.
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/s/ Eric Langan
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By: Eric Langan, President
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GREEN STAR, INC.
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/s/ Thanasi Mantas
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By: Thanasi Mantas, President
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FINE DINING CLUB, INC.
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/s/ Thanasi Mantas
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By: Thanasi Mantas, President
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BLUE STAR ENTERTAINMENT, INC.
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/s/ Thanasi Mantas
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By: Thanasi Mantas, President
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SELLER:
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By:
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/s/ Thanasi Mantas
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Thanasi Mantas, Individually
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ADELPHI GROUP LTD.
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By:
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/s/ Alexi Mantas
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Althkos, Inc., General Partner
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By:
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Alexi Mantas, President
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PNYX LIMITED PARTNERSHIP
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By:
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/s/ Alexi Mantas
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Althkos, Inc., General Partner
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By:
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Alexi Mantas, President
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1.
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PARTIES: Seller agrees to sell and convey to Buyer the Property described in Paragraph 2. Buyer agrees to buy the Property from Seller for the sales price stated in Paragraph 3. The parties to this contract are:
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Seller:
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Adelphi Group Ltd.
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Address:
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7203 John Carpenter Freeway Dallas, Texas 75247
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Phone:
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214-226-2525
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Fax:
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214-637-7014 or 1-888-727-5153
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E-mail:
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thanasim@gmail.com
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Buyer:
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RCI Holdings, Inc
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Address:
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10959 Cutten Road, Houston, Texas 77066
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Phone:
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281-397-6730
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Fax:
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281-397-6565
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E-mail:
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eric@ricks.com
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2.
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PROPERTY:
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B.
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Seller will sell and convey the Property together with:
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3.
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SALES PRICE: At or before closing, Buyer will pay the following sales price for the Property:
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A. Cash portion payable by Buyer at closing
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$ | 300,000 | ||
B. Sum of all financing described in Paragraph 4
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$ | 6,200,000 | ||
C. Sales price (sum of 3A and 3B)
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$ | 6,500,000 |
4.
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FINANCING: Buyer will finance the portion of the sales price under Paragraph 3B as follows:
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 1
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5.
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EARNEST MONEY:
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A.
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Not later than Three (3) days after the Effective Date, Buyer must wire $5,000.00 as earnest money with Capital Title, A Shaddock Company at 7001 Preston Road, Suite 120, Dallas, Texas 75205 with Vicki Hoodwin (214-219-7300-Office 214-219-7305-Fax) If Buyer fails to timely deposit the earnest money, Seller may terminate this contract or exercise any of Seller’s other remedies by providing written notice to Buyer before Buyer deposits the earnest money.
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B.
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Buyer may instruct the escrow agent to deposit the earnest money in an interest-bearing account at a federally insured financial institution and to credit any interest to Buyer.
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6.
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ALLOCATION OF SALES PRICE:
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7.
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TITLE POLICY, SURVEY, AND UCC SEARCH:
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(1)
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Seller, at Seller’s expense, will furnish Buyer an Owner’s Policy of Title Insurance (the title policy(ies)) issued by (title company), in the amount of the sales price, dated at or after closing, insuring Buyer against loss under the title policy(ies), subject only to:
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(2)
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The standard printed exception as to discrepancies, conflicts, or shortages in area and boundary lines, or any encroachments or protrusions, or any overlapping improvements:
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(3)
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Within ten (10) days after the Effective Date, Seller will furnish Buyer a commitment for title insurance (the commitment) including legible copies of recorded documents evidencing title exceptions. Seller authorizes the title company to deliver the commitment and related documents to Buyer at Buyer’s address.
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B.
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Survey: Within ten (10) days after the Effective Date:
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(1)
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Seller, at Seller’s expense, will furnish Buyer current surveys of the Property dated after the Effective Date. The surveys must be made in accordance with the: (i) ALTA/ACSM Land Title Survey standards, or (ii) Texas Society of Professional Surveyors’ standards for a Category 1A survey under the appropriate condition and be subject to the reasonable approval of the Buyer and the Title Company.
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 2
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C.
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UCC Search:
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(1)
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Within ten (10) days after the Effective Date, Seller, at Seller’s expense, will furnish Buyer a Uniform Commercial Code (UCC) search prepared by a reporting service and dated after the Effective Date. The search must identify documents that are on file with the Texas Secretary of State and the county where the Property is located that relate to all personal property on the Property and show, as debtor, Seller and all other owners of the personal property in the last 5 years.
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D.
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Buyer’s Objections to the Commitment, Survey, and UCC Search:
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(1)
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Within five (5) days after Buyer receives the commitment, copies of the documents evidencing the title exceptions, the survey, and the required UCC search, Buyer may object to matters disclosed in the items if: (a) the matters disclosed are a restriction upon the Property or constitute a defect or encumbrance to title to the real or personal property described in Paragraph 2 other than those permitted by this contract or liens that Seller will satisfy at closing or Buyer will assume at closing; or (b) the items show that any part of the Property lies in a special flood hazard area (an “A” or “V” zone as defined by FEMA).
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(2)
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Seller may, but is not obligated to, cure Buyer’s timely objections within ten (10) days after Seller receives the objections. The closing date may be extended as necessary, but not to exceed thirty (30) days, to provide such time to cure the objections if Seller elects to attempt to cure. If Seller fails to cure the objections by the time required, Buyer may terminate this contract by providing written notice to Seller within 5 days after the time by which Seller must cure the objections. If Buyer terminates, the earnest money, less any independent consideration under Paragraph 8B, will be refunded to Buyer.
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(3)
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Buyer’s failure to timely object or terminate under this Paragraph 7D is a waiver of Buyer’s right to object except that Buyer will not waive the requirements in Schedule C of the commitment which are intended to be removed at or before Closing.
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 3
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A.
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Present Condition: Buyer accepts the Property in its present "as is" condition.
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B.
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Feasibility Period: Buyer may terminate this contract for any reason within thirty (30) days after the Effective Date (feasibility period) by providing Seller written notice of termination.
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 4
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C.
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Inspections, Studies, or Assessments:
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(a)
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employ only trained and qualified inspectors and assessors;
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(b)
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notify Seller, in advance, of when the inspectors or assessors will be on the Property;
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(c)
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abide by any reasonable entry rules or requirements of Seller;
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(d)
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not interfere with existing operations or occupants of the Property; and
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D.
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Property Information: Solely to the extent that the following items of information currently exist and are within Seller’s current possession:
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 5
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E.
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Contracts Affecting Operations: Until closing, Seller: (1) will operate the Property in the same manner as on the Effective Date under reasonably prudent business standards; and (2) will not transfer or dispose of any part of the Property, any interest or right in the Property, or any of the personal property or other items described in Paragraph 2B or sold under this contract save and except for normal wear and tear of personal property in the usual course of business. Seller may not enter into, amend, or terminate any other contract that affects the operations of the Property or Tenant Lease or License without Buyer’s written approval.
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9.
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LEASES:
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A.
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Pursuant to Section 2.3(vi) of the Stock Purchase Agreement referred to in Paragraph 13.A, all Lease Agreements which exist by and between Green Star, Inc., Fine Dining, Inc., Blue Star Entertainment, Inc., Adelphi Group, Ltd. and/or PNYX, Ltd. shall be terminated effective as of the Closing Date. All rights of Lessor under any such Lease Agreement shall remain Seller’s sole property including the right of Seller to forgive any amounts owed under such Leases. Likewise, all liabilities and obligations to Lessees under such Leases shall remain Seller’s sole obligation. The Lease that exists between PNYX, Ltd., a Texas limited partnership and Valentin Monsivalv and Anselmo Sifuentes d/b/a Aladdin Car Wash (the “Car Wash Lease”) shall be assigned to Buyer at Closing. Except for the Car Wash Lease, all rights of Lessor under all such other lease agreements shall remain Seller’s sole property and likewise all liabilities under all such other lease agreements shall remain Seller’s sole obligation.
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B.
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Estoppel Certificates: Except for the Car Wash Lease, all Lease Agreements related to the Adelphi real property and/or the PNYX real property shall have been terminated at Closing. The only Estoppel Certificates that shall be required shall be from any third party Tenant (e.g., the Car Wash) which Buyer elects to retain.
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10.
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REPRESENTATIONS OF SELLER: See Exhibit “D” attached hereto.
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11.
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CLOSING:
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A.
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The date of the closing of the sale (closing date) will be on or before the later of:
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(1)
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þ January 2, 2012 or the date on which Buyer has obtained all required approvals and authorizations as set forth in Paragraph 13.C whichever occurs later.
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(2)
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þ 5 days after objections made under Paragraph 7D have been cured or waived and subject to and conditioned on the Special Provisions contained in Paragraph 13 below.
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B.
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If either party fails to close by the closing date, the non-defaulting party may exercise the remedies in Paragraph 16.
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C.
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At closing, Seller will execute and deliver to Baby, a o general þ special warranty deed. The deed must include a vendor’s lien if any part of the sales price is financed. The deed must convey good and indefeasible title to the Property and show no exceptions other than those permitted under Paragraph 7 or other provisions of this contract. Seller must convey the Property:
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 6
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(1)
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with no liens, assessments, or Uniform Commercial Code or other security interests against the Property which will not be satisfied out of the sales price, unless securing loans Buyer assumes; and
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(2)
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with no persons in possession of any part of the Property as lessees, tenants at sufferance, or trespassers except tenants under the written leases assigned to Buyer under this contract.
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D.
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At closing, Seller, at Seller’s expense, will also deliver to Buyer:
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(1)
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a Special Warranty Deed, free and clear of all liens and encumbrances except as herein provided;
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(2)
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tax statements showing no delinquent taxes on the Property;
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(3)
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a bill of sale with warranties of title conveying title, free and clear of all liens, to any personal property defined as part of the Property in Paragraph 2 or sold under this contract;
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(4)
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an assignment of all leases which have not been terminated, if any, to or on the Property with full warranties of title and free and clear of all liens and encumbrances;
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(5)
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to the extent that the following items are assignable, an assignment to Buyer of the following items as they relate to the Property or its operations;
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(a)
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licenses and permits;
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(b)
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maintenance, management, and other contracts; and
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(c)
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warranties and guaranties;
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(6)
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evidence that the person executing this contract is legally capable and authorized to bind Seller;
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(7)
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an affidavit acceptable to the escrow agent stating that Seller is not a foreign person or, if Seller is a foreign person, a written authorization for the escrow agent to: (i) withhold from Seller’s proceeds an amount sufficient to comply applicable tax law; and (ii) deliver the amount to the Internal Revenue Service together with appropriate tax forms;
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(8)
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any notices, statements, certificates, affidavits, releases, and other documents required by this contract, the commitment, or law necessary for the closing of the sale and the issuance of the title policy, all of which must be completed and executed by Seller as necessary; and
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(9)
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Estoppel Certificate(s) for any tenant for which the lease is not to be terminated.
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E.
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At closing, Buyer will:
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(1)
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pay the agreed portion of the sales price in good funds acceptable to the escrow agent;
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(2)
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deliver evidence that the person executing this contract and the closing documents is legally capable and authorized to bind Buyer;
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(3)
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execute all loan documents in favor of Seller including the Promissory Notes secured by a Vendor’s Lien and Deed of Trust liens and security interests in and to all the outstanding shares of Green Star, Inc., and Fine Dining Club, Inc. as well as the appropriate stock pledges and stock powers, Mortgagees Title Policy; and
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(4)
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execute and deliver any notices, statements, certificates, or other documents required by this contract or law necessary to close the sale, including Seller finance documents..
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F.
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Unless otherwise agreed by the parties before closing, the Closing Documents for which forms exist in the current edition of the Texas Real Estate Forms Manual (State Bar of Texas) will be prepared using those forms or the most recent documents contained in Pro-Doc. All Closing Documents will be prepared by Buyer’s attorney but shall be subject to the reasonable approval of Buyer, Seller and/or Buyer’s and Seller’s counsel.
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Initialed for Identification by Seller ______ and Buyer ______
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Page | 7
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12.
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POSSESSION: Seller will deliver possession of the Property to Buyer upon closing and funding of this sale in its present condition with any repairs Seller is obligated to complete under this contract, ordinary wear and tear excepted.
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13.
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SPECIAL PROVISIONS:
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A.
|
This Agreement is subject to the simultaneous closing of the following stock purchase transactions by the Buyer or affiliated companies of the Buyer:
|
|
B.
|
This Agreement is also subject to the simultaneous closing of the following real estate transaction by the Buyer or affiliated companies of the Buyer:
|
|
C.
|
This Contract is subject to the Buyer or its affiliates having obtained all required approvals and authorizations for:
|
|
(1)
|
revised RM Mixed Beverage License in the name of Fine Dining, Inc. and/or such other entity as Buyer may select reflecting the change in corporate control resulting from the sale of Fine Dining shares to RCI Dining for sale of alcoholic beverages on the Silver City Premises located at 7501 N. Stemmons Freeway;
|
|
(2)
|
a sexually oriented business license issued by the City of Dallas for Suite A, 7501 N. Stemmons Freeway to operate an adult cabaret featuring adult topless entertainment in the name of Green Star, Inc. d/b/a Silver City based upon a revised Application which reflects the sale of Green Star shares to RCI Stemmons;
|
|
(3)
|
a dance hall license issued by the City of Dallas for Suite A, 7501 N. Stemmons Freeway; and
|
|
(4)
|
if Buyers so elect a sexually oriented business license issued by the City of Dallas, Texas for 1449 Inwood Road to operate an adult cabaret featuring adult topless entertainment by Blue Star after a revised Application has been filed to reflect the sale of shares to RCI Inwood.
|
|
D.
|
All existing Lease Agreements by and between Adelphi, PNYX, Fine Dining, Green Star, and/or Blue Star shall be terminated at Closing. All rights of Lessor under any such Lease Agreement shall remain Seller’s sole property. Likewise, all liabilities under such Leases shall remain Seller’s sole property and likewise, all liabilities under such Leases shall remain Seller’s sole obligation.
|
14.
|
SALES EXPENSES:
|
|
A.
|
Seller’s Expenses: Seller will pay for the following at or before closing:
|
|
(1)
|
releases of existing liens, other than those liens assumed by Buyer, including prepayment penalties and recording fees;
|
|
(2)
|
release of Seller’s loan liability, if applicable;
|
|
(3)
|
tax statements or certificates;
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 8
|
|
(4)
|
preparation of the deed and any bill of sale;
|
|
(5)
|
one-half of any escrow fee;
|
|
(6)
|
costs to record any documents to cure title objections that Seller must cure; and
|
|
(7)
|
other expenses that Seller will pay under other provisions of this contract, including Owner Title Policy and Survey.
|
|
B.
|
Buyer’s Expenses: Buyer will pay for the following at or before closing:
|
|
(1)
|
preparation fees for loan documents;
|
|
(2)
|
recording fees for the deed and any deed of trust;
|
|
(3)
|
premiums for flood and hazard insurance as may be required by Buyer’s lender;
|
|
(4)
|
one-half of any escrow fee; and
|
|
(5)
|
other expenses that Buyer will pay under other provisions of this contract including Survey exceptions amendments and Mortgagees Title Policy.
|
15.
|
PRORATIONS:
|
|
A.
|
Prorations:
|
|
(1)
|
Taxes, rents, and insurance will be prorated through the closing date.
|
|
(2)
|
If the amount of ad valorem taxes for the year in which the sale closes is not available on the closing date, taxes will be prorated on the basis of taxes assessed in the previous year. If the taxes for the year in which the sale closes vary from the amount prorated at closing, the parties will adjust the prorations when the tax statements for the year in which the sale closes become available. This Paragraph 15A(2) survives closing.
|
|
(3)
|
Seller will transfer all reserve deposits held by the Seller or Seller’s lender for the payment of taxes, insurance premiums, and other charges to Buyer at closing without the payment of additional funds.
|
|
B.
|
Rollback Taxes: If Seller changes the use of the Property before closing or if a denial of a special valuation on the Property claimed by Seller results in the assessment of additional taxes, penalties, or interest (assessments) for periods before closing, the assessments will be the obligation of Seller. If this sale or Buyer’s use of the Property after closing results in additional assessments for periods before closing, the assessments will be the obligation of Buyer. This Paragraph 15B survives closing.
|
16.
|
DEFAULT:
|
|
A.
|
If Buyer fails to comply with this contract, Buyer is in default and Seller may:
|
|
(1)
|
terminate this contract and receive the earnest money, as liquidated damages and as Seller’s sole remedy; or
|
|
(2)
|
seek any other relief provided by law. Seller þ may o may not enforce specific performance.
|
|
B.
|
If, without fault, Seller is unable within the time allowed to deliver the survey or the commitment, Buyer may:
|
|
(1)
|
extend the time for performance up to fifteen (15) days and the closing will be extended as necessary.
|
|
(1)
|
terminate this contract and receive the earnest money, less any independent consideration under Paragraph 8B, as liquidated damages and as Buyer’s sole remedy; or
|
|
(2)
|
enforce specific performance, or seek such other relief as may be provided by law, or both.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 9
|
17.
|
CASUALTY LOSS AND CONDEMNATION:
|
|
A.
|
If any part of the Property is damaged or destroyed by fire or other casualty after the Effective Date and Seller elects not to restore the Property to its previous condition as soon as reasonably possible and not later than the closing date or If, without fault, Seller is unable to do so, Buyer may:
|
|
(1)
|
terminate this contract and the earnest money, less any independent consideration under Paragraph 8B, will be refunded to Buyer;
|
|
(2)
|
extend the time for performance up to forty five (45) days and closing will be extended as necessary; or
|
|
(3)
|
accept at closing: (i) the Property in its damaged condition; (ii) an assignment of any insurance proceeds Seller is entitled to receive along with the insurer’s consent to the assignment; and (iii) a credit to the sales price in the amount of any unpaid deductible under the policy for the loss.
|
|
B.
|
If before closing, condemnation proceedings are commenced against any part of the Property, Buyer may:
|
|
(1)
|
terminate this contract by providing written notice to Seller within 15 days after Buyer is advised of the condemnation proceedings and the earnest money, less any independent consideration under Paragraph 8B, will be refunded to Buyer; or
|
|
(2)
|
appear and defend the condemnation proceedings and any award will, at Buyer’s election, belong to: (a) Seller and the sales price will be reduced by the same amount; or (b) Buyer and the sales price will not be reduced.
|
18.
|
ATTORNEY’S FEES: If Buyer, Seller, or any escrow agent is a prevailing party in any legal proceeding brought under or with relation to this contract or this transaction, such party is entitled to recover from the non-prevailing parties all costs of such proceeding and reasonable attorney’s fees. This Paragraph 18 survives termination of this contract.
|
19.
|
ESCROW:
|
|
A.
|
At closing, the earnest money will be applied first to any cash down payment, then to Buyer’s closing costs, and any excess will be refunded to Buyer. If no closing occurs, escrow agent may require a written release of liability of escrow agent from all parties.
|
|
B.
|
If one party makes written demand for the earnest money, escrow agent will give notice of the demand by providing to the other party a copy of the demand. If escrow agent does not receive written objection to the demand from the other party within 15 days after the date escrow agent sent the demand to the other party, escrow agent may disburse the earnest money to the party making demand, reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors.
|
|
C.
|
Escrow agent will deduct any independent consideration under Paragraph 7B(1) before disbursing any earnest money to Buyer and will pay the independent consideration to Seller.
|
|
D.
|
If escrow agent complies with this Paragraph 19, each party hereby releases escrow agent from all claims related to the disbursal of the earnest money.
|
|
E.
|
Notices under this Paragraph 19 must be sent by certified mail, return receipt requested. Notices to escrow agent are effective upon receipt by escrow agent.
|
|
F.
|
Any party who wrongfully fails or refuses to sign a release acceptable to escrow agent within 7 days after receipt of the request will be liable to the other party for liquidated damages in an amount equal to the sum of: (i) three times the amount of the earnest money; (ii) the earnest money; (iii) reasonable attorney's fees; and (iv) all costs of suit.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 10
|
20.
|
1031 EXCHANGE:
|
21.
|
MATERIAL FACTS: To the best of Seller’s knowledge and belief: (Check only one box.)
|
22.
|
NOTICES: All notices between the parties under this contract must be in writing and are effective when hand-delivered, mailed by certified mail return receipt requested, or sent by facsimile transmission to the parties addresses or facsimile numbers stated in Paragraph 1. Any address for notice may be changed by written notice delivered as provided herein. Copies of each notice must be given by one of these methods to the attorney of the party to whom notice is given.
|
|
þ
|
A. Seller also consents to receive any notices by e-mail at Seller’s e-mail address stated in Paragraph 1.
|
|
þ
|
B. Buyer also consents to receive any notices by e-mail at Buyer’s e-mail address stated in Paragraph 1.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 11
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 12
|
24.
|
ADDITIONAL NOTICES: See Exhibit “E” attached hereto.
|
Seller:
|
Adelphi Group, Ltd.
|
Buyer:
|
RCI Holdings, Inc.
|
|||
By: Althkos, Inc., its General Partner
|
By: Eric Langan, President
|
|||||
By (signature):
|
/s/ Alexi Mantas
|
By (signature):
|
/s/ Eric Langan
|
|||
Printed Name: Alexi Mantas
|
Printed Name: Eric Langan
|
|||||
Title: President
|
Title: President
|
ATTORNEYS REQUEST
|
|||
Seller’s Attorney:
|
Roger Albright
|
Buyer’s Attorney: Robert Axelrod
|
|
Address:
|
3301 Elm Street, Dallas, TX 75226
|
Address:5300 Memorial Drive, Suite 700, Houston, Texas
|
|
Phone & Fax:214-939-9224 214-939-9229
|
Phone & Fax:713-861-1996 Ext. 2; 713-552-0202
|
||
E-mail: ralaw@rogeralbright.com
|
E-mail:rdaxel@asklawhou.com
|
||
Seller’s attorney requests copies of documents, notices, and other information:
|
Buyer’s attorney requests copies of documents, notices, and other information:
|
||
þ the title company sends to Buyer.
|
þ the title company sends to Seller.
|
||
þ Seller sends to Buyer.
|
þ Buyer sends to Seller.
|
Escrow Agent:
|
Address:
|
|||
By:
|
Phone & Fax:
|
Assigned file number (GF#):
|
E-mail:
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 13
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 14
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 15
|
|
(2)
|
The terms and condition of the Adelphi Note are as follows:
|
|
(1)
|
Payments of interest only for months one (1) through twelve (12) with payments commencing 30 days after Closing;
|
|
(2)
|
Thereafter, one hundred and nineteen (119) equal monthly installments of principal and interest, based upon a fifteen (15) year amortization schedule, with a balloon payment of all outstanding principal and interest due thereon on the one hundred and thirty second (132nd) month from the date of execution of the Adelphi Note, provided however, that
|
|
(a)
|
The Payee shall have a onetime right, effective the sixty-first (61st) month after the date of execution of the Adelphi Promissory Note to adjust the existing interest rate from five and one-half percent (5.5%) per annum to “prime” plus two and one-half percent (2.5%) based upon the “prime” rate established in the Wall Street Journal on the 61st month after the execution of the Adelphi Note, but in no event to exceed nine percent (9%) per annum;
|
|
(b)
|
At the end of the forty-eight (48th) month, the Payee shall have the right, with one hundred and eighty (180) days advance notice to the Maker to require a principal draw down payment of $500,000; and
|
|
(c)
|
Thirty-six (36) months after the payment of the initial $500,000 draw down of principal, if such event shall occur, the Payee shall have the additional right, with one hundred and eighty (180) days notice to the Maker to require a further principal draw down payment of $500,000.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 16
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 17
|
|
(a)
|
the creation of a subordinate lien;
|
|
(b)
|
a sale under a subordinate lien;
|
|
(c)
|
a deed under threat or order of condemnation;
|
|
(d)
|
a conveyance solely between the parties or by the Buyer to an affiliate of the Buyer; or
|
|
(e)
|
the passage of title by operation of law.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 18
|
A.
|
Seller's Representations to Buyer
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 19
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 20
|
A.
|
All Real Property Transaction Notices
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 21
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 22
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 23
|
1.
|
PARTIES: Seller agrees to sell and convey to Buyer the Property described in Paragraph 2. Buyer agrees to buy the Property from Seller for the sales price stated in Paragraph 3. The parties to this contract are:
|
Seller:
|
PNYX Limited Partnership, a Texas limited partnership
|
|
Address:
|
7203 John Carpenter Freeway Dallas, Texas 75247
|
|
Phone:
|
214-226-2525
|
|
Fax:
|
214-637-7014 or 1-888-727-5153
|
|
E-mail:
|
thanasim@gmail.com
|
|
Buyer:
|
RCI Holdings, Inc
|
|
Address:
|
10959 Cutten Road, Houston, Texas 77066
|
|
Phone:
|
281-397-6730
|
|
Fax:
|
281-397-6565
|
|
E-mail:
|
eric@ricks.com
|
2.
|
PROPERTY:
|
A.
|
“Property” means that real property situated inDallas County, Texas at the below addresses and this is legally described on the attached Exhibit “A” and “B” or as follows:
|
B.
|
Seller will sell and convey the Property together with:
|
3.
|
SALES PRICE: At or before closing, Buyer will pay the following sales price for the Property:
|
A. Cash portion payable by Buyer at closing
|
$ | 1,200,000 | ||
B. Sum of all financing described in Paragraph 4
|
$ | 2,300,000 | ||
C. Sales price (sum of 3A and 3B)
|
$ | 3,500,000 |
4.
|
FINANCING: Buyer will finance the portion of the sales price under Paragraph 3B as follows:
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 1
|
5.
|
EARNEST MONEY:
|
|
A.
|
Not later than Three (3) days after the Effective Date, Buyer must wire $5,000.00 as earnest money with Capital Title, A Shaddock Company at 7001 Preston Road, Suite 120, Dallas, Texas 75205 with Vicki Hoodwin (214-219-7300-Office 214-219-7305-Fax) If Buyer fails to timely deposit the earnest money, Seller may terminate this contract or exercise any of Seller’s other remedies by providing written notice to Buyer before Buyer deposits the earnest money.
|
|
B.
|
Buyer may instruct the escrow agent to deposit the earnest money in an interest-bearing account at a federally insured financial institution and to credit any interest to Buyer.
|
6.
|
ALLOCATION OF SALES PRICE:
|
7.
|
TITLE POLICY, SURVEY, AND UCC SEARCH:
|
|
(1)
|
Seller, at Seller’s expense, will furnish Buyer an Owner’s Policy of Title Insurance (the title policy(ies)) issued by (title company), in the amount of the sales price, dated at or after closing, insuring Buyer against loss under the title policy(ies), subject only to:
|
|
(a)
|
those title exceptions permitted by this contract or as may be approved by Buyer in writing; and
|
|
(b)
|
the standard printed exceptions contained in the promulgated form of title policy unless this contract provides otherwise.
|
|
(2)
|
The standard printed exception as to discrepancies, conflicts, or shortages in area and boundary lines, or any encroachments or protrusions, or any overlapping improvements:
|
¨
|
(a) will not be amended or deleted from the title policy.
|
|
þ
|
(b) will be amended to read “shortages in areas” at the expense of Buyer þ Seller.
|
|
(3)
|
Within ten (10) days after the Effective Date, Seller will furnish Buyer a commitment for title insurance (the commitment) including legible copies of recorded documents evidencing title exceptions. Seller authorizes the title company to deliver the commitment and related documents to Buyer at Buyer’s address.
|
|
B.
|
Survey: Within ten (10) days after the Effective Date:
|
|
(1)
|
Seller, at Seller’s expense, will furnish Buyer current surveys of the Property dated after the Effective Date. The surveys must be made in accordance with the: (i) ALTA/ACSM Land Title Survey standards, or (ii) Texas Society of Professional Surveyors’ standards for a Category 1A survey under the appropriate condition and be subject to the reasonable approval of the Buyer and the Title Company.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 2
|
|
C.
|
UCC Search:
|
|
(1)
|
Within ten (10) days after the Effective Date, Seller, at Seller’s expense, will furnish Buyer a Uniform Commercial Code (UCC) search prepared by a reporting service and dated after the Effective Date. The search must identify documents that are on file with the Texas Secretary of State and the county where the Property is located that relate to all personal property on the Property and show, as debtor, Seller and all other owners of the personal property in the last 5 years.
|
|
D.
|
Buyer’s Objections to the Commitment, Survey, and UCC Search:
|
|
(1)
|
Within five (5) days after Buyer receives the commitment, copies of the documents evidencing the title exceptions, the survey, and the required UCC search, Buyer may object to matters disclosed in the items if: (a) the matters disclosed are a restriction upon the Property or constitute a defect or encumbrance to title to the real or personal property described in Paragraph 2 other than those permitted by this contract or liens that Seller will satisfy at closing or Buyer will assume at closing; or (b) the items show that any part of the Property lies in a special flood hazard area (an “A” or “V” zone as defined by FEMA).
|
|
(2)
|
Seller may, but is not obligated to, cure Buyer’s timely objections within ten (10) days after Seller receives the objections. The closing date may be extended as necessary, but not to exceed thirty (30) days, to provide such time to cure the objections if Seller elects to attempt to cure. If Seller fails to cure the objections by the time required, Buyer may terminate this contract by providing written notice to Seller within 5 days after the time by which Seller must cure the objections. If Buyer terminates, the earnest money, less any independent consideration under Paragraph 8B, will be refunded to Buyer.
|
|
(3)
|
Buyer’s failure to timely object or terminate under this Paragraph 7D is a waiver of Buyer’s right to object except that Buyer will not waive the requirements in Schedule C of the commitment which are intended to be removed at or before Closing.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 3
|
|
8.
|
PROPERTY CONDITION:
|
|
A.
|
Present Condition: Buyer accepts the Property in its present "as is" condition.
|
|
B.
|
Feasibility Period: Buyer may terminate this contract for any reason within thirty (30) days after the Effective Date (feasibility period) by providing Seller written notice of termination.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 4
|
|
C.
|
Inspections, Studies, or Assessments:
|
|
(2)
|
Buyer must:
|
|
D.
|
Property Information: Solely to the extent that the following items of information currently exist and are within Seller’s current possession:
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 5
|
|
E.
|
Contracts Affecting Operations: Until closing, Seller: (1) will operate the Property in the same manner as on the Effective Date under reasonably prudent business standards; and (2) will not transfer or dispose of any part of the Property, any interest or right in the Property, or any of the personal property or other items described in Paragraph 2B or sold under this contract save and except for normal wear and tear of personal property in the usual course of business. Seller may not enter into, amend, or terminate any other contract that affects the operations of the Property or Tenant Lease or License without Buyer’s written approval.
|
9.
|
LEASES:
|
|
A.
|
Pursuant to Section 2.3(vi) of the Stock Purchase Agreement referred to in Paragraph 13.A, all Lease Agreements which exist by and between Green Star, Inc., Fine Dining, Inc., Blue Star Entertainment, Inc., Adelphi Group, Ltd. and/or PNYX, Ltd. shall be terminated effective as of the Closing Date. All rights of Lessor under any such Lease Agreement shall remain Seller’s sole property including the right of Seller to forgive any amounts owed under such Leases. Likewise, all liabilities and obligations to Lessees under such Leases shall remain Seller’s sole obligation. The Lease that exists between PNYX, Ltd., a Texas limited partnership and Valentin Monsivalv and Anselmo Sifuentes d/b/a Aladdin Car Wash (the “Car Wash Lease”) shall be assigned to Buyer at Closing. Except for the Car Wash Lease, all rights of Lessor under all such other lease agreements shall remain Seller’s sole property and likewise all liabilities under all such other lease agreements shall remain Seller’s sole obligation.
|
|
B.
|
Estoppel Certificates: Except for the Car Wash Lease, all Lease Agreements related to the Adelphi real property and/or the PNYX real property shall have been terminated at Closing. The only Estoppel Certificates that shall be required shall be from any third party Tenant (e.g., the Car Wash) which Buyer elects to retain.
|
10.
|
REPRESENTATIONS OF SELLER: See Exhibit “D” attached hereto.
|
11.
|
CLOSING:
|
|
A.
|
The date of the closing of the sale (closing date) will be on or before the later of:
|
|
(1)
|
þ January 2, 2012 or the date on which Buyer has obtained all required approvals and authorizations as set forth in Paragraph 13.C whichever occurs later.
|
|
(2)
|
þ 5 days after objections made under Paragraph 7D have been cured or waived and subject to and conditioned on the Special Provisions contained in Paragraph 13 below.
|
|
B.
|
If either party fails to close by the closing date, the non-defaulting party may exercise the remedies in Paragraph 16.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 6
|
|
C.
|
At closing, Seller will execute and deliver to Buyer, at Seller’s expense, a ¨ general þ special warranty deed. The deed must include a vendor’s lien if any part of the sales price is financed. The deed must convey good and indefeasible title to the Property and show no exceptions other than those permitted under Paragraph 7 or other provisions of this contract. Seller must convey the Property:
|
|
(1)
|
with no liens, assessments, or Uniform Commercial Code or other security interests against the Property which will not be satisfied out of the sales price, unless securing loans Buyer assumes; and
|
|
(2)
|
with no persons in possession of any part of the Property as lessees, tenants at sufferance, or trespassers except tenants under the written leases assigned to Buyer under this contract.
|
|
D.
|
At closing, Seller, at Seller’s expense, will also deliver to Buyer:
|
|
(1)
|
a Special Warranty Deed, free and clear of all liens and encumbrances except as herein provided;
|
|
(2)
|
tax statements showing no delinquent taxes on the Property;
|
|
(3)
|
a bill of sale with warranties of title conveying title, free and clear of all liens, to any personal property defined as part of the Property in Paragraph 2 or sold under this contract;
|
|
(4)
|
an assignment of all leases which have not been terminated, if any, to or on the Property with full warranties of title and free and clear of all liens and encumbrances;
|
|
(5)
|
to the extent that the following items are assignable, an assignment to Buyer of the following items as they relate to the Property or its operations;
|
|
(a)
|
licenses and permits;
|
|
(b)
|
maintenance, management, and other contracts; and
|
|
(c)
|
warranties and guaranties;
|
|
(6)
|
evidence that the person executing this contract is legally capable and authorized to bind Seller;
|
|
(7)
|
an affidavit acceptable to the escrow agent stating that Seller is not a foreign person or, if Seller is a foreign person, a written authorization for the escrow agent to: (i) withhold from Seller’s proceeds an amount sufficient to comply applicable tax law; and (ii) deliver the amount to the Internal Revenue Service together with appropriate tax forms;
|
|
(8)
|
any notices, statements, certificates, affidavits, releases, and other documents required by this contract, the commitment, or law necessary for the closing of the sale and the issuance of the title policy, all of which must be completed and executed by Seller as necessary;
|
|
(9)
|
Estoppel Certificate(s) for any tenant for which the lease is not to be terminated; and
|
(10)
|
All advance rentals and security deposits relating to the Car Wash Lease.
|
|
E.
|
At closing, Buyer will:
|
|
(1)
|
pay the agreed portion of the sales price in good funds acceptable to the escrow agent;
|
|
(2)
|
deliver evidence that the person executing this contract and the closing documents is legally capable and authorized to bind Buyer;
|
|
(3)
|
sign and send to the Car Wash Lease tenant in the Property a written statement that:
|
|
(a)
|
acknowledges Buyer has received and is responsible for the tenant’s security deposit; and
|
|
(b)
|
specifies the exact dollar amount of the security deposit;
|
|
(4)
|
sign an assignment and assumption of the Car Wash Lease;
|
|
(5)
|
execute all loan documents in favor of Seller including the Promissory Notes secured by a Vendor’s
|
|
Lien and Deed of Trust liens and security interests in and to all the outstanding shares of Blue Star Entertainment, Inc. as well as the appropriate stock pledges and stock powers, Mortgagees Title Policy; and
|
|
(6)
|
execute and deliver any notices, statements, certificates, or other documents required by this contract or law necessary to close the sale, including Seller finance documents..
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 7
|
|
F.
|
Unless otherwise agreed by the parties before closing, the Closing Documents for which forms exist in the current edition of the Texas Real Estate Forms Manual (State Bar of Texas) will be prepared using those forms or the most recent documents contained in Pro-Doc. All Closing Documents will be prepared by Buyer’s attorney but shall be subject to the reasonable approval of Buyer, Seller and/or Buyer’s and Seller’s counsel.
|
12.
|
POSSESSION: Seller will deliver possession of the Property to Buyer upon closing and funding of this sale in its present condition with any repairs Seller is obligated to complete under this contract, ordinary wear and tear excepted.
|
13.
|
SPECIAL PROVISIONS:
|
|
A.
|
This Agreement is subject to the simultaneous closing of the following stock purchase transactions by the Buyer or affiliated companies of the Buyer:
|
|
B.
|
This Agreement is also subject to the simultaneous closing of the following real estate transaction by the Buyer or affiliated companies of the Buyer:
|
|
C.
|
This Contract is subject to the Buyer or its affiliates having obtained all required approvals and authorizations for:
|
|
(1)
|
revised RM Mixed Beverage License in the name of Fine Dining, Inc. and/or such other entity as Buyer may select reflecting the change in corporate control resulting from the sale of Fine Dining shares to RCI Dining for sale of alcoholic beverages on the Silver City Premises located at 7501 N. Stemmons Freeway;
|
|
(2)
|
a sexually oriented business license issued by the City of Dallas for Suite A, 7501 N. Stemmons Freeway to operate an adult cabaret featuring adult topless entertainment in the name of Green Star, Inc. d/b/a Silver City based upon a revised Application which reflects the sale of Green Star shares to RCI Stemmons;
|
|
(3)
|
a dance hall license issued by the City of Dallas for Suite A, 7501 N. Stemmons Freeway; and
|
|
(4)
|
if Buyers so elect a sexually oriented business license issued by the City of Dallas, Texas for 1449 Inwood Road to operate an adult cabaret featuring adult topless entertainment by Blue Star after a revised Application has been filed to reflect the sale of shares to RCI Inwood.
|
|
D.
|
All existing Lease Agreements by and between Adelphi, PNYX, Fine Dining, Green Star, and/or Blue Star shall be terminated at Closing. All rights of Lessor under any such Lease Agreement shall remain Seller’s sole property. Likewise, all liabilities under such Leases shall remain Seller’s sole property and likewise, all liabilities under such Leases shall remain Seller’s sole obligation.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 8
|
14.
|
SALES EXPENSES:
|
|
A.
|
Seller’s Expenses: Seller will pay for the following at or before closing:
|
|
(1)
|
releases of existing liens, other than those liens assumed by Buyer, including prepayment penalties and recording fees;
|
|
(2)
|
release of Seller’s loan liability, if applicable;
|
|
(3)
|
tax statements or certificates;
|
|
(4)
|
preparation of the deed and any bill of sale;
|
|
(5)
|
one-half of any escrow fee;
|
|
(6)
|
costs to record any documents to cure title objections that Seller must cure; and
|
|
(7)
|
other expenses that Seller will pay under other provisions of this contract, including Owner Title Policy and Survey.
|
|
B.
|
Buyer’s Expenses: Buyer will pay for the following at or before closing:
|
|
(1)
|
preparation fees for loan documents;
|
|
(2)
|
recording fees for the deed and any deed of trust;
|
|
(3)
|
premiums for flood and hazard insurance as may be required by Buyer’s lender;
|
|
(4)
|
one-half of any escrow fee; and
|
|
(5)
|
other expenses that Buyer will pay under other provisions of this contract including Survey exceptions amendments and Mortgagees Title Policy.
|
15.
|
PRORATIONS:
|
|
A.
|
Prorations:
|
|
(1)
|
Taxes, rents, and insurance will be prorated through the closing date.
|
|
(2)
|
If the amount of ad valorem taxes for the year in which the sale closes is not available on the closing date, taxes will be prorated on the basis of taxes assessed in the previous year. If the taxes for the year in which the sale closes vary from the amount prorated at closing, the parties will adjust the prorations when the tax statements for the year in which the sale closes become available. This Paragraph 15A(2) survives closing.
|
|
(3)
|
Seller will transfer all reserve deposits held by the Seller or Seller’s lender for the payment of taxes, insurance premiums, and other charges to Buyer at closing without the payment of additional funds.
|
|
B.
|
Rollback Taxes: If Seller changes the use of the Property before closing or if a denial of a special valuation on the Property claimed by Seller results in the assessment of additional taxes, penalties, or interest (assessments) for periods before closing, the assessments will be the obligation of Seller. If this sale or Buyer’s use of the Property after closing results in additional assessments for periods before closing, the assessments will be the obligation of Buyer. This Paragraph 15B survives closing.
|
|
C.
|
Rent and Security Deposits: At closing, Seller will tender to Buyer at no additional cost to Buyer all security deposits and the following advance payments received by Seller for periods after closing relating to the Car Wash Lease: prepaid expenses, advance rental payments and other advance payments paid by tenants. Rents prorated to one party but received by the other part will be remitted by the recipient to the party to whom it was prorated within five (5) days after the rent is received. This Paragraph 15C survives closing.
|
16.
|
DEFAULT:
|
|
A.
|
If Buyer fails to comply with this contract, Buyer is in default and Seller may:
|
|
(1)
|
terminate this contract and receive the earnest money, as liquidated damages and as Seller’s sole remedy; or
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 9
|
|
(2)
|
seek any other relief provided by law. Seller þ may ¨ may not enforce specific performance.
|
|
(1)
|
extend the time for performance up to fifteen (15) days and the closing will be extended as necessary.
|
|
C.
|
If Seller fails to comply with this contract, Seller is in default and Buyer may:
|
|
(1)
|
terminate this contract and receive the earnest money, less any independent consideration under Paragraph 8B, as liquidated damages and as Buyer’s sole remedy; or
|
|
(2)
|
enforce specific performance, or seek such other relief as may be provided by law, or both.
|
17.
|
CASUALTY LOSS AND CONDEMNATION:
|
|
A.
|
If any part of the Property is damaged or destroyed by fire or other casualty after the Effective Date and Seller elects not to restore the Property to its previous condition as soon as reasonably possible and not later than the closing date or If, without fault, Seller is unable to do so, Buyer may:
|
|
(1)
|
terminate this contract and the earnest money, less any independent consideration under Paragraph 8B, will be refunded to Buyer;
|
|
(2)
|
extend the time for performance up to forty five (45) days and closing will be extended as necessary; or
|
|
(3)
|
accept at closing: (i) the Property in its damaged condition; (ii) an assignment of any insurance proceeds Seller is entitled to receive along with the insurer’s consent to the assignment; and (iii) a credit to the sales price in the amount of any unpaid deductible under the policy for the loss.
|
|
B.
|
If before closing, condemnation proceedings are commenced against any part of the Property, Buyer may:
|
|
(1)
|
terminate this contract by providing written notice to Seller within 15 days after Buyer is advised of the condemnation proceedings and the earnest money, less any independent consideration under Paragraph 8B, will be refunded to Buyer; or
|
|
(2)
|
appear and defend the condemnation proceedings and any award will, at Buyer’s election, belong to:
|
|
(a) Seller and the sales price will be reduced by the same amount; or (b) Buyer and the sales price will not be reduced.
|
18.
|
ATTORNEY’S FEES: If Buyer, Seller, or any escrow agent is a prevailing party in any legal proceeding brought under or with relation to this contract or this transaction, such party is entitled to recover from the non-prevailing parties all costs of such proceeding and reasonable attorney’s fees. This Paragraph 18 survives termination of this contract.
|
19.
|
ESCROW:
|
|
A.
|
At closing, the earnest money will be applied first to any cash down payment, then to Buyer’s closing costs, and any excess will be refunded to Buyer. If no closing occurs, escrow agent may require a written release of liability of escrow agent from all parties.
|
|
B.
|
If one party makes written demand for the earnest money, escrow agent will give notice of the demand by providing to the other party a copy of the demand. If escrow agent does not receive written objection to the demand from the other party within 15 days after the date escrow agent sent the demand to the other party, escrow agent may disburse the earnest money to the party making demand, reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 10
|
|
C.
|
Escrow agent will deduct any independent consideration under Paragraph 7B(1) before disbursing any earnest money to Buyer and will pay the independent consideration to Seller.
|
|
D.
|
If escrow agent complies with this Paragraph 19, each party hereby releases escrow agent from all claims related to the disbursal of the earnest money.
|
|
E.
|
Notices under this Paragraph 19 must be sent by certified mail, return receipt requested. Notices to escrow agent are effective upon receipt by escrow agent.
|
|
F.
|
Any party who wrongfully fails or refuses to sign a release acceptable to escrow agent within 7 days after receipt of the request will be liable to the other party for liquidated damages in an amount equal to the sum of: (i) three times the amount of the earnest money; (ii) the earnest money; (iii) reasonable attorney's fees; and (iv) all costs of suit.
|
20.
|
1031 EXCHANGE:
|
21.
|
MATERIAL FACTS: To the best of Seller’s knowledge and belief: (Check only one box.)
|
22.
|
NOTICES: All notices between the parties under this contract must be in writing and are effective when hand-delivered, mailed by certified mail return receipt requested, or sent by facsimile transmission to the parties addresses or facsimile numbers stated in Paragraph 1. Any address for notice may be changed by written notice delivered as provided herein. Copies of each notice must be given by one of these methods to the attorney of the party to whom notice is given.
|
þ
|
A.
|
Seller also consents to receive any notices by e-mail at Seller’s e-mail address stated in Paragraph 1.
|
þ
|
B.
|
Buyer also consents to receive any notices by e-mail at Buyer’s e-mail address stated in Paragraph 1.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 11
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 12
|
24.
|
ADDITIONAL NOTICES: See Exhibit “E” attached hereto.
|
Seller: PNYX Limited Partnership |
Buyer: RCI Holdings, Inc.
|
|
By:
|
Althkos, Inc., its General Partner
|
By: Eric Langan, President
|
By (signature):/s/ Alexi Mantas
|
By (signature):/s/ Eric Langan
|
|
Printed Name: Alexi Mantas
|
Printed Name: Eric Langan
|
|
Title: President
|
Title: President
|
|
ATTORNEYS REQUEST
|
||
Seller’s Attorney: Roger Albright
|
Buyer’s Attorney: Robert Axelrod
|
|
Address: 3301 Elm Street, Dallas, TX 75226
|
Address: 5300 Memorial Drive, Suite 700, Houston, Texas
|
|
Phone & Fax: 214-939-9224 214-939-9229
|
Phone & Fax: 713-861-1996 Ext. 2; 713-552-0202
|
|
E-mail: ralaw@rogeralbright.com
|
E-mail: rdaxel@asklawhou.com
|
|
Seller’s attorney requests copies of documents, notices, and other information:
þ the title company sends to Buyer.
þ Seller sends to Buyer.
|
Buyer’s attorney requests copies of documents, notices, and other information:
þ the title company sends to Seller.
þ Buyer sends to Seller.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 13
|
Escrow Agent:______________________________
|
Address:______________________________
|
By:______________________________________
|
Phone & Fax:__________________________
|
Assigned file number (GF#):__________________
|
E-mail:________________________________
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 14
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 15
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 16
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 17
|
|
(1)
|
Payments of interest only for months one (1) through twelve (12) with payments commencing 30 days after Closing;
|
|
(2)
|
Thereafter, one hundred and nineteen (119) equal monthly installments of principal and interest, based upon a fifteen (15) year amortization schedule, with a balloon payment of all outstanding principal and interest due thereon on the one hundred and thirty second (132nd) month from the date of execution of the PNYX Note, provided however, that
|
|
(a)
|
The Payee shall have a onetime right, effective the sixty-first (61st) month after the date of execution of the PNYX Promissory Note to adjust the existing interest rate from five and one-half percent (5.5%) per annum to “prime” plus two and one-half percent (2.5%) based upon the “prime” rate established in the Wall Street Journal on the 61st month after the execution of the Adelphi Note, but in no event to exceed nine percent (9%) per annum;
|
|
(b)
|
At the end of the forty-eight (48th) month, the Payee shall have the right, with one hundred and eighty (180) days advance notice to the Maker to require a principal draw down payment of $500,000; and
|
|
(c)
|
Thirty-six (36) months after the payment of the initial $500,000 draw down of principal, if such event shall occur, the Payee shall have the additional right, with one hundred and eighty (180) days notice to the Maker to require a further principal draw down payment of $500,000.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 18
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 19
|
|
(a)
|
the creation of a subordinate lien;
|
|
(b)
|
a sale under a subordinate lien;
|
|
(c)
|
a deed under threat or order of condemnation;
|
|
(d)
|
a conveyance solely between the parties or by the Buyer to an affiliate of the Buyer; or
|
|
(e)
|
the passage of title by operation of law.
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 20
|
|
A.
|
Seller's Representations to Buyer
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 21
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 22
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 23
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 24
|
Initialed for Identification by Seller ______ and Buyer ______
|
Page | 25
|
FOR IMMEDIATE RELEASE
|
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end