Exhibit 10.2
STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
this 29th day of March, 1999, by and among RICK'S CABARET INTERNATIONAL, INC., a
Texas corporation (the "Seller") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇").
WHEREAS, the Seller owns 200 shares of common stock, no par value (the
"Shares") of RCI Entertainment Louisiana, Inc., a Louisiana corporation ("RCI
Louisiana") which Shares represent all of the shares of common stock of RCI
Louisiana presently outstanding; and
WHEREAS, ▇▇▇▇▇▇▇ is the President and Chief Executive Officer of the Seller
and of RCI Louisiana; and
WHEREAS, the Seller desires to sell the Shares of RCI Louisiana to ▇▇▇▇▇▇▇
on the terms
and conditions set forth herein; and
WHEREAS, ▇▇▇▇▇▇▇ desires to purchase the Shares of RCI Louisiana from
Seller on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements and the respective representations and warranties herein contained,
and on the terms and subject to the conditions herein set forth, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
Section 1.1 Sale of the Shares. Subject to the terms and conditions
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set forth in this Agreement, at the Closing (as hereinafter defined) the Seller
hereby agrees to sell, transfer, convey and deliver to ▇▇▇▇▇▇▇ all of the Shares
of common stock of RCI Louisiana and shall deliver to ▇▇▇▇▇▇▇ stock certificates
representing the Shares, duly endorsed to ▇▇▇▇▇▇▇ or accompanied by duly
executed stock powers in form and substance satisfactory to ▇▇▇▇▇▇▇.
Section 1.2 Purchase Price. As consideration for the purchase of the
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Shares, ▇▇▇▇▇▇▇ shall pay to Seller total consideration of $2,200,000 being the
aggregate of the following components (the "Purchase Price"):
(a) An amount equal to $2,200,000, payable as follows:
(i) $1,057,327.39 in cash, cashier's check, or wire transfer; and
(ii) assignment of a $652,744.61 promissory note from ▇▇▇▇▇ ▇▇▇▇▇▇▇ issued
to ▇▇▇▇▇▇▇, (the "Secured Promissory Note") in the form attached hereto as
Exhibit 1.2(a)(ii); and
Stock Purchase Agreement - Page 1
Stock Purchase Agreement - Page 12
(iii) Execution and delivery by ▇▇▇▇▇▇▇ of a promissory note, bearing
interest at the rate of eight percent (8%) per annum and payable in forty-eight
(48) equal monthly installments (the "Additional Promissory Note"), in the form
attached hereto as Exhibit 1.2(a)(iii), in a principal amount equal to
$326,773.32.
(b) Release by ▇▇▇▇▇▇▇ of indebtedness of Seller in the amount of
$163,154.68.
Section 1.3 Allocation of Purchase Price. The $2,200,000 Purchase
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Price shall be allocated first to the net book value of RCI Louisiana as of
February 28, 1999, and the balance, if any, shall be allocated to the License
Agreement referred to in Section 2.3(i).
ARTICLE II
CLOSING
Section 2.1 The Closing. The closing of the transactions contemplated
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by this Agreement shall take place on March 29, 1999 (the "Closing Date"), at
the offices of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other time and place as agreed upon among the
parties hereto (the "Closing").
Section 2.2 Delivery and Execution. At the Closing: (a) the Seller
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shall deliver to ▇▇▇▇▇▇▇ certificates evidencing the Shares of RCI Louisiana,
duly endorsed to ▇▇▇▇▇▇▇ or accompanied by duly executed stock powers in form
and substance satisfactory to ▇▇▇▇▇▇▇ against delivery by ▇▇▇▇▇▇▇ to the Seller
of payment in an amount equal to the Purchase Price of the Shares being
purchased by ▇▇▇▇▇▇▇ in the manner set forth herein; (b) the Related
Transactions (as defined below) shall be consummated concurrently with the
Closing; and (c) the Conditions to Closing of the Seller and ▇▇▇▇▇▇▇ as set
forth in Article V and VI, respectively, shall have been satisfied or waived in
writing by the party authorized to waive such condition.
Section 2.3 Related Transactions. In addition to the purchase and sale
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of the Shares, the following actions shall take place contemporaneously at the
Closing (collectively, the "Related Transactions"):
(i) The Seller will enter into a License Agreement with ▇▇▇▇▇▇▇ which will
license the use of the name "Rick's" (plus appropriate trademarks) in the states
of Louisiana, Florida, Alabama and Mississippi, in the form attached hereto as
Exhibit 2.3(i);
(ii) ▇.▇. ▇▇▇▇▇▇, L.P. and ▇▇▇▇▇ ▇▇▇▇▇▇▇ will enter into a Stock Purchase
Agreement with ▇▇▇▇▇▇▇ to acquire all of his shares of common stock of the
Seller on the terms and conditions set forth in that Agreement;
(iii) The Seller and ▇▇▇▇▇▇▇ will enter into a Termination and
Non-Competition Agreement in the form attached hereto as Exhibit 2.3(iii) which
will, among other things, terminate all outstanding options of the Seller
presently held by ▇▇▇▇▇▇▇;
Stock Purchase Agreement - Page 2
(iv) The Seller and ▇▇▇▇▇ ▇▇▇▇▇▇ White ("White") will enter into a
Termination and Non-Competition Agreement in the form attached hereto as Exhibit
2.3(iv) which will, among other things, terminate all outstanding options of the
Seller presently held by White; and
(v) The Seller will enter into an Indemnification Agreement with ▇▇▇▇▇▇▇
which will indemnify ▇▇▇▇▇▇▇ against certain potential liabilities in the form
attached hereto as Exhibit 2.3(v).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller hereby represents and warrants to ▇▇▇▇▇▇▇ as follows:
Section 3.1. Organization, Good Standing and Qualification. Each of
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the Seller and RCI Louisiana (i) is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(ii) has all requisite power and authority to carry on its business, and (iii)
is duly qualified to transact business and is in good standing in all
jurisdictions where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to do so
would not have a material adverse effect to the Seller or RCI Louisiana,
respectively. The authorized capital stock of RCI Louisiana consists of 200
shares of common stock, no par value, of which 200 shares are validly issued and
outstanding. All of the issued and outstanding shares of common stock of RCI
Louisiana are owned by the Seller and are fully paid and non-assessable. There
are no existing warrants, options, rights of first refusal, conversion rights,
calls, commitments or other agreements of any character pursuant to which RCI
Louisiana is or may become obligated to issue any of its stock or securities.
Section 3.2 Ownership of the Shares. The Seller owns, beneficially and of
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record the Shares free and clear of any liens, claims, equities, charges,
options, rights of first refusal, or encumbrances. The Seller has the
unrestricted right and power to transfer, convey and deliver full ownership of
the Shares without the consent or agreement of any other person and without any
designation, declaration or filing with any governmental authority and upon the
transfer of the Shares to ▇▇▇▇▇▇▇ as contemplated herein, ▇▇▇▇▇▇▇ will receive
good and valid title thereto, free and clear of any liens, claims, equities,
charges, options, rights of first refusal, encumbrances or other restrictions
(except those imposed by applicable securities laws).
Stock Purchase Agreement - Page 3
Section 3.3 Authorization. The Seller is a corporation with full
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power, capacity, and authority to enter into this Agreement and perform the
obligations contemplated hereby by and for itself. All action on the part of
the Seller necessary for the authorization, execution, delivery and performance
of this Agreement by the Seller has been taken or will be taken prior to
Closing. This Agreement, when duly executed and delivered in accordance with its
terms, will constitute legal, valid, and binding obligations of the Seller
enforceable against the Seller in accordance with its terms, except as may be
limited by bankruptcy, insolvency, and other similar laws affecting creditors'
rights generally or by general equitable principles.
Section 3.4 No Breaches or Defaults. Except as set forth in Exhibit
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3.4, the execution, delivery, and performance of this Agreement by the Seller
does not: (i) conflict with, violate, or constitute a breach of or a default
under, (ii) result in the creation or imposition of any lien, claim, or
encumbrance of any kind upon the Shares, or (iii) require any authorization,
consent, approval, exemption, or other action by or filing with any third party
or Governmental Authority under any provision of: (a) any applicable Legal
Requirement, or (b) any credit or loan agreement, promissory note, or any other
agreement or instrument to which the Seller is a party or by which the Shares
may be bound or affected. For purposes of this Agreement, "Governmental
Authority" means any foreign governmental authority, the United States of
America, any state of the United States, and any political subdivision of any of
the foregoing, and any agency, department, commission, board, bureau, court, or
similar entity, having jurisdiction over the parties hereto or their respective
assets or properties. For purposes of this Agreement, "Legal Requirement" means
any law, statute, injunction, decree, order or judgment (or interpretation of
any of the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
Section 3.5 Consents. Except as set forth in Exhibit 3.5, no permit,
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consent, approval or authorization of, or designation, declaration or filing
with, any Governmental Authority or any other person or entity is required on
the part of the Seller in connection with the execution and delivery by the
Seller of this Agreement or the consummation and performance of the transactions
contemplated hereby other than as required under the federal securities laws.
Section 3.6 Pending Claims. There is no claim, suit, action or
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proceeding, whether judicial, administrative or otherwise, pending or, to the
best of the Seller's knowledge, threatened with respect to the transfer to
▇▇▇▇▇▇▇ of the Shares or the performance of this Agreement by the Seller.
Section 3.7 Disclosure. No representation or warranty of the Seller
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contained in this Agreement (including the exhibits hereto) contains any untrue
statement or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ hereby represents and warrants to the Seller as follows:
Stock Purchase Agreement - Page 4
Section 4.1 Ownership of the Secured Promissory Note. ▇▇▇▇▇▇▇ owns,
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beneficially and of record, the Secured Promissory Note free and clear of any
liens, claims, equities, charges, options, rights of first refusal, or
encumbrances. ▇▇▇▇▇▇▇ has the unrestricted right and power to transfer, convey
and deliver full ownership of the Secured Promissory Note without the consent or
agreement of any other person and without any designation, declaration or filing
with any governmental authority and upon the transfer of the Secured Promissory
Note to the Seller as contemplated herein, the Seller will receive good and
valid title thereto, free and clear of any liens, claims, equities, charges,
options, rights of first refusal, encumbrances or other restrictions.
Section 4.2 Authorization. ▇▇▇▇▇▇▇ is a person of full age of
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majority, with full power, capacity, and authority to enter into this Agreement
and perform the obligations contemplated hereby by and for himself and his
spouse. All action on the part of ▇▇▇▇▇▇▇ necessary for the authorization,
execution, delivery and performance of this Agreement by him has been taken and
will be taken prior to Closing. This Agreement, when duly executed and
delivered in accordance with its terms, will constitute legal, valid, and
binding obligations of ▇▇▇▇▇▇▇ enforceable against ▇▇▇▇▇▇▇ in accordance with
its terms, except as may be limited by bankruptcy, insolvency, and other similar
laws affecting creditors' rights generally or by general equitable principles.
Section 4.3 Purchase for Investment. ▇▇▇▇▇▇▇ is purchasing the Shares
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for his own account, for investment purposes only and not with view to any
public resale or other distribution thereof. ▇▇▇▇▇▇▇ acknowledges that he is an
Accredited Investor as that term is defined in Rule 501(a) of Regulation D of
the Securities Act of 1933, as amended. ▇▇▇▇▇▇▇ and his representatives have
received, or have had access to, and have had sufficient opportunity to review,
all books, records, financial information and other information which ▇▇▇▇▇▇▇
considers necessary or advisable to enable him to make a decision concerning his
purchase of the Shares, and that he possesses such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of his investment hereunder.
Section 4.4 No Breaches or Defaults. Except as set forth in Exhibit
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3.4, the execution, delivery, and performance of this Agreement by ▇▇▇▇▇▇▇ does
not: (i) conflict with, violate, or constitute a breach of or a default under,
(ii) result in the creation or imposition of any lien, claim, or encumbrance of
any kind upon the Secured Promissory Note, or (iii) require any authorization,
consent, approval, exemption, or other action by or filing with any third party
or Governmental Authority under any provision of: (a) any applicable Legal
Requirement, or (b) any credit or loan agreement, promissory note, or any other
agreement or instrument to which ▇▇▇▇▇▇▇ is a party or by which the Secured
Promissory Note may be bound or affected.
Section 4.5 Corporate Documents. ▇▇▇▇▇▇▇ has inspected and is fully
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satisfied with: (i) copies of the articles of incorporation and bylaws of RCI
Louisiana; (ii) the minute book of RCI Louisiana containing all records required
to be set forth of all proceedings, consents, actions, and meetings of the
shareholders and boards of directors of RCI Louisiana; (iii) the stock transfer
books of RCI Louisiana setting forth all transfers of any common stock; and (iv)
the financial statements and financial condition of RCI Louisiana.
Section 4.6 Liabilities of RCI Louisiana. ▇▇▇▇▇▇▇ hereby represents
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that RCI Louisiana has made adequate provision for all liabilities of RCI
Louisiana (real and contingent) and RCI Louisiana will discharge all of its
liabilities on a timely basis. To the extent that there is any claim made
against Seller arising out of any liabilities (real and contingent) of RCI
Louisiana, ▇▇▇▇▇▇▇ hereby agrees to indemnify Seller for all such liabilities
(real and contingent).
Stock Purchase Agreement - Page 5
Section 4.7 Consents. Except as set forth in Exhibit 3.5, no permit,
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consent, approval or authorization of, or designation, declaration or filing
with, any Governmental Authority or any other person or entity is required on
the part of ▇▇▇▇▇▇▇ in connection with the execution and delivery by ▇▇▇▇▇▇▇ of
this Agreement or the consummation and performance of the transactions
contemplated hereby other than as required under the federal securities laws.
Section 4.8 Pending Claims. There is no claim, suit, action or
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proceeding, whether judicial, administrative or otherwise, pending or, to the
best of ▇▇▇▇▇▇▇' knowledge, threatened with respect to the transfer to the
Seller of the Secured Promissory Note owned by ▇▇▇▇▇▇▇ or the performance of
this Agreement by ▇▇▇▇▇▇▇.
Section 4.9 No Additional Representations. ▇▇▇▇▇▇▇, in his capacity as
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President and Chief Executive Officer of the Seller and RCI Louisiana, has had
access to and knowledge of the Seller's and RCI Louisiana's books and records
and financial statements and condition and, except for the representations
contained in Sections 3.1 through 3.7 herein, ▇▇▇▇▇▇▇ is acquiring the Shares
solely as a result of such access to and knowledge of the books and records and
financial statements and condition or RCI Louisiana. ▇▇▇▇▇▇▇ further
acknowledges that the Seller has made no representations or warranties to
▇▇▇▇▇▇▇ as to the financial condition or otherwise of RCI Louisiana other than
as contained in Sections 3.1 through 3.7.
Section 4.10 Disclosure. No representation or warranty of ▇▇▇▇▇▇▇
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contained in this Agreement (including the exhibits hereto) contains any untrue
statement or omits to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE V
CONDITIONS TO CLOSING OF SELLER
Each obligation of Seller to be performed on the Closing Date shall be
subject to the satisfaction of each of the conditions stated in this Article V,
except to the extent that such satisfaction is waived by Seller in writing.
Section 5.1 Representations and Warranties Correct. The
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representations and warranties made by ▇▇▇▇▇▇▇ in Article IV hereof shall be
true and correct as of the Closing Date.
Section 5.2 Covenants. All covenants, agreements and conditions
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contained in this Agreement to be performed by ▇▇▇▇▇▇▇ on or prior to the
Closing Date shall have been performed or complied with in all respects.
Section 5.3 Consents. All of the consents described in Exhibit 3.5
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shall have been obtained.
Section 5.4 Payment of Purchase Price. ▇▇▇▇▇▇▇ shall have tendered the
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Purchase Price for the Shares to the Seller.
Stock Purchase Agreement - Page 6
Section 5.5 Related Transactions. The Related Transactions as set
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forth in Section 2.3 shall be consummated concurrently with the Closing.
Section 5.6 Fairness Opinion. The Seller shall have received a satisfactory
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fairness opinion from Chaffe & Associates, Inc. on the transactions contemplated
hereby.
Section 5.7 Corporate Resolutions. The Board of Directors of the
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Seller shall have approved and authorized the transactions contemplated herein
and in the Related Transactions to which it is a party.
Section 5.8 Transfer of Seller's Obligations to ▇▇▇▇▇▇▇. Prior to the
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Closing, the Seller shall transfer to RCI Louisiana and RCI Louisiana shall
assume all of the existing indebtedness of the Seller to ▇▇▇▇▇▇▇ in the amount
of $163,154.68, which represents all outstanding principal and accrued interest
on the prior loan from ▇▇▇▇▇▇▇ to the Seller. ▇▇▇▇▇▇▇ does hereby agree that
such transfer shall constitute full and final satisfaction of all liability of
Seller to ▇▇▇▇▇▇▇ with respect to such indebtedness.
Section 5.9 Release of Liability. The Seller shall have received a
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release of its liability from the Whitney National Bank in New Orleans,
Louisiana (the "Whitney Bank"), relating to all of the loans at Whitney Bank to
which the Seller is the Maker or Guarantor.
Section 5.10 Consent to Transaction. A consent to the transaction
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contemplated by this Agreement shall have been obtained from 315 Bourbon,
L.L.C., the landlord of the leased premises occupied by RCI Louisiana at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, pursuant to the lease agreement between
RCI Louisiana and 315 Bourbon, L.L.C.
Section 5.11 Resignation. ▇▇▇▇▇▇▇ shall provide to the Seller his
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written resignation as an officer of the Seller.
Section 5.12 Absence of Proceedings. No action, suit or proceeding by
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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 or any of
its subsidiaries or assets.
ARTICLE VI
CONDITIONS TO CLOSING OF ▇▇▇▇▇▇▇
Each obligation of ▇▇▇▇▇▇▇ to be performed on the Closing Date shall be
subject to the satisfaction of each of the conditions stated in this Article VI,
except to the extent that such satisfaction is waived by ▇▇▇▇▇▇▇ in writing.
Section 6.1 Representations and Warranties Correct. The
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representations and warranties made by the Seller in Article III hereof shall be
true and correct as of the Closing Date.
Stock Purchase Agreement - Page 7
Section 6.2 Covenants. All covenants, agreements and conditions
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contained in this Agreement to be performed by the Seller on or prior to the
Closing Date shall have been performed or complied with in all respects.
Section 6.3 Delivery of Certificates. The Seller shall have delivered
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certificates evidencing the Shares of RCI Louisiana, duly endorsed to ▇▇▇▇▇▇▇ or
accompanied by duly executed stock powers in form and substance satisfactory to
▇▇▇▇▇▇▇.
Section 6.4 Consents. All of the consents described in Exhibit 3.5 shall
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have been obtained.
Section 6.5 Related Transactions. The Related Transactions as set
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forth in Section 2.3 shall be consummated concurrently with the Closing.
Section 6.6 Fairness Opinion. The Seller shall have received a
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satisfactory fairness opinion from Chaffe & Associates, Inc. on the transactions
contemplated hereby.
Section 6.7 Release of Liability. The Seller shall have received a
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release of its liability from the Whitney Bank in New Orleans, Louisiana,
relating to all of the loans at Whitney Bank to which the Seller is the Maker or
Guarantor.
Section 6.8 Consent to Transaction. A consent to the transaction
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contemplated by this Agreement shall have been obtained from 315 Bourbon,
L.L.C., the landlord of the leased premises occupied by RCI Louisiana at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, pursuant to the lease agreement between
RCI Louisiana and 315 Bourbon, L.L.C.
Section 6.9 Absence of Proceedings. No action, suit or proceeding by
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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 ▇▇▇▇▇▇▇ or any of
his assets.
ARTICLE VII
INDEMNIFICATION
Stock Purchase Agreement - Page 8
Section 7.1 Indemnification from the Seller. The Seller hereby agrees
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to and shall indemnify, defend (with legal counsel reasonably acceptable to
▇▇▇▇▇▇▇), and hold ▇▇▇▇▇▇▇, his affiliates, assigns, agents and legal counsel (
the "▇▇▇▇▇▇▇ Group") harmless at all times after the date of this Agreement,
from and against any and all actions, suits, claims, demands, debts,
liabilities, obligations, losses, damages, costs, expenses, penalties or injury
(including reasonable attorneys' fees and costs of any suit related thereto)
suffered or incurred by any of the ▇▇▇▇▇▇▇ Group arising from (a) any
misrepresentation by, or breach of any covenant or warranty of the Seller
contained in this Agreement, or any exhibit, certificate, or other instrument
furnished or to be furnished by the Seller hereunder, (b) any nonfulfillment of
any agreement on the part of the Seller under this Agreement, or (c) from any
material misrepresentation in or material omission from, any certificate or
other instrument furnished or to be furnished to ▇▇▇▇▇▇▇ hereunder.
Section 7.2 Indemnification from ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ agrees to and shall
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indemnify, defend (with legal counsel reasonably acceptable to the Seller) and
hold the Seller, its officers, directors, employees, agents, legal counsel,
successors and assigns (the "Sellers Group") harmless at all times after the
date of the Agreement from and against any and all actions, suits, claims,
demands, debts, liabilities, obligations, losses, damages, costs, expenses,
penalities or injury (including reasonably attorneys' fees and costs of any suit
related thereto) suffered or incurred by any of the Sellers Group, arising from
(a) any misrepresentation by, or breach of any covenant or warranty of ▇▇▇▇▇▇▇
contained in this Agreement or any exhibit, certificate, or other agreement or
instrument furnished or to be furnished by Watters hereunder, including a
breach of Section 4.6; (b) any nonfulfillment of any agreement on the part of
▇▇▇▇▇▇▇ under this Agreement; (c) from any material misrepresentation in or
material omission from, any exhibit, certificate or other agreement or
instrument furnished or to be furnished to the Seller hereunder; or (d) any
suit, action, proceeding, claim or investigation against the Seller which arises
from or which is based upon or pertaining to ▇▇▇▇▇▇▇' conduct or the operation
or liabilities of the business of RCI Louisiana, either prior to or subsequent
to Closing.
Section 7.3 Defense of Claims. If any lawsuit or enforcement action is
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filed against any party entitled to the benefit of indemnity hereunder, written
notice thereof shall be given to the indemnifying party as promptly as
practicable (and in any event not less than fifteen (15) days prior to any
hearing date or other date by which action must be taken); provided that the
failure of any indemnified party to give timely notice shall not affect rights
to indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, the
indemnifying party shall be entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense; and such indemnified party shall cooperate in
all reasonable respects, at its cost, risk and expense, with the indemnifying
party and such attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost, participate in such investigation, trial
and defense of such lawsuit or action and any appeal arising therefrom. The
indemnifying party shall not, without the prior written consent of the
indemnified party, effect any settlement of any proceeding in respect of which
any indemnified party is a party and indemnity has been sought hereunder unless
such settlement of a claim, investigation, suit, or other proceeding only
involves a remedy for the payment of money by the indemnifying party and
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
Section 7.4 Default of Indemnification Obligation. If an entity or
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individual having an indemnification, defense and hold harmless obligation, as
above provided, shall fail to assume such obligation, then the party or entities
or both, as the case may be, to whom such indemnification, defense and hold
harmless obligation is due shall have the right, but not the obligation, to
assume
Stock Purchase Agreement - Page 9
and maintain such defense (including reasonable counsel fees and costs of any
suit related thereto) and to make any settlement or pay any judgment or verdict
as the individual or entities deem necessary or appropriate in such individual's
or entities' absolute sole discretion and to charge the cost of any such
settlement, payment, expense and costs, including reasonable attorneys' fees, to
the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendment; Waiver. Neither this Agreement nor any
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provision hereof may be amended, modified or supplemented unless in writing,
executed by all the parties hereto. Except as otherwise expressly provided
herein, no waiver with respect to this Agreement shall be enforceable unless in
writing and signed by the party against whom enforcement is sought. Except as
otherwise expressly provided herein, no failure to exercise, delay in
exercising, or single or partial exercise of any right, power or remedy by any
party, and no course of dealing between or among any of the parties, shall
constitute a waiver of, or shall preclude any other or further exercise of, any
right, power or remedy.
Section 8.2 Notices. Any notices or other communications required or
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permitted hereunder shall be sufficiently given if in writing and delivered in
Person, transmitted by facsimile transmission (fax) or sent by registered or
certified mail (return receipt requested) or recognized overnight delivery
service, postage pre-paid, addressed as follows, or to such other address has
such party may notify to the other parties in writing:
(a) if to the Seller:
Rick's Cabaret International, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Stock Purchase Agreement - Page 10
(b) if to ▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Chaffe, McCall, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
2300 Energy Centre
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
A notice or communication will be effective (i) if delivered in Person or by
overnight courier, on the business day it is delivered, (ii) if transmitted by
telecopier, on the business day of actual confirmed receipt by the addressee
thereof, and (iii) if sent by registered or certified mail, three (3) business
days after dispatch.
Section 8.3 Severability. Whenever possible, each provision of this
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Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 8.4 Successors and Assigns. Except as otherwise provided
------------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto. No party
hereto may assign its rights or delegate its obligations under this Agreement
without the prior written consent of the other parties hereto.
Section 8.5 Survival of Representations, Warranties and Covenants. All
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representations and warranties made in, pursuant to or in connection with this
Agreement shall survive the execution and delivery of this Agreement for a
period of two (2) years.
Section 8.6 Publicity. All voluntary public announcements concerning
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the transactions contemplated by this Agreement shall be mutually acceptable to
both Seller and ▇▇▇▇▇▇▇. With respect to any announcement that any of the
parties is required by law or stock exchange regulation to issue, such party
shall, to the extent possible under the circumstances, review the necessity for
and the contents of the announcement with the other parties before issuing the
announcement.
Stock Purchase Agreement - Page 11
Section 8.7 Entire Agreement. This Agreement and the other documents
-----------------
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof and supersede and cancel all prior representations, alleged warranties,
statements, negotiations, undertakings, letters, acceptances, understandings,
contracts and communications, whether verbal or written among the parties hereto
and thereto or their respective agents with respect to or in connection with the
subject matter hereof.
Section 8.8 Choice of Law. This Agreement shall be governed by, and
---------------
construed in accordance with, the laws of the State of Texas, without regard to
principles of conflict of laws. In any action between or among any of the
parties, whether arising out of this Agreement or otherwise, each of the parties
irrevocably consents to the exclusive jurisdiction and venue of the federal and
state courts located in ▇▇▇▇▇▇ County, Texas.
Section 8.9 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by different parties hereto in separate counterparts, with
the same effect as if all parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
Section 8.10 Costs and Expenses. The Seller shall pay all of the fees
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and expenses incurred by it and ▇▇▇▇▇▇▇ shall pay all of the fees and expenses
incurred by him in negotiating and preparing this Agreement (and all other
agreements executed in connection herewith or therewith) and in consummating the
transactions contemplated by this Agreement.
Section 8.11 Section Headings. The section and subsection headings in
----------------
this Agreement are used solely for convenience of reference, do not constitute a
part of this Agreement, and shall not affect its interpretation.
Section 8.12 No Third-Party Beneficiaries. Nothing in this Agreement
-----------------------------
will confer any third party beneficiary or other rights upon any person
(specifically including any employees of the Seller and its Subsidiaries) or
entity that is not a party to this Agreement.
[Remainder of Page Intentionally Left Blank]
Stock Purchase Agreement - Page 12
RICK'S CABARET INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Its: Vice-president
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Stock Purchase Agreement - Page 13