Common use of Sale of the Affiliated Clubs Clause in Contracts

Sale of the Affiliated Clubs. (i) The Parties intend that each affiliated club seller, as set forth in Exhibit 4.3(a) (an “Affiliated Club Seller”), will sell substantially all of its tangible and intangible assets and personal property (each, a “Club Transaction”) to a subsidiary of Rick’s (an “Affiliated Club Purchaser”) for the purchase price identified on Exhibit 4.3(a) pursuant to a definitive asset purchase agreement with provisions substantially similar to this Agreement (each, a “Definitive Agreement”). (ii) For clarity, (1) the Seller under this Agreement is an Affiliated Club Seller, (2) the transactions contemplated by this Agreement constitute a Club Transaction, and (3) this Agreement is a Definitive Agreement. (iii) The aggregate purchase price to be paid by Rick’s and the Affiliated Club Purchasers to the Affiliated Club Sellers from the closing of all the Club Transactions is $56,600,000, payable as follows: (1) $19,600,000 payable by cashier’s check, certified funds, or wire transfer; (2) $11,000,000 evidenced by ten-year secured promissory notes, bearing interest at 6% per annum, payable, in arrears, in one hundred twenty (120) equal monthly payments of principal and interest (each, a “10 Year Note”); (3) $8,000,000 evidenced by twenty-year secured promissory notes, bearing interest at 6% per annum, payable, in arrears, in two hundred forty (240) equal monthly payments of principal and interest (each, a “20 Year Note” and, together with the 10 Year Notes, the “Club Notes”); and (4) the issuance of 300,000 shares of restricted common stock, par value $0.01 of Rick’s, based on a per share price of $60.00 per share (the “Rick’s Shares”); with each type of consideration under subsections (1), (2), (3) and (4) above to be paid pro-rata based on the purchase price for each Club Transaction. (iv) Rick’s and the Affiliated Club Purchaser shall issue the Rick’s Shares and the Club Notes directly to HWL or Family Dog (as directed by the Seller Group), unless otherwise directly by the Seller Group. The Club Notes and the Rick’s Guaranty shall be in the form agreed to by the Parties. (v) The Related Transaction Parties desire to close all the Club Transactions on the same closing date, but recognize that such a coordinated closing is unlikely due to various requirements, including liquor licensing, that are not entirely within such parties’ control. Therefore, the Related Transaction Parties anticipate and intend to close at least six of the nine Club Transactions and the purchase of substantially all of the assets of OG1, LLC, an Unaffiliated Club as referred to and defined in Section 9.15 hereof, on the first such closing (the “First Closing”) and to close the remaining Club Transactions as soon as practicable thereafter.

Sale of the Affiliated Clubs. (i) The Parties intend that each affiliated club seller, as set forth in Exhibit 4.3(a) (an “Affiliated Club Seller”), will sell substantially all of its tangible and intangible assets and personal property or sell all of its capital stock (each, a “Club Transaction”) to a subsidiary of Rick’s (an “Affiliated Club Purchaser”) for the purchase price identified on Exhibit 4.3(a) pursuant to a definitive asset purchase agreement with provisions substantially similar to this Agreement (each, a “Definitive Agreement”). (ii) For clarity, (1) the Seller under this Agreement is an Affiliated Club Seller, (2) the transactions contemplated by this Agreement constitute a Club Transaction, and (3) this Agreement is a Definitive Agreement; however, the transaction contemplated by this Agreement is the only Club Transaction which is not structured as an asset purchase. (iii) The aggregate purchase price to be paid by Rick’s and the Affiliated Club Purchasers to the Affiliated Club Sellers from the closing of all the Club Transactions is $56,600,000, payable as follows: (1) $19,600,000 payable by cashier’s check, certified funds, or wire transfer; (2) $11,000,000 evidenced by ten-year secured promissory notes, bearing interest at 6% per annum, payable, in arrears, in one hundred twenty (120) equal monthly payments of principal and interest (each, a “10 Year Note”); (3) $8,000,000 evidenced by twenty-year secured promissory notes, bearing interest at 6% per annum, payable, in arrears, in two hundred forty (240) equal monthly payments of principal and interest (each, a “20 Year Note” and, together with the 10 Year Notes, the “Club Notes”); and (4) the issuance of 300,000 shares of restricted common stock, par value $0.01 of Rick’s, based on a per share price of $60.00 per share (the “Rick’s Shares”); with each type of consideration under subsections (1), (2), (3) and (4) above to be paid pro-rata based on the purchase price for each Club Transaction. (iv) Rick’s and the Affiliated Club Purchaser shall issue the Rick’s Shares and the Club Notes directly to HWL Seller or Family Dog (as directed by the Seller Group), unless otherwise directly by the Seller Group. The Club Notes and the Rick’s Guaranty shall be in the form agreed to by the PartiesPurchaser, Rick’s, HWL, and Family Dog. (v) The Related Transaction Parties desire to close all the Club Transactions on the same closing date, but recognize that such a coordinated closing is unlikely due to various requirements, including liquor licensing, that are not entirely within such parties’ control. Therefore, the Related Transaction Parties anticipate and intend to close at least six of the nine Club Transactions and the purchase of substantially all of the assets of OG1, LLC, an Unaffiliated Club as referred to and defined in Section 9.15 hereof, on the first such closing (the “First Closing”) and to close the remaining Club Transactions as soon as practicable thereafter.