STOCK PURCHASE AGREEMENT
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This Stock Purchase Agreement (the "Agreement") is made and entered into
this 9th day of May, 2006, by and among Joint Ventures, Inc., a Texas
corporation (the "Company"), Xxxxxxx X. Xxxxx ("Xxxxx") and Xxxxxx X. Xxxx
("Xxxx") (Xxxxx and Xxxx are referred to collectively as "Sellers") and Rick's
Cabaret International, Inc., a Texas corporation ("Purchaser" or "Rick's").
WHEREAS, Xxxx owns 1,932 shares of common stock, $1.00 par value of the
Company, which shares represents 50% of all of the shares of capital stock of
the Company presently outstanding; and
WHEREAS, Xxxxx owns 1,932 shares of common stock, $1.00 par value of the
Company, which shares represent 50% of the shares of capital stock of the
Company presently outstanding; and
WHEREAS, the shares of common stock owned by Xxxx and by Xxxxx are
hereinafter collectively referred to as the "Shares"; and
WHEREAS, the Company owns and operates an adult entertainment cabaret known
as Dreamers Cabaret ("Dreamers") located at 000 Xxxxxxx Xxxx., Xxxxx Xxxxxxx,
Xxxxx 00000; and
WHEREAS, the Sellers desire to sell the Shares of the Company to Rick's on
the terms and conditions set forth herein; and
WHEREAS, Rick's desires to purchase the Shares of the Company from Sellers
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 Sellers
hereby agree to sell, transfer, convey and deliver to Rick's all of the Shares
of common stock of the Company, free and clear of all encumbrances, which
represents all of the outstanding capital stock of the Company, and shall
deliver to Rick's stock certificates representing the Shares, duly endorsed to
Rick's or accompanied by duly executed stock powers in form and substance
satisfactory to Rick's.
Section 1.2 Purchase Price. As consideration for the purchase of the
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Shares, Rick's shall pay to Sellers a total consideration of $840,000 (the
"Purchase Price") payable 50% to Xxxxx ($420,000) and 50% to Xxxx ($420,000) by
cashier's check, certified funds or wire transfer at the Closing of the
transaction.
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 or before April 30, 2006 (the "Closing
Date"), at the offices of Xxxxxxx, Xxxxx and Xxxxxxxxx, 0000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000, 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 Sellers
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shall deliver to Rick's certificates evidencing the Shares of the Company, free
and clear of any liens, claims, equities, charges, options, rights of first
refusal or encumbrances, duly endorsed to Rick's or accompanied by duly executed
stock powers in form and substance satisfactory to Rick's against delivery by
Rick's to the Sellers of payment in an amount equal to the Purchase Price of the
Shares being purchased by Rick's in the manner set forth herein; and (b) the
Related Transactions (as defined below) shall be consummated concurrently with
the Closing.
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 Sellers will enter into a five (5) year covenant not to
compete pursuant to the terms of which the Sellers will agree not to
compete, either directly of indirectly, with Joint Ventures, Dreamers
or Rick's by operating an establishment featuring live adult
entertainment within the corporate limits of the city of South
Houston, Texas; and
(ii) The Landlord for the existing lease agreement for the location
where Dreamers is located shall consent to the transaction
contemplated by this Agreement and shall enter into an option with
Rick's to extend the lease for an additional five (5) year period from
the end of the present term of the lease.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND THE COMPANY
The Sellers and the Company, jointly and severally, hereby represent and
warrant to Rick's as follows:
Section 3.1. Organization, Good Standing and Qualification. The
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Company (i) is an entity duly organized, validly existing and in good standing
under the laws of the state of Texas, (ii) has all requisite power and authority
to 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
Sellers or the Company.
At Closing, the authorized capital stock of the Company consists of 10,000
shares of common stock, $1.00 par value, of which 3,864 shares are validly
issued and outstanding. There are
Stock Purchase Agreement - Page 2
no shares of preferred stock authorized or issued and there is no other class of
capital stock authorized or issued by the Company. All of the issued and
outstanding shares of common stock of the Company are owned by the Sellers and
are fully paid and non-assessable. None of the shares issued are in violation
of any preemptive rights. The Company has no obligation to repurchase,
reacquire, or redeem any of its outstanding capital stock. There are no
outstanding securities convertible into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company, there are no
outstanding or authorized options, warrants, calls, subscriptions, rights,
commitments or any other agreements of any character obligating the Company to
issue any shares of its capital stock or any securities convertible into or
evidencing the right to purchase or subscribe for any shares of such stock, and
there are no agreements or understandings with respect to the voting, sale,
transfer or registration of any shares of capital stock of the Company.
Section 3.2 Subsidiaries. The Company has no subsidiaries.
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Section 3.3 Ownership of the Shares. The Sellers own, beneficially and
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of record, all of the Shares of the Company free and clear of any liens, claims,
equities, charges, options, rights of first refusal, or encumbrances. The
Sellers have 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. Upon the transfer of the Shares to Rick's as contemplated herein,
Rick's 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).
Section 3.4 Authorization. Sellers represent that each is a person of
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full age of majority, with full power, capacity, and authority to enter into
this Agreement and perform the obligations contemplated hereby by for
himself/herself and his/her spouse. All action on the part of Sellers necessary
for the authorization, execution, delivery and performance of this Agreement by
him/her 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 Sellers enforceable against him/her in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization and other similar laws of general application affecting
creditors' rights generally or by general equitable principles.
All corporate action on the part of the Company necessary for the
authorization, execution, delivery and performance of this Agreement by the
Company has been taken or will be taken prior to the Closing. The Company has
the requisite corporate power and authority to execute, deliver and perform this
Agreement. This Agreement, when duly executed and delivered in accordance with
its terms, will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, and other similar laws of
general application relating to or affecting creditors' rights and to general
equitable principles.
Section 3.5 No Breaches or Defaults. The execution, delivery, and
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performance of this Agreement by the Sellers and the Company 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
Stock Purchase Agreement - Page 3
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
Sellers or the Company 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 3.6 Consents. No permit, consent, approval or authorization
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of, or designation, declaration or filing with, any Governmental Authority or
any other person or entity is required on the part of the Sellers or the Company
in connection with the execution and delivery by the Sellers or the Company of
this Agreement or the consummation and performance of the transactions
contemplated hereby.
Section 3.7 Pending Claims. There is no claim, suit, arbitration,
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investigation, action or other proceeding, whether judicial, administrative or
otherwise, now pending or, to the best of the Sellers' or the Company's
knowledge, threatened before any court, arbitration, administrative or
regulatory body or any governmental agency which may result in any judgment,
order, award, decree, liability or other determination which will or could
reasonably be expected to have any effect upon Sellers or the Company or the
transfer by Sellers to Rick's of the Shares under this Agreement, nor is there
any basis known to Sellers for any such action. No litigation is pending, or,
to Sellers' or the Company's knowledge, threatened against Sellers or the
Company, or their assets or properties which seeks to restrain or enjoin the
execution and delivery of this Agreement or any of the documents referred to
herein or the consummation of any of the transactions contemplated thereby or
hereby. Neither Sellers nor the Company is subject to any judicial injunction
or mandate or any quasi-judicial or administrative order or restriction directed
to or against them or which would affect the Company or the Shares to be
transferred under this Agreement.
Section 3.8 Taxes. The Company has timely and accurately filed all
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federal, state, foreign and local tax returns and reports required to be filed
prior to such dates and have timely paid all taxes shown on such returns as owed
for the periods of such returns, including all sales taxes and withholding or
other payroll related taxes shown on such returns. The Company has made
adequate provision for the payment of all taxes accruable for all periods ending
on or before the Closing Date to any taxing authority and is not delinquent in
the payment of any tax or governmental charge of any nature. No assessments or
notices of deficiency or other communications have been received by the Company
with respect to any tax return which has not been paid, discharged or fully
reserved against and no amendments or applications for refund have been filed or
are planned with respect to any such return. There are no agreements between
the Company and any taxing authority, including, without limitation, the
Internal Revenue Service, waiving or extending any statute of limitations with
respect to any tax return.
Section 3.9 Financial Statements. Sellers and the Company have
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delivered to Rick's the unaudited balance sheets of the Company as of October,
2005, together with the related unaudited
Stock Purchase Agreement - Page 4
statements of income, for the periods then ended (collectively referred to as
the "Financial Statements"). Such Financial Statements, including the related
notes, are in accordance with the books and records of the Company and fairly
represent the financial position of the Company and the results of operations
and changes in financial position of the Company as of the dates and for the
periods indicated, in each case in conformity with generally accepted accounting
principles applied on a consistent basis. Except as, and to the extent
reflected or reserved against in the Financial Statements, the Company, as of
the date of the Financial Statements, has no material liability or obligation of
any nature, whether absolute, accrued, continued or otherwise, not fully
reflected or reserved against in the Financial Statements. As of the Closing
Date, Sellers and the Company represent there have been no adverse changes in
the financial condition or other operations, business, properties or assets of
the Company.
Section 3.10 Compliance with Laws. The Company is, and at all times
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prior to the date hereof have been, to the best of its knowledge, in compliance
with all statutes, orders, rules, ordinances and regulations applicable to it or
to the ownership of their assets or the operation of their businesses, except
for failures to be in compliance that would not have a material adverse effect
on the business, properties, condition (financial or otherwise) or prospects of
the Company. Sellers and the Company have no basis to expect, nor have they
received, any order or notice of any such violation or claim of violation of any
such statute, order, rule, ordinance or regulation by the Company. Exhibit 3.10
sets forth all licenses and permits held by the Company used in the operation of
their businesses, all of which are in good standing and in effect as of the
Closing Date. These licenses and permits represent all of the licenses and
permits required by the Company for the operation of their business.
Section 3.11 Title to Properties; Encumbrances. The Company has good
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and marketable title to all of its properties and assets, real and personal,
tangible and intangible, that are material to the condition (financial or
otherwise), business, operations or prospects of the Company, free and clear of
all mortgages, claims, liens, security interests, charges, leases, encumbrances
and other restrictions of any kind and nature, except (i) as disclosed in the
Financial Statements of the Company, (ii) statutory liens not yet delinquent,
and (iii) such liens consisting of zoning or planning restrictions,
imperfections of title, easements and encumbrances, if any, as do not materially
detract from the value or materially interfere with the present use of the
property or assets subject thereto or affected thereby. At the time of
Closing, the assets of the Company shall include, but shall not be limited to,
two parcels of real property located at 000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxx,
Xxxxx, which it owns free and clear of any mortgages, liens, claims, security
interests, charges, rights of first refusal or encumbrances and the assets set
forth in the Company's 2004 corporate income tax return, along with all
equipment and fixtures located on the premises at Dreamers as of the Closing
Date.
Section 3.12 No Liabilities. As of the Closing Date the Company does
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not and shall not have any obligation or liability (contingent or otherwise) to
any third party.
Section 3.13 Contracts and Leases. Except as disclosed in Exhibit
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3.13, the Company (i) has no leases of personal property relating to the assets
of the Company, whether as lessor or lessee; (ii) has no contractual or other
obligations relating to the assets of the Company, whether written or oral; and
(iii) has not given any power of attorney to any person or organization for any
purpose relating to the assets of the Company. The Company has an existing real
estate lease agreement
Stock Purchase Agreement - Page 5
covering the real property where Dreamers operates its adult entertainment
cabaret located at 000 Xxxxxxx Xxxx., Xxxxx Xxxxxxx, Xxxxx. The Company has
furnished Purchaser a copy of each and every contract, lease or other document
relating to the assets of the Company to which they are subject or are a party
or a beneficiary. To Sellers' and the Company's knowledge, such contracts,
leases or other documents are valid and in full force and effect according to
their terms and constitutes a legal, valid and binding obligation of the Company
and the other respective parties thereto and are enforceable in accordance with
their terms. Sellers and the Company have no knowledge of any default or breach
under such contracts, leases or other documents or of any pending or threatened
claims under any such contracts, leases or other documents. Neither the
execution of this Agreement, nor the consummation of all or any of the
transactions contemplated under this Agreement, will constitute a breach or
default under any such contracts, leases or other documents which would have a
material adverse effect on the financial condition of the Company for the
operation of its business after the Closing.
Section 3.14 Material Agreements; Action. There are no material
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contracts, agreements, commitments, understandings or proposed transactions,
whether written or oral, to which Sellers or the Company is a party or by which
they are bound.
Section 3.15 No Default. Neither Sellers nor the Company is in default
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under any term or condition of any instrument evidencing, creating or securing
any indebtedness of Sellers or the Company, and there has been no default in any
material obligation to be performed by Sellers or the Company under any other
contract, lease, agreement, commitment or undertaking to which it is a party or
by which it or its assets or properties are bound, nor have Sellers or the
Company waived any material right under any such contract, lease, agreement,
commitment or undertaking.
Section 3.16 Books and Records. The books of account, minute books,
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stock record books and other records of the Company, all of which have been made
available to Rick's, are accurate and complete and have been maintained in
accordance with sound business practices. Upon Closing, all books and records
will be in the possession of Sellers or the Company.
Section 3.17 Disclosure. No representation or warranty of the Sellers
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or the Company 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.
Section 3.18 Brokerage Commission. No broker or finder has acted on
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behalf of Sellers or the Company in connection with this Agreement or the
transactions contemplated hereby, and no person is entitled to any brokerage or
finder's fee or compensation in respect thereof based in any way on agreements,
arrangements or understandings made by or on behalf of Sellers or the Company.
Stock Purchase Agreement - Page 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF RICK'S
Rick's hereby represents and warrants to the Sellers and the Company as
follows:
Section 4.1 Authorization. Rick's is a corporation duly organized in
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the state of Texas and has full power, capacity, and authority to enter into
this Agreement and perform the obligations contemplated hereby. All action on
the part of Rick's necessary for the authorization, execution, delivery and
performance of this Agreement by it 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 Rick's
enforceable against Rick's 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 4.2 No Breaches or Defaults. The execution, delivery, and
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performance of this Agreement by Rick's does not: (i) conflict with, violate,
or constitute a breach of or a default under or (ii) 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 Rick's is a party.
Section 4.3 Consents. No permit, consent, approval or authorization
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of, or designation, declaration or filing with, any Governmental Authority or
any other person or entity is required on the part of Rick's in connection with
the execution and delivery by Rick's of this Agreement or the consummation and
performance of the transactions contemplated hereby other than as required under
the federal securities laws.
Section 4.4 Disclosure. No representation or warranty of Rick's
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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.
Section 4.5 Brokerage Commission. No broker or finder has acted on
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behalf of Rick's in connection with this Agreement or the transactions
contemplated hereby, and no person is entitled to any brokerage or finder's fee
or compensation in respect thereof based in any way on agreements, arrangements
or understandings made by or on behalf of Rick's.
Stock Purchase Agreement - Page 7
ARTICLE V
CONDITIONS TO CLOSING OF SELLER
AND THE COMPANY
Each obligation of Sellers and the Company 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 Sellers
and the Company in writing.
Section 5.1 Representations and Warranties Correct. The
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representations and warranties made by Rick's contained in this Agreement 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 Rick's on or prior to the Closing
Date shall have been performed or complied with in all respects.
Section 5.3 Delivery of Certificate. Rick's shall provide to Sellers
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and the Company Certificates, dated the Closing Date and signed by the President
of Rick's to the effect set forth in Section 5.1 and 5.2 for the purpose of
verifying the accuracy of such representations and warranties and the
performance and satisfaction of such covenants and conditions.
Section 5.4 Payment of Purchase Price. Rick's shall have tendered the
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Purchase Price for the Shares as referenced in Section 1.2 to the Sellers
concurrently with the Closing.
Section 5.5 Related Transactions. The Related Transaction set forth in
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Section 2.3 shall be consummated concurrently with the Closing.
Section 5.6 Corporate Resolutions. Rick's shall provide corporate
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resolutions of the Board of Directors of Rick's which approve the transactions
contemplated herein and authorize the execution, delivery and performance of
this Agreement and the documents referred to herein to which it is or is to be a
party dated as of the Closing Date.
Section 5.7 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 Rick's.
ARTICLE VI
CONDITIONS TO CLOSING OF
RICK'S
Each obligation of Rick's 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 Rick's in writing.
Section 6.1 Representations and Warranties Correct. The
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representations and warranties made by the Sellers and the Company hereof shall
be true and correct as of the Closing Date.
Stock Purchase Agreement - Page 8
Section 6.2 Covenants. All covenants, agreements and conditions
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contained in this Agreement to be performed by the Sellers and the Company on or
prior to the Closing Date shall have been performed or complied with in all
respects.
Section 6.3 Delivery of Certificate. Sellers and the Company shall
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provide to Rick's certificates, dated the Closing Date and signed by the Sellers
and by the President of the Company, respectively, to the effect set forth in
Section 6.1 and 6.2 for the purpose of verifying the accuracy of such
representations and warranties and the performance and satisfaction of such
covenants and conditions.
Section 6.4 Delivery of Shares. Sellers shall have delivered
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certificates evidencing the Shares of the Company, duly endorsed to Rick's or
accompanied by duly executed stock powers in form and substance satisfactory to
Rick's.
Section 6.5 Corporate Resolutions. The Company shall provide to Rick's
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a corporate resolution of the Board of Directors of the Company, which approves
the transactions contemplated herein and authorizes the execution, delivery and
performance of this Agreement and the documents referred to herein to which it
is or is to be a party dated as of the Closing Date.
Section 6.6 Consents; Transfer of Licenses. All necessary transfers of
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licenses and leases required for the continued operation of the business of the
Company shall have been obtained. The sexually oriented business license of
Dreamers shall be in full force and effect.
Section 6.7 Related Transactions. The Related Transaction set forth in
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Section 2.3 shall be consummated concurrently with the Closing.
Section 6.8 Resignation. The Officers and Directors of the Company
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shall have provided to Rick's their written resignations.
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 the Company or any of its
assets.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Indemnification from Sellers and the Company. Sellers and
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the Company, jointly and severally, hereby agree to and shall indemnify, defend
(with legal counsel reasonably acceptable to Rick's), and hold Rick's, its
officers, directors, employees, affiliates, assigns, agents and legal counsel
(collectively, the "Rick's 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 Rick's Group arising
Stock Purchase Agreement - Page 9
from: (a) any misrepresentation by, or breach of any covenant or warranty of the
Sellers or the Company contained in this Agreement, or any exhibit, certificate,
or other instrument furnished or to be furnished by Sellers or the Company
hereunder; (b) any nonfulfillment of any agreement on the part of Sellers or the
Company under this Agreement; (c) from any liability or obligation due to any
third party by the Company incurred at or prior to the Closing Date; or (d) any
suit, action, proceeding, claim or investigation against Rick's which arises
from or which is based upon or pertaining to Seller's or the Company's conduct
or the operation or liabilities of the business of the Company prior to the
Closing Date.
Section 7.2 Indemnification from Rick's. Rick's agrees to and shall
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indemnify, defend (with legal counsel reasonably acceptable to the Seller) and
hold each Seller, the Company, its officers, directors, employees, agents,
affiliates, legal counsel, successors and assigns (collectively, the "Seller's
Group") harmless at all times after the date of the Agreement from and against
any and all actions, suits, claims, demands, debts, liabilities, obligations,
losses, damages, costs, expenses, penalties or injury (including reasonably
attorney's fees and costs of any suit related thereto) suffered or incurred by
any of the Seller's Group, arising from (a) any misrepresentation by, or breach
of any covenant or warranty of Rick's contained in this Agreement or any
exhibit, certificate, or other agreement or instrument furnished or to be
furnished by Rick's hereunder; (b) any nonfulfillment of any agreement on the
part of Rick's under this Agreement; or (c) any suit, action, proceeding, claim
or investigation against Sellers which arises from or which is based upon or
pertaining to Rick's conduct or the operation of the business of the Company
subsequent to the Closing Date.
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
Stock Purchase Agreement - Page 10
obligation, then the party or entities or both, as the case may be, to whom such
indemnification, defense and hold harmless obligation is due shall have the
right, but not the obligation, to assume and maintain such defense (including
reasonable counsel fees and costs of any suit related thereto) and to make any
settlement or pay any judgment or verdict as the individual or entities deem
necessary or appropriate in such individuals or entities absolute sole
discretion and to charge the cost of any such settlement, payment, expense and
costs, including reasonable attorneys' fees, to the entity or individual that
had the obligation to provide such indemnification, defense and hold harmless
obligation and same shall constitute an additional obligation of the entity or
of the individual or both, as the case may be.
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 Sellers
or the Company: Joint Ventures, Inc.
X.X. Xxx 000
Xxxxx Xxxxxxx, Xxxxx 00000
(b) if to Rick's: Xxxx Xxxxxx, President/CEO
00000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
with a copy to: Xxxxxx X. Xxxxxxx
Xxxxxxx, Xxxxx & Xxxxxxxxx
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
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.
Stock Purchase Agreement - Page 11
Section 8.3 Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 8.4 Assignment; Successors and Assigns. Except as otherwise
----------- -----------------------
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and permitted assigns of the parties hereto. No
party hereto may assign its rights or delegate its obligations under this
Agreement without the prior written consent of the other parties hereto, which
consent will not be unreasonably withheld.
Section 8.5 Survival of Representations, Warranties and Covenants. All
-----------------------------------------------------
representations and warranties made in, pursuant to or in connection with this
Agreement shall survive the execution and delivery of this Agreement for the
maximum period allowed by law.
Section 8.6 Public Announcements. The parties hereto agree that prior
--------------------
to making any public announcement or statement with respect to the transactions
contemplated by this Agreement, the party desiring to make such public
announcement or statement shall consult with the other parties hereto and
exercise their best efforts to (i) agree upon the test of a joint public
announcement or statement to be made by all of such parties or (ii) obtain
approval of the other parties hereto to the text of a public announcement or
statement to be made solely by the party desiring to make such public
announcement; provided, however, that if any party hereto is required by law to
make such public announcement or statement, then such announcement or statement
may be made without the approval of the other parties.
Section 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 Xxxxxx County, Texas.
Section 8.9 Counterparts and Facsimiles. This Agreement may be
-----------------------------
executed in multiple counterparts and in any number of counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute and be deemed to be one and the same instrument and each of which
shall be considered and deemed an original for all purposes. This Agreement
shall be effective with the facsimile signature of any of the parties set forth
below and the facsimile signature
Stock Purchase Agreement - Page 12
shall be deemed as an original signature for all purposes and the Agreement
shall be deemed as an original for all purposes.
Section 8.10 Costs and Expenses. Each party shall pay their own
--------------------
respective fees, costs and disbursements incurred in connection with 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 Company) or any entity that is not
a party to this Agreement.
Section 8.13 Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
Section 8.14 Further Assurances. Each party covenants that at any
-------------------
time, and from time to time, after the Closing Date, it will execute such
additional instruments and take such actions as may be reasonably be requested
by the other parties to confirm or perfect or otherwise to carry out the intent
and purposes of this Agreement.
Section 8.15 Exhibits Not Attached. Any exhibits not attached hereto
----------------------
on the date of execution of this Agreement shall be deemed to be and shall
become a part of this Agreement as if executed on the date hereof upon each of
the parties initialing and dating each such exhibit, upon their respective
acceptance of its terms, conditions and/or form.
[[SIGNATURES ON FOLLOWING PAGE]]
Stock Purchase Agreement - Page 13
IN WITNESS WHEREOF, the undersigned have executed this Stock Purchase
Agreement to become effective as of the date first set forth above.
RICK'S CABARET INTERNATIONAL, INC.
/s/ Xxxx Xxxxxx
-----------------------------------
By: Xxxx Xxxxxx, President/CEO
Date: 5-9-06
-----------------------------
JOINT VENTURES, INC.
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
By: /s/ Xxxxxxx X. Xxxxx, President
--------------------
Date: 5-9-06
-----------------------------
XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx, Individually
Shareholder of Joint Ventures, Inc.
d/b/a Dreamers Cabaret
XXXXXX X. XXXX
/s/ Xxxxxx X. Xxxx
-----------------------------------
Xxxxxx X. Xxxx, Individually
Shareholder of Joint Ventures, Inc.
d/b/a Dreamers Cabaret
Stock Purchase Agreement - Page 14
EXHIBITS
