INTELLECTUAL PROPERTY PURCHASE AGREEMENT
Exhibit 10.1
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
This Intellectual Property Purchase Agreement (the “Agreement”) is made and entered into on October 18, 2021 (the “Effective Date”), by and among Club Licensing, LLC, a Colorado limited liability company (the “Seller”), Xxxxxxx Xxxxxx (“Xxxxxx”), and Xxxx Xxxxxx (“Xxxxxx”, and together with Xxxxxx, the “Members”) (Seller and the Members are the “Seller Group”), Big Sky Hospitality Holdings, Inc., a Texas corporation (the “Purchaser” or “Big Sky”), and RCI Hospitality Holdings, Inc., a Texas corporation (“Rick’s,” and together with the Purchaser, the “Purchaser Group”). The Seller, the Members, the Purchaser, and Rick’s are sometimes hereinafter collectively referred to as the “Parties” or individually as a “Party.” A reference to the Seller Group or the Purchaser Group is a reference to each Party that comprises such group.
WHEREAS, the Seller owns certain intellectual property, including without limitation common law trademarks and trademarks registered with the United States Patent and Trademark Office (the “USPTO”), that is used in the operation of 11 adult entertainment establishments (each a “Business,” and collectively, the “Businesses,” the names and locations of which are set forth in Exhibit 4.3(a)); and
WHERAS, the Members own all of the issued and outstanding membership interests of the Seller; and
WHEREAS, on July 23, 2021, Rick’s, Big Sky, and certain subsidiaries of Big Sky entered into nine asset purchase agreements and two stock purchase agreements (collectively, the “Purchase Agreements”) with various parties to acquire the Businesses in either asset sales or stock sales, subject in each case to the provisions of the applicable Purchase Agreement; and
WHEREAS, in connection with the Purchase Agreements, the Purchaser hereunder desires to acquire, and Seller hereunder desires to sell to the Purchaser, all of Seller’s right, title and interest in and to such intellectual property.
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 ASSETS
(a) all right, title and interest in and to the use of the names of the Businesses or any derivative thereof, and any branding, design or logo associated with the names of the Businesses, throughout the world and all letter patents, trademarks, and copyrights, if any, that are or may be granted thereon or embodied therein, and any and all applications, registrations, renewals and extensions in connection therewith, together with the goodwill associated with and/or symbolized by the names of the Businesses and all common law rights in and to the names of the Businesses and the right to obtain future registrations thereof, and all rights, claims and privileges pertaining to the names of the Businesses, including, without limitation, all proceeds thereof and all causes of action, claims and demands and other rights for, or arising from the names of the Businesses, including, without limitation, the right to prosecute and maintain registrations and applications and the right to xxx and recover damages for past, present and future infringement in the United States and in any country or countries foreign to the United States;
(b) the exclusive right to exercise, exploit, assign, transfer, commercialize, develop, improve, and grant rights and licenses under and with respect to any of the items referenced in Section 1.1(a), and to xxx or otherwise enforce, and continue any suit or other enforcement, for any infringement occurring before or after the Closing Date as well as all statutory, contractual and other claims, demands, and causes of action for royalties, fees, or other income from, or infringement, misappropriation or violation of, any of the foregoing, and all of the proceeds from the foregoing that are accrued and unpaid as of, and/or accruing after, the Closing Date; and
(c) all universal resource locators (“URL’s”) and internet domain names owned by the Seller or its affiliates that are associated with or used to identify the Businesses, and all source code and associated files necessary to operate URL’s, including but not limited to images, graphics, content of the web pages, page layouts, scripts, forms and databases, and all goodwill associated with or used in connection with the operation or business of the URL’S and internet domain names; and
(d) all interests, rights, title, control, and login information to any social media accounts for the Businesses, including but not limited to Facebook, Instagram, Twitter, Snapchat, and Yelp (at Closing, the Seller will provide the Purchaser with all user names, passwords and any other relevant information needed to access these accounts).
All of the items set forth in this Section 1.1 are collectively referred to as the “Purchased Assets.” The Purchased Assets include without limitation the items listed in Schedule 5.23.
Article II
(a) the liabilities and obligations related or connected to the Purchased Assets arising or accruing after the Closing (other than liabilities arising out of a breach of this Agreement by the Seller Group), including (i) contractual liabilities arising from the Seller’s ownership of the Purchased Assets on or after the Closing Date (provided each such contractual liability is created or assumed by the Purchaser, subject to subsection (b) below), (ii) any liability resulting from the ownership of any of the Purchased Assets that occurs subsequent to the Closing, and (iii) any taxes for any portion of any taxable periods or portions of taxable periods ending subsequent to the Closing, related to the Purchased Assets, and any liens on the Purchased Assets relating to any such taxes accruing during the period subsequent to the Closing; and
(b) the liabilities arising on or after the Closing Date under the contracts set forth in Schedule 2.2, which are assumed in writing by Purchaser (the liabilities and obligation set forth in subsections (a) and (b) are collectively, the “Assumed Liabilities”).
(a) All transfer, documentary, sales, use, stamp, registration, and other such taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with the consummation of the transactions contemplated by this Agreement shall be borne 50% by the Seller Group and 50% by the Purchaser Group.
(b) After the Closing, each Party shall promptly notify the other Parties of any pending or threatened audit or assessment, suit, proposed adjustment, deficiency, dispute, or judicial proceeding or similar claim relating to taxes (a “Tax Claim”) with respect to Losses for which another Party could be liable under this Agreement. The Seller Group shall have a right to control, at its own cost, without affecting its or any other Person’s rights to indemnification under this Agreement, the defense of all Tax Claims relating to the Purchased Assets, or the transferring employees for any tax period ending on or before the Closing Date; provided, that the Seller Group shall not settle any Tax Claim relating to such period that will in any way affect the taxes in a tax period ending after the Closing Date without the prior written consent of Purchaser (which may not be unreasonably withheld, conditioned, or delayed). Any such liability will be an Excluded Liability.
Article III
THE PURCHASED ASSETS
Purchase Price. The Purchaser shall pay to the Seller for all of the Purchased Assets a total purchase price of $13,000,000 (the “Purchase Price”), which will be payable at the Closing as follows:
(a) $1,000,000 evidenced by a 20-year secured promissory note, bearing interest at 6% per annum, payable, in arrears, in two hundred forty (240) equal monthly payments of principal and interest (the “Note”); and
(b) the issuance and delivery of 200,000 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”).
Article IV
Section 4.2 Delivery of Documents at Closing. At the Closing:
(a) the Seller will deliver to the Purchaser:
(i) a xxxx of sale, in a form agreed to by the Parties, executed by the Seller;
(ii) a lock-up/leak-out agreement, in a form agreed to by the Parties (a “Lock-up/Leak-Out Agreement”), executed by the Seller;
(iii) an agreement terminating the Existing Licensing Agreements (defined in Section 5.16), in a form agreed to by the Parties, executed by the Seller and each Club Seller;
(iv) a short-form trademark assignment under which the trademark applications and/or registrations listed on Schedule 5.23 and all associated goodwill are assigned to Purchaser, which trademark assignment may be filed by Purchaser with the assignment division of the United States Patent and Trademark Office; and
(v) the various certificates, instruments, and documents (and will take the required actions) referred to in Article IX; and
(b) the Purchaser will deliver to the Seller:
(i) the Lock-up/Leak-Out Agreement executed by Rick’s;
(ii) the Purchase Price in accordance with Article III, including the Note and issuance and delivery of the Rick’s Shares;
(iii) the executed Guaranty Agreement of Rick’s of the Note (the “Rick’s Guaranty”);
(iv) the various certificates, instruments, and documents (and will take the required actions) referred to in Article VIII.
(a) Sale of the Clubs.
(i) The Parties intend that each club seller, as set forth in Exhibit 4.3(a) (an “Club Seller”), will sell substantially all of its tangible and intangible assets and personal property (each, a “Club Transaction”) to a subsidiary of Big Sky (a “Club Purchaser”) pursuant to a definitive asset purchase agreement, and for two of the Businesses, a subsidiary of Big Sky will purchase the stock or membership interests of such Club Seller through a purchase agreement (each, a “Definitive Agreement”).
(ii) The Related Transaction Parties desire to close all the Club Transactions along with the transactions contemplated by this Agreement 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 the purchase of substantially all of the assets of OG1, LLC, plus at least and additional six of the 11 Club Transactions and the purchase of the Purchased Assets hereunder on the first such closing (the “First Closing”) and to close the remaining Club Transactions as soon as practicable thereafter.
(b) Sale of the Real Property. At the First Closing, and pursuant to one or more definitive purchase and sale agreements, the appropriate parties shall close on the purchase and sale of six parcels of real property from certain real estate sellers to RCI Holdings, Inc., a Texas corporation wholly owned by Xxxxx, all as identified and for the aggregate purchase prices set forth on Exhibit 4.3(b). The real estate sellers will sell, transfer, convey and deliver by warranty deed (or such other legal conveyance document) the real estate properties set forth beside the real estate sellers name on Exhibit 4.3(b), which warranty deeds will convey good and marketable title to the real properties to RCI Holdings, Inc. free and clear of all liens, claims and encumbrances, subject only to liens created as part of the purchase of the real property (the “Real Estate Transaction”).
Article V
REPRESENTATIONS AND WARRANTIES
Except as set forth in the Disclosure Schedules accompanying this Agreement (each a “Schedule” and collectively the “Schedules”), the Seller Group, jointly and severally, hereby represents and warrants to the Purchaser Group the following as of the Effective Date:
Section 5.3 Subsidiaries. The Seller does not own any subsidiaries.
(a) All action on the part of the Seller necessary for the authorization, execution, delivery and performance of this Agreement and all documents related thereto to consummate the transactions contemplated herein have been taken by the Seller Group or will be taken prior to the Closing Date. The Seller has the requisite power and authority to execute and deliver this Agreement and to perform their obligations hereunder and to consummate the transactions contemplated hereby. This Agreement, when duly executed and delivered in accordance with its terms, will constitute a valid and binding obligation of the Seller, enforceable against the Seller 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.
(b) Xxxx Xxxxxx is a person of full age of majority, with full power, capacity, and authority to enter into this Agreement and perform the obligations contemplated hereby by and for himself. All action on the part of Xx. Xxxxxx necessary for the authorization, execution, delivery and performance of this Agreement by Xx. Xxxxxx has been taken, or will be taken by Xx. Xxxxxx prior to the Closing Date. This Agreement, when duly executed and delivered in accordance with its terms, will constitute legal, valid and binding obligations of Xx. Xxxxxx enforceable against him in accordance with the 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.
(c) Xxxxxxx Xxxxxx is a person of full age of majority, with full power, capacity, and authority to enter into this Agreement and perform the obligations contemplated hereby by and for himself. All action on the part of Xx. Xxxxxx necessary for the authorization, execution, delivery and performance of this Agreement by Xx. Xxxxxx has been taken, or will be taken by Xx. Xxxxxx prior to the Closing Date. This Agreement, when duly executed and delivered in accordance with its terms, will constitute legal, valid and binding obligations of Xx. Xxxxxx enforceable against him in accordance with the 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.
Section 5.6 Acquisition of Stock for Investment.
(a) The Seller Group understands that the issuance of the Rick’s Shares (as referenced in Article III herein) will not have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and accordingly, are restricted securities, and the Seller Group’s present intention is to receive and hold the Rick’s Shares for investment only and not with a view to the distribution or resale thereof.
(b) Additionally, the Seller Group understands that any sale of any of the Rick’s Shares issued under current law, will require either (i) the registration of the Rick’s Shares under the Securities Act and applicable state securities laws; (ii) compliance with Rule 144 under the Securities Act; or (iii) the availability of an exemption from the registration requirements of the Securities Act and applicable state securities laws.
(c) The Seller Group acknowledges and represents that they are Accredited Investors as that term is defined in Rule 5.01(a) of Regulation D promulgated under the Securities Act.
(d) To assist in implementing the above provisions, the Seller Group hereby consents to the placement of the legend set forth below, or a substantially similar legend, on all certificates representing ownership of the Rick’s Shares acquired hereby until the Rick’s Shares have been sold, transferred, or otherwise disposed of, pursuant to the requirements hereof. The legend shall read substantially as follows:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACTS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT, ARE RESTRICTED AS TO TRANSFERABILITY, AND MAY NOT BE SOLD, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION AND QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
(e) The Seller Group understands and agrees that Rick’s may notify its transfer agent of the Lock-Up/Leak-Out Agreements and the limitation on the number of Rick’s Shares that may be sold in any given month in accordance with the terms and conditions of the Lock-Up/Leak-Out Agreement.
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Section 5.19 [Intentionally omitted].
Section 5.20 [Intentionally omitted].
Section 5.23 Intellectual Property.
(a) The Seller is the sole and exclusive owner of all right, title, and interest in and to the Purchased Assets free and clear of all liens, security interests, charges, encumbrances, equities, or other adverse claims (including without limitation undisclosed distribution rights). The Seller Group has not received notice of, and there is no basis for, any claim, charge, action, suit, or preceding against the Seller involving: (i) unfair competition with respect to any intangible property right of any third person or entity; (ii) infringement by the Purchased Assets of any patent, trademark, trade name, copyright, trade secret, or other intellectual property right of any third party; (iii) the improper use of the trade secrets, formulae, or intellectual property of others; or (iv) a claim that any trademark, trade name, service xxxx, or logo in use or proposed for use by the Seller is likely to be confused with a trademark, trade name, service xxxx, or logo of a third party.
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(b) There are no outstanding, nor are there any threatened, disputes or other disagreements with respect to (i) ownership by the Seller of all of its Purchased Assets, (ii) any licenses or similar agreements or arrangements which limit the Seller’s right to exploit the Purchased Assets, or (iii) infringement by a third party of any of the Purchased Assets. The Seller Group has taken all steps reasonably necessary to protect its right, title, and interest in and to its Purchased Assets and the continued use of the Purchased Assets. Without limiting the generality of the foregoing, all designs, drawings, specifications, source code, object code, documentation, flow charts and diagrams incorporating, embodying, or reflecting any of the Purchased Assets at any state of its development were written, developed, and created solely and exclusively by employees of the Seller without the assistance of any third party, or were created by third parties who assigned ownership of their rights to the Seller in valid and enforceable agreements.
(c) The Seller has at all times used commercially reasonable efforts to protect its trade secrets and has not disclosed or otherwise dealt with such items in such a manner as to cause the loss of such trade secrets by release thereof into the public domain. The Seller Group has at all times used commercially reasonable efforts to protect the confidentiality of all of its other confidential and proprietary information and that of third parties which is or has been in the Seller’s possession. Each person currently or formerly employed by the Seller (including independent contractors, if any) that has or had access to confidential information and trade secrets of the Seller has executed a confidentiality and non-disclosure agreement. Such confidentiality and non-disclosure agreements constitute valid and binding obligations of the Seller and such person, enforceable in accordance with their respective terms, except as enforceability may be limited by general equitable principles or the exercise of judicial discretion in accordance with such principles.
(d) Federally Registered Trademarks. The trademarks listed on Schedule 5.23 are part of the Purchased Assets, and comprise an accurate and complete list of all trademarks for which Seller has applied for federal registration or obtained federal registration with the USPTO.
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Article VI
REPRESENTATIONS AND WARRANTIES
The Purchaser Group hereby jointly and severally represents and warrants to the Seller Group as follows:
Section 6.1 Organization, Good Standing and Qualification of the Purchaser Group.
(a) The Purchaser (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 Purchaser.
(b) Rick’s (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 Rick’s.
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Article VII
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Article VIII
the Seller Group
Each obligation of the Seller Group to be performed on the Closing Date will be subject to the satisfaction of each of the conditions stated in this Article VIII, except to the extent that such satisfaction is waived by the Seller Group in writing:
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Section 8.6 Good Standing Certificate. The Seller Group shall have received a Certificate of Good Standing issued by the state of Texas for the Purchaser and for Rick’s.
Section 8.8 [Intentionally omitted].
Article IX
CONDITIONS TO CLOSING OF
the PURCHASER Group
Each obligation of the Purchaser Group to be performed on the Closing Date will be subject to the satisfaction of each of the conditions stated in this Article IX, except to the extent that such satisfaction is waived by the Purchaser Group in writing.
Section 9.1 Representations and Warranties Correct. The representations and warranties made by the Seller Group will be true and correct in all material respects as of the Closing Date.
Section 9.2 Covenants. All covenants, agreements and conditions contained in this Agreement to be performed by the Seller Group on or prior to the Closing Date will have been performed or complied with in all material respects, including the delivery at Closing of all the documents, instruments, and agreements described in Section 4.2.
Section 9.3 Delivery of Certificate. The Seller Group will provide to the Purchaser Group certificates, dated the Closing Date and signed by the appropriate officers of each member of the Seller Group, to the effect set forth in Sections 9.1 and 9.2 for the purpose of verifying the accuracy of such representations and warranties and/or the performance and satisfaction of such covenants and conditions.
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Section 9.4 Delivery of Purchase Assets. The Seller will have delivered all instruments of assignment and bills of sale necessary to transfer to Purchaser good and marketable title to the Purchased Assets, free and clear of all Encumbrances (except Permitted Encumbrances) in form and substance satisfactory to the Purchaser.
Section 9.5 Corporate Resolutions. Each member of the Seller Group will provide to the Purchaser Group resolutions of its board of directors, managers, shareholders, members and general partner, as the case may be, of each of the respective Parties which approve all of 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 on or before of the Closing Date.
Section 9.6 Good Standing Certificate. Purchaser shall have received a Certificate of Good Standing issued by the state of Colorado for the Seller.
Section 9.7 Consents. All third party consents or other arrangements or actions required by Governmental Authorities in order to permit the transfer of the Purchased Assets by the Purchaser shall have been received.
Section 9.8 [Intentionally omitted].
Section 9.9 Related Transactions. On or prior to the Closing Date, the relevant parties shall close the First Closing, including closing the acquisition of OG1, LLC plus at least six of the other 11 Club Transactions, and the Real Estate Transaction.
Section 9.10 Satisfactory Diligence. Within the Due Diligence Period, Purchaser will have concluded its due diligence investigation of the Seller and the Purchased Assets and all other matters related to the foregoing and will be satisfied with the results thereof.
Section 9.11 Financial Records. The financial records of the Seller and Club Sellers will be maintained and exist consistent with past practices and able to be audited by Rick’s independent auditors.
Section 9.12 Bank Financing. RCI Holdings, Inc. or its Affiliates shall have obtained bank financing in an amount of not less than $10,800,000 for the acquisition of the Real Properties as contemplated pursuant to Section 4.3(b) of the Related Transactions.
Section 9.13 Adjusted EBITDA. The 2019 adjusted EBITDA for the Club Sellers shall total an aggregate of not less than $10,700,000.
Section 9.14 Absence of Proceedings. No action, suit, or proceeding by or before any court or any governmental or regulatory authority will have been commenced and no investigation by any governmental or regulatory authority will have been commenced seeking to restrain, prevent or challenge the transactions contemplated hereby or seeking judgments against any member of the Seller Group or any of the Seller’s assets.
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Article X
[Intentionally omitted]
Article XI
Section 11.3 Matters Involving Third Parties.
(a) If any third party notifies any Party (an “Indemnified Party”) with respect to any matter (a “Third-Party Claim”) that may give rise to a claim for indemnification against any other Party (the “Indemnifying Party”) under this Article XI, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is thereby prejudiced.
(b) Any Indemnifying Party will have the right to assume the defense of the Third-Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party at any time within 15 days after the Indemnified Party has given notice of the Third-Party Claim; provided, however, that the Indemnifying Party must conduct the defense of the Third-Party Claim actively and diligently thereafter in order to preserve its rights in this regard; and provided further that the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third-Party Claim.
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(c) So long as the Indemnifying Party has assumed and is conducting the defense of the Third-Party Claim in accordance with Section 11.3(b) above, (i) the Indemnifying Party will not consent to the entry of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld) unless the judgment or proposed settlement involves only the payment of money damages by one or more of the Indemnifying Parties and does not impose an injunction or other equitable relief upon the Indemnified Party and (ii) the Indemnified Party will not consent to the entry of any judgment on or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnifying Party (not to be unreasonably withheld).
(d) In the event none of the Indemnifying Parties assumes and conducts the defense of the Third-Party Claim in accordance with Section 11.3(b) above, (i) the Indemnified Party may defend against, and consent to the entry of any judgment on or enter into any settlement with respect to, the Third-Party Claim in any manner it may reasonably deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying Party in connection therewith) and (ii) the Indemnifying Parties will remain responsible for any Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third-Party Claim to the fullest extent provided in this Article XI.
Section 11.4 Limitation of Indemnification.
(a) Only with respect to Losses arising from a Third-Party Claim(s), the aggregate amount of all Losses for which the Seller Group shall be liable for under Section 11.1(a) shall not exceed $1,000,000 per claim (excluding the cost of attorney’s fees); provided, the foregoing limitation shall not apply to Losses arising out of the breach of any Fundamental Representation (defined in Section 11.6), in the case of fraud, and/or in the case of direct (or first party) claim(s);
(b) The aggregate amount of all Losses arising from Third Party Claims for which the Seller Group shall be liable under Section 11.1 shall not exceed an amount equal to the Purchase Price plus the cost of attorney’s fees incurred by the Purchaser Indemnitees (including the cost of attorney’s fees incurred by the Seller Group on behalf of the Purchaser Indemnitees) in connection with such Losses, and the aggregate amount of all Losses arising from direct (or first party) claims for which the Seller Group shall be liable under Section 11.1 shall not exceed an amount equal to the Purchase Price plus the cost of attorney’s fees incurred by the Purchaser Indemnitees in connection with such Losses (for clarity, any Losses arising from third party claims will not go towards the cap on direct (or first party) claims and vice versa); provided, the foregoing limitation shall not apply in the case of fraud; and
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Section 11.5 Indemnification Threshold.
(a) Notwithstanding anything in this Agreement to the contrary, no Purchaser Indemnitee shall be entitled to indemnification under this Article XI until the aggregate Losses suffered by the Purchaser Indemnitees exceeds $25,000 (the “Indemnification Threshold”), at which point the Seller Group will indemnify the Purchaser Indemnitees dollar for dollar for any amounts as if there had been no Indemnification Threshold.
(b) Notwithstanding anything in this Agreement to the contrary, no Seller Indemnitee shall be entitled to indemnification under this Article XI until the aggregate Losses suffered by the Seller Indemnitees exceeds the Indemnification Threshold, at which point the Purchaser Group will only be obligated to indemnify the Seller Indemnitees from and against further Losses.
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Section 11.9 Exclusive Remedy.
(a) Except as set forth in Section 11.9(b), the Parties acknowledge and agree that, from and after Closing, the foregoing indemnification provisions in Article XI shall be the exclusive remedy of the Purchaser Indemnitees and the Seller Indemnitees with respect to this Agreement.
(b) Notwithstanding anything in Section 11.9(a) to the contrary, nothing in Article XI shall (i) prohibit the Purchaser Group or any of their affiliates from bringing a claim against any Person, including any of the Seller Group, alleging such Person committed fraud in connection with the transactions contemplated by this Agreement or (ii) limit any remedy of the Purchaser Group or any of their affiliates may have against such Person, and only such Person, but only in the event a court of competent jurisdiction finally determines that such Person is liable for fraud.
Article XII
Section 12.1 Amendment; Waiver. Neither this Agreement nor any 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 will 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, will constitute a waiver of, or will preclude any other or further exercise of, any right, power or remedy.
Section 12.2 Notices. Any notices or other communications required or permitted hereunder will be sufficiently given if in writing and delivered in Person or sent by registered or certified mail (return receipt requested) or nationally recognized overnight delivery service, postage pre-paid, or electronic mail, provided that any notice sent by electronic mail must include a reference to this Section 12.2 to be effective, addressed as follows, or to such other address as such Party may notify to the other Parties in writing:
(a) | If to the Seller: | Club Licensing, LLC |
Attn: Xxxx Xxxxxx | ||
000 X Xxxxx Xx. #000 | ||
Xxxxxxxx, XX 00000 | ||
email: xxxxxxxxx | ||
with a copy to: | Xxxx Xxxxx | |
Fairfield and Xxxxx, P.C. | ||
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000 | ||
Xxxxxx, Xxxxxxxx 00000-0000 | ||
email: xxxxxx@xxxxx.xxx |
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(b) | If to Members: | Attn: Xxxx Xxxxxx |
000 X Xxxxx Xx. | ||
Xxxxxxxx, XX 00000 | ||
email: xxxxxxxxx | ||
with a copy to: | Xxxx Xxxxx | |
Fairfield and Xxxxx, P.C. | ||
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000 | ||
Xxxxxx, Xxxxxxxx 00000-0000 | ||
email: xxxxxx@xxxxx.xxx | ||
(c) | If to the Purchaser: | Big Sky Hospitality Holdings, Inc. |
Attn: Xxxx Xxxxxx, President | ||
00000 Xxxxxx Xxxx | ||
Xxxxxxx, Xxxxx 00000 | ||
email: xxxx@xxxxx.xxx | ||
(d) | If to Rick’s: | RCI Hospitality Holdings, Inc. |
Attn: Xxxx Xxxxxx, President | ||
00000 Xxxxxx Xxxx | ||
Xxxxxxx, Xxxxx 00000 | ||
Email: xxxx@xxxxx.xxx | ||
with a copy to: | Xxxxxx X. Xxxxxxx | |
Xxxxxxx & Xxxxx | ||
0000 Xxxxxxxx Xxxxx, Xxxxx 0000 | ||
Xxxxxxx, Xxxxx 00000 | ||
email: xxxxxx@xxxxxxxxx.xxx |
A notice or communication will be effective (i) if delivered in Person, by electronic mail, or by overnight courier, on the business day it is delivered and (ii) if sent by registered or certified mail, three (3) business days after dispatch. In the event a Party delivers a notice by electronic mail, such Party agrees to deposit the original notice in a post office, branch office post office, or mail depository maintained by the U.S. Postal Service postage prepaid and addressed as set forth above.
Section 12.3 Severability. Whenever possible, each provision of this Agreement will 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.
Intellectual Property Purchase Agreement - Page 23 |
Section 12.4 Assignment; Successors and Assigns. Except as otherwise provided herein, the provisions hereof will 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 12.5 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 will advise the other Parties hereto and exercise their best efforts to agree upon the text of a public announcement or statement to be made 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, provided that such Party will advise the other Parties hereto.
Section 12.6 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 12.7 Choice of Law; Jurisdiction. This Agreement will 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 arising out of or related to this Agreement, each of the Parties irrevocably consents to the exclusive jurisdiction and venue of the federal and state courts located in Xxxxxx County, Texas.
Section 12.8 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together will be considered one and the same agreement and will become effective when counterparts have been signed by each Party and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature will create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
Section 12.9 Costs and Expenses. Each Party will pay their own respective fees, costs, and disbursements incurred in connection with the negotiation and execution of this Agreement and the other agreements contemplated hereby, the performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby.
Intellectual Property Purchase Agreement - Page 24 |
(a) by the mutual consent, in writing, of the Parties hereto;
(b) by the Purchaser Group, on the one hand, or the Seller Group, on the other hand, if the First Closing shall not have occurred on or before December 31, 2021 (the “Outside Date”), unless the failure of the Closing to take place on or before such date is attributable to a breach by such Party or Parties’ of any of its or their obligations set forth in this Agreement;
(c) by the Purchaser Group, on the one hand, or the Seller Group, on the other hand, if any of the conditions to such Parties’ obligations to perform set forth in Articles VIII and IX of this Agreement, as applicable, becomes incapable of fulfillment; provided, however, that a Party may not seek termination pursuant to this Section 12.14(c) if such condition is incapable of fulfillment due to the failure of such Party or Parties’ to perform the agreements and covenants contained herein required to be performed by such Party or Parties or its or their affiliate at or before the Closing; and
(d) by the Purchaser Group, on the one hand, or the Seller Group, on the other hand, if the other shall have breached or failed to perform any of its covenants or other agreements contained in this Agreement, which breach or failure to perform would cause any of the conditions to such Party’s obligations to perform set forth in Articles VIII and IX of this Agreement, as applicable, to not then be satisfied; provided that such breach or failure to perform such covenant or agreement is not cured within ten (10) days after written notice thereof from the non-breaching Party, or in the case where the date or period of time specified for performance has lapsed, promptly following written notice thereof from the non-breaching Party.
Section 12.15 Notice of Termination. Any Party desiring to terminate this Agreement pursuant to Section 12.14 shall give written notice of such termination to the other Parties to this Agreement.
Section 12.16 Attorney Review - Construction. In connection with the negotiation and drafting of this Agreement, the Parties represent and warrant to each other that they have had the opportunity to be advised by attorneys of their own choice and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendments hereto.
Section 12.17 Interpretation. All personal pronouns used in this Agreement will include the other genders, whether used in the masculine, feminine or neuter gender and the singular will include the plural and vice versa, wherever appropriate. The word “including” shall be interpreted to mean “including without limitation.”
Section 12.18 Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING TO THIS AGREEMENT OR ANY DEALINGS BETWEEN OR AMONG THEM RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES.]
Intellectual Property Purchase Agreement - Page 25 |
Seller Group: | CLUB LICENSING, LLC | |
By: | /s/ Xxxx Xxxxxx | |
Name: | Xxxx Xxxxxx | |
Title: | Manager | |
/s/ Xxxx Xxxxxx | ||
Xxxx Xxxxxx | ||
/s/ DocuSigned by: Xxxxxxx Xxxxxx | ||
XXXXXXX XXXXXX |
Signature page to Intellectual Property Purchase Agreement
Purchaser Group: | Big Sky Hospitality Holdings, Inc. | |
By: | /s/ Xxxx Xxxxxx | |
Name: | Xxxx Xxxxxx | |
Title: | President | |
RCI HOSPITALITY HOLDINGS, INC. | ||
By: | /s/ Xxxx Xxxxxx | |
Name: | Xxxx Xxxxxx | |
Title: | President |
Signature page to Intellectual Property Purchase Agreement
EXHIBIT 4.3(a)
Club Purchase Agreements
Club Sellers | Club Name | Address of Club | ||
Glenarm Restaurant Concepts LLC | Diamond Cabaret Denver | 0000 Xxxxxxx Xxxxx, Xxxxxx, XX | ||
Glendale Restaurant Concepts LLC | Mile High Club | 0000 X Xxxxxxxx Xxx., Xxxxxxxx, XX | ||
Xxxxxxxx Restaurant Concepts, LLC | Diamond Club St. Louis | 0000 Xxxxxxxxxxx Xxx., Xxx 00, Xxxxxx, XX | ||
Indy Restaurant Concepts, LLC. | PT’s Indy | 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxxxx, XX | ||
Kenkev, Inc. | PT’s Portland | 000 Xxxxxxxxx Xx., Xxxxxxxx, XX | ||
MRC, LLC | Country Rock Cabaret | 000 Xxxxxxxx Xxx., Xxxxxx, XX | ||
Raleigh Restaurant Concepts, LLC | Men’s Club Raleigh | 0000 Xxxxxxx Xx., Xxxxxxx, XX | ||
Xxxxx Restaurant Concepts, LLC | LaBoheme | 0000 Xxxxx Xx., Xxxxxx, XX | ||
VCG Restaurants Denver, LLC | PT’ Centerfold | 0000 X Xxxxxx Xxx., Xxxxxx, XX | ||
OG1, LLC | PT’s Showclub | 0000 X Xxxxx Xxx., Xxxxxx, XX | ||
Market Entertainment Inc. | PT’s Louisville | 000 X Xxxxxx Xx., Xxxxxxxxxx, XX |
EXHIBIT 4.3(b)
Real Estate Property
Real Estate Sellers | Address of Real Properties | Purchase Price* | Club that Occupies Real Property | |||
1601 W Xxxxx LLC | 0000 X Xxxxx Xxx., Xxxxxx XX | $3,325,000 | PT’s Showclub | |||
200 Riverside LLC | 000 Xxxxxxxxx Xx., Xxxxxxxx, XX | $3,100,000 | PT’s Showclub | |||
000 X Xxxxxx LLC | 000 X Xxxxxx Xx., Xxxxxxxxxx, XX | $1,900,000 | PT’s Showclub | |||
0000 X Xxxxxx LLC | 0000 X Xxxxxx Xxx., Xxxxxx, XX | $4,500,000 | PT’s Centerfolds | |||
4451 E Virginia LLC | 0000 X Xxxxxxxx Xxx., Xxxxxxxx, XX | $3,325,000 | Mile High Men’s Club | |||
0000 Xxxxxxxxx Xxxx LLC | 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxxxx, XX | $1,850,000 | PT’s Showclub |
* The purchase price for each real property may change, provided that the aggregate purchase price remains unchanged.
SCHEDULE 5.23
Federally Registered Trademarks
Serial/Registration No. | Xxxx | Class | Assignee | Status | ||||
Reg. No. 6347939 |
|
41 | Club Licensing LLC | Registered on 5/11/2021; next renewal deadline is 5/11/2027 | ||||
Reg. No. 90210302 |
|
41 | Club Licensing LLC | Registered on the Supplemental Register on 7/20/2021; next renewal deadline is 7/20/2027 | ||||
Serial No. 90169173 |
|
41 | Club Licensing LLC | Application filed in 2020 was abandoned due to non-use | ||||
Serial No. 86947152 |
|
41 | Club Licensing LLC | Application filed in 2016 was abandoned due to non-use | ||||
Reg. No. 4828874 |
|
41 | Club Licensing LLC | Registered on 10/6/2015; registration renewed; next renewal deadline is 10/6/2025 | ||||
Reg. No. 2043156 |
|
41 | Club Licensing LLC | Registered on 3/11/1997; next renewal deadline is 3/11/2027 | ||||
Reg. No. 3097033 |
|
41 | Club Licensing LLC | Registered on 5/30/2006; next renewal deadline is 5/30/2026 | ||||
Reg. No. 4858252 |
|
41 | Club Licensing LLC | Registered on 11/24/2015; currently within renewal period; Section 8 & 15 Declarations due no later than 11/24/2021 | ||||
Reg. No. 1718977 |
|
41 | Club Licensing LLC | Registered on 9/22/92; next renewal deadline is 9/22/2022 | ||||
Common Law |
|
N/A | Club Licensing LLC | N/A | ||||
Common Law |
|
N/A | Club Licensing LLC | N/A | ||||
Common Law | La Boheme Gentlemen’s Cabaret
|
N/A | Club Licensing LLC | N/A | ||||
Common Law | ![]() |
N/A | Club Licensing LLC | N/A |