Attached files
Securities
and Exchange Commission
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
To Section 13 or 15(d) Of
The
Securities Exchange Act of 1934
Date of
Report: December 18, 2009
RICK'S
CABARET INTERNATIONAL, INC.
(Exact Name of Registrant As Specified in Its Charter)
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Texas
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0-26958
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76-0037324
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(State
Or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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10959
Cutten Road
Houston,
Texas 77066
(Address
Of Principal Executive Offices, Including Zip Code)
(281)
397-6730
(Issuer’s Telephone Number, Including Area Code)
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ITEM
1.01
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT.
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On
December 18, 2009, our wholly owned subsidiary, RCI Entertainment (3105 I-35),
Inc. (“RCI”), entered into and closed a Stock Purchase Agreement (the “RCI
Purchase Agreement”) with Spiridon Karamalegos (“Karamalegos”), the Joy Club of
Austin, Inc. (“JOY”) and North IH-35 Investments, Inc. (“NIII”), whereby RCI
acquired 51% of the outstanding stock of JOY and 49% of the outstanding stock of
NIII. JOY is the owner and operator of the adult nightclub business
known as “Joy of Austin” which leases and occupies the real property and
improvements located at 3105 South IH 35, Round Rock, Texas 78664 (the
“Property”). NIII is the owner of the Property and leases the
Property to JOY. Contemporaneously with entry into the RCI Purchase
Agreement, RCI and Karamalegos entered into an Assignment and Assumption
Agreement (the “Assignment Agreement”), whereby Karamalegos assigned to RCI his
right to acquire the remaining 49% of the outstanding stock of JOY and the
remaining 51% of the outstanding stock of NIII, which right Karamalegos obtained
pursuant to a Purchase Agreement entered into between Karamalegos, Evangelos
Polycrates (“Polycrates”), JOY and NIII (the “Polycrates Purchase
Agreement”). Pursuant to the RCI Purchase Agreement and the
Assignment Agreement, RCI acquired and owns 100% of the outstanding stock of JOY
and 100% of the outstanding stock of NIII.
Pursuant
to the terms of the RCI Purchase Agreement and the Assignment Agreement, RCI
paid aggregate consideration of $4,550,000, plus assumption of a promissory note
with First State Bank-Taylor (the “Purchase Price”), for the acquisition of JOY
and NIII. The Purchase Price was payable as follows:
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(i)
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$1,820,000
by wire transfer to Karamalegos;
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(ii)
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$880,000
by wire transfer to Polycrates;
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(iii)
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$530,000
evidenced by a five (5) year secured promissory note to Karamalegos,
bearing interest at the rate of 4.75% per annum and payable in sixty (60)
equal monthly installments of principal and interest of $9,941.16 (the
“Karamalegos Note”). The Karamalegos Note is secured by a third
lien in favor of Karamalegos against the Property and improvements located
thereon and a second lien on all of the shares of JOY and
NIII;
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(iv)
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$1,320,000
evidenced by a five (5) year secured promissory note to Polycrates,
bearing interest at the rate of 4.75% per annum and payable in sixty (60)
equal monthly installments of principal and interest of $24,759.12 (the
“Polycrates Note”). The Polycrates Note is individually
guaranteed by Karamalegos for the first thirty (30) months and is secured
by a second lien in favor of Polycrates against the Property and
improvements located thereon and a first lien on all of the shares of JOY
and NIII; and
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(v)
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The
assumption of a Promissory Note dated Sept. 10, 2004, in the original
principal amount of $850,000, executed by NIII and payable to First State
Bank-Taylor, which Promissory Note had a current balance of $652,489.25 as
of November 16, 2009, and is secured by the Property and improvements
located thereon. The note bears interest at the rate of 7.25%,
payable in monthly installments of principal and interest of
$7,761.33. The interest rate is subject to adjustment on
September 10, 2014 to the rate of prime plus 2.5%. The note is
due and payable on or before September 10,
2019.
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Also
pursuant to the agreements described above, Karamalegos entered into a four (4)
year Non-Competition Agreement with RCI, and Polycrates entered into a three (3)
year Non-Competition Agreement with RCI.
A copy of
the RCI Purchase Agreement is attached hereto as Exhibit 10.1. A copy
of the Assignment Agreement is attached hereto as Exhibit 10.2. A
copy of the Polycrates Purchase Agreement is attached hereto as Exhibit
10.3. A copy of the Karamalegos Note is attached hereto as Exhibit
10.4. A copy of the Polycrates Note is attached hereto as Exhibit
10.5. A copy of the form of Non-Competition Agreement is attached
hereto as Exhibit 10.6. A copy of the press release related to this
transaction is attached hereto as Exhibit 99.1.
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ITEM
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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(d)
Exhibits
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Exhibit
Number
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Description
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Stock
Purchase Agreement dated December 18, 2009, by and between RCI
Entertainment (3105 I-35), Inc., Spiridon Karamalegos, the Joy Club of
Austin, Inc. and North IH-35 Investments, Inc.
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Assignment
and Assumption Agreement dated December 18, 2009, by and between Spiridon
Karamalegos and RCI Entertainment (3105 I-35), Inc., with the consent of
Evangelos Polycrates
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Purchase
Agreement dated December 18, 2009, by and between Spiridon Karamalegos, ,
the Joy Club of Austin, Inc. and North IH-35 Investments,
Inc.
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Promissory
Note dated December 18, 2009, in favor of Spiridon
Karamalegos.
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Promissory
Note dated December 18, 2009, in favor of Evangelos
Polycrates.
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Form
of Non-Competition Agreement
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Press
Release dated December 21, 2009
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report on Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
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RICK'S
CABARET INTERNATIONAL, INC.
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Date: December
21, 2009
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By:
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/s/ Eric
Langan
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Eric
Langan
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President
and Chief Executive Officer
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