Attached files
Exhibit 10.4
[EXECUTION
VERSION]
PROMISSORY
NOTE
$530,000.00
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Houston,
Texas
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December
18, 2009
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FOR VALUE RECEIVED, RCI Entertainment
(3105 I-35), Inc., (“Maker”,
whether one or more) a wholly owned subsidiary of Rick’s Cabaret International,
Inc., with a business address of 10959 Cutten Road, Houston, Texas 77066,
promises to pay to the order of Spiridon Karamalegos, an individual and Texas
resident (“Payee”),
at ___________________________, or such other place as the holder of this
Promissory Note (“Note”) may
hereafter designate in writing, in immediately available funds and in lawful
money of the United States of America, the principal sum of five hundred thirty Thousand
and No/100 Dollars ($530,000.00), together with interest on the unpaid
principal balance of this Note from time to time outstanding until maturity at
the Stated Rate and interest on all past due amounts, both principal and accrued
interest, at the Maximum Rate; provided, however, that for the full term of this
Note the interest rate produced by the aggregate of all sums paid or agreed to
be paid to the holder of this Note for the use, forbearance or detention of the
true principal balance of this Note from time to time outstanding shall not
exceed the Maximum Rate.
“Stated
Rate” means a rate per annum equal to Four and 75/100 percent
(4.75%);
provided, however, that if the Stated Rate ever exceeds the Maximum Rate, the
Stated Rate shall then and thereafter be fixed at a rate per annum equal to the
Maximum Rate then and from time to time thereafter in effect until the total
amount of interest accrued at the Stated Rate on the unpaid balance of this Note
equals the total amount of interest which would have accrued had the Maximum
Rate at all times been equal to the Stated Rate from time to time in
effect.
“Maximum
Rate” means, on any day, the maximum non-usurious rate of interest
permitted for that day by whichever of applicable federal or Texas law permits
the higher interest rate, stated as a rate per annum. Without notice
to Maker or any other person or entity, the Maximum Rate shall automatically
fluctuate upward and downward as and in the amount by which said Maximum Rate
fluctuates.
Principal and interest are due and
payable in equal monthly installments of Nine Thousand Nine Hundred Forty-One
and 16/100 Dollars ($9,941.16), beginning on January 18, 2010, with each
succeeding installment being due and payable on the 18th day
of each calendar month thereafter until the fifth (5th) anniversary of this
Note, or December 18, 2014, when all principal and accrued interest under this
Note and all amounts owing hereunder but not previously paid shall be due
(“Final
Maturity Date”). All payments in repayment of this Note shall
be applied first to discharge accrued interest and then to the outstanding
principal amount of this Note and any other sums owing pursuant to this
Note. Maker may prepay all or any part of the principal of this Note
before maturity without penalty.
The unpaid principal balance of this
Note at any time shall be the total amounts loaned or advanced hereunder by the
holder hereof, less the amount of payments or prepayments of principal made
hereon by or for the account of Maker.
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Interest shall be computed for the
actual number of days elapsed in a year consisting of 365 days, unless the
Maximum Rate would thereby be exceeded, in which event, to the extent necessary
to avoid exceeding the Maximum Rate, interest shall be computed on the basis of
the actual number of days elapsed in the applicable calendar year in which it
accrued.
If, for any reason whatever, the
interest paid or received on this Note during its full term produces a rate
which exceeds the Maximum Rate, the holder of this Note shall refund to the
payor or, at the holder’s option, credit against the principal of this Note such
portion of said interest as shall be necessary to cause the interest paid on
this Note to produce a rate equal to the Maximum Rate, and all sums contracted
for, charged or received by or paid to the holder of this Note for the use,
forbearance or detention of the indebtedness evidenced hereby shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
in equal parts throughout the full term of this note, so that the interest rate
is uniform throughout the full term of this note.
This Note is secured by, among other
liens and security interests, the following: (i) second lien on one
hundred percent (100%) of the issued and outstanding shares of the Joy Club of
Austin, Inc., a Texas corporation, (ii) one hundred percent (100%) of the issued
and outstanding shares of North IH35 Investments, Incorporated, a Texas
corporation, and (iii) the lien created in that certain Second Subordinated Deed
of Trust of even date herewith from Maker to Douglass D. Hearne, Jr., Trustee,
for the benefit of Payee (the “Deed of
Trust”), covering that certain real property and all improvements thereto
more particularly described on Exhibit “A”, attached
hereto and made a part hereof for all purposes.
The failure of the Maker to timely pay
any principal or installment of interest on this Note, or the occurrence of any
event of Default under any security instrument or guaranty at any time securing
or guaranteeing payment of this indebtedness shall constitute Default under this
Note. Upon any such Default, such holder may, at its option, exercise
any or all rights, powers and remedies afforded by law or under any instruments
securing this Note, including the right to declare the unpaid balance of
principal and accrued interest on this Note at once mature and
payable.
If any holder of this Note retains an
attorney in connection with any such Default or to collect, enforce or defend
this Note or any papers intended to secure or guarantee it in any lawsuit or in
any probate, reorganization, bankruptcy or other proceeding, or if Maker sues
any holder in connection with this Note or any such papers and does not prevail,
then Maker agrees to pay to each such holder, in addition to principal and
interest, all reasonable costs and expenses incurred by such holder in trying to
collect this Note or in any such suit or proceeding, including reasonable
attorney’s fees.
The term “Default” as used in this
Note shall include the occurrence of any of the events defined as Default in the
Deed of Trust. It is agreed that time is of the essence of this Note
and, in the event of a default, of a failure to pay principal and
interest herein provided when due, or a breach of the provisions of any of the
instruments executed in connection with or securing this Note, Payee, at its
option, and subject to the notice and cure provisions in the Deed of Trust, may
declare the entire unpaid principal balance and all unpaid accrued interest
owing hereon at once due and payable. Failure to exercise this option
shall not constitute a waiver of the right to exercise the same in the event of
any subsequent Default.
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Notwithstanding any other provision of
this Note, in the event of a Default under this Note or the Deed of Trust,
before exercising any of Payee’s remedies under this Note or the Deed of Trust,
Payee will first give Maker written notice of default and Maker will have the
number of days specified in the Deed of Trust after written notice is given in
which to cure the Default (“Cure Period”). If the default is not
cured within the Cure Period, Maker and any and all co-makers, endorsers,
guarantors and sureties waives all further demand for payment, presentation for
payment, notice of intention to accelerate maturity, notice of acceleration of
maturity or protest, to the extent permitted by law. Each such
person agrees that his, her or its liability on or with respect to this Note
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect or maintain perfection of any
lien against or security interest in any such security or the partial or
complete unenforceability of any guaranty or other surety obligation, in each
case in whole or in part, with or without notice and before or after
maturity.
This Note shall be governed by and
construed in accordance with the laws of the State of Texas and the United
States of America from time to time in effect. Travis County, Texas
shall be a proper place of venue for suit hereon. Maker and any and all
co-makers, endorsers, guarantors and sureties irrevocably agree that any legal
proceedings in respect of this Note or any loan agreement, security agreement,
guaranty or other writing relating hereto shall be brought in the district
courts of Travis County, Texas, or the United States District Court for the
Western District of Texas.
THE INDEBTEDNESS EVIDENCED BY THIS NOTE
IS PAYABLE IN FULL ON DECEMBER 18, 2014. AT MATURITY YOU MUST REPAY
THE ENTIRE PRINCIPAL BALANCE OF SUCH INDEBTEDNESS AND UNPAID INTEREST THEN
DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE SUCH INDEBTEDNESS
AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF
OTHER ASSETS THAT YOU MAY OWN OR YOU WILL HAVE TO FIND A LENDER, WHICH MAY BE
THE LENDER YOU HAVE SUCH INDEBTEDNESS WITH, WILLING TO LEND YOU THE
MONEY. IF YOU REFINANCE SUCH INDEBTEDNESS AT MATURITY, YOU MAY HAVE
TO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN
IF YOU OBTAIN REFINANCING FROM THE SAME LENDER.
THIS PROMISSORY NOTE AND ALL OTHER
SECURITY DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH, TOGETHER
CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the undersigned
Maker has duly executed this Note effective as of the day and year above first
written.
MAKER:
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RCI
Entertainment (3105 I-35), Inc.
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By:
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Name:
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Title:
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