form8k.htm
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: September 5, 2008
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)
ITEM
2.01 COMPLETION OF
ACQUISITION OF ASSETS.
On
September 5, 2008, our wholly owned subsidiary RCI Entertainment (Las Vegas),
Inc. (the “Purchaser”) completed the acquisition of certain assets (the
“Purchased Assets”) of DI Food & Beverage of Law Vegas, LLC, a Nevada
limited liability company (the “Seller”) pursuant to a Third Amended
Asset Purchase Agreement (the “Third Amendment”) between Purchaser, Rick’s
Cabaret International, Inc. (“Rick’s”), Seller, and Harold Danzig (“Danzig”),
Frank Lovaas (“Lovaas”) and Dennis DeGori (“DeGori”) who are all members of
Seller. The Seller owned and operated an adult entertainment cabaret
known as “Scores” (the “Club”), located at 3355 Procyon Street, Las Vegas,
Nevada 89102 (the “Real Property”). A copy of the Third
Amendment is attached hereto as Exhibit 10.1.
At
Closing, Purchaser paid Seller an aggregate amount as follows (the “Purchase
Price”):
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(i)
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$12,000,000
payable by wire transfer;
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(ii)
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$3,000,000
pursuant to a promissory note (“the Rick’s Promissory Note”), executed by
and obligating Rick’s, bearing interest at eight percent (8%) per annum
with a five (5) year amortization, with monthly payments of principal and
interest, with the initial monthly payment due in April 2009 with a
balloon payment of all then outstanding principal and interest due upon
the expiration of two (2) years from the execution of the Rick’s
Promissory Note; and
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(iii)
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200,000
shares of restricted common stock, par value $0.01 of Rick’s (the “Rick’s
Shares”) issued to the Seller.
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A copy of
the Rick’s Promissory Note is attached hereto as Exhibit 10.2.
As part
of the transaction, we entered into a Lock-Up/Leak-Out Agreement with the Seller
pursuant to which, on or after seven (7) months after the closing date, the
Seller shall have the right, but not the obligation, to have Rick’s purchase
from Seller a total of 150,000 of the Rick’s Shares (“Rick’s Put Share”) in an
amount and at a rate of not more than 6,250 of the Rick’s Put Shares per month
(the “Monthly Shares”) calculated at a price per share equal to $20.00 per share
(“Value of the Rick’s Shares”). At our election during any given
month, we may either buy the Monthly Shares or, if we elect not to buy the
Monthly Shares from the Seller, then the Seller shall sell the Monthly Shares in
the open market. Any deficiency between the amount which the Seller
receives from the sale of the Monthly Shares and the Value of the Rick’s Shares
shall be paid by us within three (3) business days of the date of sale of the
Monthly Shares during that particular month. Our obligation to
purchase the Monthly Shares from the Seller shall terminate and cease at such
time as the Seller has received a total of $3,000,000 from the sale of the
Rick’s Shares and any deficiency. Under the terms of the
Lock-Up/Leak-Out Agreement, Seller may not sell more than 25,000 Rick’s Shares
per 30-day period, regardless of whether the Seller “Puts” the Rick’s Put Shares
to Rick’s or sells them in the open market or otherwise. A copy of
the Lock-Up/Leak-Out Agreement is attached hereto as Exhibit 10.3.
Upon
closing of the transaction, we entered a two-year Non-Compete Agreement with
DeGori (the “DeGori Non-Compete Agreement”) pursuant to which DeGori agreed not
to compete with the Club by operating an establishment serving liquor and
providing live female nude or semi-nude adult entertainment in Clark County,
Nevada or in a radius of 25 miles of Clark County, Nevada; provided, however,
that the Non-Competition Agreement specifically excluded the Penthouse Club and
the Bada Bing Club located in Clark County, Nevada. We agreed
to pay DeGori cash consideration of $66,667 for entering into the
Non-Competition Agreement. Additionally, at Closing, we also
entered into a 12-month Consulting Agreement with DeGori (the “Consulting
Agreement”) for a total aggregate of $133,333 in consulting fees payable in
eighteen (18) equal monthly payments of $7,407.38 per month with the first
payment due October 15, 2008. A copy of the Degori Non-Compete
Agreement is attached hereto as Exhibit 10.4. A copy of the
Consulting Agreement is attached hereto as Exhibit 10.5.
Upon
closing of the transaction, we entered a one-year Non-Compete Agreement with
Lovaas (the “Lovaas Non-Compete Agreement”) pursuant to which Lovaas agreed not
to compete with the Club by operating an establishment serving liquor and
providing live female nude or semi-nude adult entertainment in Clark County,
Nevada, or any of its surrounding counties; provided, however, that this
Non-Competition Agreement shall specifically exclude the Penthouse Club and the
Bada Bing Club located in Clark County, Nevada. A copy of the Lovaas
Non-Compete Agreement is attached hereto as Exhibit 10.6.
The terms
and conditions of the Stock Purchase Agreement were the result of extensive
arm’s length negotiations between the parties. A copy of the
press release related to this transaction is attached hereto as Exhibit
99.1.
ITEM
9.01 FINANCIAL STATEMENTS
AND EXHIBITS
(c) Exhibits
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Third
Amendment to Asset Purchase
Agreement
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Lock-Up/Leak-Out
Agreement
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Non-Competition
Agreement (DeGori)
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Consulting
Agreement (DeGori)
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Non-Competition
Agreement (Lovaas)
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Press
release dated September 5, 2008
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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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By:
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/s/ Eric
Langan
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Date: September
8, 2008
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Eric
Langan
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President
and Chief Executive Officer
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