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Exhibit 10.2
REAL ESTATE
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
WIRE WAY, LLC,
a Texas limited liability company
(" Seller
")
and
RCI HOLDINGS, INC.,
a Texas corporation
(" Purchaser
")
REAL
ESTATE PURCHASE AND SALE AGREEMENT
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT (this "
Agreement ")
is made and entered into by and between WIRE WAY, LLC, a Texas
limited liability company (" Seller "), and
RCI HOLDINGS, INC., a Texas corporation (" Purchaser "),
pursuant to the terms and conditions set forth herein.
W I T N E S S E T H:
WHEREAS , Seller is the owner of a certain real property
consisting of approximately 4.637± acres of land, together
with all rights, (excepting for mineral rights as set forth below)
, title and interests of Seller in and to any and all improvements
and appurtenances exclusively belonging or pertaining thereto (the
" Property ")
located at 10557 Wire Way, Dallas (the " City "),
Dallas County, Texas, which Property is more particularly described
on Exhibit
A attached hereto and incorporated herein by reference;
and
WHEREAS, contemporaneously with the execution of this
Agreement, North by East Entertainment, Ltd., a Texas limited
partnership (" North by East
"), is entering into an agreement with RCI Entertainment (Northwest
Highway), Inc., a Texas corporation (" RCI
Entertainment "), a wholly owned subsidiary of Rick's
Cabaret International, Inc., a Texas corporation (" Rick's ") for
the sale and purchase of the assets of the business more commonly
known as "Platinum Club II" that operates from and at the Property
(" Asset
Purchase Agreement "); and
WHEREAS, subject to and simultaneously with the closing of
the Asset Purchase Agreement, Seller will enter into a lease with
RCI Entertainment, as Tenant, for the Property, dated to be
effective as of the closing date, as defined in the
Asset Purchase Agreement (the " Lease ")
attached hereto as Exhibit
B and incorporated herein by reference; and
WHEREAS , subject to the closing of the Asset Purchase
Agreement, the execution and acceptance by Seller of the Lease, and
pursuant to the terms and provisions contained herein, Seller
desires to sell and convey to Purchaser and Purchaser desires to
purchase the Property.
NOW, THEREFORE , for and in consideration of the premises
and mutual covenants and conditions contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE
Section 1.01. Purchase
and Sale . Pursuant
to the terms and provisions contained herein, Seller hereby agrees
to sell, transfer and convey by General Warranty Deed to Purchaser,
and Purchaser hereby agrees to purchase from Seller, the Property,
free and clear of all liens and encumbrances subject to any
permitted exceptions mutually agreed to by the Parties (the
“Permitted Exceptions”). Seller hereby reserves from
this sale, all right, title and interest of Seller in and to the
oil, gas and other non-surface minerals under the Property;
provided, neither Seller nor Seller’s heirs, successors,
lessees, assigns or grantees, shall ever use any portion of the
surface of the Property for the development of or exploration for
the oil, gas and other non-surface minerals reserved hereunder, any
such use being expressly waived by Seller for all purposes and for
all times. The aforementioned General Warranty Deed
shall include a provision reserving from the sale all right, title
and interest of Seller in and to the oil, gas and other non-surface
minerals under the Property; provided, neither Seller nor
Seller’s heirs, successors, lessees, assigns or grantees,
shall ever use any portion of the surface of the Property for the
development of or exploration for the oil, gas and other
non-surface minerals reserved hereunder, any such use being
expressly waived by Seller for all purposes and for all
times.
Section 1.02. Disclaimer
and Indemnity. THE PROPERTY
SHALL BE CONVEYED AND TRANSFERRED TO PURCHASER “ AS IS, WHERE IS AND WITH ALL
FAULTS”. EXCEPT FOR THE REPRESENTATIONS,
WARRANTIES AND COVENANTS OF SELLER SET FORTH IN ARTICLE V OF THIS
AGREEMENT, SELLER DOES NOT WARRANT OR MAKE ANY REPRESENTATIONS,
EXPRESS OR IMPLIED, AS TO FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, DESIGN, QUANTITY, QUALITY, LAYOUT, FOOTAGE,
PHYSICAL CONDITION, PERATION, COMPLIANCE WITH SPECIFICATIONS,
ABSENCE OR LATENT DEFECTS OR COMPLIANCE WITH LAWS AND REGULATIONS
(INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY
AND THE ENVIRONMENT) OR ANY OTHER MATTER AFFECTING THE PROPERTY AND
SELLER SHALL BE UNDER NO OBLIGATION WHATSOEVER TO UNDERTAKE ANY
REPAIRS, ALTERATIONS OR OTHER WORK OF ANY KIND WITH RESPECT TO ANY
PORTION OF THE PROPERTY. FURTHER, PURCHASER SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS SELLER AND SELLER’S
REPRESENTATIVES FROM AND AGAINST ANY CLAIMS OR CAUSES OF ACTION
ARISING OUT OF THE CONDITION OF THE PROPERTY BROUGHT BY ANY OF
PURCHASER’S SUCCESSORS OR ASSIGNS, OR ANY THIRD PARTY,
AGAINST SELLER OR SELLER’S
REPRESENTATIVES. INFORMATION PROVIDED OR TO BE PROVIDED
BY SELLER IN RESPECT OF THE PROPERTY WAS OBTAINED FROM A VARIETY OF
SOURCES. SELLER HAS NOT MADE AN INDEPENDENT
INVESTIGATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS
TO THE ASSURACY OR COMPLETENESS THEREOF. PURCHASER HEREBY ASSUMES
ALL RISK AND LIABILITY RESULTING FROM THE OWNERSHIP, USE,
CONDITION, LOCATION, MAINTENANCE, REPAIR OR OPERATION OF THE
PROPERTY, WHICH PURCHASER WILL INSPECT AND ACCEPT “AS
IS”. IN THIS REGARD, PURCHASER ACKNOWLEDGES THAT
(a) PURCHASER HAS NOT ENTERED INTO THIS AGREEMENT IN RELIANCE UPON
ANY INFORMATION GIVEN TO PURCHAWSER PRIOR TO THE DATE OF THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO, PROMOTIONAL MATERIALS OR
FINANCIAL DATA , (b) PURCHASER WILL MAKE ITS DECISION TO PURCHASE
THE PROPERTY BASED UPON PURCHASER’S OWN DUE DILIGENCE AND
INVESTIGATIONS, (c) PURCHASER HAS SUCH KNOWLEDGE AND EXPERIENCE IN
REAL ESTATE INVESTIGATION TO EVALUATE THE MERITS AND RISKS OF THE
TRANSACTIONS PROVIDED IN THIS AGREEMENT, AND (d) PURCHASER IS
FINANCIALLY ABLE TO BEAR THE ECONOMIC RISK OF THE LOSS OF SUCH
INVESTMENT AND THE COST OF THE DUE DILIGENCE AND INVESTIGATIONS
UNDER THIS AGREEMENT. IT IS UNDERSTOOD AND AGREED THAT
THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATION TO
REFLECT THAT THE PROPERTY IS SOLD BY SELLER AND PURCHASED BY
PURCHASER SUBJECT TO THE FOREGOING. Disclaimers similar
to the foregoing in form satisfactory to Seller as well as
Seller’s reservation of the mineral estate shall be inserted
in any and all documents to be delivered by Seller to Purchaser at
Closing.
ARTICLE II
PURCHASE PRICE, EARNEST MONEY AND INDEPENDENT
CONSIDERATION
Section 2.01. Purchase
Price . The purchase price (the " Purchase Price
") to be paid by Purchaser to Seller for the Property acquired
pursuant to this Agreement shall be Six Million and No/100 Dollars
($6,000,000.00). Except as otherwise set forth herein,
the Purchase Price shall be due and payable in cash at the Closing
(as hereinafter defined) of the Property.
Section 2.02. Earnest
Money .
Contemporaneously with the execution of this
Agreement, Purchaser shall deliver to Republic Title of Texas,
Inc., Attention: Mel Morgan, 2626 Howell, 10 th
Floor, Dallas, Texas 75204 (the "
Title
Company "), the amount of One Hundred Thousand Dollars
($100,000.00) (the " Initial Earnest
Money ") in cash or immediately available
funds. The Initial Earnest Money is fully refundable
until the later of June 10, 2008 or ten (10) days after the
approval of RCI Entertainment’s application for a sexually
oriented business license by the City of Dallas and the transfer of
all other permits utilized to operate Platinum Club II, (but in no
event later than August 31, 2008) after which date it becomes
non-refundable but will continue to be held by the Title Company
and shall be credited against the Purchase Price at
Closing.
Section 2.03. Additional
Payments. Subject to and
simultaneously with the closing of the Asset Purchase Agreement,
Purchaser shall pay to Seller, directly, the sum of One
Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00) in
cash or immediately available funds (the “Cash
Payment”). This Cash Payment delivered to
Seller shall be immediately non-refundable. If this
transaction closes, the $1,500,000 Cash Payment delivered hereunder
shall be credited against the Purchase Price at
Closing.
Section 2.04. Additional
Earnest Money.
Commencing on such date 60 days from the closing and
funding of the Asset Purchase Agreement and continuing each
consecutive month thereafter until the Closing (as hereinafter
defined), Purchaser shall deliver as additional earnest
money (" Additional Earnest
Money ") to the Title Company each month the amount of Two
Hundred Thousand and No/100 Dollars ($200,000.00) in cash or
immediately available funds until not later than the
Closing. Any and all Additional Earnest Money delivered
to the Title Company shall be immediately
non-refundable. If this transaction closes, all
Additional Earnest Money delivered hereunder shall be credited
against the Purchase Price at Closing. In the event that
Purchaser does not deliver any portion of the Additional Earnest
Money to Seller as set forth herein and such failure to deliver
continues for a period of five (5) business days thereafter, then
this Agreement may be terminated by either party as its sole remedy
for such failure, and no party shall thereafter have any further
obligation to the other hereunder.
ARTICLE III
SURVEY, TITLE BINDER, LEASES AND SOIL TESTS
Section 3.01. Survey
and Title Binder .
(a) Seller and Purchaser acknowledge that
Seller has delivered, or caused to be delivered, to Purchaser a
copy of an existing on-the-ground survey (the " Survey ") of
the Property.
(b) Within
ten (10) days after the Date of Execution of this Agreement
(as hereinafter defined), Seller shall deliver or cause to be
delivered to Purchaser, at Seller's sole expense, at the
address stated below, a copy of (i) a title commitment (the "
Title
Binder ") addressed to Purchaser issued
by the Title Company, showing Purchaser and Seller
as set forth in this Agreement, covering the Property and
binding the Title Company to issue to Purchaser at the
Closing, on behalf of
the Title Company (or its underwriter), a Texas Owner's Policy
of Title Insurance on the standard form of policy prescribed
by the Texas State Board of Insurance (the " Owner's Title
Policy ") in the aggregate amount of the Purchase Price
for the Property to be acquired by Purchaser pursuant hereto,
and (ii) copies of any and all instruments referred to in the
Title Binder as constituting exceptions or restrictions upon
or matters affecting the title of Seller to the Property,
except that copies of any liens or any other matters which are
to be released at or before the Closing may be omitted (the "
Exception
Documents ").
(c) Seller
and Purchaser acknowledge that Seller has delivered, or caused
to be delivered, to Purchaser true, correct, complete and
legible copies of any and all leases or other conditions
affecting or relating to the Property, whether such leases or
conditions are presently in written form, valid or
recorded.
(d) Seller
and Purchaser acknowledge that Seller has delivered, or caused
to be delivered, to Purchaser a copy of the "as built" plans
for the interior and exterior of the building located on the
Property.
(e) Seller
and Purchaser acknowledge that Seller has delivered, or caused
to be delivered, to Purchaser any and all soils and compaction
tests (collectively, the " Soils
Tests ") and environmental tests and reports (the "
Environmental
Reports ") performed by or on behalf of Seller or which
Seller has in its possession relating to the
Property. Without in any way limiting or
diminishing Seller's obligation hereunder, Purchaser shall
have the right, at Purchaser's expense, to have the Seller's
Soil Tests and Environmental Reports updated and/or reissued
to Purchaser.
Section 3.02. Review
of Survey and Title Binder . In the
event any exceptions or reservations appear in the Title Binder or
in the event the Survey is unacceptable to Purchaser, Purchaser's
sole and exclusive remedy shall be to terminate this Agreement by
written notice delivered to Seller on or before the date which is
ten (10) business days after the date of Purchaser's receipt of all
the items to be delivered referenced above in Section 3.01 and the
Purchaser shall be entitled to immediately receive the return of
the Initial Earnest Money . If Purchaser does not
exercise its right to terminate this Agreement in accordance with
this Section 3.02 ,
all matters contained in or on, and all of Purchaser's objections
to, the Title Binder, Survey, Exception Documents and all other
documents delivered hereunder or otherwise obtained by Purchaser
pursuant to or in connection with this Agreement or the Property
shall either be cured to the satisfaction of Purchaser or waived by
Purchaser at or prior to the closing of the Asset Purchase
Agreement. In the event that the Purchaser does not
waive any exceptions or reservations that appear, then
Purchaser’s sole and exclusive remedy shall be to terminate
this Agreement by written notice delivered to Seller and shall be
entitled to immediately receive the return of the Initial Earnest
Money. Any matters to which Purchaser does not object or
which Purchaser waives or is deemed to have waived shall be "
Permitted
Exceptions ". If Purchaser terminates this
Agreement as provided in this Section 3.02 ,
this Agreement shall terminate and no party hereunder shall
thereafter have any further obligation to the other hereunder,
except as otherwise provided herein.
ARTICLE IV
FEASIBILITY STUDY AND INSPECTION
Section 4.01. Feasibility
Study . (a) On or before (i)
ten (10) days after the approval of RCI Entertainment’s
application for sexually oriented business license by the City of
Dallas and (ii) the transfer of all other permits utilized to
operate the Platinum Club II (but in no event later than August 31,
2008), Purchaser may conduct its due diligence on the Property,
including but not limited to, studies or tests or to conduct an
engineering and/or economic feasibility study of the Property,
which studies and tests may have included, without limitation,
financial and marketing analyses, soil tests, topographical
analysis, engineering studies, environmental studies and tests and
similar preliminary work. Purchaser hereby expressly waives the
right to any additional period of time for same.
(b) Notwithstanding
the foregoing, Purchaser shall indemnify and defend Seller and
hold Seller harmless from and against any and all claims,
liabilities or damages to the Property or against Seller
caused by Purchaser's and/or Purchaser's authorized agents',
representatives' or employees' actions during the or as a
result of any inspection of the Property by such parties
during such time period.
ARTICLE V
REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS
Section 5.01. Representations,
Warranties and Covenants of Seller . Seller
represents, warrants and covenants to Purchaser as
follows:
(a)
Organization,
Good Standing and Qualification. The Seller
(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 operate its business, and
(iii) is duly qualified to transact business and is in good
standing in Texas.
(b)
Ownership of the
Property . As of the Closing, the Seller
will be able to convey the Property free and clear of any
lien, claims, equities, charges, options, rights of first
refusal or encumbrances (save and except the Permitted
Exceptions) as evidenced by the title commitment for the
Property to be issued to Purchaser prior to the Closing and as
evidenced by a title policy to be provided to Purchaser at the
time of Closing. Seller shall have at Closing the
unrestricted right and power to transfer, convey and deliver
full ownership of the Property 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 Property to the
Purchaser as contemplated herein, Purchaser 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, subject to the agreed upon
Permitted Exceptions, if any.
(c)
Authorization
. The Seller has all requisite corporate power and
authority to execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the transactions
contemplated hereby. All action on the part of the
Seller necessary for the authorization, execution, delivery
and performance of this Agreement has been taken by the
Seller. This Agreement, when duly executed and delivered in
accordance with its terms, will constitute legal, valid and
binding obligations of the
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