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: February 15, 2005
RICK'S CABARET INTERNATIONAL, INC.
(Exact Name of Registrant As Specified in Its Charter)
Texas 0-26958 76-0037324
(State Or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation Identification No.)
10959 Cutten Road
Houston, Texas 77066
(Address Of Principal Executive Offices, Including Zip Code)
(281) 397-6730
(Registrant's Telephone Number, Including Area Code)
505 North Belt, Suite 630
Houston, Texas 77060
(281) 820-1181
(Registrant's previous office/phone)
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On February 13, 2005, we entered an Option to Purchase Agreement (the
"Option Agreement") with Top Shelf, LLC, a North Carolina limited liability
company ("Top Shelf") and the holder of Top Shelf's membership interests to
purchase all of the issued and outstanding membership interests of Top Shelf
which owns a nightclub known as "The Manhattan Club" located in Charlotte, North
Carolina (the "Club"). The Option Agreement provides for a four-month option
period and purchase price of $1,000,000 which is payable with 180,000 shares of
our common stock (the "Shares") and a seven year promissory note bearing
interest at the rate of 7% (the "Note"). Subject to the completion of the
transaction, we will be required to file a registration statement for the
Shares. For purposes of calculating the purchase price, the Shares will be
valued at the average closing price of our stock for the five (5) days preceding
the effective date of the registration statement. If the value of the Shares
declines subsequent to the effective date of the registration statement, then
the Seller shall have the right to "put" the Shares back to us on terms and
conditions to be negotiated by the parties and set forth in the definitive
agreement. It was further agreed that once the Seller has received the value of
the Shares, then his "put" rights will immediately terminate.
We intend to enter a Definitive Agreement upon satisfaction of certain
conditions, including Rick's obtaining a temporary liquor license, Rick's
obtaining a sexually oriented business license, and other conditions consistent
with transactions of this type. However, the Option Agreement shall immediately
terminate if we are denied a temporary liquor license by the North Carolina
Liquor Authority. Under the Option Agreement, there are provisions for us to
pay a Breakup Fee of $200,000 under certain conditions if we fail to execute and
close the transaction. 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 Option Agreement is attached hereto as Exhibit 10.1.
Additionally, on February 13, 2005, our wholly owned subsidiary, RCI
Entertainment (North Carolina), Inc., a North Carolina corporation ("RCI North
Carolina"), entered a Management Agreement (the "Management Agreement") with Top
Shelf under which RCI North Carolina will manage, operate, maintain and market
the Club. Under the Management Agreement, RCI North Carolina will operate the
Club under the name "Rick's Cabaret" pursuant to a limited grant of license
rights, and will receive one hundred percent (100%) of the net cash flow
generated by the Club. A copy of the Management Agreement is attached hereto as
Exhibit 10.2.
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
Exhibit Number Description
10.1 Option to Purchase Agreement
10.2 Management Agreement
99.1 Press release dated February 15, 2005
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.
RICK'S CABARET INTERNATIONAL, INC.
By: /s/ Eric Langan
---------------------
Date: February 15, 2005 Eric Langan
Chairman, President, Chief Executive
Officer and Acting Chief Accounting Officer