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: March 31, 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)
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ITEM
2.01
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COMPLETION
OF ACQUISITION OR DISPOSITION OF
ASSETS.
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On March
31, 2008, our wholly owned subsidiary, RCI Entertainment (Philadelphia), Inc.
(the “Purchaser”) completed the acquisition of 100% of the issued and
outstanding shares of common stock (the “TEZ Shares”) of The End Zone, Inc., a
Pennsylvania corporation (the “Company”) which owns and operates “Crazy Horse
Too Cabaret” (the “Club“) located at 2908 South Columbus Blvd., Philadelphia,
Pennsylvania 19148 (the “Real Property”) from Vincent Piazza (the
“Seller”). As part of the transaction, our wholly owned subsidiary,
RCI Holdings, Inc. (“RCI Holdings”) acquired from the Piazza Family Limited
Partnership (the “Partnership Seller”) 51% of the issued and outstanding
partnership interest (the “Partnership Interests”) in TEZ Real Estate, LP, a
Pennsylvania limited partnership (the “Partnership”) and 51% of the issued and
outstanding membership interest (the “Membership Interests”) in TEZ Management,
LLC, a Pennsylvania limited liability company, which is the general partner of
the Partnership (the “General Partner”). The Partnership owns the
Real Property where the Club is located. At closing, we paid a
purchase price of $3,500,000 in cash for the Partnership Interests and
Membership Interests, and issued 195,000 shares of our restricted common stock
(the “Rick’s Shares”) for the TEZ Shares.
As part
of the transaction, we entered into a Lock-Up/Leak-Out Agreement with the Seller
pursuant to which, on or after one year after the closing date, the Seller shall
have the right, but not the obligation, to have Rick’s purchase from Seller
5,000 Rick’s Shares per month (the “Monthly Shares”), calculated at a price per
share equal to $23.00 (“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 $4,485,000 from the
sale of the Rick’s Shares and any deficiency.
Additionally,
at closing, the Seller and the Partnership Seller entered a five-year agreement
not to compete with us within a twenty (20) mile radius of the Club. Finally,
the Company entered into a new lease agreement with the Partnership giving it
the right to lease the Real Property for twenty (20) years (“Original Term”)
with an option for an additional nine (9) years eleven (11) eleven months
(“Option Term”) with rent payable at the rate of (i) $50,000 per month, subject
to adjustment for increases in the Consumer Price Index (CPI) every five years
during the Original Term and the Option Term, or (ii) 8% of gross sales,
whichever is higher. The maximum increase in the CPI for any five (5)
year period shall be 15%.
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
Lock-Up/Leak-Out Agreement is attached hereto as Exhibit 10.1. A copy
of the Non-Compete 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.
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ITEM
9.01
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FINANCIAL
STATEMENTS AND EXHIBITS
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(c)
Exhibits
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Exhibit
Number
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Description
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Lock-Up/Leak-Out
Agreement
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Non-Competition
Agreement
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Press
release dated March 31, 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:
April 2, 2008
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Eric
Langan
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President
and Chief Executive Officer
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