Asset Purchase Agreement - RCI Internet Holdings Inc., Rick's Cabaret International Inc. and Voice Media Inc.
ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement ("Agreement") is made this 6th day of July,
2000, by and between RCI INTERNET HOLDINGS, INC., a Texas corporation, ("RCI")
with its principal place of business located at 505 North Belt, Suite 630,
Houston, Texas 77060, RICK'S CABARET INTERNATIONAL, INC., a Texas corporation
("Rick's"), with its principal place of business located at 505 North Belt,
Suite 630, Houston, Texas 77060, and VOICE MEDIA, INC., a Nevada corporation,
whose address is 2533 North Carson Street, Suite 1091, Carson City, Nevada 89706
(the "Seller").
R E C I T A L S:
WHEREAS, the Seller is the owner of all of the tangible and intangible
assets associated or used in connection with the operation of XXXpassword.com
("Password" or the "Site"); and
WHEREAS, Seller desires to sell and transfer all of the tangible and
intangible assets associated or used in connection with the operation of
Password; and
WHEREAS, RCI desires to acquire the assets of Seller, upon and subject to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein and in reliance upon the representations and
warranties contained herein, the parties hereto covenant and agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS AND PROPERTY
1.1 Assets of Seller to be Acquired by RCI (the "Purchased Assets").
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On the Closing Date (as defined in Article IV hereof), and subject to the terms
and conditions set forth in this Agreement, RCI agrees to purchase, accept and
acquire from Seller, and Seller agrees to sell, transfer, assign, convey and
deliver to RCI the following Purchased Assets:
1.1.1 the goodwill associated with or used in connection with the
operation or business of Password (the "Goodwill");
1.1.2 to the extent their transfer is permitted pursuant to the terms
thereof, all advertising and traffic agreements, contracts, agreements,
licenses, commitments, arrangements, instruments and understandings which
relate to the business and operation of Password exclusively;
1.1.3 any and all copies of records in Seller's possession relating to
or compiled in connection with its business and operation of Password which
are requested by RCI (the "Records").
<PAGE>
1.2 On the Closing Date (as defined in Article IV hereof), and subject
to the terms and conditions set forth in this Agreement, the Seller agrees to
transfer and assign to RCI, and RCI agrees to accept from Seller the following
Intellectual Property which is used solely for the business of Password or are
otherwise necessary for the ownership of Password (the "Intellectual Property"):
1.2.1 all proprietary rights held by Seller in the XXXPassword.com
domain name (the "Domain Name");
1.2.2 all ownership rights held by Seller in the content and text,
navigational devices, menu structures or arrangement, icons, operational
instructions, scripts, commands, syntax, screen design and other designs
and visual expressions contained on the Site, whether stored, encoded,
recorded or written on disk, tape, film, memory device, paper or other
media of any nature (the "Content"); and
1.2.3 all proprietary rights held by Seller in and to all trademarks
and any applications therefor, tradenames and any applications therefor,
tradedress, trademark registrations and any applications therefor, service
marks, copyrights, copyright registrations and any applications therefor,
slogans, logs, associated with or used in connection with the operation or
business of Password exclusively, including all rights, title and interest
in and to the following tradename and trademark XXXPassword and
XXXPassword.com used in connection with the operation of the Site (the
"Trademarks").
1.3 Intent of the Parties. Although the Exhibits to this Agreement are
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intended to be complete, in the event such Exhibits fail to contain the
description of any asset belonging to Seller which is used solely for the
business of Password or are otherwise necessary for the ownership of Password,
such assets shall nonetheless be deemed transferred to RCI at the Closing.
ARTICLE II
EXCLUDED LIABILITIES
RCI shall have no obligation and shall not assume or agree to pay, perform
or discharge, nor shall RCI be directly or indirectly responsible or obligated
for, any debts, obligations, contracts, fines, or penalties or liabilities of
Seller, wherever or however incurred, except for liabilities subsequent to the
date of Closing which are expressly assumed, and the assumption of refund
liabilities and credit card chargebacks for sales made from the Password
website. All personal property taxes on the Purchased Assets will be paid in
full by the Seller for all years prior to the Closing and the taxes for year of
Closing will be pro rated to the Closing Date. Further, RCI shall not assume or
be responsible for any of the liabilities or obligations of Seller or with
respect to the business prior to the Closing Date, including any fines or
penalties levied against Seller by any third party, and further including,
without limitation, the following:
ASSET PURCHASE AGREEMENT - PAGE 2
<PAGE>
(i) Nonenumerated Liabilities. Any liability or obligation of Seller
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of any kind, known or unknown, contingent or otherwise, not resulting
from any covenant, agreement or indemnity of RCI in this Agreement or
the other agreements and instruments to be executed and delivered by
RCI in connection with Agreement;
(ii) Taxes. Any liability or obligation of Seller for federal, state,
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or local income, franchise, property, sales or use or recapture taxes,
assessments, and penalties, whether arising out of the transactions
contemplated by this agreement or otherwise;
(iii) Violations of Law. Any liability or obligation resulting from
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violations of any applicable laws or regulations by Seller prior to
the Closing Date or infringement of third party rights or interests
prior to the Closing Date;
(iv) Employee Liabilities. Any employee liabilities relating to present
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and past employees of the business with respect to plans, programs,
policies, commitments, and other benefit entitlements established
or existing on or prior to the Closing (whether or not such
liabilities are accrued or payable at the Closing, and whether or not
such liabilities are contingent in nature);
(v) Litigation. Any litigation pending or threatened against Seller,
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the business or the Purchased Assets; and
(vi) Nontransferable Contracts and Agreements. Any liability or
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obligation associated with any contract, agreement, instrument,
license or other right or obligation of Seller which is an asset of
the business but which requires the consent of some third party to be
assigned and/or transferred and with respect to which such consent of
such third party has not been obtained.
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Purchase Price. As consideration for the Purchased Assets, RCI
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shall pay to Seller as follows:
(i) 700,000 restricted shares of Rick's Cabaret International, Inc.
("Rick's") common stock, par value $.01("Rick's Stock"), of which
250,000 shares are subject to that certain Escrow Agreement set forth
in Section 4.2(ii) below; and
(ii) An Earn Out Amount of $380,000 plus either (1) $475,000 if the
earnings before depreciation, amortization, interest and taxes
("EBITDA") of Password during the first full twelve-month period
beginning on the Closing Date exceeds $800,000 but is less than
$1,200,000 (but not otherwise) or (2) $925,000 if the EBITDA of
Password during the first full twelve-month period beginning on the
Closing Date exceeds $1,200,000.
ASSET PURCHASE AGREEMENT - PAGE 3
<PAGE>
The Earn Out Amount shall be paid in monthly amounts equal only to 50% of
the Free Net Cash Flow (as defined below) of all Internet commerce generated by
Password during the 6 year period from the Closing Date. If 50% of the Free Net
Cash Flow of all Internet commerce generated by Password during the 6 year
period from the Closing Date is less than the Earn Out Amount, then the excess
of the Earn Out Amount shall not be paid. For purposes of this Agreement, the
term "Free Net Cash Flow" shall be defined as cash proceeds less variable costs,
overhead costs and payment of income taxes due. Cash Proceeds shall be the
aggregate amount of all cash received from, without limitation, cash sales,
credit or charge card sales, sales on open account or any combination of the
same and other such sources less refunds and customer credits. Variable Costs
shall be the aggregate amount of all charges or reduction of proceeds by the
credit card processor/merchant bank and the cost paid to webmasters as a
commission for traffic sent to the website. Without limitation, such
processor/merchant bank costs shall include discounts, fees, chargebacks, fines
and all other such costs. In the event that the third party processor/merchant
bank shall require a reserve fund, for the purposes of this Agreement, said fund
shall be considered a Variable Cost. To the extent reserve funds are recovered
from the credit card processor/merchant bank and available for distribution,
then such amount shall be deemed Cash Proceeds available for distribution.
Overhead Costs shall be the aggregate amount of all charges for third party
content licensing fees, bandwidth charges and the Management Fee as set forth in
Section 7 of the Management Agreement executed simultaneously herewith between
RCI and National Telemedia Corp., an affiliate of Seller, in the form attached
hereto as Exhibit "C". The parties hereto acknowledge that to the extent the
specific identification of third party content costs is impractical, they agree
to the allocation of the actual costs based on the percentage of Password sales
to the combined sales of all websites of Seller benefiting from such third party
content.
With respect to the payment of income taxes due, the parties agree to
retain a reserve in an amount of the Cash Proceeds equal to 35%. In the event
the federal tax liability for the corresponding fiscal year is determined to be
less than the amount held in reserve, then such amount shall become available
for distribution to the Seller and RCI.
Further, Seller agrees that to the extent there are any shortfalls to the
Free Net Cash Flow in any given month that the Seller will pay such shortfall
amount, in an amount not to exceed $50,000, and be reimbursed prior to any
further distribution from the Free Net Cash Flow.
ARTICLE IV
THE CLOSING
4.1 Date and Time. The closing of the transactions contemplated by
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this Agreement (the "Closing") shall take place at the offices of Axelrod, Smith
& Kirshbaum, 5300 Memorial Drive, Suite 700, Houston, Texas 77007 on July 6,
2000 or at such other time and on such date as the parties hereto shall mutually
agree. For purposes of this Agreement, the date on which the Closing actually
occurs is the "Closing Date".
ASSET PURCHASE AGREEMENT - PAGE 4
<PAGE>
4.2 Related Transactions. In addition to the consummation of the
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acquisition of the Purchased Assets, the following actions shall take place
contemporaneously at the Closing:
(i) Rick's and Seller shall enter into an Escrow Agreement pursuant to
which 250,000 shares of Rick's Stock shall be delivered in the name of
the Seller to be held and distributed by the Escrow Agent in
accordance with the terms of the Escrow Agreement in the form attached
hereto as Exhibit "A"; and
(ii) The Seller will enter into a Voting Agreement with Eric Langan,
President and Chief Executive Officer of Rick's, pursuant to which the
Seller will authorize Eric Langan to vote the 250,000 shares of Rick's
Stock held in escrow during the time that the shares are held in
escrow pursuant to the Voting Agreement in the form attached hereto as
Exhibit "B".
(iii)RCI and National Telemedia, Corp., an affiliate of Seller, shall
enter into a Management Agreement pursuant to which National
Telemedia, Corp. will maintain, manage and operate the XXXPassword.com
website in accordance with the terms of the Management Agreement in
the form attached hereto as Exhibit "C".
4.3 Closing Documents of Seller. At the Closing, Seller shall deliver
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or cause to be delivered to RCI the following:
(a) all instruments of assignment and bills of sale necessary to transfer
to RCI good and marketable title to the Purchased Assets free and
clear of all liens, charges or encumbrances;
(b) all documents necessary to transfer the domain name XXXPassword.com;
(c) officers certificate required by Section 9.2(c);
(d) resolutions of the Board of Directors as required by Section 9.2(d);
and
(e) executed Escrow Agreement, Voting Agreement and Management Agreement
as provided for in Section 4.2.
4.4 Closing Documents of RCI. At the Closing, RCI shall deliver or
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cause to be delivered to Seller, the following:
(a) officers certificate required by Section 9.1(c);
(b) resolutions of the Board of Directors as required by Section 9.1(d);
and
(c) executed Escrow Agreement, Voting Agreement and Management Agreement
as provided for in Section 4.2.
ASSET PURCHASE AGREEMENT - PAGE 5
<PAGE>
4.5 Closing Documents of Rick's. At the Closing, Rick's shall deliver or
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cause to be delivered to Seller, the following:
(a) either (i) certificates evidencing 700,000 shares of Rick's common
stock, duly executed for issuance by Rick's to Voice Media, of which
250,000 shares will be immediately placed in escrow with the Escrow
Agent pursuant to the Escrow Agreement referred to in Section 4.2(ii)
or (ii) letter of instructions from a duly authorized officer of
Rick's to American Securities Transfer, Inc. (Rick's's transfer
agent), instructing the transfer agent to duly issue stock
certificates evidencing the shares of Common Stock of Rick's to Voice
Media, all as contemplated by this Agreement, in form and substance
satisfactory to counsel for the Stockholders;
(b) officers certificate required by Section 9.1(e); and
(c) resolutions of the Board of Directors as required by Section 9.1(f).
(d) executed Escrow Agreement, Voting Agreement and Management Agreement
as provided for in Section 4.2.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE SELLER
The Seller hereby represents and warrants to RCI and Rick's as follows:
5.1 Organization and Capitalization of Seller. Seller is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Nevada, with full power and authority and all necessary governmental
and regulatory licenses, permits and authorizations to carry on the businesses
in which it is engaged, to own the properties that it owns currently and to
perform its obligations under this Agreement, is duly qualified or licensed to
do business and is in good standing as a foreign corporation in all states or
jurisdictions which the conduct of such business requires such qualification and
which the failure to be so qualified or licensed would have a material adverse
effect on the business of the Seller. All of such issued and outstanding
shares of common stock of Seller are duly authorized, validly issued, fully paid
and non-assessable.
5.2 Authorization of Agreement. Seller has all requisite corporate
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power and authority to execute and deliver this Agreement and to perform its
obligations here-under. The execution and delivery by Seller of this Agreement
and the performance by Seller of its obligations hereunder (a) have been duly
and validly authorized by all requisite corporate action and (b) will not
violate its charter or bylaws or any order, writ, injunction, decree, statute,
rule or regulations applicable to it or any of its properties or assets, or be
in conflict with, result in a breach of or constitute a default under any note,
bond, indenture, mortgage, lease, license, franchise agreement or other
agreement, instrument or obligation, or result in the creation or imposition of
any lien, charge or encumbrance of any kind or nature whatsoever upon any of the
properties or assets of Seller. This Agreement and each and every agreement,
document, exhibit and instrument to be executed, delivered and performed by the
Seller in connection herewith constitute the valid and legally binding
obligations of the Seller enforceable against it in accordance with their
respective terms, except as enforceability may be limited by applicable
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws from time to time in effect affecting the enforcement of
creditors' rights generally.
ASSET PURCHASE AGREEMENT - PAGE 6
<PAGE>
5.3 Consents. No consent of, approval by, order or authorization of,
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or registration, declaration or filing by Seller with any court or any
governmental or regulatory agency or authority having jurisdiction over Seller
or any of its property or assets or any other person is required on the part of
Seller in connection with the consummation of the transactions contemplated by
this Agreement, excluding any registration, declaration or filing the failure to
effect which would not have a material adverse effect on the financial condition
of Seller or the operation of its business after the Closing.
5.4 Title to Purchased Assets. The Seller has and will transfer to RCI
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at Closing good and marketable title to all of the Purchased Assets, which are
being sold to RCI under this Agreement, free and clear of all liens, claims,
charges, encumbrances, restrictions or security interests. Seller is not a
party to any contract or obligation whereby there has been granted to anyone an
absolute or contingent right to purchase, obtain or acquire any rights in the
Purchased Assets.
5.5 Material Agreements; Action. Exhibit 5.5, is an accurate and
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complete list of all contracts, agreements, commitments, understandings or
proposed transactions, whether written or oral, to which Seller or Password or
any of its subsidiaries is a party or by which it is bound that involve or
relate to: (i) the ownership of the Password Internet domain "name" owned or
operated by Seller; (ii) any banking relationship for processing of credit card
charges or other charges by customers of the Password Internet domain site owned
or operated by Seller; or (iii) covenants of Seller or any of its subsidiaries
not to compete in any line of business or with any person in any geographical
area or covenants of any other person not to compete with Seller or any of its
subsidiaries in any line of business or in any geographical area. There have
been made available to RCI and its representatives true and complete copies of
all such agreements. All such agreements are in full force and effect and are
the legal, valid and binding obligation of Seller or its subsidiaries,
enforceable against them in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). None of Seller or any of its subsidiaries is
in default under any such agreements nor to the best of its knowledge, is any
other party to any such agreements in default thereunder in any respect.
5.6 Contracts and Leases. Seller (i) has no leases of any personal
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property relating to the Purchased Assets, whether as lessor or lessee; (ii) has
no contractual or other obligations relating to the Purchased Assets, whether
written or oral; and (iii) has not given any power of attorney to any person or
organization for any purpose relating to the Purchased Assets. Exhibit 5.6 sets
forth a complete list, including any amendment of each domain name, lease or
contract which are part of the Purchased Assets and Intellectual Property to be
acquired by RCI. Seller has furnished RCI a copy of each contract, lease or
other document relating to the Purchased Assets and Intellectual Property to
which they are subject or are a party or a beneficiary, which is to be assumed
or acquired by RCI. To Seller's knowledge, such contracts, leases or other
documents are valid and in full force and effect according to their terms and
each constitutes a legal, valid and binding obligation of Seller and the other
respective parties thereto and is enforceable in accordance with their terms,
and the Seller has no knowledge of any default or breach under such contract,
lease or other document or of any pending or threatened claims under any such
contract, lease or other document. Neither the signing or execution of this
Agreement, nor the consummation of all or any of the transactions contemplated
under this Agreement, will constitute a breach or default under any such
contract, lease or other document.
ASSET PURCHASE AGREEMENT - PAGE 7
<PAGE>
5.7 Litigation. Except as disclosed in Exhibit 5.7, there is no suit,
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claim, arbitration, investigation, action or proceeding entered against, now
pending or, to the Seller's knowledge, threatened against the Seller, the
Purchased Assets or the Intellectual Property, before any court, arbitration,
administrative or regulatory body or any governmental agency which may result in
any judgment, order, award, decree, liability or other determination which will
or could reasonably be expected to have any effect upon the Purchased Assets or
the Intellectual Property, nor is there any basis known to Seller for any such
action. No litigation is pending, or, to Seller's knowledge, threatened,
against Seller, or its assets or properties which seeks to restrain or enjoin
the execution and delivery of this Agreement or any of the documents referred to
herein or the consummation of any of the transactions contemplated hereby or
thereby. The Seller is not subject to any judicial injunction or mandate or any
quasi-judicial or administrative order or restriction directed to or against it
or which would affect the Purchased Assets.
5.8 Taxes. Seller has timely and accurately filed all federal, state,
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foreign and local tax returns and reports required to be filed prior to such
dates and have timely paid all taxes shown on such returns as owed for the
periods of such returns, including all sales taxes and withholding or other
payroll related taxes shown on such returns. No assessments or notices of
deficiency or other communications have been received by Seller with respect to
any tax return which has not been paid, discharged or fully reserved against and
no amendments or applications for refund have been filed or are planned with
respect to any such return. There is no dispute or claim concerning any tax
liability of Seller either claimed or raised by any authority in writing as to
which Seller or its directors or officers has knowledge. There are no
agreements between Seller and any taxing authority, including, without
limitation, the Internal Revenue Service, waiving or extending any statute of
limitations with respect to any tax return.
5.9 Financial Statements. The calculation of EBITDA previously
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delivered to RCI, through the period ended May 31, 2000, was prepared in
accordance with the principles and procedures employed in prior periods by
Seller, consistently applied with the principles and procedures employed in
prior periods by Seller (the "EBITDA Calculation"). The EBITDA Calculation has
been provided to and reviewed by the accountants for Buyer.
ASSET PURCHASE AGREEMENT - PAGE 8
<PAGE>
5.10 Conduct of Business.
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(a) Ordinary Course of Business. Since May 31, 2000 (the "EBITDA
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Calculation Date") Seller has operated the business of Password in the ordinary
course consistent with past practices.
(b) No Material Adverse Change. Since the EBITDA Calculation Date,
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there has been no material adverse change in the business or the assets of
Password or in the financial condition, or operations of the business of
Password.
(c) Absence of Particular Events. Since the EBITDA Calculation Date,
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Password has not: (i) suffered any damage or destruction adversely affecting the
business or involving the assets in an amount in excess of Five Thousand Dollars
($5,000.00); (ii) increased the compensation payable or to become payable to
employees of Seller involved in the business; (iii) incurred any liability or
obligation relating to the business other than in the ordinary course consistent
with past practice; (iv) made any change in any method, practice, or principle
of accounting involving the business or assets; (v) paid, loaned, or advanced
any material monetary amount or other asset to, or sold, transferred, or leased
any asset to, any employee involved in the business except for normal
compensation involving salary and benefits; or (vi) agreed to take any action
described in this Section 5.10(c).
(d) Absence of Joint Ventures, etc. Seller is not a party to any joint
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venture or other similar agreement or arrangement that involves any sharing of
profits of the business or the assets of Password.
5.11 Compliance with Laws. To Seller's best knowledge, Seller is and
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at all times prior to the date hereof has been, in compliance with all statutes,
orders, rules, and regulations applicable to it or to the ownership of its
assets or the operation of its business, except for failures to be in compliance
that would not have a material adverse effect on the business, properties,
condition (financial or otherwise) or prospects of Seller, and Seller has no
basis to expect to receive, and have not received, any order or notice of any
such violation or claim of violation of any such statute, order, rule, ordinance
or regulation.
5.12 Intellectual Property.
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(a) Seller owns, has good and marketable title to, and has full right
to use and transfer to RCI, all of the Intellectual Property free and clear of
any material liens, mortgages, judgments, or other encumbrances of any kind, and
no rights or licenses of any kind respecting the Intellectual Property have been
granted to any third party. There are no outstanding, or, to the best knowledge
of the Seller, threatened claims of infringement against Seller respecting the
use of any of the Intellectual Property in connection with the operations or
business of the Seller or Password and it has no knowledge of any trademark,
service mark, trade name, assumed name, copyright, patent, trade secret,
contractual or other rights of any third party which may be violated or
infringed by the use of any of the Intellectual Property in connection with
Seller's operations or business.
ASSET PURCHASE AGREEMENT - PAGE 9
<PAGE>
(b) Seller warrants that Buyer shall have access to and the right to
use the Content provided pursuant to this Agreement which is owned by Seller and
Seller warrants that with respect to Content licensed from third parties, to
Seller's best knowledge, Buyer shall have the right to access and use of such
Content.
5.13 No Default. Seller is not in material default under any term or
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condition of any instrument evidencing, creating or securing any material
indebtedness of Seller, and there has been no default in any material obligation
to be performed by Seller under any other agreement to which it is a party or by
which it or its assets or properties are bound.
5.14 Password Indebtedness. Seller has delivered to RCI true and
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complete copies of all documents related to any indebtedness of Password (the
"Password Indebtedness") and made available to RCI all correspondence concerning
the status of the Password Indebtedness.
5.15 Pending Claims. There is no claim, suit, action or proceeding,
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whether judicial, administrative or otherwise, pending or, to the best of
Seller's knowledge, threatened that would preclude or restrict the performance
of this Agreement by Seller.
5.16 Absence of Change. The Seller has no knowledge of any present or
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future condition or state of facts or circumstances which would materially and
adversely affect the business of Password.
5.17 Disclosure. No representation or warranty of Seller contained in
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this Agreement (including the exhibits hereto) contains any untrue statement or
omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
5.18 No Brokerage Commission. No broker or finder has acted for the
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Seller in connection with this Agreement or the transactions contemplated
hereby, and no person is entitled to any brokerage or finder's fee or
compensation in respect thereof based in any way on agreements, arrangements or
understandings made by or on behalf of the Seller.
5.19 Acquisition of Stock for Investment. The Seller understands that
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the issuance of common stock of Rick's has not been registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities acts,
and Seller represents and warrants to RCI and Rick's that its present intention
is to receive and hold the common stock of Rick's for investment only and not
with a view to the distribution or resale thereof. The Seller further
acknowledges that it has had access to information regarding RCI and Rick's and
its operations, and that Seller has such knowledge and experience in financial
and business matters so as to be capable of evaluating the relative merits and
risks of an investment in Rick's.
ASSET PURCHASE AGREEMENT - PAGE 10
<PAGE>
Additionally, the Seller understands that any sale by the Seller of any of
the common stock of Rick's received under this Agreement, will under current
law, require either (a) the registration of the common stock of Rick's under the
Act and applicable state securities acts; (b) compliance with Rule 144 of the
Act; or (c) the availability of an exemption from the registration requirements
of the Act and applicable state securities acts. The Seller hereby agrees to
execute, deliver, furnish or otherwise provide to Rick's an opinion of counsel
reasonably acceptable to Rick's prior to any subsequent transfer of the common
stock of Rick's, that such transfer will not violate the registration
requirements of the federal or state securities acts. The Seller further agrees
to execute, deliver, furnish or otherwise provide to Rick's any documents or
instruments as may be reasonably necessary or desirable in order to evidence and
record the common stock of Rick's acquired hereby.
To assist in implementing the above provisions, the Seller hereby consents
to the placement of the legend, or a substantially similar legend, set forth
below, on all certificates representing ownership of the common stock of Rick's
acquired hereby until the common stock of Rick's has been sold, transferred, or
otherwise disposed of, pursuant to the requirements hereof. The legend shall
read substantially as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACTS. THESE SECURITIES
MUST BE ACQUIRED FOR INVESTMENT, ARE RESTRICTED AS TO TRANSFERABILITY, AND
MAY NOT BE SOLD, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION AND QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL
AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM."
In addition, the Seller consents to Rick's placing a "stop transfer
notation" in its corporate records concerning the transfer of the common stock
of Rick's acquired by the Seller.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF RCI
RCI hereby represents and warrants to Seller as follows:
6.1 Organization of RCI. RCI is a corporation duly organized, validly
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existing and in good standing in the laws of the state of Texas, with full power
and authority to carry on the businesses in which it is engaged, to own the
properties that it owns currently and will own at the Closing, and to perform
its obligations under this Agreement , is duly qualified or licensed to do
business and is in good standing as a foreign corporation in all states or
jurisdictions which the conduct of such business requires such qualification and
which the failure to be so qualified or licensed would have a material adverse
effect on the business of RCI. The authorized capital stock of RCI consists of
1,000 shares of common stock, $.01 par value, of which 1,000 shares are validly
issued and outstanding. All of such issued and outstanding shares of common
stock of RCI are duly authorized, validly issued, fully paid and non-assessable.
6.2 Authorization of Agreement. RCI has all requisite corporate power
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and authority to execute and deliver this Agreement and to perform its
obligations here-under. The execution and delivery by RCI of this Agreement and
the performance by RCI of its obligations hereunder (a) have been duly and
validly authorized by all requisite corporate action and (b) will not violate
its charter or bylaws or any order, writ, injunction, decree, statute, rule or
regulations applicable to it or any of its properties or assets, or be in
conflict with, result in a breach of or constitute a default under any note,
bond, indenture, mortgage, lease, license, franchise agreement or other
agreement, instrument or obligation, or result in the creation or imposition of
any lien, charge or encumbrance of any kind or nature whatsoever upon any of the
properties or assets of RCI. This Agreement and each and every agreement,
document, exhibit and instrument to be executed, delivered and performed by RCI
in connection herewith constitute the valid and legally binding obligations of
RCI enforceable against it in accordance with their respective terms, except as
enforceability may be limited by applicable equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws from time to
time in effect affecting the enforcement of creditors' rights generally.
ASSET PURCHASE AGREEMENT - PAGE 11
<PAGE>
6.3 Consents. No consent of, approval by, order or authorization of,
--------
or registration, declaration or filing by RCI with any court or any governmental
or regulatory agency or authority having jurisdiction over RCI or any of its
property or assets or any other person is required on the part of RCI in
connection with the consummation of the transactions contemplated by this
Agreement, excluding any registration, declaration or filing the failure to
effect which would not have a material adverse effect on the financial condition
of RCI or the operation of its business after the Closing and except for any
filing under the federal or state securities laws.
6.4 Disclosure. No representation or warranty of RCI contained in this
----------
Agreement (including the exhibits hereto) contains any untrue statement or omits
to state a material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which they were made, not
misleading.
6.5 Litigation. No Litigation is pending, or, to RCI's knowledge,
----------
threatened, against RCI, or its assets or properties which seeks to restrain or
enjoin the execution and delivery of this Agreement or any of the documents
referred to herein or the consummation of any of the transactions contemplated
hereby or thereby. There are no judgments or outstanding orders, injunctions,
decrees, stipulations or awards against RCI or any of its assets or properties.
6.6 Brokerage Commission. No broker or finder has acted for RCI in
---------------------
connection with this Agreement or the transactions contemplated hereby, and no
person is entitled to any brokerage or finder's fee or compensation in respect
thereof based in any way on agreements, arrangements or understandings made by
or on behalf of RCI.
6.7 No Default. RCI is not in material default under any term or
-----------
condition of any instrument evidencing, creating or securing any material
indebtedness of RCI, and there has been no default in any material obligation to
be performed by RCI under any other agreement to which it is a party or by which
it or its assets or properties are bound.
6.8 Pending Claims. There is no claim, suit, action or proceeding,
---------------
whether judicial, administrative or otherwise, pending or, to the best of RCI's
knowledge, threatened that would preclude or restrict the performance of this
Agreement by RCI.
ASSET PURCHASE AGREEMENT - PAGE 12
<PAGE>
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF RICK'S
Rick's hereby represents and warrants to Seller as follows:
7.1 Organization of Rick's. Rick's is a corporation duly organized,
------------------------
validly existing and in good standing in the laws of the state of Texas, with
full power and authority to carry on the businesses in which it is engaged, to
own the properties that it owns currently and will own at the Closing, and to
perform its obligations under this Agreement , is duly qualified or licensed to
do business and is in good standing as a foreign corporation in all states or
jurisdictions which the conduct of such business requires such qualification and
which the failure to be so qualified or licensed would have a material adverse
effect on the business of Rick's. The authorized capital stock of Rick's
consists of (i) 15,000,000 shares of common stock, $.01 par value of which
3,699,178 shares are validly issued and outstanding, and (ii) 1,000,000 shares
of preferred stock $.10 par value, none of which are issued and outstanding.
All of such issued and outstanding shares of common stock of Rick's are duly
authorized, validly issued, fully paid and non-assessable.
7.2 Authorization of Agreement. Rick's has all requisite corporate
----------------------------
power and authority to execute and deliver this Agreement and to perform its
obligations here-under. The execution and delivery by Rick's of this Agreement
and the performance by Rick's of its obligations hereunder (a) have been duly
and validly authorized by all requisite corporate action and (b) will not
violate its charter or bylaws or any order, writ, injunction, decree, statute,
rule or regulations applicable to it or any of its properties or assets, or be
in conflict with, result in a breach of or constitute a default under any note,
bond, indenture, mortgage, lease, license, franchise agreement or other
agreement, instrument or obligation, or result in the creation or imposition of
any lien, charge or encumbrance of any kind or nature whatsoever upon any of the
properties or assets of Rick's. This Agreement and each and every agreement,
document, exhibit and instrument to be executed, delivered and performed by
Rick's in connection herewith constitute the valid and legally binding
obligations of Rick's enforceable against it in accordance with their respective
terms, except as enforceability may be limited by applicable equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws from time to time in effect affecting the enforcement of creditors' rights
generally.
7.3 Consents. No consent of, approval by, order or authorization of,
--------
or registration, declaration or filing by Rick's with any court or any
governmental or regulatory agency or authority having jurisdiction over Rick's
or any of its property or assets or any other person is required on the part of
Rick's in connection with the consummation of the transactions contemplated by
this Agreement, excluding any registration, declaration or filing the failure to
effect which would not have a material adverse effect on the financial condition
of Rick's or the operation of its business after the Closing and except for any
filing under the federal or state securities laws.
7.4 Disclosure. No representation or warranty of Rick's contained in
----------
this Agreement (including the exhibits hereto) contains any untrue statement or
omits to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.
7.5 Brokerage Commission. No broker or finder has acted for Rick's in
---------------------
connection with this Agreement or the transactions contemplated hereby, and no
person is entitled to any brokerage or finder's fee or compensation in respect
thereof based in any way on agreements, arrangements or understandings made by
or on behalf of Rick's.
ASSET PURCHASE AGREEMENT - PAGE 13
<PAGE>
7.6 Nasdaq Compliance. As of the date hereof, the shares of common
------------------
stock of Rick's are listed for trading on the Nasdaq SmallCap Market. To the
best of Rick's knowledge, no action is pending or threatened by Nasdaq against
Rick's that would result in the shares of Rick's common stock being delisted
from the Nasdaq SmallCap Market. Rick's will use its best efforts to maintain
its listing on the Nasdaq SmallCap Market.
7.7 No Default. Rick's is not in material default under any term or
-----------
condition of any instrument evidencing, creating or securing any material
indebtedness of Rick's, and there has been no default in any material obligation
to be performed by Rick's under any other agreement to which it is a party or by
which it or its assets or properties are bound.
7.8 Pending Claims. There is no claim, suit, action or proceeding,
---------------
whether judicial, administrative or otherwise, pending or, to the best of Rick's
knowledge, threatened that would preclude or restrict the performance of this
Agreement by Rick's.
ARTICLE VIII
COVENANT OF VOICE MEDIA
Voice Media covenants and agrees that it shall continue to advertise,
market, distribute and promote the Site consistent with its past practices,
including the marketing and distribution of the Site through its use of the
webmaster affiliate programs of the Seller.
ARTICLE IX
CONDITIONS TO CLOSING
9.1 Conditions to the Obligations of Seller. The obligations of Seller
---------------------------------------
to consummate the transactions contemplated hereby shall be subject to the
satisfaction, on or before the Closing Date, of each and every one of the
following conditions, unless waived, in whole or in part, by Seller for purposes
of consummating such transaction.
(a) The representations and warranties of RCI and Rick's set forth in
this Agreement shall be true and correct in all material respects on the
Closing Date;
(b) RCI and Rick's shall have performed and complied with all
agreements, obligations, covenants and conditions required by this
Agreement to be performed or complied with on or prior to the Closing Date;
(c) The Seller shall have received a certificate, dated the Closing
Date and signed by the President of RCI to the effect set forth in Section
9.1(a) and 9.1(b) for the purpose of verifying the accuracy of such
representations and warranties and the performance and satisfaction of such
covenants and conditions;
(d) The Seller shall have received corporate resolutions of the Board
of Directors of RCI, certified by an officer of RCI, which authorize the
execution, delivery and performance of this Agreement and the documents
referred to herein to which it is or is to be a party dated as of the
Closing Date;
ASSET PURCHASE AGREEMENT - PAGE 14
<PAGE>
(e) The Seller shall have received a certificate, dated the Closing
Date and signed by the President of Rick's to the effect set forth in
Section 9.1(a) and 9.1(b) for the purpose of verifying the accuracy of such
representations and warranties and the performance and satisfaction of such
covenants and conditions;
(f) The Seller shall have received corporate resolutions of the Board
of Directors of Rick's, certified by an officer of Rick's, which authorize
the execution, delivery and performance of this Agreement and the documents
referred to herein to which it is or is to be a party dated as of the
Closing Date;
(g) The related transactions as set forth in Section 4.2 shall be
consummated concurrently with the Closing;
(h) The Board of Directors of Rick's shall have appointed two
additional directors to its Board of Directors as selected by Seller; and
(i) No action, suit or proceeding by or before any court or any
governmental or regulatory authority shall have been commenced and no
investigation by any governmental or regulatory authority shall have been
commenced seeking to restrain, prevent or challenge the transactions
contemplated hereby or seeking judgments against RCI or Rick's.
9.2 Conditions to the Obligations of RCI and Rick's. The obligations
--------------------------------------------------
of RCI and Rick's to effect the transactions contemplated hereby shall be
subject to the satisfaction, on or before the Closing Date, of each and every
one of the following conditions, unless waived, in whole or in part, by RCI and
Rick's for purposes of consummating such transaction.
(a) The representations and warranties of Seller set forth herein
shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on the Closing Date;
(b) Seller shall have performed and complied with all agreements,
obligations, covenants and conditions required by this Agreement to be
performed or complied with by Seller on or prior to the Closing;
(c) RCI and Rick's shall have received a certificate, dated the
Closing Date and signed by the President of the Seller to the effect set
forth in Section 9.2(a) and 9.2(b) for the purpose of verifying the
accuracy of such representations and warranties and the performance and
satisfaction of such covenants and conditions;
(d) RCI and Rick's shall have received corporate resolutions of the
Board of Directors of Seller, certified by an officer of Seller, which
authorize the execution, delivery and performance of this Agreement and the
documents referred to herein to which it is or is to be a party dated as of
the Closing Date;
ASSET PURCHASE AGREEMENT - PAGE 15
<PAGE>
(e) As of May 31, 2000, the (i) Gross Revenues of XXXPassword.com for
the preceding full five (5) months shall exceed $1,250,000 and (ii) the
EBITDA derived from XXXPassword.com for the five (5) month period, shall be
in excess of $167,000;
(f) The related transactions set forth in Section 4.2 shall be
consummated concurrently with the Closing; and
(g) Seller shall have delivered to RCI all instruments of assignment
and bills of sale necessary to transfer to RCI good and marketable title to
the Purchased Assets;
(h) No action, suit or proceeding by or before any court or any
governmental or regulatory authority shall have been commenced and no
investigation by any governmental or regulatory authority shall have been
commenced seeking to restrain, prevent or challenge the transactions
contemplated hereby or seeking judgments against Seller.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification from the Seller. The Seller agrees to and shall
---------------------------------
indemnify, defend (with legal counsel reasonably acceptable to RCI), and hold
RCI, Rick's and their officers, directors, shareholders, employees, agents,
affiliates, and assigns harmless at all times after the date of this
Agreement, from and against and in respect of, any liability, claim, deficiency,
loss, damage, penalty or injury, and all reasonable costs and expenses
(including reasonable attorneys' fees and costs of any suit related thereto)
suffered or incurred by RCI or Rick's arising from (a) any misrepresentation by,
or breach of any covenant or warranty of Seller contained in this Agreement, or
any Exhibit, certificate, or other instrument furnished or to be furnished by
Seller hereunder, or any claim by a third party (regardless of whether the
claimant is ultimately successful) which if true would be such a
misrepresentation or breach; (b) any nonfulfillment of any agreement on the part
of Seller under this Agreement, or from any material misrepresentation in or
material omission from, any certificate or other instrument furnished or to be
furnished to RCI or Rick's hereunder; and (c) any suit, action, proceeding,
claim or investigation, pending or threatened against or affecting RCI or Rick's
which arises from, which arose from, or which is based upon or pertaining to
Seller's conduct or operation of the business of the Seller or Seller's
ownership, possession or use of the Purchased Assets and employment of
employees, and any other matter or state of facts relating to the transactions
contemplated herein existing prior to Closing.
10.2 Indemnification from RCI. RCI agrees to and shall indemnify,
--------------------------
defend (with legal counsel reasonably acceptable to Seller) and hold Seller, its
officers, directors, shareholders, employees, agents, affiliates and assigns
harmless at all times after the date of Closing from and against, and in
respect of any liability, claim, deficiency, loss, damage, or injury, and all
reasonable costs and expenses (including reasonably attorneys' fees and costs of
any suit related thereto) suffered or incurred by Seller, from (a) any
ASSET PURCHASE AGREEMENT - PAGE 16
<PAGE>
misrepresentation by, or breach of any covenant or warranty of, RCI contained in
this Agreement or any Exhibit, certificate, or other agreement or instrument
furnished or to be furnished by RCI hereunder, or any claim by a third party
(regardless of whether the claimant is ultimately successful), which if true,
would be such a misrepresentation or breach; (b) any nonfulfillment of any
agreement on the part of RCI under this Agreement, or from any misrepresentation
in or omission from, any certificate or other agreement or instrument furnished
or to be furnished to Seller hereunder; and (c) any suit, action, proceeding,
claim or investigation against Seller which arises from or which is based upon
or pertaining to RCI's conduct or operation of the business of RCI or RCI's
ownership, possession or use of the Purchased Assets and employment of
employees, and any other matter or state of facts relating to the transactions
contemplated herein subsequent to Closing.
10.3 Indemnification from Rick's. Rick's agrees to and shall
-----------------------------
indemnify, defend (with legal counsel reasonably acceptable to Seller) and hold
Seller, its officers, directors, shareholders, employees, agents, affiliates and
assigns harmless at all times after the date of Closing from and against, and
in respect of any liability, claim, deficiency, loss, damage, or injury, and all
reasonable costs and expenses (including reasonably attorneys' fees and costs of
any suit related thereto) suffered or incurred by Seller, from (a) any
misrepresentation by, or breach of any covenant or warranty of, Rick's contained
in this Agreement or any Exhibit, certificate, or other agreement or instrument
furnished or to be furnished by Ricks hereunder, or any claim by a third party
(regardless of whether the claimant is ultimately successful), which if true,
would be such a misrepresentation or breach or (b) any nonfulfillment of any
agreement on the part of Ricks under this Agreement, or from any
misrepresentation in or omission from, any certificate or other agreement or
instrument furnished or to be furnished to Seller hereunder.
10.4 Defense of Claims. If any lawsuit or enforcement action is filed
------------------
against any party entitled to the benefit of indemnity hereunder, written notice
thereof shall be given to the indemnifying party as promptly as practicable (and
in any event not less than fifteen (15) days prior to any hearing date or other
date by which action must be taken); provided that the failure of any
indemnified party to give timely notice shall not affect rights to
indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if the
indemnifying party shall acknowledge in writing to such indemnified party that
this Agreement applies with respect to such lawsuit or action, then the
indemnifying party shall be entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense; and such indemnified party shall cooperate in
all reasonable respects, at its cost, risk and expense, with the indemnifying
party and such attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost, participate in such investigation, trial
and defense of such lawsuit or action and any appeal arising therefrom. The
indemnifying party shall not, without the prior written consent of the
indemnified party, effect any settlement of any proceeding in respect of which
any indemnified party is a party and indemnity has been sought hereunder unless
such settlement of a claim, investigation, suit, or other proceeding only
involves a remedy for the payment of money by the indemnifying party and
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
ASSET PURCHASE AGREEMENT - PAGE 17
<PAGE>
10.5 Default of Indemnification Obligation. If an entity or individual
-------------------------------------
having an indemnification, defense and hold harmless obligation, as above
provided, shall fail to assume such obligation, then the party or entities or
both, as the case may be, to whom such indemnification, defense and hold
harmless obligation is due shall have the right, but not the obligation, to
assume and maintain such defense (including reasonable counsel fees and costs of
any suit related thereto) and to make any settlement or pay any judgment or
verdict as the individual or entities deem necessary or appropriate in such
individual's or entities' absolute sole discretion and to charge the cost of any
such settlement, payment, expense and costs, including reasonable attorneys'
fees, to the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.
ARTICLE XI
MISCELLANEOUS
11.1 Notices. All notices and other communications provided for herein
-------
shall be in writing and shall be duly given if delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or
overnight air courier guaranteeing next day delivery:
(a) If to RCI and Rick's:
RCI Internet Holdings, Inc.
Mr. Eric Langan, President
505 North Belt, Suite 630
Houston, Texas 77060
Fax: (281) 820 1445
With a copy to:
Robert D. Axelrod
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
Fax: (713) 552-0202
(b) If to Seller to:
Voice Media, Inc.
Ron Levi, President
2533 North Carson Street, Suite 1091
Carson City, Nevada 89706
Fax: (702) 883-2384
ASSET PURCHASE AGREEMENT - PAGE 18
<PAGE>
With copies to:
Howard Rosoff
Rosoff, Schiffres & Barta
Suite 1450
11755 Wilshire Blvd.
Los Angeles, California 90025
Fax: (310) 478-1439
Guy Mizrachi
c/o National Telemedia Corporation
5000 North Parkway Calabasas, Suite 205
Calabasas, California 91302
Fax: (818) 591-3434
All notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; three days after being
deposited in the mail, postage prepaid, sent certified mail, return receipt
requested, if mailed; and the next day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery. If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it.
11.2 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, which consent will not
be unreasonably withheld. This Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective heirs,
personal representatives, successors and assigns.
11.3 Counterparts. This Agreement may be executed in any number of
------------
counterparts, which taken together shall constitute one and the same instrument
and each of which shall be considered an original for all purposes.
11.4 Section Headings. The section headings contained in this
-----------------
Agreement are for convenient reference only and shall not in any way affect the
meaning or interpretation of this Agreement.
11.5 Entire Agreement; Amendment. This Agreement, the documents to be
----------------------------
executed hereunder and the exhibits attached hereto constitute the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties pertaining to the subject matter hereof,
and there are no warranties, representations or other agreements among the
parties in connection with the subject matter hereof except as specifically set
forth herein or in documents delivered pursuant hereto. No supplement,
amendment, alteration, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the parties hereto. All of the
exhibits referred to in this Agreement are hereby incorporated into this
Agreement by reference and constitute a part of this Agreement.
11.6 Survival. All warranties and representations herein shall survive
--------
the Closing and shall be true and correct as of the date hereof . The
respective representations, warranties, covenants and agreements set forth in
this Agreement shall survive the Closing for the maximum period allowed by law.
ASSET PURCHASE AGREEMENT - PAGE 19
<PAGE>
11.7 Public Announcements. The parties hereto agree that prior to
---------------------
making any public announcement or statement with respect to the transactions
contemplated by this Agreement, the party desiring to make such public
announcement or statement shall consult with the other parties hereto and
exercise their best efforts to (i) agree upon the text of a joint public
announcement or statement to be made by all of such parties or (ii) obtain
approval of the other parties hereto to the text of a public announcement or
statement to be made solely by the party desiring to make such public
announcement; provided, however, that if any party hereto is required by law to
make such public announcement or statement, then such announcement or statement
may be made without the approval of the other parties.
11.8 Validity. The invalidity or unenforceability of any provision of
--------
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
11.9 Waiver. No waiver by any party of any default or non-performance
------
shall be deemed a waiver of any subsequent default or non-performance, and no
waiver of any kind shall be effective unless set forth in writing and signed by
the party against whom such waiver is to be charged.
11.10 Further Assurances. Each party covenants that at any time, and
-------------------
from time to time, after the Closing Date, it will execute such additional
instruments and take such actions as may be reasonably requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.
11.11 Exhibits Not Attached. Any exhibits not attached hereto on the
-----------------------
date of execution of this Agreement shall be deemed to be and shall become a
part of this Agreement as if executed on the date hereof upon each of the
parties initialing and dating each such exhibit, upon their respective
acceptance of its terms, conditions and/or form.
11.12 Expenses. All expenses incurred by the parties hereto in
--------
connection with or related to the authorization, preparation and execution of
this Agreement and the Closing of the transactions contemplated hereby, shall be
borne solely and entirely by the party which has incurred the same.
11.13 Attorneys' Review. In connection with the negotiation and
------------------
drafting of this Agreement, the parties represent and warrant to each other that
they have had the opportunity to be advised by attorneys of their own choice.
11.14 Gender. All personal pronouns used in this Agreement shall
------
include the other genders, whether used in the masculine, feminine or neuter
gender, and the singular shall include the plural, and vice versa, whenever
appropriate.
11.15 Jurisdiction and Process. This Agreement shall be governed by,
--------------------------
and its provisions construed to be in compliance with, the laws of the State of
Texas. The parties agree that venue for purposes of construing or enforcing this
Agreement shall be proper in Harris County, Texas, if a claim is brought by the
Seller against RCI or Rick's and is proper in Los Angeles, California, if a
claim is brought by RCI or Rick's against the Seller.
ASSET PURCHASE AGREEMENT - PAGE 20
<PAGE>
[[[SIGNATURES ON FOLLOWING PAGE]]]
ASSET PURCHASE AGREEMENT - PAGE 21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
RCI INTERNET HOLDINGS, INC.
By: /s/ Eric Langan
Eric Langan, President
RICK'S CABARET INTERNATIONAL, INC.
By: /s/ Eric Langan
Eric Langan, President
VOICE MEDIA, INC.
By: /s/ Ron Levi
Ron Levi, President
ASSET PURCHASE AGREEMENT - PAGE 22