Document:

ex102.htm

AGREEMENT FOR THE SALE AND ASSIGNMENT AND

AFFIRMATION OF OBLIGATION

THIS AGREEMENT FOR THE SALE AND ASSIGNMENT AND AFFIRMATION OF OBLIGATION (“Agreement”) is made and entered into as of January 28, 2011, by and among Green Shoe Inc. (the “Assignor”); Syndication Capital L.L.C. (the “Assignee”); and Grid Petroleum Corp., a Nevada corporation (the “Corporation”).

RECITALS

	
  

	
A.

	
The Corporation is indebted to the Assignor in the amount of $64,135.00 (the “Indebtedness”) for money lent by the Assignor to the Corporation on March 26, 2008.

	
  

	
B.

	
The Assignor desires to sell and assign the Indebtedness to the Assignee; and the Assignee desires to acquire the Indebtedness from the Assignor, on the terms and subject to the conditions and limitations specified in this Agreement.

	
  

	
C.

	
The Assignor and the Assignee desire that the Corporation agree to the sale and assignment of the Indebtedness and, additionally, the Corporation affirm to the Assignee the obligation of the Corporation to the Assignee to pay the Indebtedness, on those terms and subject to those conditions specified in that certain Loan Agreement, dated March 26, 2008, signed on and delivered on behalf of the Corporation, a copy of which is attached to this Agreement marked Exhibit “A” and the provisions of which, by this reference, are made a part here of as though specified completely and specifically at length hereat (the “Loan Agreement”).

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES, COVENANTS AND UNDERTAKINGS SPECIFIED IN THIS AGREEMENT AND FOR GOOD AND OTHER VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE OBLIGATED LEGALLY AND EQUITABLY, THE PARTIES TO THIS AGREEMENT HEREBY AGREE AS FOLLOWS:

 

 

  

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1.

	
Recitals. The above recitals are true and correct and, by this reference, made a part of this Agreement proper, as though specified completely and specifically at length in this Agreement proper.

	
  

	
2.

	
Sale and Assignment of the Indebtedness. In exchange, and as consideration, for the payment by the Assignee to the Assignor of $50,000.00, the receipt and sufficiency are hereby acknowledged, the Assignor hereby sells, assigns, transfers, conveys, delivers, and sets over unto the Assignee all right, title, and interest of the Assignor in and to the Indebtedness, including, but not limited to, any and all security or collateral for or securing the Indebtedness; all such right, title and interest to be held and enjoyed by the Assignee for the Assignee’s use and behoof and for the use and behoof of the Assignee’s successors and assigns, as fully, completely, and entirely as the same would have been held and enjoyed by the Assignor if this sale and assignment had not occurred.

	
  

	
3.

	
Consent to and Affirmation of Indebtedness. The Corporation hereby irrevocably and unconditionally consents to the sale and assignment of the Indebtedness, on the terms and subject to the conditions and limitations specified in this Agreement.  The Corporation hereby confirms, ratifies, and affirms, as its obligation, and shall pay or cause to be paid, when due and payable, all of the Indebtedness, on the terms and subject to the conditions specified in the Loan Agreement.  The Indebtedness is not subject to any counter-claim, offset, or deduction by the Corporation in any manner whatsoever.

	
  

	
4.

	
Assignor’s Power and Capacity to Sign Agreement. The Assignor represents, warrants, and covenants that as of the date of its execution of this Agreement the Assignor has the power and capacity to enter into, perform, and deliver this Agreement.

	
  

	
5.

	
Owner of the Indebtedness.  The Assignor is the owner of the Indebtedness and has not sold, assigned, transferred, conveyed, or otherwise disposed of the Indebtedness, or any portion thereof.

	
  

	
6.

	
Corporation’s Power and Capacity to Sign Agreement.  The Corporation represents, warrants, and covenants that as of the date of its execution of this Agreement (a) the persons signing this Agreement for and on behalf of the Corporation have the power and capacity to enter into, perform, and deliver this Agreement and (b) the execution and delivery of this Agreement by the Corporation has been duly authorized by all necessary action of the Corporation.

	
  

	
7.

	
Assignee’s power and Capacity to Sign Agreement.  The Assignee represents, warrants and covenants that as of the date of its execution of this Agreement the Assignee has the power and capacity to enter into, perform, and deliver this Agreement.

	
  

	
8.

	
Status as Officer or Director of the Corporation.  Neither the Assignor nor any officer, director, employee, manager, shareholder, agent, affiliate, or person acting for or on behalf of the Assignor is, and during that 90-day period immediately preceding the date of execution of this Agreement was, an officer or director of the Corporation.

	
  

	
9.

	
Status as Control Person of the Corporation.  Neither the Assignor nor any officer, director, employee, manager, shareholder, agent, affiliate, or person acting for or on behalf of the Assignor controls, and during that 90-day period immediately preceding the date of execution of this Agreement controlled, 10% or more of the issued and outstanding securities of any class of equity securities of the Corporation.

  

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10.

	
Definitions of “person” and “control”.  As used in this Agreement, in addition to terms defined elsewhere in this Agreement, the terms “person” and “affiliate” shall have the respective definitions and meanings specified hereinafter, and variances and derivatives of those terms shall have correlative meanings.  The term “person” shall include individual, company, sole proprietorship, corporation, joint venture, limited liability company, association, joint stock company, fraternal order, cooperative, league, club, society, organization, trust, estate, governmental agency, political subdivision or authority, firm, municipality, congregation, partnership, or other form of entity, whether active or inactive.  The term “control” and its variants and derivatives mean the possession, direct or indirect, of the power to direct or cause the direction or influence of the management and policies of a person, whether by membership, ownership of voting securities, contract, or otherwise.

	
  

	
11.

	
No Change Of the Indebtedness. Notwithstanding any other provision of this Agreement, nothing specified in this Agreement shall in any way supersede, modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in any way affect the Indebtedness or the Loan Agreement. This Agreement is intended only to cause and effectuate the herein sale and assignment of the Indebtedness.

	
  

	
12.

	
Further Assurances.  Each party, at any time and from time to time, at any other party's request, shall execute, acknowledge, and deliver any and all instruments and take any and all action that may be necessary or proper to carry out, perform, and effectuate the intents and purposes of the provisions of this Agreement.  In the event of refusal or failure to do so by any party, any other such party shall have the power and authority, as attorney-in-fact for the party so refusing or failing, to execute, acknowledge, and deliver such instrument and take any and all such action.

	
  

	
13.

	
Captions and Interpretations.  Captions of the paragraphs of this Agreement are for convenience and reference only, and the words specified therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction, or meaning of the provisions of this Agreement.  The language in this Agreement shall always be construed in accordance with the fair meaning of that language, as if prepared by all parties and not strictly for or against any party.  The rule of construction which requires a court to resolve any ambiguities against the drafting party shall not apply in interpreting the provisions of this Agreement.

	
  

	
14.

	
Choice of Law and Consent to Jurisdiction.  This Agreement shall be deemed to have been entered into in the State of Nevada. All questions concerning the validity, interpretation, or performance of any of the terms, conditions, and provisions of this Agreement or of any of the rights or obligations of the parties shall be governed by, and resolved in accordance with, the laws of the State of Nevada, without regard to conflicts of law principles.

	
  

	
15.

	
Severability.  In the event any provision of this Agreement, for any reason, is determined by a court of competent jurisdiction to be invalid, such determination shall not affect the validity of any remaining provisions of this Agreement, which remaining provisions shall remain in full force and effect, as if this Agreement had been executed with such invalid provision hereof eliminated.  It is hereby declared the intention of the parties that they would have executed the remaining provisions of this Agreement without including any such provision which, for any reason, may be hereafter determined to be invalid.

	
  

	
16.

	
Governmental Rules and Regulations.  The transaction and relationship contemplated by this Agreement are, and shall remain, subject to any and all present and future orders, rules and regulations of any duly constituted authority having jurisdiction of that transaction and relationship.

  

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17.

	
Force Majeure.  If any party is rendered unable, completely or partially, by the occurrence of an event of "force majeure" (hereinafter defined) to perform such party's obligations created by the provisions of this Agreement, such party shall give to the other parties prompt written notice of the event of "force majeure" with reasonably complete particulars concerning such event; thereupon, the obligations of the party giving such notice, to the extent that those obligations are affected by the event of "force majeure," shall be suspended during, but no longer than, the continuance of the event of "force majeure."  The party affected by such event of "force majeure" shall use all reasonable diligence to resolve, eliminate and terminate the event of "force majeure" as quickly as practicable. The requirement that an event of "force majeure" shall be resolved and eliminated with all reasonable diligance, as hereinabove specified, shall not require the settlement of strikes, lockouts or other labor difficulties by the party involved, contrary to such party's wishes, and the resolution of any and all such difficulties shall be handled entirely within the discretion of the party concerned. The term "force majeure" as used herein shall be defined as and mean any act of God, strike, civil disturbance, lockout or other industrial disturbance, act of the public enemy, war, blockade, public riot, earthquake, tornado, hurricane, lightning, fire, epidemics, quarantine restrictions, public demonstration, storm, flood, explosion, freight embargoes, governmental action, governmental delay, restraint or inaction, unavailability of equipment, default of a party's subcontractors or suppliers, and any other cause or event, whether of the kind enumerated specifically herein, or otherwise, which is not reasonably within the control of the party claiming such suspension.

	
  

	
18.

	
Execution in Counterparts.  This Agreement may be prepared in multiple copies and forwarded (by facsimile or electronic transmission) to each of the parties to this Agreement for signature.  The signatures of those parties may be affixed to one copy or to separate copies of this Agreement and when all such copies are received by (facsimile or electronic transmission) and signed by both such parties, those copies shall constitute one agreement which is not otherwise separable or divisible.

	
  

	
19.

	
Expenses.  Each party to this Agreement shall pay such party’s costs and expenses incurred by such party in connection with the preparation, execution and delivery of this Agreement and the transaction contemplated by the provisions of this Agreement.

	
  

	
20.

	
Brokers.  No broker, finder, or investment banker is entitled to any brokerage, finder’s, or other fee or commission in connection with this Agreement or the transaction or relationship contemplated by this Agreement or any related transaction based upon any agreements, written or oral, made by or on behalf of any party to this Agreement.

	
  

	
21.

	
Assignment.  No party to this Agreement shall have the right, without the consent of the other parties to this Agreement, to assign, transfer, sell, pledge, hypothecate, delegate, or otherwise transfer, whether voluntarily, involuntarily or by operation of law, any of such party’s rights or obligations created by the provisions of this Agreement, nor shall the parties’ rights be subject to encumbrance or the claim of creditors.  Any such purported assignment, transfer, or delegation shall be null and void.

	
  

	
22.

	
Successors and Assigns.  This Agreement and each of its provisions shall obligate the heirs, executors, administrators, successors, and assigns of each of the parties.  Nothing specified in this paragraph, however, shall be a consent to the assignment or delegation by any party of such party’s respective rights and obligations created by the provisions of this Agreement.

	
  

	
23.

	
Third Party Beneficiaries.  Except as expressly specified by the provisions of this Agreement, this Agreement shall not be construed to confer upon or give to any person, other than the parties hereto, any right, remedy or claim pursuant to, or because of, this Agreement or of any term or condition of this Agreement.

 

  

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24.

	
Waiver and Modification.  No modification, supplement or amendment of this Agreement or of any covenant, representation, warranty, condition, or limitation specified in this Agreement shall be valid unless the same is made in writing and duly executed by both parties.  No waiver of any covenant, representation, warranty, condition, or limitation specified in this Agreement shall be valid unless the same is made in writing and duly executed by the party making the waiver.  No waiver of any provision of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver.

	
  

	
25.

	
Notices.  Any notice, direction or instruction required or permitted to be given pursuant to this Agreement shall be given in writing by (a) telegram, facsimile transmission, electronic transmission, or similar method, if confirmed by mail as provided in this Agreement; (b) mail, if mailed postage prepaid, by certified mail, return receipt requested; or (c) hand delivery to any party to this Agreement at the address of such party specified below.  If given by telegram, facsimile transmission, electronic transmission, or similar method or by hand delivery, such notice, director or instruction shall be deemed to have been given or made on the day on which such notice, direction or instruction was delivered, and if mailed, such notice direction or instruction shall be deemed to have been given or made on the second (2nd) business day following the day after which such notice, direction or instruction was mailed.  Any party to this Agreement may, from time to time by similar notice, give notice of any change of address and in such event, the address of such party shall be deemed to be changed accordingly.

	
  

	
26.

	
Consent to Agreement.  By executing this Agreement, each party represents that such party has read or caused to be read this Agreement in all particulars and consents to the rights, conditions, obligations, duties, and responsibilities imposed upon such party by the provisions of this Agreement.  Each party represents, warrants, and covenants that such party executes and delivers this Agreement of such party’s free will and with no threat, undue influence, menace, coercion or duress, whether economic or physical.  Moreover, each party represents, warrants, and covenants that such party executes this Agreement acting on such party's independent judgment.

  

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IN WITNESS WHEREOF, the parties have executed this Assignment on the day and year specified in the preamble of this Agreement.

 

	
The Assignor:

	
The Corporation:

	  	  
	
Green Shoe Inc.

	
Grid Petroleum Corp.,

	  	
a Nevada Corporation

	
 

	  
	  	  
	
By: ___________________

	
By: ___________________

	  	  
	
Its: ___________________

	
Its: President

	  	  
	  	  
	  	  
	  	  
	
The Assignee:

	  
	  	  
	
Syndication Capital L.L.C.

	  
	  	  
	  	  
	
By: ___________________

	  
	  	  
	
Its: ___________________

	  

  

-6-ex10_1.htm

Exhibit 10.1

 

THIRD AMENDMENT TO PURCHASE AGREEMENT

This Third Amendment to Purchase Agreement (the “Agreement”) is made and entered into this ___ day of January, 2011, by and among the Gold Club of Indy, LLC, an Indiana limited liability company (the “Company”), Lori Pfeifer, personal representative of The Estate of Albert Pfeiffer, deceased, and sole member of the Company (“Member”),  The Estate of Albert Pfeiffer, deceased (the “Estate”), RCI Dining Services (Indiana), Inc., a Texas corporation (the “Buyer”), and RCI Holdings, Inc., a Texas corporation (“RCI”).

WHEREAS, Member owns 100% of the Membership Interest of the Company (the “Membership Interest”); and

WHEREAS, the Company owns and operates an adult entertainment cabaret known as “The Gold Club” (the “Club” or “Gold Club”), located at 3551 Lafayette Road, Indianapolis, Indiana 46222; and

WHEREAS, the Company owns the real property commonly known as 3551 Lafayette Road, Indianapolis, Indiana 46222 and the improvements, including building and fixtures, located thereon (the “Real Property” or “Premises”), as more fully described on Exhibit “A” attached hereto; and

WHEREAS, the parties hereto have entered into a Purchase Agreement dated December 13, 2010, whereby the Company agreed (i) to sell to the Buyer 100% Membership Interests, and (ii) to convey to RCI the Real Property; and

WHEREAS, the parties hereto have also entered into an Agreement to Amend Purchase Agreement, dated on or around December 29, 2010, and a Second Amendment to Purchase Agreement, dated January 14, 2011; and

WHEREAS, the parties hereto have negotiated, in good faith, new terms and conditions of the Purchase Agreement and wish to amend and restate, in its entirety, the Purchase Agreement, thereby restructuring it as an asset purchase agreement.

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements and the respective representations and warranties herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

The Purchase Agreement is hereby amended and restated in its entirety to read as follows, and the Exhibits to the Purchase Agreement shall be revised as necessary to conform to the amended and restated Purchase Agreement:

  

 

  

AMENDED AND RESTATED PURCHASE AGREEMENT

This Amended and Restated Purchase Agreement (the “Agreement”) is made and entered into this ___ day of January, 2011, by and among the Gold Club of Indy, LLC, an Indiana limited liability company (the “Company”), Lori Pfeifer, personal representative of The Estate of Albert Pfeiffer, deceased, and sole member of the Company (“Member”),  The Estate of Albert Pfeiffer, deceased (the “Estate”), RCI Dining Services (Indiana), Inc., a Texas corporation (the “Buyer”), and RCI Holdings, Inc., a Texas corporation (“RCI”).

WHEREAS, Member owns 100% of the Membership Interest of the Company (the “Membership Interest”); and

WHEREAS, the Company owns and operates an adult entertainment cabaret known as “The Gold Club” (the “Club” or “Gold Club”), located at 3551 Lafayette Road, Indianapolis, Indiana 46222; and

WHEREAS, the Company owns the real property commonly known as 3551 Lafayette Road, Indianapolis, Indiana 46222 and the improvements, including building and fixtures, located thereon (the “Real Property” or “Premises”), as more fully described on Exhibit “A” attached hereto; and

WHEREAS, the Company desires to (i) sell, transfer and convey all of the assets owned by it which are associated or used in connection with the operation of the Gold Club to the Buyer, on the terms and conditions set forth herein, and (ii) sell the Real Property to RCI on the terms and conditions set forth herein; and

WHEREAS, the Buyer desires to purchase the assets owned by the Company on the terms and conditions set forth herein; and

WHEREAS, RCI desires to purchase the Real Property from the Company on the terms and conditions set forth herein; and

WHEREAS, the Buyer and RCI are wholly owned subsidiaries of Rick’s Cabaret International, Inc., a Texas corporation.

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements and the respective representations and warranties herein contained, and on the terms and subject to the conditions herein set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

PURCHASE AND SALE OF THE ASSETS

Section 1.1        Assets of the Company to be Transferred to Buyer.  On the Closing Date (as defined in Section 5.1 hereof), and subject to the terms and conditions set forth in this Agreement, the Company shall sell, convey, transfer and assign, or cause to be sold, conveyed, transferred and assigned to Buyer free and clear of all liens and encumbrances, and Buyer shall acquire all of the tangible and intangible assets and personal property of every kind and description and wherever situated of the business of the Gold Club from the Company, including but not limited to, the following personal property of the Company:

  

Purchase Agreement - Page 2

  

	
  

	
(i)

	
all of the tangible and intangible assets and personal properties of every kind and description and wherever situated of the business of the Gold Club, including, without limitation, inventories, furniture, fixtures, equipment (including office and kitchen equipment), computers and software, appliances, sign inserts, sound and lighting and telephone systems not incorporated into the building, telephone numbers, and other personal property of whatever kind and nature owned or leased by the Company, installed, located, situated or used in, on, or about, or in connection with the operation, use and enjoyment of the Premises and all other items on the subject Premises and used in connection with the operation of the Gold Club;

	
  

	
(ii)

	
all of the Company's inventory of supplies, accessories and any and all other items of personal property of whatever nature, including but not limited to all alcoholic beverages, sold by the Company in the operation of the Gold Club (the "Inventory");

	
  

	
(iii)

	
all supplies (other than Inventory) and other "consumable supplies" used in connection with the operation of the Gold Club (the "Supplies");

	
  

	
(iv)

	
all of the Company's right, title, and interest, as lessee, of any and all equipment leased by the Company and located at the Gold Club (the "Leased Equipment")  for which Buyer agrees to assume payment if disclosed by Company.  Company shall cancel and pay for any undisclosed equipment lease that Buyer does not continue to use.

	
  

	
(v)

	
all right, title, and interest of the Company to the use of the telephone numbers presently being used by the Gold Club, including all rotary extensions thereto, and all advertisements in the "Yellow Pages", "City Directory" and other similar publications (the "Telephone Numbers") and after the Closing (as defined in Section 5.1 hereof), Buyer shall assume all expenses for the Telephone Numbers and advertising;

	
  

	
(vi)

	
copies of the Company's lists of suppliers, and any and all of books, records, papers, files, memoranda and other documents relating to or compiled in connection with the operation of the Gold Club which are requested by Buyer (the "Records");

	
  

	
(vii)

	
all intellectual property of every kind of the Company, including but not limited to all trade marks, trade names, service marks, patents, copyrights, and trade secrets;

	
  

	
(viii)

	
all universal resource locators (“URL’s”) and internet domain names, and all goodwill associated with or used in connection with the operation or business of the URL’s and internet domain names;

	
  

	
(ix)

	
to the extent transferable, any and all necessary permits and authorizations which are needed to conduct an adult entertainment business serving alcoholic beverages at the Gold Club which the Company has the right to transfer and convey, including its sexually oriented business permit and license and all other licenses, consents, authorizations, accreditations, waivers and approvals (together with all government filings pertaining thereto), however designated, established, maintained or renewed and issued evidencing or authorizing the Company, the Company’s agent(s) or nominee(s) for the purpose of engaging in the business and/or operation of an adult cabaret nightclub business, gaming facility, restaurant, bar, lounge, sale of liquor or any other business currently operating or capable of being operated on the Premises however characterized.

  

Purchase Agreement - Page 3

  

All of the items set forth in this Section 1.1 are collectively referred to as the “Purchased Assets”.  Exhibit 1.1 shall be a list of all furniture, fixtures and equipment included within the Purchased Assets.

Section 1.2        Excluded Assets.  Specifically excluded from the Purchased Assets are (i)  the corporate seals, books, accounting records and records related to corporate governance of the Company (ii) all Company bank accounts and all Company monies (including cash) on hand as of the Closing Date and (iii) all credit card receipts and ATM purchases as of the Closing Date (hereinafter collectively referred to as the “Excluded Assets”).

Section 1.3        Intent of the Parties.  Although the description of the Purchased Assets in Section 1.1 is intended to be complete, in the event Section 1.1 fails to contain the description of any assets belonging to the Company which are used for the business of the Gold Club, such assets shall nonetheless be deemed transferred to Buyer at the Closing.

ARTICLE II

NO ASSUMPTION OF LIABILITIES

Section 2.1        Excluded Liabilities.  Notwithstanding anything contained in this Agreement to the contrary, Buyer shall have no obligation and is not assuming, and the Company shall retain, pay, perform, defend and discharge, all of the liabilities and obligations of every kind whatsoever related or connected to the Purchased Assets or the business of the Gold Club arising or accruing prior to the Closing Date, whether disclosed or undisclosed, known or unknown on the Closing Date, direct or indirect, absolute or contingent, secured or unsecured, liquidated or unliquidated, accrued or otherwise, whether liabilities for taxes, liabilities of creditors, liabilities arising under any profit sharing, pension or other benefit under any plan of the Company, liabilities to any Governmental Agency (as hereinafter defined) or any third parties, liabilities assumed or incurred by the Company by operation of law or otherwise (collectively, the “Excluded Liabilities”), including, but not limited to, (i) contractual liabilities arising from the Gold Club’s business or ownership of the Purchased Assets prior to the Closing Date, and (ii) any taxes owing by the Company occurring before Closing, or whether related to the business of the Gold Club, the Purchased Assets or otherwise and any liens on the Purchased Assets relating to any such taxes.

  

Purchase Agreement - Page 4

  

Section 2.2        Taxes.  The Company shall pay when due any sales, transfer, excise, or other taxes which may be imposed in any jurisdiction in connection with or arising from the sale and transfer of any of the Purchased Assets to Buyer.

Section 2.3        Bulk Sales Laws.  The Company acknowledges that any applicable provisions of any tax clearance or bulk sales laws pertaining to the transactions contemplated by this Agreement are  being complied with and that the Company agrees to indemnify and hold harmless Buyer from and against any and all liabilities arising out of or relating to any such tax clearance or bulk sales law.  Any such liability shall be an Excluded Liability.

ARTICLE III

PURCHASE PRICE FOR

THE PURCHASED ASSETS

As consideration for the purchase of the Purchased Assets, Buyer shall pay to the Company an aggregate amount payable at Closing, of $825,000.00 payable by cashier’s check, certified funds or wire transfer, which amount is referred to hereinafter as the “Asset Purchase Price.”

ARTICLE IV

PURCHASE AND SALE OF

THE REAL PROPERTY

Section 4.1        Sale of the Real Property.  Subject to the terms and conditions set forth in this Agreement, at the Closing, the Company hereby agrees to sell, transfer, convey and deliver a General Warranty Deed which shall convey good and marketable title to the Real Property to RCI, free and clear of all liens and encumbrances.  The Company and RCI will execute the Addendum to Third Amendment to Purchase Agreement, attached hereto as Exhibit 4.1 (“Amended Addendum”) which will provide for the conveyance of good and marketable title to the Real Property, free and clear of all liens and encumbrances.

Section 4.2        Purchase Price for the Real Property.  As consideration for the purchase of the Real Property, RCI shall pay to the Company at Closing the total consideration of $850,000.00 (the “Real Property Purchase Price”), which shall be payable by cashier’s check, certified funds or wire transfer.

 

The Asset Purchase Price and the Real Property Purchase Price, (in the aggregate amount of $1,675,000) are collectively referred to herein as the “Purchase Price.”

ARTICLE V

CLOSING

Section 5.1        The Closing.  The closing of the transactions provided for in this Agreement shall take place within five (5) days after the approval for the Buyer to possess all necessary permits, licenses and other authorizations, whether city, county, state or federal, which may be needed to operate an establishment serving beer, wine and liquor and providing live female semi-nude adult entertainment on the Real Property at the Club and all such permits, licenses and authorizations shall be in good order, without any administrative actions pending or concluded that may challenge or present an obstacle to the continued performance of live female semi-nude adult entertainment with the sale of beer, wine and liquor at the Club (the “Closing Date”) or at such other time and place as agreed upon in writing among the parties hereto (the “Closing”).  The parties have agreed further to close at  Midwest Title Company, 755 E. Main Street, Greenwood, IN 46143 or at such other place as is mutually agreeable to all of the parties hereto.  Notwithstanding the foregoing, in the event that the Buyer is unable to obtain the approval to possess all necessary permits, licenses and other authorizations as set forth herein by May 1, 2011, then any party hereto may terminate this Agreement and it shall be of no further force or effect.

  

Purchase Agreement - Page 5

  

Section 5.2        Delivery and Execution.  At the Closing: (i) the Company shall deliver to Buyer all instruments of assignment and bills of sale necessary to transfer to Buyer good and marketable title to the Purchased Assets free and clear of all liens, charges or encumbrances against delivery by Buyer to the Company of payment in an amount equal to the Asset Purchase Price of the Purchased Assets being purchased by Buyer in the manner set forth herein; (ii) the Company shall deliver to RCI a General Warranty Deed which shall convey good and marketable title to the Real Property, free and clear of all liens and encumbrances against delivery by RCI to the Company of payment in the amount equal to the Real Property Purchase Price for the Real Property being purchased by RCI in the manner set forth in Section 4.2; and (iii) the Related Transactions (as defined below) shall be consummated concurrently with the Closing.

Section 5.3        Related Transactions.  In addition to the purchase and sale of the Purchased Assets and the purchase and sale of the Real Property, the following action shall take place contemporaneously at the Closing (the "Related Transactions"):

The Buyer and the sole Member of the Company will enter into a five (5) year covenant not to compete pursuant to the terms of which Member will agree not to compete, either directly of indirectly, with the adult nightclub presently known as The Gold Club, by operating an establishment providing live female nude or semi-nude adult entertainment in Indianapolis, Indiana or any of the adjacent counties thereto.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

OF THE MEMBER, THE ESTATE AND THE COMPANY

The Member, Estate and the Company, jointly and severally, hereby represent and warrant to the Buyer and RCI as follows:

Section 6.1        Organization, Good Standing and Qualification.

(i)        The Company (A) is an Indiana limited liability company duly organized, validly existing, is not dissolved and is in good standing under the laws of the state of Indiana, (B) has all requisite power and authority to own, operate and lease its properties, to carry on its business, and to transfer the Purchased Assets to Buyer, and (C) is duly qualified to transact business and is in good standing in all jurisdictions where its ownership, lease or operation of property or the conduct of its business requires such qualification, except where the failure to do so would not have a material adverse effect to the Company.

  

Purchase Agreement - Page 6

  

(ii)        The authorized capital of the Company consists of one hundred percent (100%) of the Membership Interest which is validly issued and outstanding. There is no other class of capital authorized or issued by the Company.  All of the issued and outstanding Membership Interest of the Company are owned by the Member and are fully paid and non-assessable.  None of the Membership Interests issued are in violation of any preemptive rights.  The Company has no obligation to repurchase, reacquire, or redeem any of its outstanding Membership Interest.  There are no outstanding securities convertible into or evidencing the right to purchase or subscribe for any Membership Interest of the Company, there are no outstanding or authorized options, warrants, calls, subscriptions, rights, commitments or any other agreements of any character obligating the Company to issue any Membership Interest or any securities convertible into or evidencing the right to purchase or subscribe for any Membership Interest, and there are no agreements or understandings with respect to the voting, sale, transfer or registration of any Membership Interest of the Company.

Section 6.2        Subsidiaries.  The Company does not have any subsidiaries.

Section 6.3        Ownership of the Purchased Assets.  The Company owns all of the Purchased Assets free and clear of any liens, claims, equities, charges, options, rights of first refusal, or encumbrances. The Company has the unrestricted right and power to transfer, convey and deliver full ownership of the Purchased Assets 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 Purchased Assets to Buyer as contemplated herein, Buyer 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.

Section 6.4        Ownership of the Real Property.  Except as set forth in Schedule 6.4, the Company owns, beneficially and of record, the Real Property free and clear of any liens, claims, equities, charges, options, rights of first refusal, or encumbrances as evidenced by the title commitment for the Real Property to be issued to RCI prior to Closing and as evidenced by a title policy provided to RCI at the time of Closing.  The Company has the unrestricted right and power to transfer, convey and deliver full ownership of the Real 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 Real Property to RCI as contemplated herein, RCI 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.

Section 6.5         Authorization.  The Company 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 Company necessary for the authorization, execution, delivery and performance of this Agreement and all documents related to consummate the transactions contemplated herein have been taken or will be taken prior to the Closing Date by the Company. This Agreement, when duly executed and delivered in accordance with its terms, will constitute the legal, valid and binding obligations of the Company enforceable against it in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization and other similar laws of general application affecting creditors’ rights generally or by general equitable principles.

  

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The Member and the Estate represent that they have the full power, capacity, and authority to enter into this Agreement and perform the obligations contemplated hereunder and to consummate the transactions contemplated hereby.  All action on the part of the Estate necessary for the authorization, execution, delivery and performance of this Agreement has been or will be taken prior to Closing Date.  This Agreement, when duly executed and delivered in accordance with its terms, will constitute legal, valid and binding obligations of the Member and the Estate enforceable against them in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization and other similar laws of general application affecting creditors’ rights generally or by general equitable principles.

Section 6.6        Consents.  Except as set forth in Schedule 6.6, no consent of, approval by, order or authorization of, or registration, declaration or filing by the Company or the Estate with any court or any governmental or regulatory agency or authority having jurisdiction over the Company or the Estate, or any of their respective property or assets is required on the part of the Company or the Estate (i) in connection with the consummation of the transactions contemplated by this Agreement or (ii) as a condition to the legality, validity or enforceability as against the Company or the Estate.

Section 6.7        Taxes.  The Company has timely and accurately filed all federal, state, 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 and any taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor or independent contractor.  The Company has made adequate provision for the payment of all taxes accruable for all periods ending on or before the Closing Date to any taxing authority and are not delinquent in the payment of any tax or governmental charge of any nature.  Neither the Company nor the Estate has any knowledge of any liability for any tax to be imposed by any taxing authorities upon the Company as of the date of this Agreement and as of the Closing that is not adequately provided for.  No assessments or notices of deficiency or other communications have been received by the Company or the Estate 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.  None of the federal, state, foreign or local tax returns of the Company have been audited by any taxing authority.  Neither the Company nor the Estate has knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or threatened against the Company for any period, nor of any basis for any such assessment, adjustment or contingency. There are no agreements between the Company or the Estate and any taxing authority waiving or extending any statute of limitations with respect to any tax return.

Section 6.8        Financial Statements.  The Company and Estate have delivered to the Buyer and RCI on December 1, 2010 the unaudited balance sheets of the Company as of October 31, 2010, together with the related unaudited statements of income, for the periods then ended (collectively referred to as the “Financial Statements”).  Such Financial Statements are in accordance with the books and records of the Company and fairly represent the financial position of the Company and the results of operations and changes in financial position of the Company as of the dates and for the periods indicated.  Except as set forth in Schedule 6.8, the Company, as of the date of the Financial Statements, has no material liability or obligation of any nature, whether absolute, accrued, continued or otherwise.  As of the Closing Date, the Estate and the Company will represent there have been no adverse changes in the financial condition or other operations, business, properties or assets of the Company from that reflected in the latest Financial Statements of the Company as furnished pursuant to this Agreement.

  

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Section 6.9        Labor Matters. The Company is not a party or otherwise subject to any collective bargaining agreement with any labor union or association.  There are no discussions, negotiations, demands or proposals that are pending or have been conducted or made with or by any labor union or association, and there are not pending or threatened against the Company any labor disputes, strikes or work stoppages.   Neither the Company nor the Club is a party to any written or oral contract, agreement or understanding for the employment of any officer, director or employee of the Company.

Section 6.10        Compliance with Laws.  To the best of the Company’s and Estate’s knowledge, the Company is, and at all times prior to the date hereof, has been in compliance with all statutes, orders, rules, ordinances and regulations applicable to it or to the ownership of its assets or the operation of the Club.  Neither the Company nor the Estate has any basis to expect, nor have they received, any order or notice of any such violation or claim of violation of any such statute, order, rule, ordinance or regulation by the Company.  The Company owns, holds, possesses or lawfully uses in the operation of its business all permits and licenses which are in any manner necessary or required for it to conduct its operation and business as now being conducted.  Schedule 6.10 sets forth all licenses and permits held by the Company used in the operation of the business of the Club, all of which are in good standing and which will be in effect as of the Closing Date.

Section 6.11        No Conflicts.  The execution and delivery by the Company and the Estate of this Agreement does not, and the performance and consummation by the Company and the Estate of the transactions contemplated hereby will not (i) conflict with the articles of organization,  regulations of the Company, or laws of the State of Indiana; (ii) conflict with or result in a breach or violation of, or default under, or give rise to any right of acceleration or termination of, any of the terms, conditions or provisions of any note, bond, lease, license, agreement or other instrument or obligation to which the Company is a party or by which the assets or properties of the Company are bound; (iii) result in the creation of any encumbrance on any of the assets or properties (real or personal) of the Company; or (iv) violate any law, rule, regulation or order applicable to the Company or any of the assets or properties of the Company.

Section 6.12        Title to Properties; Encumbrances.  The Company has good and marketable title to all of the Purchased Assets, which represent all of the assets, personal, tangible, and intangible, that are material to the conditions (financial or otherwise), business, operations or prospects of the Company and the Club, free and clear of all mortgages, claims, liens, security interests, charges, leases, encumbrances and other restrictions of any kind and nature, except (i) as disclosed in the Financial Statements of the Company, (ii) statutory liens not yet delinquent, and (iii) such liens consisting of zoning or planning restrictions, imperfections of title, easements, pledges, charges and encumbrances, if any, as do not materially detract from the value or materially interfere with the present use of the property or assets subject thereto or affected thereby, including the business of the Club.  With the exception of the items listed on Schedule 6.12 all of which will be paid in full prior to Closing, the Company has good and marketable title to the Real Property, free and clear of all mortgages, claims, liens, security interests, charges, leases, encumbrances and other restrictions of any kind and nature.

  

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Section 6.13        No Pending Transactions.  Except for the transactions contemplated by this Agreement, neither the Company nor the Estate is a party to or bound by or the subject of any agreement, undertaking, commitment or discussions or negotiations with any person that could result in (i) the sale, merger, consolidation or recapitalization of the Company, (ii) the sale of any of the Purchased Assets, (iii) the sale of the Real Property by the Company, (iv) the sale of any outstanding Membership Interest of the Company, (v) the acquisition by the Company of any operating business or the capital stock of any other person or entity, (vi) the borrowing of money by the Company, whether secured or unsecured, (vii) any agreement with any of the respective officers, managers or affiliates of the Company, or (viii) the expenditure of more than $5,000 or the performance by the Company extending for a period of more than six (6) months from the date hereof.

Section 6.14        Contracts and Leases.  Except as set forth in Schedule 6.14, the Company does not (i) have any leases of personal property relating to the Purchased Assets, whether as lessor or lessee; (ii) have any contractual or other obligations relating to the Purchased Assets, whether written or oral; or (iii) have given any power of attorney to any person or organization for any purpose relating to the Purchased Assets or the business of the Company.  The Company shall provide Buyer prior to the Closing Date each and every contract, lease or other document relating to the assets of the Company to which they are subject or are a party or a beneficiary.  To the knowledge of the Company and the Estate, such contracts, leases or other documents are valid and in full force and effect according to their terms and constitute a legal, valid and binding obligation of the Company and the other respective parties thereto and are enforceable in accordance with their terms.  The Company and the Estate have no knowledge of any default or breach under such contracts, leases or other documents or of any pending or threatened claims under any such contracts, leases or other documents.  Neither the 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 contracts, leases or other documents which would have a material adverse effect on the financial condition of the Company or the operation of the Club after the Closing.

Section 6.15        No Default.  The Company is not (i) in violation of any provision of its articles of organization or regulations or (ii) in default under any term or condition of any instrument evidencing, creating or securing any indebtedness of the Company.  Further, there has been no default in any material obligation to be performed by the Company under any other contract, lease, agreement, commitment or undertaking to which it is a party or by which it or its assets or properties are bound, nor has the Company waived any material right under any such contract, lease, agreement, commitment or undertaking.

Section 6.16        Books and Records.  The books of account, minute books, stock record books or other records of the Company are accurate and complete and have been maintained in accordance with sound business practices.

  

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Section 6.17        Insurance Policies.  Copies of all insurance policies maintained by the Company relating to the operation of the Club have been or will be delivered prior to Closing.  The policies of insurance held by the Company are in such amounts, and insure against such losses and risks, as the Company reasonably deems appropriate for its property and business operations.  All such insurance policies are in full force and effect, and all premiums due thereon have been paid.  Valid policies for such insurance will be outstanding and duly in force at all times prior to the Closing.

Section 6.18        Pending Claims.  Except as set forth in Schedule 6.18, there are no claims, suits, arbitrations, investigations, actions or other proceedings, whether judicial, administrative or otherwise, now pending or, to the best knowledge of  the Company or the Estate, threatened 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 Company or the business of the Club, the transfer of the Purchased Assets by the Company to Buyer under this Agreement, the operation of the Club after the Closing Date, or the transfer of the Real Property to RCI, nor is there any basis known to the Company or the Estate for any such action. No litigation is pending, or, to the knowledge of the Company or the Estate, threatened against the Company or the business of the Club, the Real Property, or the Purchased Assets or properties of the Company 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 thereby or hereby.  Neither the Company nor the Estate is subject to any judicial injunction or mandate or any quasi-judicial or administrative order or restriction directed to or against them which would affect the Company or the business of the Club, the Purchased Assets or the Real Property to be transferred under this Agreement.

Section 6.19        No Liabilities.  Except as to bills not yet received (which the Estate shall pay as to the amounts incurred prior to Closing) as of the Closing Date, the Company does not and shall not have any obligation or liability (contingent or otherwise) or unpaid bill to any third party.

Section 6.20        Unpaid Bills.  As of the Closing, there will be no unpaid bills or claims in connection with any repair of the Premises or other work performed or materials purchased in connection with the repair of the Premises.

Section 6.21        Notices. Neither the Estate nor the Company or any of its representatives has received any written notice (i) from any insurance companies, governmental agencies or from any other parties of any condition, defects or inadequacies with respect to the Premises which, if not corrected, would result in termination of insurance coverage or increase its cost, (ii) from any governmental agencies or any other third parties with respect to any violations of any building codes and/or zoning ordinances or any other governmental laws, regulations or orders affecting the Premises, including, without limitation, the Americans With Disabilities Act, (iii) of any pending or threatened condemnation proceedings with respect to the Premises, or (iv) of any proceedings which could or would cause the change, redefinition or other modification of the zoning classification of the Premises.

Section 6.22        Proceedings Relating to Premises.  There is no pending, or, to the best of Estate’s or the Company’s knowledge, contemplated or threatened, judicial, municipal or administrative proceedings with respect to, or in any manner affecting the Premises or any portion thereof, including, without limitation, proceedings for or involving tenant evictions, collections, condemnations, eminent domain, alleged building code or zoning violations, violations relating to the alcoholic beverage permit, personal injuries or property damage alleged to have occurred on the Premises or by reason of the use and operation of the Premises, or written notice of any attachments, executions, assignments for the benefit of creditors, receiverships, conservatorships or voluntary or involuntary proceedings in bankruptcy or pursuant to any other debtor relief laws pending or threatened against the seller of the Premises or the Premises itself, or the taking of the Premises for public needs.

  

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Section 6.23        Public Improvements.  Neither the Estate nor the Company has knowledge of any existing or proposed public improvements which involve or which may result in any charge being levied or assessed against the Premises or which will or could result in the creation of any lien upon the Premises or any part thereof.

Section 6.24        Certificates.  To the best of Estate’s or the Company’s knowledge, all certificates of occupancy, licenses, permits, authorizations and approvals required by law or by any governmental authority having jurisdiction over the Premises have been obtained and are in full force and effect and will be in full force and effect as of the Closing Date.

Section 6.25        Material Defect.  To the best knowledge of the Estate or the Company or any representative of the Company, there are no material defects to the Premises which have not been disclosed in writing to RCI.

Section 6.26        Flooding.  To the best knowledge of the Estate or the Company or any representative of the Company, no flooding has occurred on the Premises.

Section 6.27        Environmental.  To the best of Estate’s and the Company’s knowledge, neither the Estate nor the Company has caused, allowed to be caused, failed to prevent or has been made aware of, an environmental condition on the Premises that required or requires abatement or correction under an Environmental Law, or has given or is reasonably likely to give rise to any civil or criminal liability under an Environmental Law, or has created or may create a public or private nuisance, including the presence of asbestos, PCB’s, hazardous substances, radioactive waste or radon, on, in or affecting the Property.

 

Neither the Estate nor the Company or any of their representatives have received any citation, directive, letter or other communication, written or oral, or any notice of any proceeding, claim or lawsuit relating to any environmental issue arising out of the ownership or occupation of the Premises, and there is no basis known to the Estate or the Company for any such action.  Estate shall provide to Buyer prior to the execution of this Agreement an Indiana Responsible Property Transfer Law Disclosure Form as required by I.C. 13-25-3-2.

For purposes of this warranty, “Environmental Law” shall mean any and all Applicable Laws (i) regulating the use, treatment, generation, transportation, storage, control, management, recycling or disposal of any Hazardous Material, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the Superfund Amendment and Reauthorization Act of 1986 (“SARA”), Public Law 99-499, 100 Stat. 1613, the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), 7 U.S.C. §136 et. seq., the Safe Drinking Water Act ("SWDA"), 42 U.S.C. §300f et. seq., the Surface Mining Control and Reclamation Act (“SMCR”), 30 U.S.C. §1201 et. seq., and/or (ii) relating to the protection, preservation or conservation of the environment.

 

  

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Section 6.28        Brokerage Commission.  Except as set forth in Schedule 6.28, no broker or finder has acted for the Company or the Estate in connection with this Agreement or the transactions contemplated hereby, and no person other than as set forth in Schedule 6.28, 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 Company or the Estate.

Section 6.29         Disclosure.  No representation or warranty of the Company, Member or the Estate contained in this Agreement (including the exhibits and schedules 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.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

OF BUYER AND RCI

Buyer and RCI hereby represent and warrant to the Company and the Estate as follows:

Section 7.1        Organization, Good Standing and Qualification.  Buyer and RCI (i) are entities duly organized, validly existing and in good standing under the laws of the state of Texas, (ii) have all requisite power and authority to carry on its business, and (iii) are duly qualified to transact business and are in good standing in all jurisdictions where their ownership, lease or operation of property or the conduct of their business requires such qualification, except where the failure to do so would not have a material adverse effect to Buyer and/or RCI.

Section 7.2        Authorization.  Buyer is a corporation duly organized in the state of Texas and has full power, capacity, and authority to enter into this Agreement and perform the obligations contemplated hereby.  RCI is a corporation duly organized in the state of Texas and has full power, capacity, and authority to enter into this Agreement and perform all the obligations contemplated hereby.  All action on the part of Buyer and RCI necessary for the authorization, execution, delivery and performance of this Agreement by them has been or will be taken before Closing.  This Agreement, when duly executed and delivered in accordance with its terms, will constitute legal, valid, and binding obligations of Buyer and RCI enforceable against Buyer and RCI in accordance with its terms, except as may be limited by bankruptcy, insolvency, and other similar laws affecting creditors' rights generally or by general equitable principles.

Section 7.3        Consents.  No permit, consent, approval or authorization of, or designation, declaration or filing with, any governmental authority or any other person or entity is required on the part of Buyer or RCI in connection with the execution and delivery by Buyer and RCI of this Agreement or the consummation and performance of the transactions contemplated hereby other than as may be required under the federal securities laws.

  

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Section 7.4        Disclosure.  No representation or warranty of Buyer or RCI contained in this Agreement (including the exhibits and schedules 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.

Section 7.5        Brokerage Commission.  No broker or finder has acted for the Buyer or 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 Buyer or RCI.

ARTICLE VIII

COVENANTS OF THE COMPANY AND THE ESTATE

Section 8.1        Stand Still.  To induce Buyer and RCI to proceed with this Agreement, the Company, Member and the Estate agree that until the Closing Date or the termination of this Agreement, none of the representatives of the Company or the Estate will offer to sell or solicit any offer to purchase or engage in any discussions or activities of any nature whatsoever, directly or indirectly, involving in any manner the actual or potential sale, transfer, encumbrance, pledge, collateralization or hypothecation of any of the Purchased Assets, or any Membership Interest of the Company or the Real Property.  The Company, Member and the Estate hereby agree to advise the Buyer and RCI of any contact from any third party regarding the possible acquisition of any of the Purchased Assets or any Membership Interest of the Member or other investment in the Company, the acquisition of the Real Property, or of any contact which would relate to the transactions contemplated by this Agreement.

        Section 8.2        Access; Due Diligence.  Between the date of this Agreement and the Closing Date, the Company and the Estate shall (a) provide Buyer and RCI and/or their authorized representatives reasonable access to the Club, offices, warehouse and other facilities and properties of the Company and to the books and records of the Company; (b) permit the Buyer and RCI and/or their authorized representatives to make inspections thereof; and (c) cause the officers and advisors of the Company and the Club to furnish the Buyer with such financial and operating data and other information with respect to the business and properties of the Company and the Club and to discuss with the Buyer or RCI and their authorized representatives the affairs of the Company and the Club as the Buyer or RCI may from time to time reasonably request.

Section 8.3        Preservation of Business.  From the date of the execution hereof until the Closing Date, the Company and the Estate shall operate the business of the Club in substantially the same manner as it has heretofore, consistent with past practices, and

	
  

	
(a)

	
The Company and the Estate will not authorize, declare, pay or effect any dividend or liquidation or other distribution in respect of the Membership Interest of the Company, or any other equity interest or any direct or indirect redemption, purchase or other acquisition of any equity interest of the Company;

  

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(b)

	
The Company will not make any changes in its condition (financial or otherwise), liabilities, assets, or business or in any of its business relationships, including relationships with suppliers or customers, that, when considered individually or in the aggre­gate, might reasonably be expected to have a material effect on the Company or the results of operations of the Club;

	
  

	
(c)

	
The Company will not increase the salary or other compensation payable or to become payable by  the Company to any employee, or the declaration, payment, or commitment or obligation of any kind for the pay­ment by the Company of a bonus or other additional salary or compensation to any such person;

	
  

	
(d)

	
The Company will not sell, lease, transfer or assign any of its assets, tangible or intangible;

	
  

	
(e)

	
The Company will not accelerate, terminate, modify or cancel any agreement, contract, lease or license (or series of related agreements, contracts, leases and licenses) involving more than $1,000 to which the Company is a party;

	
  

	
(f)

	
The Company will not make any loans to any person or entity, or guarantee any loan, absent the consent of the Buyer;

	
  

	
(g)

	
The Company will not waive or release any right or claim held by the Company, absent the consent of the Buyer;

	
  

	
(h)

	
The Company will operate its business in the ordinary course and consistent with past practices so as to preserve its business organization intact, to retain the ser­vices of its employees and to preserve its goodwill and relationships with suppliers, creditors, cus­tomers, and others having business relationships with it;

	
  

	
(i)

	
The Company will not issue any note, bond or other debt security or create, incur or assume, or guarantee any indebtedness for borrowed money or capitalized lease obligations;

	
  

	
(j)

	
The Company will not delay or postpone the payment of accounts payable and other liabilities;

	
  

	
(k)

	
The Company will not make any loan to, or enter into any employment agreement or other transaction with, any of its directors, officers, and employees, members or managers;

	
  

	
(l)

	
The Company will not make any change in any method, practice, or principle of accounting involving the business of the Company, or the assets of the Company;

	
  

	
(m)

	
The  Company, Member and Estate will not issue, sell or otherwise dispose of any of the Purchased Assets or any of its Membership Interests, or create, sell or dispose of any options, rights, conversion rights or other agreements or commitments of any kind relating to the issuance, sale or disposition of any of the Purchased Assets or the its Membership Interests;

  

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(n)

	
The Company and Estate will not reclassify, split up or otherwise changes of its Membership Interests;

	
  

	
(o)

	
The Company and Estate will not be a party to any merger, consolidation or other business combination; and

	
  

	
(p)

	
The Company and Estate will not agree to take any action described in this Section 8.3.

ARTICLE IX

CONDITIONS TO CLOSING

The obligations of the parties to effect the transactions contemplated hereby are subject to the satisfaction at or prior to the Closing of the following conditions:

Section 9.1        Conditions to Obligations of Buyer and RCI.

	
  

	
(a)

	
Representations and Warranties of the Member, the Estate and the Company.  The representations and warranties of the Member, the Estate and the Company shall be true and correct on the date hereof and on and as of the Closing Date, as though made on and as of the Closing Date;

 

	
  

	
(b)

	
Covenants.  All covenants, agreements and conditions contained in this Agreement to be performed by the Company, Member and the Estate on or prior to the Closing Date shall have been performed or complied with in all respects;

 

	
  

	
(c)

	
Delivery of Certificates.  The Estate and the Company shall provide to Buyer and RCI certificates, dated as of the Closing Date and signed by the Estate, the Member and by the representative of the Company, respectively, to 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)

	
Resolutions.  The Company shall have delivered corporate resolutions of the Company, 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;

 

	
  

	
(e)

	
Delivery of Purchased Assets.  The Company shall have delivered all instruments of assignment and bills of sale necessary to transfer to Buyer good and marketable title to the Purchased Assets in form and substance satisfactory to the Buyer;

 

  

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(f)

	
Conveyance of Real Property.  The Company shall deliver or cause to be delivered to RCI a General Warranty Deed and any other documents necessary to convey good and marketable title to the Real Property, free and clear of all encumbrances.  Company shall further deliver to Buyer all documents reasonably requested of Company, including without limitation a Vendor’s Affidavit and Certificate of  Non Foreign Status;

 

	
  

	
(g)

	
Related Transactions.  The Related Transactions set forth in Section 5.3 shall be consummated concurrently with the Closing;

 

	
  

	
(h)

	
Permits.  Buyer shall possess all necessary permits, licenses and other authorizations, whether city, county, state or federal, which may be needed to conduct female semi-nude adult entertainment with the sale of alcoholic beverages on the Premises, including any and all Entertainment permits or licenses issued by the state of Indiana and all such permits, licenses and authorizations shall be in good order, and, unless otherwise waived by the Buyer, without any administrative actions pending or concluded that may challenge or present an obstacle to the continued performance of female semi-nude adult entertainment with the sale of alcoholic beverages at the Club and the Certificate of Occupancy issued by the City of Indianapolis-Marion County which zones the Premises for an adult oriented business shall be in full force and effect;

 

	
  

	
(i)

	
Liabilities.  Except as to bills not yet received (which the Estate shall pay as to amounts incurred prior to Closing) as of the Closing Date, the Company does not have any obligations or liabilities (contingent or otherwise) or unpaid bills to any third party;

 

	
  

	
(j)

	
Third-Party Consents.  Any and all consents or waivers required from third parties relating to this Agreement or any of the other transactions contemplated hereby, if any, shall have been obtained;

 

	
  

	
(k)

	
Satisfactory Diligence.  Buyer shall have concluded its due diligence investigation of the Company and their respective assets and properties, RCI shall have concluded to its satisfaction its due diligence investigation related to the title to the Real Property, the adequacy of all permits and licenses for Buyer’s intended business purpose and all other matters related to the foregoing, and shall be satisfied, in its sole discretion, with the results thereof;

 

	
  

	
(l)

	
No Actions or Proceedings.  No claim, action, suit, investigation or proceeding shall be pending or threatened before any court or governmental agency which presents a substantial risk of the restraint or prohibition of the transactions contemplated by this Agreement;

 

	
  

	
(m)

	
Government Approvals.  All authorizations, permits, consents, orders, licenses or approvals of, or declarations or filings with, or expiration of waiting periods imposed by, any governmental entity necessary for the consummation of the transactions contemplated by this Agreement shall have been filed, occurred or been obtained; and

 

  

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(n)

	
Approval by Probate Court.  The obligations of the parties to effect the transactions as contemplated by this Agreement and the Amended Addendum are subject to the approval by the Judge of the Johnson County Superior Court, in which Court pends the probate estate of Albert Pfeiffer, Deceased, and any and all necessary orders of or transfers authorized by the Indiana Alcohol and Tobacco Commission

 

Section 9.2        Conditions to Obligations of the Company, Member and the Estate.

 

	
  

	
(a)

	
Representations, Warranties and Agreements of Buyer and RCI.  The representations and warranties of Buyer and RCI shall be true and correct on the date hereof and on and as of the Closing Date, as though made on and as of the Closing Date;

 

	
  

	
(b)

	
Covenants.  All covenants, agreements and conditions contained in this Agreement to be performed by the Buyer and RCI on or prior to the Closing Date shall have been performed or complied with in all respects;

 

	
  

	
(c)

	
Delivery of Certificates.  Buyer and RCI shall provide to the Company and the Estate certificates dated as of the Closing Date and signed by a representative of the Buyer and RCI 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)

	
Resolutions.  Buyer and RCI shall deliver resolutions of the Buyer and 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;

 

	
  

	
(e)

	
Payment of Purchase Price.  Buyer and RCI shall have tendered the cash portions of the Purchase Price set forth in Article III and Section 4.2;

	
  

	
(f)

	
Related Transactions.  The Related Transaction set forth in Section 5.3 shall be consummated concurrently with the Closing;

	
  

	
(g)

	
Third Party Consents.  Any and all consents or waivers required from third parties relating to this Agreement or any of the other transactions contemplated hereby, if any, shall have been obtained;

	
  

	
(h)

	
No Actions or Proceedings.  No claim, action, suit, investigation or proceeding shall be pending or threatened before any court or governmental agency which presents a substantial risk of the restraint or prohibition of the transactions contemplated by this Agreement;

  

Purchase Agreement - Page 18

  

	
  

	
(i)

	
Government Approvals.  All authorizations, permits, consents, orders or approvals of, or declarations or filings with, or expiration of waiting periods imposed by, any governmental entity necessary for the consummation of the transactions contemplated by this Agreement shall have been filed, occurred or been obtained; and

 

	
  

	
(j)

	
Approval by Probate Court.   The obligations of the parties to effect the transactions contemplated by this Agreement and the Amended Addendum are subject to the approval by the Judge of the Johnson County Superior Court, in which Court pends the probate estate of Albert Pfeiffer, Deceased.

 

ARTICLE X

CLOSING ADJUSTMENTS

The Estate and the Buyer agree that there shall be an adjustment made within ninety (90) days of the Closing Date to adjust for any liabilities that are found to exist of the Company as of the Closing Date, as such liabilities may relate to the Purchased Assets or the operation and business of the Company or the Gold Club, so that the Estate shall be responsible and liable to the Buyer for the liabilities of the Company that exist as of the Closing Date, less any credit which the Estate would be entitled to for cash on hand, cash funds in any ATM machine on the premises, credit card receivables or pro rata portion of prepaid items paid by the Estate (including any pro rated amounts due to the Estate for pre-payment of liquor liability, workman’s compensation and business owners policies of insurance, which have previously been paid by the Estate).

ARTICLE XI

INDEMNIFICATION

Section 11.1        Indemnification from the Estate.  The Company and the Estate hereby agrees to and shall indemnify, defend (with legal counsel reasonably acceptable to Buyer), and hold Buyer and RCI,  their officers, directors, shareholders, employees, affiliates, parent, agents, legal counsel, successors and assigns  (collectively, the “Buyer’s Group”) harmless at all times after the date of this Agreement, from and against any and all actions, suits, claims, demands, debts, liabilities, obligations, losses, damages, costs, expenses, penalties or injury  (including reasonable attorneys fees and costs of any suit related thereto) suffered or incurred by any or all of  the Buyer’s Group arising from: (a) any misrepresentation by, or breach of any covenant or warranty of the Estate, the Member or the Company contained in this Agreement, or any exhibit, certificate, or other instrument furnished or to be furnished by the Estate or the Company hereunder; (b) any nonfulfillment of any agreement on the part of  the Estate, Member or the Company under this Agreement;  (c) any liability or obligation due to any third party by the Company or the Estate incurred at or prior to the Closing Date; or (d) any suit, action, proceeding, claim or investigation against Buyer’s Group which arises from or which is based upon or pertaining to the Company’s or the Estate’s conduct or the operation or liabilities of the business of the Company or the business of the Gold Club prior to the Closing Date.

Section 11.2        Indemnification from Buyer.  Buyer agrees to and shall indemnify, defend (with legal counsel reasonably acceptable to Company) and hold the Company and the Estate and its employees, affiliates, agents, legal counsel, successors and assigns, (collectively, the "Estates’ Group") harmless at all times after the date of the Agreement from and against any and all actions, suits, claims, demands, debts, liabilities, obligations, losses, damages, costs, expenses, penalties or injury (including reasonably attorneys fees and costs of any suit related thereto) suffered or incurred by any or all of Estates’ Group, arising from (a) any misrepresentation by, or breach of any covenant or warranty of Buyer or RCI contained in this Agreement or any exhibit, certificate, or other agreement or instrument furnished or to be furnished by Buyer or RCI hereunder; (b) any nonfulfillment of any agreement on the part of Buyer or RCI under this Agreement; or (c) any suit, action, proceeding, claim or investigation against the Estate’s Group which arises from or which is based upon or pertaining to Buyer’s conduct or the operation of the business of the Company subsequent to the Closing Date.

  

Purchase Agreement - Page 19

  

Section 11.3        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, 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.

Section 11.4        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.

Section 11.5        Survival of Representations and Warranties.  The respective representations, warranties and indemnities given by the parties to each other pursuant to this Agreement shall survive the Closing for a period ending forty-eight (48) months from the Closing Date (“Survival Date”).  Notwithstanding anything to the contrary contained herein, no claim for indemnification may be made against the party required to indemnify (the “Indemnitor”) under this Agreement unless the party entitled to indemnification (the “Indemnitee”) shall have given the Indemnitor written notice of such claim as provided herein on or before the Survival Date.  Any claim for which notice has been given prior to the expiration of the Survival Date shall not be barred hereunder.

  

Purchase Agreement - Page 20

  

ARTICLE XII

MISCELLANEOUS

Section 12.1        Amendment; Waiver.  Neither this Agreement nor any provision hereof may be amended, modified or supplemented unless in writing, executed by all the parties hereto.  Except as otherwise expressly provided herein, no waiver with respect to this Agreement shall be enforceable unless in writing and signed by the party against whom enforcement is sought.  Except as otherwise expressly provided herein, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any party, and no course of dealing between or among any of the parties, shall constitute a waiver of, or shall preclude any other or further exercise of, any right, power or remedy.

Section 12.2        Notices.  Any notices or other communications required or permitted hereunder shall be sufficiently given if in writing and delivered in person, transmitted by facsimile transmission (fax) or sent by registered or certified mail (return receipt requested) or recognized overnight delivery service, postage pre-paid, addressed as follows, or to such other address has such party may notify to the other parties in writing:

	
  

	
(a)

	
if to the Estate:

	
The Estate of Albert Pfeiffer

c/o of Lori Pfeiffer, Personal Representative

of The Estate of Albert Pfeiffer

3551 Lafayette Road

Indianapolis, Indiana 46222

	
  

	
with a copy to:

	
Douglas W. Kessler

Smart & Kessler

1648 Fry Road, Suite A

Greenwood, Indiana 46142

Fax: (317) 885-9126

	
  

	
(b)

	
if to the Company or

	
Gold Club of Indy, LLC

	
  

	
Member:

	
3551 Lafayette Road

Indianapolis, Indiana 46222

	
  

	
with a copy to:

	
Douglas W. Kessler

Smart & Kessler

1648 Fry Road, Suite A

Greenwood, Indiana 46142

Fax: (317) 885-9126

  

Purchase Agreement - Page 21

  

	
  

	
(c)

	
if to Buyer or RCI:

	
RCI Entertainment (Indiana), Inc.

Attn:  Eric Langan, President

10959 Cutten Road

Houston, Texas  77066

Fax:  (281) 397-6765

	
  

	
with a copy to:

	
Robert D. Axelrod

Axelrod Smith & Kirshbaum

5300 Memorial Drive, Suite 700

Houston, Texas  77007

Fax:  (713) 552-0202

A notice or communication will be effective (i) if delivered in person or by overnight courier, on the business day it is delivered, (ii) if transmitted by telecopier, on the business day of actual confirmed receipt by the addressee thereof, and (iii) if sent by registered or certified mail, three (3) business days after dispatch.

Section 12.3        Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

Section 12.4        Assignment; Successors and Assigns.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the parties hereto.  No party hereto may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other parties hereto, which consent will not be unreasonably withheld.

Section 12.5        Entire Agreement.  This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof and supersede and cancel all prior representations, alleged warranties, statements, negotiations, undertakings, letters, acceptances, understandings, contracts and communications, whether verbal or written among the parties hereto and thereto or their respective agents with respect to or in connection with the subject matter hereof.

Section 12.6        Jurisdiction.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas, without regard to principles of conflict of laws.  The parties agree that venue for purposes of construing or enforcing this Agreement shall be proper in Harris County, Texas.

Section 12.7        Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

  

Purchase Agreement - Page 22

  

Section 12.8        Costs and Expenses.   Each party shall pay their own respective fees, costs and disbursements incurred in connection with this Agreement.

Section 12.9        Section Headings.  The section and subsection headings in this Agreement are used solely for convenience of reference, do not constitute a part of this Agreement, and shall not affect its interpretation.

Section 12.10      No Third-Party Beneficiaries.  Nothing in this Agreement will confer any third party beneficiary or other rights upon any person (specifically including any employees of Hotel Development) or any entity that is not a party to this Agreement.

Section 12.11      Attorney Review - Construction.  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 and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto.

Section 12.12      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 be requested by the other parties to confirm or perfect or otherwise to carry out the intent and purposes of this Agreement.

Section 12.13      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 agree upon the text of a public announcement or statement to be made 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.

Section 12.14      Exhibits or Schedules Not Attached.  Any exhibits or schedules 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 or schedule, upon their respective acceptance of its terms, conditions and/or form.

  

Purchase Agreement - Page 23

  

IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated Purchase Agreement to become effective as of the date first set forth above.

	  	
RCI DINING SERVICES (INDIANA), INC.

	  	  	  
	  	  	  
	  	
/s/ Eric Langan

	  	
By:

	
Eric Langan, President

	  	
Date:

	  
	  	  	  
	  	  	  
	  	
RCI HOLDINGS, INC.

	  	  	  
	  	
/s/ Eric Langan

	  	
By:

	
Eric Langan, President

	  	
Date:

	  
	  	  	  
	  	  	  
	  	
THE ESTATE OF ALBERT PFEIFFER

	  	  	  
	  	
/s/ Lori L. Pfeiffer

	  	
By:

	
Lori Pfeiffer, Personal Representative of

	  	  	
The Estate of Albert Pfeiffer

	  	
Date:

	  
	  	  	  
	  	  	  
	  	
GOLD CLUB OF INDY, LLC

	  	  	  
	  	  	  
	  	
/s/ Lori L. Pfeiffer

	  	
By:

	
Lori Pfeiffer

	  	
Its:

	
Member

	  	
Date:

	  
	  	  	  
	  	  	  
	  	
/s/ Lori L. Pfeiffer

	  	
Lori Pfeiffer, Individually as to Section 8.3(m) only, and as Personal Representative of The Estate of Albert Pfeiffer

  

Purchase Agreement - Page 24

  

EXHIBITS AND SCHEDULES

 

 

 

Purchase Agreement - Page 25

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