<PAGE> 1
As filed with the Securities and Exchange Commission on May 21, 1996.
Registration No. 33-________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------
RICK'S CABARET INTERNATIONAL, INC.
(Exact name of issuer as specified in its charter)
Texas 76-0037324
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
3113 Bering Drive, Houston, Texas 77057
(Address of principal executive offices)
50,000 CONSULTANT'S SHARES TO BE ISSUED PURSUANT TO
CONSULTING AGREEMENT BY AND BETWEEN
RICK'S CABARET INTERNATIONAL, INC. AND
SUMMIT MARKETING & PUBLIC RELATIONS, INC.
(Full title of the plan)
---------------
Robert L. Watters
President
Rick's Cabaret International, Inc.
3113 Bering Drive
Houston, Texas 77057
(713) 785-0444
(Name, address and telephone number, including area code, of agent for service)
---------------
Copy to:
Robert D. Axelrod
Axelrod, Smith & Kirshbaum
5300 Memorial Drive, Suite 700
Houston, Texas 77007
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share(*) price(*) fee
---------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Common stock, 50,000 shares $5.00 $250,000 $87.00
par value $.01
- ------------------------------------------------------------------------------------------------------
</TABLE>
* Estimated pursuant to Rule 457(h) of the Securities Act of 1933, as
amended, solely for purposes of calculating the registration fee.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
PROSPECTUS
ITEM 1. PLAN INFORMATION.
(a) General Plan Information.
The 50,000 shares (the "50,000 Consultant's Shares") of common stock,
par value $.01 per share (the "Common Stock"), of Rick's Cabaret International,
Inc. (the "Company") being registered pursuant to the Registration Statement on
Form S-8 are shares to be issued to Summit Marketing & Public Relations, Inc.
(the "Consultant") pursuant to the terms of a consulting agreement (the
"Consulting Agreement") dated as of May 1, 1996, by and between the Consultant
and the Company. The registrant whose securities are being offered is Rick's
Cabaret International, Inc. The 50,000 Consultant's Shares will be issued
subsequent to the effective date of the Registration Statement on Form S-8 (the
"Registration Statement") covering the 50,000 Consultant's Shares of which this
Prospectus forms a part. A copy of the Consulting Agreement is annexed as
Exhibit 4 to the Registration Statement on Form S-8.
Under the terms of the Consulting Agreement dated May 1, 1996, the
Company is engaging on a full-time basis the Consultant, for a period of six
(6) months commencing upon the execution of the Consulting Agreement, to
provide to the Company consulting services with respect to financial and public
relations and stockholder relations. The Consulting Agreement will terminate
on November 1, unless earlier terminated, at the option of the Company, due to
the short-term disability of the principals of the Consultant.
As partial consideration for the Consultant performing the consulting
services described in the Consulting Agreement, the Company shall issue to the
Consultant 50,000 shares of its Common Stock. Of the 50,000 Consultant's
Shares, 16,667 shares shall be issued to the Consultant immediately upon the
effective date of the Registration Agreement ("Effective Date"), and the
remaining 33,333 shares shall be issued by the Company to the Consultant as
follows:
<TABLE>
<CAPTION>
Number of Shares Date to be Issued to the Consultant
---------------- -----------------------------------
<S> <C>
16,667 30 days from the Effective Date
16,666 60 days from the Effective Date
</TABLE>
Pursuant to the Consulting Agreement, the Company agreed to file with
the Securities and Exchange Commission a registration statement on Form S-8
covering the 50,000 Consultant's Shares and to pay all expenses incurred in
connection with filing of such registration statement.
As additional consideration for providing the consulting services
described in the Consulting Agreement, the Company has granted to the
Consultant 200,000 warrants to purchase 200,000 shares of Common Stock of the
Company at $4.50 per share for a term of six (6) months commencing on May 1,
1996, exercisable (i) 100,000 shares at any time during the six month period,
and (ii) an additional 100,000 shares if the Company's Common Stock closes at a
bid price of $5.50 per share for five consecutive days. Further, the Company
has granted to the Consultant 200,000 additional warrants to purchase 200,000
shares of Common Stock of the Company at $4.50 per share for a twelve (12)
month period commencing
2
<PAGE> 3
on May 1, 1996, exercisable (i) 100,000 shares only if the Company's shares of
Common Stock close at a bid price of $6.50 per share for five consecutive days
and (ii) an additional 100,000 shares only if the Company's shares of Common
Stock close at a bid price of $8.00 per share for five consecutive days.
The shares of Common Stock issuable upon exercise of the warrants have
certain piggyback registration rights.
The Consulting Agreement also contains a non-competition provision
which provides that the Consultant will not, absent the prior written consent
of the Company, in any manner, directly or indirectly, own, manage, operate,
join, control or participate in the ownership, management, operation or control
of or be employed or connected in any manner with any company or firm which
competes, or would compete, with the Company.
The Consulting Agreement and the securities to be issued pursuant
thereto are not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
The address and telephone number, including area code, to obtain
additional information regarding the information discussed herein is Rick's
Cabaret International, Inc., 3113 Bering Drive, Houston, Texas 77057,
Attention: Robert L. Watters; (713) 785-0444.
(b) Securities Offered.
The title of the Plan is the 50,000 Consultant's Shares to be Issued
Pursuant to the Consulting Agreement dated May 1, 1996, by and between the
Company and the Consultant. The total amount of securities being offered
pursuant to such Plan is 50,000 shares of Common Stock.
(c) Employees who may Participate in the Plan.
The Plan covers the 50,000 Consultant's Shares. Only the Consultant
will be issued such shares. The Consultant is receiving such shares based upon
the services outlined in the Consulting Agreement to be performed for the
Company by the Consultant.
(d) Purchase of Securities Pursuant to the Plan and Payment for
Securities Offered.
The Consultant will be receiving, for its services to be rendered, the
50,000 Consultant's Shares in accordance with the terms of the Consulting
Agreement as described above. The shares are being issued to the Consultant
for the consulting services the Consultant will provide to the Company. The
Board of Directors of the Company determined the value of the services to be
provided to the Company by the Consultant.
(e) Resale Restrictions.
Following the issuance to the Consultant of the 50,000 Consultant's
Shares as described herein, there will be no restrictions imposed under the
Consulting Agreement upon resale by the Consultant of the 50,000 Consultant's
Shares, provided such shares of Common Stock have been registered and are then
covered by an effective Registration Statement.
3
<PAGE> 4
(f) Tax Effects of Plan Participation.
Upon the issuance of the 50,000 Consultant's Shares, the Consultant
will recognize ordinary income (treated as compensation income) equal to the
fair market value of the Common Stock at the time of issuance. The Company
will be entitled to a tax deduction in the same amount and at the same time as
the Consultant realizes such income. Upon the sale of such shares, the
Consultant will recognize capital gain or loss measured by the difference
between the amount realized on the sale and the fair market value of the Common
Stock at the time of issuance. Such capital gain or loss will be short-term or
long-term, depending upon the length of time the shares were held by the
Consultant.
(g) Investment of Funds.
Not applicable.
(h) Withdrawal from the Plan; Assignment of Interest.
The 50,000 Consultant's Shares may be transferred, assigned, pledged,
or hypothecated by the Consultant.
(i) Forfeitures and Penalties.
Not applicable.
(j) Charges and Deductions, and Liens Therefor.
Not applicable.
ITEM 2. REGISTRANT INFORMATION.
The Company will promptly furnish, without charge, a copy of any
documents filed by the Company with the Securities and Exchange Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended, or the Company's then annual report to stockholders, upon
the written or oral request of the person receiving this document which
documents are incorporated by reference into this document. Such requests
should be addressed to Robert L. Watters, President, Rick's Cabaret
International, Inc., 3113 Bering Drive, Houston, Texas 77057 (telephone (713)
785-0444).
Dated: May 21, 1996.
4
<PAGE> 5
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have been filed with the Securities and
Exchange Commission (the "Commission") by Rick's Cabaret International, Inc.
(the "Company"), are incorporated herein by reference and made a part hereof:
(a) the Company's Annual Report on Form 10-KSB for the fiscal year ended
September 30, 1995; (b) all other reports filed pursuant to Section 13(a) or
15(d) of the Exchange Act since September 30, 1995; and (c) the Company's
Registration Statement on Form SB-2, as amended (Registration Statement No.
33-88372, dated October 11, 1995).
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, subsequent to
the date hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold shall be deemed to be incorporated by
reference herein and to be part hereof from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be modified or superseded for purposes
of this Registration Statement to the extent that a statement contained herein
or in any other subsequently filed document which also is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The Company's Common Stock is registered under Section 12 of the
Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Articles of Incorporation of the Company ("Articles") provide for
indemnification of Directors and Officers in accordance with the Texas Business
Corporation Act. Article Eight of the Articles provides as follows:
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law, or for which the person is found liable to the
Corporation, (iii) under Article 2.41 of the Texas Business Corporation Act, or
(iv) for any transaction from which the director derived an improper personal
benefit, whether or not the benefit resulted from an action taken in the
person's official capacity.
5
<PAGE> 6
Article Nine of the Articles provides as follows:
Section 9.1 The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending, or
completed action, suit or proceeding, whether civil, criminal, administrative,
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was a director, officer employee or agent
of the corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement, actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit, or proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interest of the
Corporation and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 9.2 The Corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue, or matter as to which such person shall
have been adjudged to be liable to the Corporation unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Section 9.3 To the extent that a director, officer, employee or agent
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 9.1 and 9.2., or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 9.4 Any indemnification under Sections 9.1 and 9.2 of this
Article Nine (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in Section 9.1 and 9.2.
Such determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the shareholders in a vote that
excludes the shares held by directors who are parties to such action, suit or
proceeding.
Section 9.5 Expenses incurred in defending a civil or criminal
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent of his good faith belief that he has met the
standard of conduct necessary for
6
<PAGE> 7
indemnification under Sections 9.1 and 9.2 and a written undertaking to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article Nine.
Section 9.6 The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Article Nine shall not
be deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to acting in another capacity while holding such
office.
Section 9.7 The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the provisions of this
Article Nine.
Section 9.8 For the purpose of this Article Nine, references to "the
Corporation" shall include, in addition to the resulting Corporation, any
constituent corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Article Nine with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
Section 9.9 For purposes of this Article Nine, referenced to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Article Nine.
Section 9.10 The indemnification and advancement of expenses provided
by, or granted pursuant to, this Article Nine shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Section 9.11 The provisions of this Article Nine: (i) are for the
benefit of, and may be enforced by, each person entitled to indemnification
hereunder, the same as if set forth in their entirety in a written instrument
duly executed and delivered by the Corporation and such person; and (ii)
constitute a continuing offer to all present and future persons entitled to
indemnification hereunder. The Corporation, by its filing of these Articles of
Incorporation: (a) acknowledges and agrees that each person entitled to
indemnification hereunder has relied upon and will continue to rely upon the
7
<PAGE> 8
provisions of this Article Nine in accepting and serving in any of the
capacities entitling such person to indemnification hereunder; (b) waives
reliance upon, and all notices of acceptance of, such provisions by such
persons; and (c) acknowledges and agrees that no present or future person
entitled to indemnification hereunder shall be prejudiced in such person's
right to enforce the provisions of this Article Nine in accordance with their
terms by any act or failure to act on the part of the Corporation.
Section 9.12 No amendment, modification, or repeal of this Article
Nine or any provision hereof shall in any manner terminate, reduce, or impair
the right of any past, present or future person entitled to indemnification
hereunder to be indemnified by the Corporation, nor the obligation of the
Corporation to indemnify any such person, under and in accordance with the
provisions of this Article Nine as in effect immediately prior to such
amendment, modification, or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification, or repeal, regardless of when such claims may arise or be
asserted.
The foregoing discussion of the Company's Articles and of the Texas
Business Corporation Act is not intended to be exhaustive and is qualified in
its entirety by such Articles and statutes, respectively.
The Underwriting Agreement provides for indemnification of the Company
and the Underwriters and their respective officers, directors and controlling
persons within the meaning of the Act against certain liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The following is a list of exhibits filed as part of the Registration
Statement:
<TABLE>
<CAPTION>
Exhibit Number Description of Exhibit
-------------- ----------------------
<S> <C>
4 Consulting Agreement by and between Rick's Cabaret
International, Inc. and Summit Marketing & Public
Relations, Inc.
5 Opinion of Axelrod, Smith & Kirshbaum
23(i) Consent of Jackson & Rhodes
23(ii) Consent of Axelrod, Smith & Kirshbaum
</TABLE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
A. (1) To file during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement:
8
<PAGE> 9
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in this registration statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement; provided, however, that paragraphs (a) (i) and
(a) (ii) above do not apply if the registration statement is on Form
S-3 or Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the 1934 Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
that the Registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on May 14, 1996.
RICK'S CABARET INTERNATIONAL, INC.
By: /s/ Robert L. Watters
----------------------------------
Robert L. Watters, Chairman of the
Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert L. Watters Chairman of the Board, May 14, 1996
- ------------------------------- Chief Executive Officer, and
Robert L. Watters Director (Principal Executive
Officer)
/s/ Erich Norton White Director and Executive May 14, 1996
- ------------------------------ Vice President
Erich Norton White
/s/ Scott C. Mitchell Director May 15, 1996
- ------------------------------
Scott C. Mitchell
Director May ___, 1996
- ------------------------------
Martin Sage
/s/ Gary White Chief Financial Officer, May 14, 1996
- ------------------------------ (Principal Financial Officer
Gary White and Principal Accounting Officer)
</TABLE>
10
<PAGE> 11
INDEX TO EXHIBITS
4 Consulting Agreement by and between Rick's
Cabaret International, Inc. and Summit
Marketing & Public Relations, Inc.
5 Opinion of Axelrod, Smith & Kirshbaum
23(i) Consent of Jackson & Rhodes
23(ii) Consent of Axelrod, Smith & Kirshbaum
<PAGE> 1
EXHIBIT 4
CONSULTING AGREEMENT
THIS Agreement made as of the 1st. day of May, 1996, by and between RICK'S
CABARET INTERNATIONAL INC. ("RICK'S") a Houston, Texas Corporation with offices
at 3113 Bering Drive, Houston, Texas 77057 and SUMMIT Marketing & Public
Relations Inc., (SUMMIT), a Florida Corporation, with its principal place of
business at 2101 Corporate Blvd., Suite 210, Boca Raton, Florida 33431
("SUMMIT").
WHEREAS, RICK'S desires to secure and retain SUMMIT'S AVAILABILITY
AND SERVICES AS A PUBLIC RELATIONS CONSULTANT WITH THE FINANCIAL COMMUNITY FOR
THE BENEFIT OF RICK'S.
WHEREAS, SUMMIT wishes to be available and provide public relations
consulting services to RICK'S.
NONE, THEREFORE, in consideration of the mutual promises, covenants
and conditions herein contained, and other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, it is agreed
as follows:
ARTICLE I
Definitions
For the purpose of this Agreement, the following terms have the following
meanings:
1.1 "Consulting Services" includes, but is not limited to: servicing
and maintaining preexisting relationships between and amongst brokers, dealers,
market makers, shareholders and other related parties and RICK'S; informing and
updating the aforementioned parties, the financial press, and financial markets
of press releases, market sensitive information, and other news relating to
RICK'S on a timely basis; developing and implementing advertising and
promotional plans for the benefit of RICK'S; receiving and relaying inquiries
from potential investors to the appropriate persons or parties; the answering
of questions and commenting on documents, press releases, marketing plans, and
advising with respect to the nature and scope of financial community
relationships.
1.2 "Disability" means event or act that prevents the principals of
SUMMIT from performing the Consulting Services.
1.3 "Entity" shall mean any natural person, public or private
corporation, proprietorship, partnership, governmental entity, association,
organization, or group. Any reference herein to any entity, whether or not a
party herein, which is a corporation, partnership, bank, trust or any entity
shall be construed as including all past and present subsidiaries, affiliates,
directors, officers, employees and agents of the entity.
<PAGE> 2
CONSULTING AGREEMENT
PAGE 2.
ARTICLE II
Consulting Services
2.1 Performance of Services. During the term of this Agreement,
SUMMIT shall render Consulting Services to RICK'S.
2.2 Provisions of Services. SUMMIT shall provide Consulting Services
for at least a reasonable amount of time each month during the term of this
Agreement. This requirement is for the benefit of RICK'S and may be waived
in writing by RICK'S and shall be subject to the ordinary and customary
vacation periods of the United States of America. SUMMIT shall not be required
to provide Consulting Services for any prescribed number of hours on any given
day.
2.3 Short Term Disability. If during the term of this Agreement all
of the available principals of SUMMIT qualified to provide Consulting Services
to RICK'S suffer a disability and as a result are unable to perform the
Consulting Services for a period of thirty (30) consecutive days from the date
SUMMIT notifies RICK'S of such Disability. RICK'S shall have the option to
immediately terminate this Agreement without further compensation.
2.4 Dissolution, Insolvency, Bankruptcy, etc. If SUMMIT becomes
dissolved, insolvent, bankrupt or ceases its business operations during the
term of this Agreement, then the parties may agree to employ SUMMIT'S nominee
as a substitute consultant under the same terms and conditions as set forth
herein for the period of time remaining in this Agreement.
2.5 Place of Services. The parties understand that the Consulting
Services are to be performed by telephone and facsimile, unless otherwise
mutually agreed to between the parties.
2.6 No Default or Conflict. To the best of its knowledge, SUMMIT is
not in default nor would the execution, delivery or performance of this
Agreement cause it to be in default, with respect to any law, regulation,
charter, by- law, agreement or other commitment or injunction, decree, judgment
or other order of any court or agency that is applicable to SUMMIT and which
precludes the performance of its obligations under this Agreement or result in
a conflict of interest. During the term of this Agreement, SUMMIT will not
enter into any contract, agreement, or commitment or act in a manner which
would (1) cause it to be in default with respect to any law, regulation,
charter, by-law agreement or other commitments or any injunction, decree,
judgment or other order of any court or agency that would preclude the full and
timely performance of its obligations under this Agreement, or (2) result in a
conflict of interest with the performance of the obligations and duties
hereunder.
<PAGE> 3
CONSULTING AGREEMENT
PAGE 3.
ARTICLE III
Compensation
3.1 Consulting Fees. In consideration for performance of the
Consulting Services, RICK'S agrees to pay the sum of 50,000 shares of free
trading stock, 400,000 options to purchase the common stock at the inception
of this Agreement.
Structure for Consulting Fees as follows:
1. 50,000 shares of RICK'S free trading stock to be paid in
three (3) installments of 16,667 shares upon the signing of this agreement,
16,667 shares (30) days thereafter and 16,666 (30) days after that. All
stock, (50,000 shares) and all warrants to be delivered as soon as possible
after signing.
2. A (6) month option to purchase 200,000 shares of RICK'S
at $4.50 exercisable as follows:
(a) 100,000 at anytime during (6) months.
(b) 100,000 when RICK'S closes at $5.50 bid for (5)
consecutive days.
3. To purchase an additional 200,000 options at $4.50 for a
(12) month period.
(a) 100,000 when RICK'S closes at $6.50 bid for (5)
consecutive days.
(b) 100,000 when RICK'S closes at $8.00 bid for (5)
consecutive days.
3.2 Common Stock. The common stock of RICK'S is listed on the
NASDAQ and has been duly registered with the Securities and Exchange
Commission (the "SEC") in accordance with Section 12 (g) of the Securities
Exchange Act of 1934, as amended (herein called the "Exchange Act") and the
National Association of Securities Dealers (the "NASD"). Said common stock is
the only "equity security" (as defined in the Exchange Act) of RICK'S
required to be registered under Section 12 of the Exchange Act. If any shares
of common stock required to be reserved for purposes of this Agreement
hereunder require registration with or approval of any governmental authority
under any federal (including but not limited to the Act or similar federal
statute than in force) or state law, or listing on any national securities
exchange, before such shares may be issued, RICK'S will, at its expense, as
expeditiously as possible to cause such shares to be duly registered or
approved or listed on the relevant national securities
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CONSULTING AGREEMENT
PAGE 4.
exchange, as the case may be. RICK'S shall pay all expenses, issuance taxes
and other charges payable in connection with the preparation, execution and
delivery of certificates for common stock issuable pursuant to this Agreement.
If RICK'S at any time proposes to register any of its securities under the Act
on any appropriate form, it will at each such time give written notice to
SUMMIT of its intention to do so. Upon the written request to RICK'S from
SUMMIT, given within thirty (30) days after receipt of any such notice, RICK'S
will cause the common stock which RICK'S has been requested to register by
SUMMIT to be registered under the Act, all to the extent requisite to permit
the sale or other disposition by SUMMIT of common stock so registered. As
expeditiously as possible after the effectiveness of any registration pursuant
to this Section 3, registered, new common stock certificates not bearing any
legend and free from restrictions of any kind.
a. RICK'S agrees to deliver 400,000 warrants and 50,000
shares of its common stock without any restrictive legend of any kind to SUMMIT
upon execution of this Agreement in the name of SUMMIT Marketing & Public
Relations Inc.
ARTICLE IV
Confidential Information
4.1 Ownership of Confidential Information. Any Confidential
Information which has been made available to SUMMIT or is learned, acquired,
developed, made or conceived by SUMMIT, either alone or jointly with others, in
the course of or arising out of the rendering of the Consulting Services, shall
be and remain RICK'S sole and exclusive property. The parties agree, that the
copyrights to any work or agreements made, negotiated, consummated, or
conceived by SUMMIT through or as a result of performing the Consulting
Services, if any, shall be considered a work made for hire for the sole and
exclusive ownership and benefit of RICK'S.
4.2 Confidential Treatment. SUMMIT agrees to treat as confidential
and shall not, except in its duties in rendering Consulting Services or as
applicable law requires, at any time, directly or indirectly, use, disclose,
publish or OTHERWISE disseminate, any of the Confidential Information without
prior written approval from RICK'S and in accordance with any federal and any
applicable state securities laws. SUMMIT further
<PAGE> 5
CONSULTING AGREEMENT
PAGE 5.
agrees to use its best efforts to protect Confidential Information against
unauthorized use or improper disclosure. However, this paragraph should not be
construed so as to prevent SUMMIT from using the Confidential Information in or
testifying at in any arbitration or court proceeding instituted to enforce the
rights of SUMMIT under the terms and conditions of this Agreement.
ARTICLE V
Non-Compete
5.1 Restriction. SUMMIT covenants and agrees that, absent prior
written consent from RICK'S during the period of this Agreement (or such
longer period as SUMMIT actually provides Consulting Services to RICK'S,
neither it nor any of its affiliates shall, in any manner, directly or
indirectly own, manage, operate, join, control or participate in the ownership,
management, operation or control of, or be employed or connected in any manner,
in any company or firm which competes, or would compete, with RICK'S market
throughout the world and including the United States of America.
ARTICLE VI
Term and Termination
6.1 Term. This Agreement shall commence upon the date of this
Agreement first written above and shall continue in full force and effect for a
period of 6 months ending on the 1st. day of November, 1996 unless sooner
terminated a provided in Section 6.2. In the event neither party notifies the
other party in writing at least thirty (30) days prior to the expiration of the
Term, this Agreement shall be renewed for one additional Term under terms and
conditions to be agreed upon at that time.
6.2 Termination. RICK'S shall have a right to terminate this
Agreement upon thirty (30) days written notice of same and the payment to
SUMMIT or its assignees of one month's Consulting Fee and any out-of-pocket
expenses due. Upon payment of the amount described herein and in full
compliance with the terms provided in this Agreement together with written
notice of termination to SUMMIT, RICK'S obligations under this Consulting
Agreement shall be deemed discharged and this Agreement shall be deemed null
and void.
ARTICLE VII
Miscellaneous
7.1 Governing Law, Severability. This Agreement shall be construed
in accordance with, and governed for all purposes by the laws of the State of
Texas. In
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CONSULTING AGREEMENT
PAGE 6.
case any one or more of the provisions contained in this Agreement shall, for
any reason, be held, to be invalid, illegal or unenforceable, in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
If, moreover, any one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed, by limiting and
reducing it, so as to be enforceable to the extent compatible with the
applicable law as it shall then appear.
7.2 Disputes. Any action brought to settle the terms of this
Agreement or to enforce any of its provisions shall be brought in the State and
Federal Courts of the State of Florida and in no other jurisdiction. The
parties hereby consent to jurisdiction and waive any objection as to venue or
jurisdiction of the above-named court. Each party may seek injunctive relief
which shall not be deemed or construed as a bar to an action for damages
regarding any breach or performance and shall not be deemed an election of
remedies.
7.3 Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same agreement. This
Agreement shall be effective when each of the parties shall have executed at
least one counterpart, although not all of the parties may have executed the
same counterpart.
7.4 Entire Agreement. This Agreement constitutes the entire
Agreement amount the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties with
respect to the subject matter thereof. In addition, except as otherwise
specifically provided herein, no change, modification or addition shall be
valid unless in writing and signed by or on behalf of the parties hereto.
7.5 Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
7.6 Relationship. Nothing in this Agreement is intended to or shall
establish any agency, partnership or joint venture relationship between the
parties. SUMMIT shall be deemed for all purposes an independent contractor of
RICK'S for the purpose of this Agreement.
<PAGE> 7
CONSULTING AGREEMENT
PAGE 7.
IN WITNESS WHEREOF, the parties have duly examined this Agreement of seven (7)
pages as of this day and year first above written whereupon it became a binding
agreement among them.
SUMMIT MARKETING & PUBLIC RICK'S CABARET INTERNATIONAL,
RELATIONS, INC. INC.
BY: /s/ ROGER TAFT BY: /s/ ROBERT L. WATTERS
------------------------------ ------------------------------
NAME: ROGER TAFT NAME: ROBERT L. WATTERS
---------------------------- ----------------------------
TITLE: President TITLE: President
--------------------------- ---------------------------
<PAGE> 1
EXHIBIT 5
AXELROD, SMITH & KIRSHBAUM
An Association of Professional Corporations
ATTORNEYS AT LAW
5300 Memorial Drive, Suite 700
Houston, Texas 77007-8292
Telephone (713) 861-1996
Robert D. Axelrod, P.C. Facsimile (713) 552-0202
May 16, 1996
Robert L. Watters, President
Rick's Cabaret International, Inc.
3113 Bering Drive
Houston, Texas 77057
Dear Mr. Watters:
As counsel for Rick's Cabaret International, Inc., a Texas corporation
("Company"), you have requested our firm to render this opinion in connection
with the registration statement of the Company on Form S-8 ("Registration
Statement") under the Securities Act of 1933, as amended (the "Act"), filed
with the Securities and Exchange Commission relating to the registration of the
issuance of up to 50,000 shares of common stock, par value $.01 per share (the
"Common Stock"), to be issued to Summit Marketing & Public Relations
Inc.("Summit"), a consultant to the Company, pursuant to a Consulting Agreement
dated May 1, 1996 ("Consulting Agreement") between the Company and Summit.
We are familiar with the Registration Statement and the registration
contemplated thereby. In giving this opinion, we have reviewed the
Registration Statement and such other documents and certificates of public
officials and of officers of the Company with respect to the accuracy of the
factual matters contained therein as we have felt necessary or appropriate in
order to render the opinions expressed herein. In making our examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents presented to us as originals, the conformity to original documents of
all documents presented to us as copies thereof, and the authenticity of the
original documents from which any such copies were made, which assumptions we
have not independently verified.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas; and
<PAGE> 2
Page 2
May 16, 1996
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2. The shares of Common Stock to be issued are validly authorized
and, when issued and delivered in accordance with the terms of
the Consulting Agreement, will be validly issued, fully paid
and nonassessable.
We consent to the to the filing of this opinion as an exhibit to the
Registration Statement and to the reference in the Registration Statement to
Axelrod, Smith, & Kirshbaum under the heading "Exhibits-Opinion."
Very truly yours,
/s/ AXELROD, SMITH & KIRSHBAUM
<PAGE> 1
EXHIBIT 23.i
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Rick's Cabaret International, Inc.
We consent to the incorporation by reference in the registration statement on
Form S-8 of Rick's Cabaret International, Inc. of our report dated November 15,
1995, relating to the consolidated balance sheets of Rick's Cabaret
International, Inc. as of September 30, 1995 and 1994 and the related
statements of income, changes in stockholders' equity and cash flows for the
years then ended, which report appears in the annual report on Form 10-KSB of
Rick's Cabaret International, Inc.
Jackson & Rhodes, P.C.
Dallas, Texas
May 21, 1996
<PAGE> 1
EXHIBIT 23.ii
CONSENT OF COUNSEL
The consent of Axelrod, Smith & Kirshbaum, is contained in their
opinion filed as Exhibit 5 to this Registration Statement.
