Document:

ex10_1.htm

    
      
        

      
Exhibit 10.1

    

    

    EXECUTION
VERSION

    

    LOCK-UP/LEAK-OUT
AGREEMENT

    

    

    THIS LOCK-UP/LEAK-OUT AGREEMENT
(the “Agreement”) is made and entered into as of the 31st day of March, 2008,
between RICK’S CABARET
INTERNATIONAL, INC., a Texas corporation (“Rick’s”), and VINCENT PIAZZA (“Holder”).

    

    WHEREAS, the Holder has agreed
to sell to Rick’s 700 shares of common stock of The End Zone, Inc., a
Pennsylvania corporation (the “Company”) which represents 100% of the issued and
outstanding shares of common stock of the Company pursuant to the Second
Amendment to Purchase Agreement between Holder, TEZ Real Estate, LP, a
Pennsylvania limited partnership, TEZ Management, LLC, a Pennsylvania limited
liability company, the Company, the Piazza Family Limited Partnership, RCI
Entertainment (Philadelphia), Inc., a Pennsylvania corporation, Rick’s and RCI
Holdings, Inc., a Texas corporation dated January 29, 2008, as amended by the
Third Amendment to Purchase Agreement (the “Amended and Restated Purchase
Agreement”); and

    

    WHEREAS, under the terms of
the Amended and Restated Purchase Agreement, the Holder shall be entitled to
receive 195,000 shares of common stock of Rick’s (“Rick’s Common Stock”) upon
the Closing of the Amended and Restated Purchase Agreement (“Closing Date”),
which is conditioned upon, among other things, the execution and delivery of
this Agreement; and

    

    WHEREAS, the Holder has agreed
to enter into this Agreement and to restrict the sale, assignment, transfer,
conveyance, or hypothecation of the Rick’s Common Stock, all on the terms set
forth below; and

    

    WHEREAS, any capitalized terms
not defined herein shall have the meaning set forth in the Amended and Restated
Purchase Agreement.

    

    NOW, THEREFORE, in
consideration of the foregoing premises and the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:

    

    
      	
              1.

            	
              The
      Holder agrees he may not sell, pledge, hypothecate, transfer, assign or in
      any other manner dispose of the Rick’s Common Stock for one year from
      the date hereof.

            

    

    

    
      	
              2.

            	
              (a)

            	
              Thereafter,
      on or after one (1) year from the date hereof, the Holder shall have the
      right, but not the obligation, to have Rick’s purchase from the Holder
      5,000 of the Rick’s Common Stock per month (the “Monthly Shares”)
      calculated at a price per share equal to $23.00 per share (“Value of the
      Rick’s Common Stock”) until the Holder has received an aggregate of
      $4,485,000 from (i) the sale of the Rick’s Common Stock, regardless of
      whether sold to Rick’s, sold in the open market or in a private
      transaction or otherwise and (ii) the payment of any Deficiency (as
      hereinafter defined) by Rick’s.  Holder shall notify Rick’s
      during any given month of its election to “Put” the Monthly Shares to
      Rick’s during that particular month and Rick’s shall have three (3)
      business days to elect to buy the Monthly Shares or instruct the Holder to
      sell the Monthly Shares in the open market.  At Rick’s election,
      during any given month, it may either buy the Monthly Shares or, if Rick’s
      elects not to buy the Monthly Shares from Holder, then Holder shall sell
      the Monthly Shares in the open market and any deficiency between the
      amount which Holder receives from the sale of the Monthly Shares and the
      Value of the Rick’s Common Stock (the “Deficiency”) shall be paid by
      Rick’s within three (3) business days after receipt of written notice from
      the Holder of the sale of the Monthly Shares which shall provide the
      written sales confirmation and the amount of the
      Deficiency.  Rick’s obligation under this Section 2(a) to
      purchase the Monthly Shares from Holder shall terminate and cease at such
      time as Holder has received an aggregate amount of $4,485,000 from (i) the
      sale of the Rick’s Common Stock, regardless of whether sold to Rick’s,
      sold in the open market or in a private transaction or otherwise, and (ii)
      the payments to Holder of any Deficiency by Rick’s.  Holder
      agrees to provide monthly statements to Rick’s as to the total number of
      Rick’s Common Stock which Holder sold and the amount of proceeds derived
      therefrom. Except as set forth below in Section 2(b), nothing contained in
      this Section 2(a) shall limit or preclude Holder from selling the Rick’s
      Common Stock  in the open market or require Holder to “Put” the
      Rick’s Common Stock  to Rick’s during any given
      month.

            

    

    
      
         

      

      
        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (b)

            	
              In
      the event the Holder elects not to “Put” the Rick’s Common Stock to
      Rick’s, the Holder shall not sell more than 25,000 shares of Rick’s Common
      Stock per 30-day period and will not sell more than 75,000 shares of
      Rick’s Common Stock per 90-day period regardless of whether the Holder
      “Puts” the Rick’s Common Stock to Rick’s or sells them in the open market,
      in a private transaction or otherwise.  In the event that the
      Holder elects to sell the Rick’s Common Stock pursuant to this Section
      2(b), then any amount sold at prices less than the Value of the Rick’s
      Common Stock shall be deemed to be sold at $23.00 for purposes of this
      Section 2(b).

            

    

    

    
      	
              3.

            	
              The
      Holder acknowledges and agrees that Rick’s may advise its Transfer Agent
      of this Agreement and issue a stop transfer order to the Transfer Agent to
      ensure that any sale of the Rick’s Common Stock by the Holder is in
      accordance with the terms and conditions
hereof.

            

    

    

    
      	
              4.

            	
              The
      Holder agrees that it will not engage in any short selling of the Rick’s
      Common Stock during the term of this
Agreement.

            

    

    

    
      	
              5.

            	
              Except
      as otherwise provided in this Agreement or any other agreements between
      the parties, the Holder shall be entitled to their respective beneficial
      rights of ownership of the Rick’s Common Stock, including the right to
      vote the Rick’s Common Stock for any and all
  purposes.

            

    

    

    
      	
              6.

            	
              The
      resale restrictions on the Rick’s Common Stock set forth in this Agreement
      shall be in addition to all other restrictions on transfer imposed by
      applicable United States and state securities laws, rules and
      regulations.

            

    

    
 

    Lock-Up/Leak-Out
Agreement – Page 2

    
      
         

      

      
        
          

        

      

      
         

      

    

     

    
      	
              7.

            	
              If
      either Rick’s or the Holder fails to fully adhere to the terms and
      conditions of this Agreement, it shall be liable to the other party for
      any damages suffered by the other party by reason of any such breach of
      the terms and conditions hereof.  Rick’s and the Holder agree
      that in the event of a breach of any of the terms and conditions of this
      Agreement by Rick’s or the Holder, that in addition to all other remedies
      that may be available in law or in equity to Rick’s or the Holder, as the
      case may be, a preliminary and permanent injunction and an order of a
      court requiring Rick’s or the Holder to cease and desist from violating
      the terms and conditions of this Agreement and specifically requiring
      Rick’s or the Holder to perform their obligations hereunder is fair and
      reasonable by reason of the inability of the parties to this Agreement to
      presently determine the type, extent or amount of damages that Rick’s or
      the Holder may suffer as a result of any breach or continuation thereof.
      In the event of default hereunder, the non-defaulting party shall be
      entitled to recover reasonable attorney's fees incurred in the enforcement
      of this Agreement.

            

    

    

    
      	
              8.

            	
              This
      Agreement sets forth the entire understanding of the parties hereto with
      respect to the subject matter hereof, and may not be amended except by a
      written instrument executed by the parties
  hereto.

            

    

    

    
      	
              9.

            	
              This
      Agreement shall be governed by, and construed in accordance with, the laws
      of the Commonwealth of Pennsylvania, without regard to principles of
      conflict of laws.

            

    

    

    
      	
              10.

            	
              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.

            

    

     

    (SIGNATURES
ON FOLLOWING PAGE)

     

     

    
      Lock-Up/Leak-Out
Agreement – Page 3

       

    

    
      
         

      

      
        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, the
undersigned have duly executed and delivered this Agreement as of the day and
year first above written.

    

    

    
      	
              Date:
      March 31, 2008

            	
              RICK’S
      CABARET INTERNATIONAL, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Eric Langan

            
	 
      	 
      	
              Eric
      Langan, President

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              HOLDER

            
	 
      	 
      	 
      
	 
      	
              /s/ Vincent Piazza

            
	 
      	
              VINCENT
      PIAZZA

            
	 
      	 
      	 
      
	 
      	
              Number
      of Rick’s Common Stock Subject to this Agreement:

            
	 
      	 
      	 
      
	 
      	
              195,000
      shares of Rick’s Common Stock

            

    

     

     

    
      Lock-Up/Leak-Out
Agreement – Page 4ex10_2.htm

    
      
        
          

        
Exhibit 10.2

      

      

      EXECUTION
VERSION

      

      NON-COMPETITION
AGREEMENT

      

      This
Non-Competition Agreement dated March 31, 2008 (the "Non-Competition
Agreement"), is by and among Rick’s Cabaret International, Inc., Texas
corporation, (“Rick’s”),  Vincent
Piazza (the “Seller” or “Piazza”) and the Piazza Family Limited Partnership (the
“Piazza Family Partnership”).

      

      W
I T N E S S E T H:

      

      WHEREAS,
Seller is the owner of 100% of the outstanding shares of common stock of The End
Zone, Inc., a Pennsylvania corporation (the “Company”) which owns and operates
an adult entertainment cabaret known as Crazy Horse Too Cabaret (the “Club”)
located at 2908 South Columbus Blvd., Philadelphia, PA 19148 (the “Real
Property”); and

      

      WHEREAS,
the parties entered into a Second Amendment to Purchase Agreement dated January
29, 2008, between Piazza, TEZ Real Estate, LP, a Pennsylvania limited
partnership (the “Partnership”), TEZ Management, LLC, a Pennsylvania limited
liability company (the “General Partner”), the Company, the Piazza Family
Partnership, RCI Entertainment (Philadelphia), Inc., a Pennsylvania corporation
(“RCI (Philadelphia)”), Rick’s and RCI Holdings, Inc., a Texas corporation
(“RCI”), as amended by the Third Amendment to Partnership Agreement (the
“Purchase Agreement”); and

      

      WHEREAS,
pursuant to the terms of the Purchase Agreement, at the time of Closing (as
defined in the Purchase Agreement ), Piazza or the Piazza Family Partnership
(the “Partnership Seller”) shall own (a) 100% of the issued and outstanding
partnership interest in the Partnership and (b) 100% of the issued and
outstanding membership interest in the General Partner; and

      

      WHEREAS,
pursuant to the terms and condition of the Purchase Agreement, the Seller has
agreed to sell to RCI (Philadelphia) 100% of his ownership interest in the
Company (the “Acquisition”); and

      

      WHEREAS,
as part of the Acquisition, RCI, a subsidiary of Rick’s, shall acquire from the
Partnership Seller 51% of the ownership interest of the Partnership (the
“Limited Partnership Interest”) and 51% of the ownership interest of the General
Partner (the “Membership Interest”); and

      

      WHEREAS,
the sale by Seller of his 51% ownership interest in the Company and the sale by
the Partnership Seller of his or its 51% Limited Partnership Interest and 51%
Membership Interest to RCI are hereinafter collectively referred to as the
“Transaction”; and

      

      WHEREAS,
the Seller and the Piazza Family Partnership will benefit from the Transaction;
and

      
        
           

        

        
          
            

          

        

        
           

        

      

      WHEREAS,
in connection with the Transaction, Rick’s and RCI, have agreed to pay Seller
and the Partnership Seller cash and certain other consideration, as more fully
described in the Purchase Agreement; and

      

      WHEREAS,
Rick’s and RCI require that the Seller and the Piazza Family Partnership enter
into this Non-Competition Agreement as a condition to Rick’s and RCI entering
into the Transaction; and

      

      WHEREAS,
the Seller and the Piazza Family Partnership agree to enter into this
Non-Competition Agreement in consideration of acts on the part of Rick’s, RCI
(Philadelphia) and RCI  as contemplated by the Transaction;
and

      

      NOW,
THEREFORE, in consideration of the premises, the closing of the Transaction and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

      

      1.          
  Covenants.   From
and after the date of this Non-Competition Agreement through and including the
five (5) year period immediately following the date of this Non-Competition
Agreement (such five (5) year period, the “Restricted Period”), neither Seller
nor the Piazza Family Partnership shall compete with Rick’s or any of Rick’s
subsidiaries or affiliates, the Company or the Club, and shall not either
individually or jointly, directly or indirectly, whether for compensation or
not, alone or in association with any other person or entity, without the
express written consent of Rick’s:

      

      
        	
                 
      

              	
                (a)

              	
                Own
      or share in the earnings of, carry on, manage, operate, control, be
      engaged in, render services to, solicit customers for, participate in or
      otherwise be connected with, any business engaged in the operation of an
      establishment featuring live female nude or semi-nude entertainment within
      a twenty (20) mile radius of the Real Property, provided that nothing
      contained herein shall preclude Seller or the Piazza Family Partnership
      from owning, in the aggregate, less that .05% of the shares of any
      publicly traded company engaged in the adult entertainment industry;
      or

              

      

      
        	
                 
      

              	
                (b)

              	
                Solicit
      or induce, or attempt to solicit or induce, any employee, independent
      contractor, or agent or consultant of Rick’s or the Club to leave his or
      her employment or terminate his or her agreement or relationship with
      Rick’s or the Club.

              

      

      

      2.          
  Acknowledgments
and Agreements of the Seller and the Piazza Family Partnership.   The Seller
and the Piazza Family Partnership acknowledge and agree that:

      

      
        	
                 
      

              	
                (a)

              	
                Due
      to the nature of Rick’s business, the foregoing covenants place no greater
      restraint upon the Seller and the Piazza Family Partnership than is
      reasonably necessary to protect the business and goodwill of
      Rick’s;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                These
      covenants protect a legitimate interest of Rick’s and do not serve solely
      to limit Rick’s future competition;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                This
      Non-Competition Agreement is not an invalid or unreasonable restraint of
      trade;

              

      

      

      

      Non-Competition
Agreement - Page 2

      
        
           

        

        
          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (d)

              	
                A
      breach of these covenants by the Seller or the Piazza Family Partnership
      would cause irreparable damage to
Rick’s;

              

      

      

      
        	
                 
      

              	
                (e)

              	
                These
      covenants will not preclude the Seller or the Piazza Family Partnership
      from becoming gainfully employed following the closing of the Purchase
      Agreement;

              

      

      

      
        	
                 
      

              	
                (f)

              	
                These
      covenants are reasonable in scope and are reasonably necessary to protect
      Rick’s business and goodwill and valuable and extensive trade which Rick’s
      has established through its own expense and
  effort;

              

      

      

      
        	
                 
      

              	
                (g)

              	
                The
      signing of this Non-Competition Agreement is necessary as part of the
      consummation of the Transaction previously discussed;
  and

              

      

      

      
        	
                 
      

              	
                (h)

              	
                The
      Seller and the Piazza Family Partnership have carefully read and
      considered all provisions of this Non-Competition Agreement and that all
      of the restrictions set forth are fair and reasonable and are reasonably
      required for the protection of the interests of
  Rick’s.

              

      

      

      3.          
  Remedies,
Injunction.   In the
event of an actual breach of any provisions of this Non-Competition Agreement by
the Seller or the Piazza Family Partnership, the Seller and the Piazza Family
Partnership agree that Rick’s shall be entitled to a temporary restraining
order, preliminary injunction and/or permanent injunction restraining and
enjoining the Seller and the Piazza Family Partnership from violating the
provisions herein.  Nothing in this Non-Competition Agreement shall be
construed to prohibit Rick’s from pursuing any other available remedies for such
breach or threatened breach, including the recovery of damages from the Seller
or the Piazza Family Partnership.  The Seller and the Piazza Family
Partnership further agree that, for the purpose of any such injunction
proceeding, it shall be presumed that Rick’s legal remedies would be inadequate
and that Rick’s would suffer irreparable harm as a result of any violation of
the provisions of this Non-Competition Agreement by the Seller or the Piazza
Family Partnership.

      

      4.        
    Severability.   In the
event that any of the provisions of this Non-Competition Agreement are held to
be invalid or unenforceable in whole or in part, those provisions to the extent
enforceable and all other provisions shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts had not been included
in this Non-Competition Agreement.  In the event that any provision
relating to the time period or scope of a restriction shall be declared by a
court of competent jurisdiction to exceed the maximum time period or scope such
court deems reasonable and enforceable, then the time period or scope of the
restriction deemed reasonable and enforceable by the court shall become and
shall thereafter be the maximum time period or the applicable scope of the
restriction.  The Seller and the Piazza Family Partnership further
agree that such covenants and/or any portion thereof are severable, separate and
independent, and should any specific restriction or the application thereof, to
any person, firm, corporation, or situation be held to be invalid, that holding
shall not affect the remainder of such provisions or covenants.

      

      5.        
    General
Provisions.

      

      
        	
                 
      

              	
                (a)

              	
                Notices.  Any
      notices to be given hereunder by either party to the other may be effected
      either by personal delivery in writing or by mail, registered or
      certified, postage prepaid with return receipt requested or by a
      recognized overnight delivery service.  Mailed notices shall be
      addressed to the parties at the addresses set forth below, but each party
      may change their address by written notice in accordance with this
      Paragraph (a).  Notices delivered person­ally shall be
      deemed communicated as of actual receipt; mailed notices shall be deemed
      communicated as of three (3) days after
      mailing; and overnight delivery service shall be deemed delivered one (1)
      day after depositing with the overnight delivery
      service.

              

      

      

      

      Non-Competition
Agreement - Page 3

      
        
           

        

        
          
            

          

        

        
           

        

      

       

      
        	
                If
      to Rick’s:

              	
                Eric
      Langan, President

              
	 
      	
                10959
      Cutten Road

              
	 
      	
                Houston,
      Texas 77066

              
	 
      	 
      
	
                With
      a copy to:

              	
                Mr.
      Robert D. Axelrod

              
	 
      	
                Axelrod,
      Smith & Kirshbaum

              
	 
      	
                5300
      Memorial Drive, Suite 700

              
	 
      	
                Houston,
      Texas 77007

              
	 
      	 
      
	
                If
      to Seller or:

              	
                Vincent
      Piazza

              
	
                The
      Piazza Family

              	
                401
      S. Schuylkill Avenue

              
	
                Partnership

              	
                Norristown,
      Pa., 19403

              
	 
      	 
      
	
                With
      a copy to:

              	
                Mr.
      Stuart N. Cohen

              
	 
      	
                Butera,
      Beausang, Cohen & Brennan

              
	 
      	
                630
      Freedom Business Center, Suite 212

              
	 
      	
                King
      of Prussia, PA  19406

              

      

      

      
        	
                 
      

              	
                (b)

              	
                Law Governing Non-Competition
      Agreement and Venue.  This Non-Competition Agreement
      shall be governed by, and construed in accordance with, the laws of the
      State of Pennsylvania, without regard to principles of conflict of
      laws.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                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.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Contract Terms to be
      Exclusive.  This Non-Competition Agreement contains the
      sole and entire agreement between the parties and shall supersede any and
      all other agreements between the parties with respect to the agreement of
      the Seller and the Piazza Family Partnership not to compete with
      Rick’s.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Waiver or Modification
      Ineffective Unless in Writing.  It is further agreed that
      no waiver or modification of this Non-Competition Agreement or of any
      covenant, condition, or limitation herein contained shall be valid unless
      in writing and duly executed by the party to be charged therewith and that
      no evidence of any waiver or modification shall be offered or received in
      evidence in any proceeding or litigation between the parties hereto
      arising out of or affecting this Non-Competition Agreement, or the rights
      or obligations of any party hereunder, unless such waiver or modification
      is in writing, duly executed as
aforesaid.

              

      

      

      

      Non-Competition
Agreement - Page 4

      
        
           

        

        
          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (f)

              	
                Assignment.  The
      rights and benefits of Rick’s under this Non-Competition Agreement shall
      inure to the benefit of and be binding upon the successors and assigns of
      Rick’s.  The rights of the Seller and the Piazza Family
      Partnership hereunder are personal and nontransferable except that the
      rights and benefits hereof shall inure to the benefit of the heirs,
      executors and legal representatives of the Seller and the Piazza Family
      Partnership.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Binding
      Effect.  Except as otherwise provided herein, this
      Non-Competition Agreement shall be binding upon and inure to the benefit
      of the parties hereto and their respective successors and
      assigns.

              

      

      

      IN
WITNESS WHEREOF, this Non-Competition Agreement has been executed as of the 31st
day of March, 2008.

      
 

      
        	 
      	
                RICK’S
      CABARET INTERNATIONAL, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                 /s/ Eric Langan

              
	 
      	 
      	
                  
      Eric Langan, President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                THE
      PIAZZA FAMILY LIMITED PARTNERSHIP

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Vince Piazza

              
	 
      	
                Its:

              	
                General
      Partner

              
	 
      	 
      	 
      
	 
      	
                SELLER:

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Vince Piazza

              
	 
      	Vincent
      Piazza

      

      

      

      Non-Competition
Agreement - Page 5

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