Document:

ex10_4.htm

    
      

    

    Exhibit
10.4

     

     

    
      EXECUTION
VERSION

      [FORM
OF]

      

      

      LOCK-UP/LEAK-OUT
AGREEMENT

      

      

      THIS LOCK-UP/LEAK-OUT AGREEMENT
(the “Agreement”) is made and entered into as of the ____ day of _____________,
2008, between RICK’S CABARET
INTERNATIONAL, INC., a Texas corporation (“Rick’s”), and [NAME] (“Holder” or
“[Name]”).

      

      WHEREAS, the parties entered
into a Purchase Agreement dated March 4, 2008 (the “Purchase Agreement”),
between Jerry Golding (“Golding”), Kenneth Meyer (“Meyer”), Charles McClure
(“McClure”), Hotel Development-Texas, Ltd., a Texas limited partnership (“Hotel
Development”), HD Texas Management, LLC, a Texas limited liability company
(“HD”), DPC Holdings, LLC, a Texas limited liability company (“DPC”),
Illusions-Dallas Private Club, Inc., a not-for-profit Texas corporation
(“Illusions”), Rick’s, RCI Entertainment (Dallas), Inc., a Texas corporation
(“Buyer”) and RCI Holdings, Inc., a Texas corporation (“RCI”) pursuant to
which  pursuant to which Buyer would acquire 100% of the limited
partnership interest of Hotel Development (the “Partnership Interest”) and 100%
of the membership interest in HD (the “Membership Interest”) and pursuant to
which RCI would acquire the Real Property (the “Transaction”), as amended;
and

      

      WHEREAS, pursuant to the terms
and condition of the Purchase Agreement, as amended, Golding has agreed to sell
to Buyer his ownership interest in Hotel Development and HD (the “Acquisition”);
and

      

      WHEREAS, under the terms of
the Purchase Agreement, as amended, [Name] shall be  entitled to
receive 50,694 shares of common stock of Rick’s (“Rick’s Common Stock”) upon the
Closing of the Purchase Agreement (“Closing Date”), which is conditioned upon,
among other things, the execution and delivery of this Agreement;
and

      

      WHEREAS, the parties entered
into an Amendment to Purchase Agreement dated April __, 2008 (the “Amendment”),
to set aside 3,500 of [Name]’s shares of Rick’s Common Stock (the “Escrow
Shares”) to be held by Robert D. Axelrod, P.C. pursuant to an Escrow Agreement
(the “Escrow Agreement”); and

      

      WHEREAS, [Name] 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 Purchase Agreement,
as amended.

      

      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
      1,207 of the Rick’s Common Stock per month (the “Monthly Shares”)
      calculated at a price per share equal to $25.00 per share (“Value of the
      Rick’s Common Stock”) until the Holder has received an aggregate of
      $1,267,350 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 $1,267,350 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.  For
      purposes of determining Rick’s obligation under this Section 2(a) to
      purchase the Monthly Shares, the Escrow Shares shall be deemed valued at
      $87,500.  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 sell (i) not more than 2,414 shares of Rick’s
      Common Stock per 7-day period, (ii) not more than 6,035 shares of Rick’s
      Common Stock per 30-day period, and (iii) not more than 16,898 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 $25.00 for purposes of this
      Section 2(b).

              

      

      
        
           

        

        
          Lock-Up/Leak-Out
Agreement - Page
2

          
            

          

        

        
           

        

      

      
        	
                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.

              

      

      

      
        	
                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 State of Texas, 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.

              

      

      
        
           

        

        
          Lock-Up/Leak-Out Agreement -
Page 3

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
undersigned have duly executed and delivered this Lock-Up/Leak-Out Agreement as
of the day and year first above written.

      

      

      
        	
                Date:
      April ____ , 2008

              	
                RICK’S
      CABARET INTERNATIONAL, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Eric
      Langan, President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                HOLDER

              
	 
      	 
      	 
      
	 
      	
                 

              
	 
      	
                [NAME]

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

              
	 
      	 
      	 
      
	 
      	
                50,694
      shares of Rick’s Common Stock

              

      

       

       

      Lock-Up/Leak-Out Agreement
- Page 4ex10_5.htm

    
      

    

    Exhibit
10.5

    
 

    
      EXECUTION
VERSION

      

      LOCK-UP/LEAK-OUT
AGREEMENT

      

      

      THIS LOCK-UP/LEAK-OUT AGREEMENT
(the “Agreement”) is made and entered into as of the 11th day
of April, 2008, between RICK’S
CABARET INTERNATIONAL, INC., a Texas corporation (“Rick’s”), and DPC HOLDINGS, LLC (“Holder”).

      

      WHEREAS, the parties entered
into a Purchase Agreement dated March 4, 2008 (the “Purchase Agreement”),
between Jerry Golding, Kenneth Meyer, Charles McClure, Hotel Development-Texas,
Ltd., a Texas limited partnership (“Hotel Development”), HD Texas Management,
LLC, a Texas limited liability company (“HD”), Holder, Illusions-Dallas Private
Club, Inc., a not-for-profit Texas corporation (“Illusions”), Rick’s, RCI
Entertainment (Dallas), Inc., a Texas corporation (“Buyer”) and RCI Holdings,
Inc., a Texas corporation (“RCI”) pursuant to which  pursuant to which
Buyer would acquire 100% of the limited partnership interest of Hotel
Development (the “Partnership Interest”) and 100% of the membership interest in
HD (the “Membership Interest”) and pursuant to which RCI would acquire the Real
Property (the “Transaction”), as amended; and

      

      WHEREAS, pursuant to the terms
and condition of the Purchase Agreement, as amended, Holder has agreed to sell
to RCI the real property located at 8550 North Stemmons Freeway, Dallas,
Texas  75247 (the “Real Property”); and

      

      WHEREAS, under the terms of
the Purchase Agreement, as amended, Holder shall be  entitled to
receive 57,918 shares of common stock of Rick’s (“Rick’s Common Stock”) upon the
Closing of the Purchase Agreement (“Closing Date”), which is conditioned upon,
among other things, the execution and delivery of this Agreement;
and

      

      WHEREAS, 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 Purchase Agreement,
as amended.

      

      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
      1,379 of the Rick’s Common Stock per month (the “Monthly Shares”)
      calculated at a price per share equal to $25.00 per share (“Value of the
      Rick’s Common Stock”) until the Holder has received an aggregate of
      $1,447,950 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 $1,447,950 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 sell (i) not more than 2,758 shares of Rick’s
      Common Stock per 7-day period, (ii) not more than 6,895 shares of Rick’s
      Common Stock per 30-day period, and (iii) not more than 19,306 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 $25.00 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.

              

      

      
        
           

        

        
          Lock-Up/Leak-Out
Agreement - Page 2

          
            

          

        

        
           

        

      

      
        	
                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.

              

      

      

      
        	
                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 State of Texas, 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
APPEAR ON THE FOLLOWING PAGE.]

      
        
           

        

        
          Lock-Up/Leak-Out
Agreement - Page 3

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
undersigned have duly executed and delivered this Lock-Up/Leak-Out Agreement as
of the day and year first above written.

      

      

      
        	
                Date:
      April 11, 2008

              	
                RICK’S
      CABARET INTERNATIONAL, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Eric Langan

              
	 
      	 
      	
                Eric
      Langan, President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                HOLDER

              
	 
      	 
      	 
      
	 
      	
                /s/ Charles A. McClure

              
	 
      	
                DPC
      HOLDINGS, LLC

              
	 
      	
                By:

              	
                Charles
      A. McClure

              
	 
      	
                Its:

              	
                Managing
      Member

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

              
	 
      	 
      	 
      
	 
      	
                57,918
      shares of Rick’s Common Stock

              

      

       

       

       Lock-Up/Leak-Out Agreement
- Page 4

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