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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:
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1.
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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.
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2.
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(a)
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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 t
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