NON-COMPETITION AGREEMENTNonCompetition Agreement |
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RICKS CABARET INTERNATIONAL INC | End Zone, Inc | Piazza Family Limited Partnership | Piazza Family Partnership, RCI Entertainment (Philadelphia), Inc | Piazza, TEZ Real Estate, LP | Rick's and RCI Holdings, Inc | Rick's Cabaret International, Inc | TEZ Management, LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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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:
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(a)
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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
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(b)
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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.
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2.
Acknowledgments
and Agreements of the Seller and the Piazza Family Partnership. The Seller
and the Piazza Family Partnership acknowledge and agree that:
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(a)
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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;
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(b)
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These
covenants protect a legitimate interest of Rick’s and do not serve solely
to limit Rick’s future competition;
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(c)
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This
Non-Competition Agreement is not an invalid or unreasonable restraint of
trade;
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Non-Competition
Agreement - Page 2
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(d)
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A
breach of these covenants by the Seller or the Piazza Family Partnership
would cause irreparable damage to
Rick’s;
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(e)
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These
covenants will not preclude the Seller or the Piazza Family Partnership
from becoming gainfully employed following the closing of the Purchase
Agreement;
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(f)
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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;
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(g)
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The
signing of this Non-Competition Agreement is necessary as part of the
consummation of the Transaction previously discussed;
and
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(h)
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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.
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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-Co
