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:
