EXECUTION VERSION
[FORM OF]
NON-COMPETITION AGREEMENT
This
Non-Competition Agreement dated April ____, 2008 (the
"Non-Competition Agreement"), is by and among Rick’s
Cabaret International, Inc., Texas corporation,
(“Rick’s”) and [Name]
(“[Name]”).
W I T N E S S E T H:
WHEREAS , the parties entered into a Purchase Agreement
dated March 4, 2008 (the “Purchase Agreement”), between
Jerry [Name] (“[Name]”), 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 Cabaret
International, Inc., a Texas corporation (“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”); and
WHEREAS , Hotel Development owns an adult entertainment
cabaret known as “The Executive Club” (the
“Club”), located at 8550 North Stemmons Freeway,
Dallas, Texas 75226 (the “Premises”); and
WHEREAS , the parties entered into an Amendment to Purchase
Agreement dated April __, 2008, to set aside an aggregate of 10,500
of the Rick’s LLC Shares to be held by Robert D. Axelrod,
P.C. pursuant to an Escrow Agreement (the “Escrow
Agreement”) ; and
WHEREAS , pursuant to the terms and condition of the
Purchase Agreement, [Name] has agreed to sell to Buyer his
ownership interest in Hotel Development and HD and has agreed to
sell to RCI his ownership interest in DPC (the
“Acquisition”); and
WHEREAS , [Name] will benefit from the Transaction;
and
WHEREAS , in connection with the Transaction, Buyer,
Rick’s and RCI, have agreed to pay [Name] cash and certain
other consideration, as more fully described in the Purchase
Agreement; and
WHEREAS , Buyer, Rick’s and RCI require that [Name]
enter into this Non-Competition Agreement as a condition to Buyer,
Rick’s and RCI entering into the Transaction;
and
WHEREAS , [Name] agree to enter into this Non-Competition
Agreement in consideration of acts on the part of Buyer,
Rick’s and RCI as contemplated by the Transaction;
and
WHEREAS , all terms not defined herein shall have the
meaning set forth in the Purchase Agreement, as
amended.
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”), [Name] shall not compete
with Rick’s or any of Rick’s
subsidiaries or affiliates, Hotel Development 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 in Dallas County, Tarrant County or any of
the adjacent counties thereto; 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 [Name] .
[Name] acknowledges and agrees 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 [Name] than is reasonably necessary
to protect the business
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