CONSULTING AGREEMENT
Exhibit
10.5
This
Consulting Agreement (the "Agreement") is by and between RICK’S CABARET INTERNATIONAL,
INC., a Texas corporation ("Rick’s") and XXXXXX XXXXXX ("Consultant" or
“XxXxxx”), a Nevada resident.
W
I T N E S S E T H:
WHEREAS, the parties entered
into an Asset Purchase Agreement dated April 17, 2008, as subsequently amended
(the “Asset Purchase Agreement”), between the Buyer, Rick’s, DI Food and
Beverage of Las Vegas, LLC, a Nevada limited liability company (the “Seller”)
and Xxxxxx Xxxxxx (“Danzig”), Xxxxx Xxxxxx (“Xxxxxx”) and XxXxxx pursuant to
which Buyer will acquire substantially all of the assets of Seller in accordance
with the terms and conditions thereof (the “Transaction”); and
WHEREAS, as part of the Asset
Purchase Agreement, Rick’s required that XxXxxx enter into a Non-Competition
Agreement (“Non-Competition Agreement”) as a condition to Buyer and Rick’s
entering into the Transaction; and
WHEREAS, as a further part of
the Asset Purchase Agreement and the entering into the Non-Competition
Agreement, Rick’s desires for Consultant to provide management consulting
services to Rick’s; and
WHEREAS, as a further part of
the Asset Purchase Agreement and the entering into the Non-Competition
Agreement, XxXxxx desires to provide consulting services as provided for herein
to Rick’s.
NOW, THEREFORE, for and in
consideration of the mutual covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Service. Rick’s hereby
engages Consultant and Consultant hereby accepts engagement with Rick’s upon the
terms and conditions hereinafter set forth.
2. Duties.
(a) Subject
to the power of the Chief Executive Officer of Rick’s, Consultant will serve
Rick’s as a Nightclub Management Consultant. In general, the scope of the
Consultant’s duties shall be to provide advice, direction and assistance to
Rick’s with respect to (a) improving club earnings; (b) formulating
recommendations for new systems and procedures to improve club revenues and day
to day club operations; (c) evaluating and targeting for reduction of club
operational expenses; (d) evaluating club operations through onsite inspections
and analysis and providing reports thereon; (e) improving day to day customer
service; (f) improving day to day customer relationships; and (g) increasing
market awareness of the name “Rick’s”. The nature and content of any
actions, reports, decisions or obligations undertaken in connection with the
advice or assistance provided by the Consultant are solely the obligation of
Rick’s.
(b) It
is understood by and between the Parties that Consultant will provide services
to Rick’s as set forth above, but that these services shall not require
Consultant to have the duties or obligations of an employee of Rick’s with
respect to scheduling or reporting to anyone other than Rick’s Chief Executive
Officer. It is further understood that Consultant operates, owns,
owns an interest in and/or provides services for other nightclub/adult
entertainment establishments inside and outside the State of
Nevada. As such, while Consultant will use his best efforts to
provide services to Rick’s under this Agreement, it is understood that he shall
not be required to have a set schedule, to provide services at any location
without prior notification of at least seven days, to consult over holidays or
to otherwise be required to unreasonably provide services to Buyer to the
exclusion of his other business obligations.
3.
Term. Subject to the
terms and conditions hereof, the term of engagement of Consultant will be twelve
(12) months from the execution hereof and will terminate on September 4, 2009
(the “Term”), unless earlier terminated by either party pursuant to the terms
hereof.
4.
Compensation
and Benefits During the Engagement Term.
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(a)
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Compensation. Rick’s
shall pay to Consultant eighteen (18) equal monthly payments of $7,407.38
per month for a total amount equal to $133,333 for the Term of this
Agreement. The consulting fee shall be due on the 15th
day of each month with the first payment due October 15,
2008.
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(b)
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Expenses. If
previously approved in writing by Rick’s Chief Executive Officer, Rick’s
will reimburse Consultant for any out of pocket expenses reasonably and
necessarily incurred by the Consultant in rendering services required
under this Agreement. Consultant will be required to provide a
detailed statement and reasonable documentation to Rick’s prior to any
reimbursement.
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(c)
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Intellectual
Property. It is agreed by the Parties that all
intellectual property rights and other intangible assets, including,
without limitation, tradenames, trademarks, servicemarks, corporate names,
logos and any existence or possible combination or derivation of any and
all of the same during the term of this Agreement shall remain the sole
property of Rick’s.
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5.
Termination. This Agreement
and the engagement created hereby will terminate upon any of the following
events:
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(a)
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Disability. Rick’s
shall have the right to terminate the engagement of the Consultant under
this Agreement for disability in the event Consultant suffers an injury,
illness, or incapacity of such character as to substantially disable him
from performing his duties without reasonable accommodation by Rick’s
hereunder for a period of more than sixty (60) consecutive days upon
Rick’s giving at least thirty (30) days written notice of
termination.
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(b)
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Death. This
Agreement will terminate on the Death of the
Consultant.
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(c)
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Breach of Non-Competition
Agreement. Rick’s may terminate this Agreement for any
breach of the Non-Competition Agreement executed simultaneously herewith
between Rick’s, Buyer and
Consultant.
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(d)
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With
Cause. Rick’s may terminate this Agreement for cause
defined as:
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(i)
embezzlement or wrongful diversion of funds of Rick’s or any of its
affiliates;
(ii)
Abandonment by Consultant of his responsibilities and duties as set forth
herein, provided Consultant’s responsibilities and duties are reasonable and
consistent with Paragraph 2 (b) above;
(iv)
other material breach of this Agreement by Consultant that remains uncured for a
period of at least ten (10) days following written notice from Rick’s;
or
(v)
conviction of Consultant with entry of a plea of nolo contendre or equivalent
plea of a felony in a court of competent jurisdiction, or any other crime or
offense involving moral turpitude.
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(e)
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Without
Cause. Consultant may terminate this Agreement without
cause; and
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(f)
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Without Cause by
Rick’s. Rick’s may terminate this Agreement without
cause. In the event that Rick’s terminates this Agreement
without cause, then the Non-Competition Agreement shall terminate
contemporaneously, provided, however, that in no event can the
Non-Competition Agreement be terminated less than six months after the
date of the Transaction, regardless of whether Rick’s terminates this
Agreement without cause less that six months from the date of the
Transaction.
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In the
event that this Agreement and the engagement created hereby terminates pursuant
to Section 5(a), (b), (c), (d), (e) or (f) above, then Rick’s shall not be
obligated to make any further payment under this Agreement to the
Consultant.
6. Waiver of
Breach. The waiver by any
party hereto of a breach of any provision of this Agreement will not operate or
be construed as a waiver of any subsequent breach by any party.
7. Costs. If
any action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party will be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
he or it may be entitled.
8. Notices. Any
notices, consents, demands, requests, approvals and other communications to be
given under this Agreement by either party to the other will be deemed to have
been duly given if given in writing and personally delivered or within two days
if sent by mail, registered or certified, postage prepaid with return receipt
requested, as follows:
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If
to Rick’s:
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Rick’s
Cabaret International, Inc.
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00000
Xxxxxx Xxxx
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx Xxxxxx, President
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If
to Consultant:
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Xxxxxx
XxXxxx
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________________________________
________________________________
9. Entire
Agreement. This Agreement constitutes the entire agreement of
the parties regarding the subject matter hereof, and supersede all prior
agreements and understanding, both written and oral, among the parties, or any
of them, with respect to the agreement of XxXxxx consulting with
Rick’s.
10. Severability. If any provision
of this Agreement is held to be illegal, invalid or unenforceable under present
or future laws effective during this Agreement, such provision will be fully
severable and this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision never comprised a part hereof; and the
remaining provisions hereof will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
11. Captions. The captions in
this Agreement are for convenience of reference only and will not limit or
otherwise affect any of the terms or provisions hereof.
12. Gender
and Number. When the context
requires, the gender of all words used herein will include the masculine,
feminine and neuter and the number of all words will include the singular and
plural.
13. Counterparts
and Facsimiles. This Agreement may be executed in multiple
counterparts and in any number of counterparts, each of which shall be deemed an
original but all of which taken together shall constitute and be deemed to be
one and the same instrument and each of which shall be considered and deemed an
original for all purposes. This Agreement shall be effective with the
facsimile signature of any of the parties set forth below and the facsimile
signature shall be deemed as an original signature for all purposes and the
Agreement shall be deemed as an original for all purposes.
14. Law
Governing Non-Competition Agreement. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Nevada, without regard to principles of conflict of laws. In any
action between the Parties, each of the Parties consents to the exclusive
jurisdiction and venue of the federal and state courts located in Xxxxx County,
Nevada.
15. Contract
Terms to be Exclusive. This Agreement
contains the sole and entire agreement between the parties and shall supersede
any and all other agreements between the parties with respect to the agreement
of XxXxxx consulting with Rick’s.
16. Binding
Effect. Except as
otherwise provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, the
parties hereto have duly executed this Agreement effective as of the day and
year first above written.
RICK’S
CABARET INTERNATIONAL, INC.:
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By:
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/s/ Xxxx Xxxxxx
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Xxxx
Xxxxxx, President
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Dated:
9-4-08
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CONSULTANT:
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By:
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/s/ Xxxxxx XxXxxx
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Xxxxxx
XxXxxx
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Dated:
9-4-08
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