Contract
Exhibit
10.6
EXECUTION
VERSION
[FORM
OF]
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 Xxxxx [Name] (“[Name]”), Xxxxxxx Xxxxx (“Xxxxx”), Xxxxxxx XxXxxxx
(“XxXxxxx”), 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 0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000 (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 Xxxxxx X. Xxxxxxx,
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
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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(d)
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A
breach of these covenants by [Name] would cause irreparable damage to
Rick’s;
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(e)
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These
covenants will not preclude [Name] 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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[Name]
has carefully read and considered all provisions of this Non-Competition
Agreement and agrees 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 [Name],
[Name] agrees that Rick’s shall be entitled to a temporary restraining order,
preliminary injunction and/or permanent injunction restraining and enjoining
[Name] from violating the provisions herein. Nothing in this
Non-Competition Agreement shall be construed to prohibit Rick’s from pursuing
any other available remedies for such breach or threatened breach, including the
recovery of damages from [Name]. [Name] further agrees that, for the
purpose of any such injunction proceeding, it shall be presumed that Rick’s
legal remedies would be inadequate and that Rick’s would suffer irreparable harm
as a result of any violation of the provisions of this Non-Competition Agreement
by [Name].
4. Severability. In the event that
any of the provisions of this Non-Competition Agreement are held to be invalid
or unenforceable in whole or in part, those provisions to the extent enforceable
and all other provisions shall nevertheless continue to be valid and enforceable
as though the invalid or unenforceable parts had not been included in this
Non-Competition Agreement. In the event that any provision relating
to the time period or scope of a restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period or scope such court
deems reasonable and enforceable, then the time period or scope of the
restriction deemed reasonable and enforceable by the court shall become and
shall thereafter be the maximum time period or the applicable scope of the
restriction. [Name] further agrees that such covenants and/or any
portion thereof are severable, separate and independent, and should any specific
restriction or the application thereof, to any person, firm, corporation, or
situation be held to be invalid, that holding shall not affect the remainder of
such provisions or covenants.
5. General
Provisions.
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(a)
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Notices. Any
notices to be given hereunder by either party to the other may be effected
either by personal delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested or by a
recognized overnight delivery service. Mailed notices shall be
addressed to the parties at the addresses set forth below, but each party
may change their address by written notice in accordance with this
Paragraph (a). Notices delivered personally shall be
deemed communicated as of actual receipt; mailed notices shall be deemed
communicated as of three (3) days after mailing; and overnight delivery
service shall be deemed delivered one (1) day after depositing with the
overnight delivery service.
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If
to Rick’s, Buyer
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Xxxx
Xxxxxx, President
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Or
RCI:
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00000
Xxxxxx Xxxx
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Xxxxxxx,
Xxxxx 00000
Non-Competition
Agreement - Page 3
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With
a copy to:
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Xx.
Xxxxxx X. Xxxxxxx
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Xxxxxxx,
Xxxxx & Xxxxxxxxx
0000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxx 00000
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If
to [Name]:
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[Name]
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_______________________
_______________________
_______________________
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With
a copy to:
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_______________________
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_______________________
_______________________
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(b)
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Law Governing Non-Competition
Agreement and Venue. This Non-Competition Agreement
shall be governed by, and construed in accordance with, the laws of the
State of Texas, without regard to principles of conflict of
laws.
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(c)
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Execution. This
Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need
not sign the same counterpart. In the event that any signature
is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original
thereof.
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(d)
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Contract Terms to be
Exclusive. This Non-Competition 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
[Name] not to compete with Rick’s.
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(e)
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Waiver or Modification
Ineffective Unless in Writing. It is further agreed that
no waiver or modification of this Non-Competition Agreement or of any
covenant, condition, or limitation herein contained shall be valid unless
in writing and duly executed by the party to be charged therewith and that
no evidence of any waiver or modification shall be offered or received in
evidence in any proceeding or litigation between the parties hereto
arising out of or affecting this Non-Competition Agreement, or the rights
or obligations of any party hereunder, unless such waiver or modification
is in writing, duly executed as
aforesaid.
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(f)
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Assignment. The
rights and benefits of Rick’s under this Non-Competition Agreement shall
inure to the benefit of and be binding upon the successors and assigns of
Rick’s. The rights of [Name] hereunder are personal and
nontransferable except that the rights and benefits hereof shall inure to
the benefit of the heirs, executors and legal representatives of
[Name].
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Non-Competition
Agreement - Page 4
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(g)
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Binding
Effect. Except as otherwise provided herein, this
Non-Competition Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and
assigns.
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IN
WITNESS WHEREOF, this Non-Competition Agreement has been executed as of the
______ day of April, 2008.
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RICK’S
CABARET INTERNATIONAL, INC.
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By:
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Xxxx
Xxxxxx, President
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[Name],
Individually
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Non-Competition Agreement -
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