NON-COMPETITION AGREEMENT
Exhibit
10.2
EXECUTION
VERSION
This
Non-Competition Agreement dated June ____, 2008 (the "Non-Competition
Agreement"), is by and among Rick’s Cabaret International, Inc., Texas
corporation, (“Rick’s”), RCI Entertainment (Northwest Highway), Inc.,
a Texas corporation (the “Buyer”) and Xxxx Xxxxxxx (“Xxxxxxx”).
W
I T N E S S E T H:
WHEREAS, the parties entered
into an Asset Purchase Agreement dated May 10, 2008 (the “Asset Purchase
Agreement”), between the Buyer, Rick’s, North by East Entertainment,
Ltd., a Texas limited partnership (the “Seller”) by and through its general
partner, Northeast Platinum, LLC, a Texas limited liability company (the
“General Partner”) and Xxxxxxx pursuant to which Buyer will acquire the assets
of Seller for a total cash purchase price of $1,500,000 (the
“Transaction”).
WHEREAS, Seller owns and
operates an adult entertainment cabaret known as “Platinum Club II” (the
“Business”), located at 00000 Xxxx Xxx, Xxxxxx, Xxxxx 00000 (the
“Real Property”).
WHEREAS, pursuant to the terms
and condition of the Asset Purchase Agreement, Seller has agreed to sell to
Buyer all of the assets related to the Business (the “Acquisition”);
and
WHEREAS, Xxxxxxx is the sole
principal of the Seller and will benefit from the Transaction; and
WHEREAS, in connection with
the Transaction, Buyer has agreed to pay Seller consideration as more fully
described in the Asset Purchase Agreement; and
WHEREAS, Buyer and Rick’s
require that Xxxxxxx enter into this Non-Competition Agreement as a condition to
Buyer and Rick’s entering into the Transaction; and
WHEREAS, Xxxxxxx agree to
enter into this Non-Competition Agreement in consideration of acts on the part
of Buyer and Rick’s as contemplated by the Transaction; and
WHEREAS, all terms not defined
herein shall have the meaning set forth in the Asset Purchase
Agreement.
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”), Xxxxxxx shall
not compete with Rick’s or Buyer or any of Rick’s subsidiaries or
affiliates, or the club known as “Platinum Club II”, 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 by:
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(a)
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Owning
or sharing 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 with an urban theme that both serves liquor and provides
live female nude or semi-nude adult entertainment in Dallas
County, Tarrant County, Texas, or any of the adjacent counties
thereto; provided, however, that the Non-Competition Agreement will permit
Xxxxxxx the right to own and/or operate an establishment without an urban
theme that both serves liquor and provides live female nude or semi-nude
adult entertainment in Dallas County, Texas, Tarrant County, Texas, or any
of the adjacent counties thereto;
or
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(b)
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Soliciting
or inducing, or attempting to solicit or induce, any employee, independent
contractor, or agent or consultant of Rick’s or Platinum Club II to leave
his or her employment or terminate his or her agreement or relationship
with Rick’s or the Platinum Club
II.
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2. Acknowledgments
and Agreements of Xxxxxxx. Xxxxxxx
acknowledges and agrees that:
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(a)
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Due
to the nature of Rick’s and Buyer’s business, the foregoing covenants
place no greater restraint upon Xxxxxxx than is reasonably necessary to
protect the business and goodwill of Rick’s or the
Buyer;
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(b)
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These
covenants protect a legitimate interest of Rick’s and the Buyer and do not
serve solely to limit Rick’s and the Buyer’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 Xxxxxxx would cause irreparable damage to
Rick’s and Buyer;
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(e)
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These
covenants will not preclude Xxxxxxx from becoming gainfully employed
following the closing of the Asset 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 and the Buyer’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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Xxxxxxx
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 and the Buyer.
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3. Remedies,
Injunction. In the event of
an actual breach of any provisions of this Non-Competition Agreement by Xxxxxxx,
Xxxxxxx agrees that Rick’s and the Buyer shall be entitled to a temporary
restraining order, preliminary injunction and/or permanent injunction
restraining and enjoining Xxxxxxx from violating the provisions
herein. Nothing in this Non-Competition Agreement shall be construed
to prohibit Rick’s or Buyer from pursuing any other available remedies for such
breach or threatened breach, including the recovery of damages from
Xxxxxxx. Xxxxxxx further agrees that, for the purpose of any such
injunction proceeding, it shall be presumed that Rick’s and the Buyer’s legal
remedies would be inadequate and that Rick’s and the Buyer would suffer
irreparable harm as a result of any violation of the provisions of this
Non-Competition Agreement by Xxxxxxx.
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. Xxxxxxx 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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00000
Xxxxxx Xxxx
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 Xxxxxxx:
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Xxxx
Xxxxxxx
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0000 X.
Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx,
Xxxxx 00000
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With
a copy to:
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Art
Xxxxxxxx
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Quilling,
Selander, Xxxxxxxxx & Xxxxxx, P.C.
0000
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
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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
Xxxxxxx not to compete with Rick’s or the
Buyer.
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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 and the Buyer under this Non-Competition
Agreement shall inure to the benefit of and be binding upon the successors
and assigns of Rick’s and the Buyer. The rights of Xxxxxxx
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 Xxxxxxx.
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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 June, 2008.
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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RCI
ENTERTAINMENT (NORTHWEST HIGHWAY), INC.
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By:
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/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, President
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/s/ Xxxx Xxxxxxx | ||
Xxxx Xxxxxxx, Individually |
Non-Competition Agreement -
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