NON-COMPETITION AGREEMENT
{EXECUTION
VERSION}
This
Non-Competition Agreement dated April 23, 2007 (the "Non-Competition
Agreement"), is by and among Rick’s Cabaret International, Inc., a Texas
corporation, (the “Company”), BLP Holdings, LLC., a Texas limited liability
company (“Seller”), and Xxxxx Xxxx, an individual residing in Flower Mound,
Texas (“Xxxx”).
W
I T N E S S E T H:
WHEREAS,
simultaneously herewith, the Seller has entered into a Stock Purchase Agreement
(the “Stock Purchase Agreement”) with the Company to sell to the Company 251,000
shares of common stock, no par value, of WKC, Inc. (“WKC”) which shares
represents 100% of the issued and outstanding shares of WKC (the “Transaction”);
and
WHEREAS,
Xxxx is the President of WKC and is the sole manager and member of the Seller;
and
WHEREAS,
WKC owns and operates an adult entertainment cabaret known as New Orleans
Nights
(“New Orleans Nights” or the “Club”) located at 0000 Xxxxxxx, Xxxx Xxxxx,
Xxxxx 00000 (the “Premises”); and
WHEREAS,
the Seller and Xxxx will each benefit from the Transaction; and
WHEREAS,
the Company requires that the Seller and Xxxx enter into this Non-Competition
Agreement as a condition to the Company entering into the Transaction;
and
WHEREAS,
to induce the Company to enter into the Stock Purchase Agreement and to complete
the Transaction, the Seller and Xxxx each agree to enter into this
Non-Competition Agreement; 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 Seller and the Company agree as follows:
1. Covenants. For
a period of five (5) years following the Closing Date set forth in the Stock
Purchase Agreement (such five (5) year period being referred to herein as
the
“Restricted Period”), neither Seller nor Xxxx shall, directly or indirectly,
either as an employee, employer, consultant, agent, lender, principal, partner,
stockholder, corporate officer, director, investor, or financier or in any
other
individual or representative capacity, whether for compensation or
not:
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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 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
Premises
(the “Prohibited Area”); or
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(b)
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Solicit
or induce, or attempt to solicit or induce, wherever located, any
employee, independent contractor, or agent or consultant of WKC,
the
Company or any of its affiliates, or the Club to leave his or her
employment or terminate his or her agreement or relationship with
WKC, the
Company or any of its affiliates or the
Club.
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2. Seller’s
and Paul’s Acknowledgments and
Agreements. The Seller and Xxxx each
acknowledge and agree that:
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(a)
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Due
to the nature of WKC’s and the Company’s business, the foregoing covenants
place no greater restraint upon the Seller and Xxxx than is reasonably
necessary to protect the business and goodwill of WKC and the
Company;
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(b)
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These
covenants protect a legitimate interest of WKC and the Company
and do not
serve solely to limit WKC’s and the Company’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 the Seller or Xxxx would cause irreparable
damage to WKC and the Company;
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(e)
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These
covenants will not preclude the Seller or Xxxx from obtaining reasonable
business relationships or becoming gainfully employed following
the
closing of the Stock Purchase
Agreement;
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(f)
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These
covenants are reasonable in scope and are reasonably necessary
to protect
WKC’s and the Company’s business and goodwill and valuable and extensive
trade which WKC and the Company have established through their
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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The
Seller and Xxxx have carefully read and considered all provisions
of this
Non-Competition Agreement and that all of the restrictions set
forth are
fair and reasonable and are reasonably required for the protection
of the
interests of WKC and the Company.
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3. Remedies,
Injunction. In the event of the
Seller’s or Paul’s actual breach of any provisions of this Non-Competition
Agreement, the Seller and Xxxx each agree that WKC and the Company shall
be
entitled to a temporary restraining order, preliminary injunction and/or
permanent injunction restraining and enjoining the Seller and/or Xxxx from
violating the provisions herein. Nothing in this Non-Competition
Agreement shall be construed to prohibit WKC or the Company from pursuing
any
other available remedies for such breach or threatened breach, including
the
recovery of damages from the Seller and/or Xxxx. The Seller and Xxxx
each further agrees that, for the purpose of any such injunction proceeding,
it
shall be presumed that WKC’s and the Company's legal remedies would be
inadequate and that WKC and the Company would suffer irreparable harm as
a
result of the Seller’s or Paul’s violation of the provisions of this
Non-Competition Agreement.
Non-Competition
Agreement - Page 2
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. The Seller and Xxxx each further agree 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 Company:
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Xxxx
Xxxxxx, President
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00000
Xxxxxx Xxxx
Xxxxxxx,
Xxxxx 00000
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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 Seller or Xxxx:
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BLP
Holdings, LLC
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Attn: Xxxxx
Xxxx
0000
Xxxxxxxxxx Xxxxx
Xxxxxx
Xxxxx, Xxxxx 00000
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(b)
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Non-Competition
Agreement - Page 3
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(c)
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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 Seller’s and Paul’s agreement not to compete with WKC and the
Company.
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(d)
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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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(e)
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Assignment. The
rights and benefits of WKC and the Company under this Non-Competition
Agreement shall inure to the benefit of and be binding upon the
successors
and assigns of WKC and the Company. The rights of the Seller
and Xxxx 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 the Seller and
Xxxx.
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(f)
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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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(g)
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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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[SIGNATURES
ON FOLLOWING PAGE]
Non-Competition
Agreement - Page 4
IN
WITNESS WHEREOF, this Non-Competition Agreement has been executed as of the
23rd
day of April, 2007.
| 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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| SELLER: | ||
| /s/ Xxxxx Xxxx | ||
| BLP HOLDINGS, LLC | ||
| By: Xxxxx Xxxx, Sole Member and Manager | ||
| /s/ Xxxxx Xxxx | ||
| XXXXX XXXX, INDIVIDUALLY | ||
Non-Competition
Agreement - Page 5
