FORM OF] NON-COMPETITION AGREEMENT
Exhibit
10.2
[FORM
OF]
This
Non-Competition Agreement dated September __, 2009 (the "Non-Competition
Agreement"), is by and among RCI Entertainment (North FW), Inc., a Texas
corporation, (“RCI Entertainment“) and Xxxxx “Skeeter” Wells, an
individual residing in Texas (“Xxxxx”).
W
I T N E S S E T H:
WHEREAS, Wells, together with
Xxxxx Xxxxx Xxxxxx (“Xxxxxx”), Xxxxx X. Xxxxxxxxxx (“Xxxxxxxxxx”), Xxxxxx
Xxxxxxx Xxxxxxxx (“Xxxxxxxx”) (Wells,
Godsey, Xxxxxxxxxx and Xxxxxxxx are referred to collectively herein as the
“Sellers”), own 100% of the outstanding shares of common stock of Cabaret North,
Inc., a Texas corporation (the “Company”), which owns and operates an adult
entertainment cabaret known as Cabaret North (the “Club”) located at 0000
Xxxxxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxx 00000; and
WHEREAS, the parties entered
into a Stock Purchase Agreement dated September __, 2009, between Wells, Godsey,
Hutchinson, Henthorn, the Company and RCI Entertainment (the “Stock Purchase
Agreement”), pursuant to which the Sellers have agreed to sell to RCI
Entertainment 100% of the outstanding shares of common stock of the Company (the
“Transaction”); and
WHEREAS, Xxxxx will benefit
from the Transaction; and
WHEREAS, in connection with
the Transaction, RCI Entertainment has agreed to pay Xxxxx cash consideration,
as more fully described in the Stock Purchase Agreement; and
WHEREAS, RCI Entertainment
requires that Xxxxx enter into this Non-Competition Agreement as a condition to
RCI Entertainment entering into the Transaction; and
WHEREAS, to induce RCI
Entertainment to enter into the Stock Purchase Agreement and to complete the
Transaction, Xxxxx agreed 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, Xxxxx and RCI Entertainment agree as follows:
1.
Covenants. For
a period of five (5) years from the date of execution hereof (such five (5) year
period being referred to herein as the “Restricted Period”), Xxxxx shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, investor or in any
other individual or representative capacity, whether for compensation or
not:
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(a)
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Own,
or have any rights of conversion to own, or share in the earnings of,
carry on, manage, operate, control, be engaged in, render services to or
solicit customers for any business engaged in the operation of an
establishment featuring live female nude or semi-nude entertainment within
Tarrant County, Texas or any adjacent county (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 the Company,
the Club, RCI Entertainment or any of their affiliates to leave his or her
employment or terminate his or her agreement or relationship with the
Company, the Club, RCI Entertainment or any of their
affiliates.
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2.
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Xxxxx’
Acknowledgments and Agreements. Xxxxx
acknowledges and agrees that:
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(a)
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Due
to the nature of the Company and RCI Entertainment’s business, the
foregoing covenants place no greater restraint upon Xxxxx than is
reasonably necessary to protect the business and goodwill of the Company
and RCI Entertainment;
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(b)
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These
covenants protect a legitimate interest of the Company and RCI
Entertainment and do not serve solely to limit the future competition of
the Company or RCI Entertainment;
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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 Xxxxx would cause irreparable damage to the
Company and RCI Entertainment;
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(e)
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These
covenants will not preclude Xxxxx 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
the business and goodwill and valuable and extensive trade which the
Company and RCI Entertainment 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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Xxxxx
has 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 the Company and RCI
Entertainment.
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3.
Remedies,
Injunction. In the event of
Well’s actual breach of any provisions of this Non-Competition Agreement, Xxxxx
agrees that the Company and RCI Entertainment shall be entitled to a temporary
restraining order, preliminary injunction and/or permanent injunction
restraining and enjoining Xxxxx from violating the provisions
herein. Nothing in this Non-Competition Agreement shall be construed
to prohibit the Company or RCI Entertainment from pursuing any other available
remedies for such breach or threatened breach, including the recovery of damages
from Xxxxx. Xxxxx further agrees that, for the purpose of any such
injunction proceeding, it shall be presumed that the Company’s and RCI
Entertainment's legal remedies would be inadequate and that the Company and RCI
Entertainment would suffer irreparable harm as a result of Xxxxx’ violation of
the provisions of this Non-Competition Agreement.
Non-Competition
Agreement - Page 2 of 5
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. Xxxxx 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 5(a). A notice or communication will be effective (i)
if delivered in Person or by overnight courier, on the business day it is
delivered and (ii) if sent by registered or certified mail, three (3)
business days after dispatch.
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If
to RCI Entertainment:
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Xxxx
Xxxxxx, President
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00000
Xxxxxx Xxxx
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Xxxxxxx,
Xxxxx 00000
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With
a copy to:
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Xxxxxx
X. Xxxxxxx
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Xxxxxxx,
Xxxxx & Xxxxxxxxx
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0000
Xxxxxxxx Xxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxx 00000
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If
to Xxxxx:
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Xxxxx
“Skeeter” Xxxxx
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With
a copy to:
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Xxxxxx
X. Xxxxxxx
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Law
Office of Xxxxxx X. Xxxxxxx
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000
Xxxx Xxxxxx, #000
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Xxxx
Xxxxx, Xxxxx 00000
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Non-Competition
Agreement - Page 3 of 5
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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. In any action between or among any of the parties,
whether arising out of this Non-Competition Agreement or otherwise, each
of the parties irrevocably consents to the exclusive jurisdiction and
venue of the federal and state courts located in Xxxxxx County,
Texas.
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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
Xxxxx’ agreement not to compete with the Company and RCI
Entertainment.
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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 each of the parties hereto 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 by each of the parties
hereto.
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(e)
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Assignment. The
rights and benefits of the Company and RCI Entertainment under this
Non-Competition Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company and RCI
Entertainment. The rights of Xxxxx 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
Xxxxx.
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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
Non-Competition 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
APPEAR ON THE FOLLOWING PAGE]
Non-Competition
Agreement - Page 4 of 5
IN
WITNESS WHEREOF, this Non-Competition Agreement has been executed as of the ___
day of September, 2009.
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RCI
ENTERTAINMENT (NORTH FW), INC.
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By:
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Xxxx
Xxxxxx, President
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XXXXX
“SKEETER” XXXXX, Individually
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Non-Competition Agreement -
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