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Exhibit 10.2
EXECUTION VERSION
NON-COMPETITION AGREEMENT
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 John Auletta
(“Auletta”).
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 Auletta 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 10557 Wire Way, Dallas,
Texas 75220 (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 , Auletta 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 Auletta enter
into this Non-Competition Agreement as a condition to Buyer and
Rick’s entering into the Transaction; and
WHEREAS , Auletta 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”), Auletta 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 Auletta 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 Auletta .
Auletta 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 Auletta 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 Auletta would cause irreparable damage
to Rick’s and Buyer;
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(e)
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These
covenants will not preclude Auletta from becoming
gainfu
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