NON-COMPETITION AGREEMENTNonCompetition Agreement |
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RICKS CABARET INTERNATIONAL INC | East Entertainment, Ltd | Northeast Platinum, LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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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 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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Non-Competition
Agreement - Page 2
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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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