Exhibit 10.2
[FORM OF]
NON-COMPETITION
AGREEMENT
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 David “Skeeter” Wells
, an individual residing in Texas (“Wells”).
W I T N E S S E T
H:
WHEREAS , Wells, together with Jerry Wayne Godsey
(“Godsey”), Chris A. Hutchinson
(“Hutchinson”), George Clifton Henthorn
(“Henthorn”) (Wells, Godsey, Hutchinson and
Henthorn 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 5316 Superior Parkway, Fort Worth,
Texas 76106; 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 , Wells will benefit from the Transaction;
and
WHEREAS , in connection with the Transaction, RCI
Entertainment has agreed to pay Wells cash consideration, as more
fully described in the Stock Purchase Agreement; and
WHEREAS , RCI Entertainment requires that Wells 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, Wells
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, Wells 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”), Wells 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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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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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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Wells’ Acknowledgments and
Agreements . Wells acknowledges and agrees
that:
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Due to the
nature of the Company and RCI Entertainment’s business, the
foregoing covenants place no greater restraint upon Wells than is
reasonably necessary to protect the business and goodwill of the
Company and RCI Entertainment;
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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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This
Non-Competition Agreement is not an invalid or unreasonable
restraint of trade;
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A breach of
these covenants by Wells would cause irreparable damage to the
Company and RCI Entertainment;
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These covenants
will not preclude Wells from obtaining reasonable business
relationships or becoming gainfully employed following the closing
of the Stock Purchase Agreement;
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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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The signing of
this Non-Competition Agreement is necessary as part of
the
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