ex10_1.htm


    
      

    

    Exhibit 10.1

     

    PURCHASE
AGREEMENT

    


    This
Purchase Agreement (the “Agreement”) is made and entered into this 4th day
of  March, 2008, by and among Jerry Golding (“Golding”), Kenneth Meyer
(“Meyer”), Charles McClure (“McClure”), Hotel Development-Texas, Ltd., a Texas
limited partnership (“Hotel Development”), HD Texas Management, LLC, a Texas
limited liability company (“HD”), DPC Holdings, LLC, a Texas limited liability
company (“DPC”), Illusions-Dallas Private Club, Inc., a not-for-profit Texas
corporation (“Illusions”), Rick’s Cabaret International, Inc., a Texas
corporation (“Rick’s), RCI Entertainment (Dallas), Inc., a Texas corporation
(“Buyer”) and RCI Holdings, Inc., a Texas corporation
(“RCI”).  Golding, Meyer and McClure are sometimes collectively
referred to herein as the “Sellers.”

    


    WHEREAS, the Sellers own 100%
of the limited partnership interest of Hotel Development (the “Partnership
Interest”) and 100% of the membership interest in HD (the “Membership
Interest”); and

    


    WHEREAS, Golding, Meyer and
McClure are the sole Directors of Illusions, a not-for-profit Texas
corporation.

    


    WHEREAS, HD is the general
partner of Hotel Development.

    


    WHEREAS, Hotel Development
owns an adult entertainment cabaret known as “The Executive Club” (the “Club”),
located at 8550 North Stemmons Freeway, Dallas, Texas 75247 (the “Premises”);
and

    


    WHEREAS, Illusions holds the
liquor license for the Club.

    


    WHEREAS, the Sellers own 100%
of the membership interests of DPC; and

    


    WHEREAS, DPC owns the real
property associated with the Premises (the “Real Property”); and

    


    WHEREAS, the Sellers desire to
sell 100% of the issued and outstanding Partnership Interest of Hotel
Development and 100% of the issued and outstanding Membership Interest of HD to
Buyer on the terms and conditions set forth herein; and

    


    WHEREAS, DPC desires to sell
the Real Property to RCI on the terms and conditions set forth herein;
and

    


    WHEREAS, the Buyer and RCI are
wholly owned subsidiaries of Rick’s.

    


    NOW, THEREFORE, in
consideration of the premises, the mutual covenants and agreements and the
respective representations and warranties herein contained, and on the terms and
subject to the conditions herein set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    ARTICLE
I

    PURCHASE
AND SALE OF THE PARTNERSHIP INTEREST,

    THE
MEMBERSHIP INTEREST

    AND
THE REAL PROPERTY

    


    Section
1.1    Sale of the Partnership
Interest and Membership Interest.  Subject to the terms and
conditions set forth in this Agreement, at the Closing (as hereinafter defined)
Sellers hereby agree to sell, transfer, convey and deliver to Buyer 100% of the
issued and outstanding Partnership Interest of Hotel Development and 100% of the
issued and outstanding Membership Interest of HD, free and clear of all
encumbrances, and shall deliver to Buyer certificates representing the
Partnership Interest, duly endorsed to Buyer or accompanied by duly executed
stock powers in form and substance satisfactory to Buyer.

    


    Section 1.2    Purchase Price for the
Partnership Interest and Membership Interest.  As consideration
for the purchase of the Partnership Interest and Membership Interest, Buyer
shall pay to Sellers the total consideration of $3,802,050 (the “LLC Purchase
Price”), which shall be payable by the issuance of 50,694 shares of restricted
common stock $.01 par value of Rick’s to each of Messrs. Golding, Meyer and
McClure, for an aggregate total of 152,082 shares (collectively, the “Rick’s LLC
Shares”) to be valued at $25.00 per share.

    


    Section
1.3    Sale of the Real
Property.  Subject to the terms and conditions set forth in
this Agreement, at the Closing (as hereinafter defined) DPC hereby agrees to
sell, transfer, convey and deliver a General Warranty Deed which shall convey
good and marketable title to the Real Property, free and clear of all liens and
encumbrances.

    


    Section
1.4    Purchase Price for the Real
Property.  As consideration for the purchase of the Real
Property, Buyer shall pay to DPC the total consideration of $5,697,950 (the
“Real Property Purchase Price”), which shall be payable as follows:

    


    
      	
               
      

            	
              (a)

            	
              $4,250,000
      by cashier’s check, certified funds or wire transfer payable at Closing;
      and

            


    

    
      	
               
      

            	
              (b)

            	
              57,918
      shares of restricted common stock $.01 par value of Rick’s (the “Rick’s
      Real Property Shares”) to be valued at $25.00 per
  share.

            


    

    


    The
Rick’s LLC Shares and Rick’s Real Property Shares are collectively referred to
herein as the “Shares.”  The LLC Purchase Price and the Real Property
Purchase Price are collectively referred to herein as the “Purchase
Price.”

    


    Section
1.5                                Right of Sellers to “Put”
Shares.


    
      
         


      

      
        Purchase
Agreement - Page 2

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              a)

            	
              Rick’s LLC
      Shares.  On or after one (1) year from the date of
      Closing, each of Messrs. Golding, Meyer and McClure shall have the right,
      but not the obligation, to have Rick’s purchase from each of Messrs.
      Golding, Meyer and McClure 1,207 of the Rick’s LLC Shares per month (the
      “Monthly LLC Shares”) calculated at a price per share equal to $25.00 per
      share (“Value of the Rick’s LLC Shares”) until Messrs. Golding, Meyer and
      McClure have each received $1,267,350 from (i) the sale of the 50,694
      Rick’s LLC Shares sold by them, regardless of whether sold to Rick’s, sold
      in the open market or in a private transaction or otherwise and (ii) the
      payment of any Deficiency (as hereinafter defined) by
      Rick’s.  Each Seller, individually, shall notify Rick’s during
      any given month of his election to “Put” the Monthly LLC Shares to Rick’s
      during that particular month and Rick’s shall have three (3) business days
      to elect to buy the Monthly LLC Shares or instruct the respective
      Seller(s) to sell the Monthly LLC Shares in the open
      market.   At Rick’s election, during any given month, it
      may either buy the Monthly LLC Shares or, if Rick’s elects not to buy the
      Monthly LLC Shares from the respective Seller(s), then such Seller(s)
      shall sell the Monthly LLC Shares in the open market and any deficiency
      between the amount which the Seller(s) receive from the sale of the
      Monthly LLC Shares and the Value of the Rick’s LLC Shares (the “LLC
      Deficiency”) shall be paid by Rick’s within three (3) business days after
      receipt of written notice from the respective Seller(s) of the sale of the
      Monthly LLC Shares which shall provide the written sales confirmation and
      the amount of the LLC Deficiency.  Rick’s obligation under this
      Section 1.5(a) to purchase the Monthly LLC Shares from any respective
      Seller shall terminate and cease at such time as such Seller has received
      an aggregate amount of $1,267,350 from (i) the sale of the Rick’s LLC
      Shares, regardless of whether sold to Rick’s, sold in the open market or
      in a private transaction or otherwise, and (ii) the payments of any LLC
      Deficiency by Rick’s.  Each of the Sellers, individually, agree
      to provide monthly statements to Rick’s as to the total number of Rick’s
      LLC Shares which Seller sold and the amount of proceeds derived
      therefrom.  Except as set forth in Section 1.5(c) below, nothing
      contained in this Section 1.5(a) shall limit or preclude any Seller from
      selling their Rick’s LLC Shares in the open market or require any Seller
      to “Put” their Rick’s LLC Shares to Rick’s during any given
      month.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Rick’s Real Property
      Shares.  On or after one (1) year from the date of
      Closing, DPC shall have the right, but not the obligation, to have Rick’s
      purchase from DPC 1,379 of the Rick’s Real Property Shares per month (the
      “Monthly Real Property Shares”) calculated at a price per share equal to
      $25.00 per share (“Value of the Rick’s Real Property Shares”) until DPC
      has received an aggregate of $1,447,950 from (i) the sale of the Rick’s
      Real Property Shares, regardless of whether sold to Rick’s, sold in the
      open market or in a private transaction or otherwise and (ii) the payment
      of any Deficiency (as hereinafter defined) by Rick’s.   DPC
      shall notify Rick’s during any given month of its election to “Put” the
      Monthly Real Property Shares to Rick’s during that particular month and
      Rick’s shall have three (3) business days to elect to buy the Monthly Real
      Property Shares or instruct DPC to sell the Monthly Real Property Shares
      in the open market.   At Rick’s election, during any given
      month, it may either buy the Monthly Real Property Shares or, if Rick’s
      elects not to buy the Monthly Real Property Shares from DPC, then DPC
      shall sell the Monthly Real Property Shares in the open market and any
      deficiency between the amount which DPC receive from the sale of the
      Monthly Real Property Shares and the Value of the Rick’s Real Property
      Shares (the “Real Property Deficiency”) shall be paid by Rick’s within
      three (3) business days after receipt of written notice from DPC of the
      sale of the Monthly Real Property Shares which shall provide the written
      sales confirmation and the amount of the Real Property
      Deficiency.  Rick’s obligation under this Section 1.5(b) to
      purchase the Monthly Real Property Shares from DPC shall terminate and
      cease at such time as DPC has received an aggregate amount of $1,447,950
      from (i) the sale of the Rick’s Real Property Shares, regardless of
      whether sold to Rick’s, sold in the open market or in a private
      transaction or otherwise, and (ii) the payments of any Real Property
      Deficiency by Rick’s.  DPC agrees to provide monthly statements
      to Rick’s as to the total number of Rick’s Real Property Shares which DPC
      sold and the amount of proceeds derived therefrom.  Except as
      set forth in Section 1.5(c) below, nothing contained in this Section
      1.5(b) shall limit or preclude the Sellers from selling the Rick’s Real
      Property Shares in the open market or require DPC to “Put” the Rick’s Real
      Property Shares to Rick’s during any given
  month.

            


    


    
      
         


      

      
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Agreement - Page 3

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (c)

            	
              Messrs.
      Golding, Meyer and McClure, individually, and Rick’s will enter into a
      Lock-Up/Leak-Out Agreement which will provide that each of Messrs.
      Golding, Meyer and McClure will sell (i) not more than 2,414 Shares per
      7-day period, (ii) not more than 6,035 Shares per 30-day period, and (iii)
      not more than 16,898 Shares per 90-day period, regardless of whether each
      of Messrs. Golding, Meyer and McClure “Put” the Shares to Rick’s or sell
      them in the open market or otherwise.  In the event that Messrs.
      Golding, Meyer or McClure elect to sell their Shares pursuant to this
      Section 1.5(c), then any amount sold at prices less than $25.00 shall be
      deemed to be sold at $25.00 for purposes of Section
  1.5.

            


    

    


    
      	
               
      

            	
              (d)

            	
              DPC
      and Rick’s will enter into a Lock-Up/Leak-Out Agreement which will provide
      that DPC will sell (i) not more than 2,758 Shares per 7-day period, (ii)
      not more than 6,895 Shares per 30-day period, and (iii) not more than
      19,306 Shares per 90-day period, regardless of whether DPC “Puts” the
      Shares to Rick’s or sells them in the open market or
      otherwise.  In the event that DPC elects to sell its Shares
      pursuant to this Section 1.5(d), then any amount sold at prices less than
      $25.00 shall be deemed to be sold at $25.00 for purposes of Section
      1.5.

            


    

    


    


    ARTICLE
II

    CLOSING

    


    Section
2.1    The
Closing.  The closing of the transactions provided for in this
Agreement shall take place on the earlier of: (i) April 30, 2008, or (ii) ten
(10) days after the approval of Rick’s application for a Sexually Oriented
Business License by the City of Dallas and the transfer of all other permits
utilized to operate the Club, with the exception of the liquor license for the
Club which shall continue to be maintained by Illusions,  to Buyer or
affiliates of Buyer (the “Closing Date”), or at such other time and place as
agreed upon in writing among the parties hereto (the “Closing”).  The
parties have agreed further to close at the law offices of Axelrod, Smith &
Kirshbaum, 5300 Memorial Drive, Suite 700, Houston,
Texas  77007.

    


    Section
2.2    Delivery and
Execution.  At the Closing: (a) the Sellers shall deliver to
Buyer certificates evidencing the Partnership Interest of Hotel Development and
the Membership Interest of HD, free and clear of any liens, claims, equities,
charges, options, rights of first refusal or encumbrances, duly endorsed to
Buyer or accompanied by duly executed stock powers in form and substance
satisfactory to Buyer against delivery by Buyer to the Sellers of payment in an
amount equal to the LLC Purchase Price for the Partnership Interest being
purchased by Buyer in the manner set forth in Section 1.2; (b) DPC shall deliver
to RCI a General Warranty Deed which shall convey good and marketable title to
the Real Property, free and clear of all encumbrances against delivery by RCI to
DPC of payment in the amount equal to the Real Property Purchase Price for the
Real Property being purchased by RCI in the manner set forth in Section 1.4; and
(c) the Related Transactions (as defined below) shall be consummated
concurrently with the Closing.


    
      
         


      

      
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Agreement - Page 4

        
          

        

      

      
         


      

    


    Section
2.3    Related
Transactions.  In addition to the purchase and sale of the
Partnership Interest and the purchase and sale of the Real Property, the
following actions shall take place contemporaneously at the Closing
(collectively, the "Related Transactions"):

    


    
      	
               
      

            	
              (a)

            	
              Each
      of the Sellers will enter into a five (5) year covenant not to compete
      pursuant to the terms of which the Sellers will agree not to compete,
      either directly of indirectly, with the Purchaser, RCI, Rick’s or any of
      their affiliates, by operating an establishment featuring live adult
      entertainment in Dallas County, Tarrant County or any of the adjacent
      counties thereto; and

            


    

    


    
      	
               
      

            	
              (b)

            	
              Rick’s.
      DPC and the Sellers shall have entered into a Lock-Up/Leak-Out
      Agreement.

            


    

    


    


    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES

    OF
THE SELLERS, HOTEL DEVELOPMENT, HD, ILLUSIONS AND DPC

    


    The
Sellers, Hotel Development, HD, Illusions and DPC, jointly and severally, hereby
represent and warrant to the Buyer, RCI and Rick’s as follows:

    


    Section
3.1.    Organization, Good Standing
and Qualification.

    


    
      	
               
      

            	
              (a)

            	
              Hotel
      Development, HD, Illusions and DPC (i) are entities duly organized,
      validly existing and in good standing under the laws of the state of
      Texas, (ii) have all requisite power and authority to own, operate and
      lease its properties and to carry on its business, and (iii) are duly
      qualified to transact business and are in good standing in all
      jurisdictions where their ownership, lease or operation of property or the
      conduct of its business requires such qualification, except where the
      failure to do so would not have a material adverse effect to the Sellers,
      Hotel Development, HD, Illusions or DPC,
  respectively.

            


    

    


    
      	
               
      

            	
              (b)

            	
              The
      authorized capital of Hotel Development consists of the units of
      Partnership Interest listed on Exhibit
      3.1(b) which are validly issued and outstanding. There is no other
      class of capital authorized or issued by Hotel Development.  All
      of the issued and outstanding Partnership Interest of Hotel Development
      are owned by the Sellers and are fully paid and
      non-assessable.  None of the Partnership Interest issued are in
      violation of any preemptive rights.  Hotel Development has no
      obligation to repurchase, reacquire, or redeem any of its outstanding
      Partnership Interest.  There are no outstanding securities
      convertible into or evidencing the right to purchase or subscribe for any
      Partnership Interest of Hotel Development, there are no outstanding or
      authorized options, warrants, calls, subscriptions, rights, commitments or
      any other agreements of any character obligating Hotel Development to
      issue any Partnership Interest or any securities convertible into or
      evidencing the right to purchase or subscribe for any Partnership
      Interest, and there are no agreements or understandings with respect to
      the voting, sale, transfer or registration of any Partnership Interest of
      Hotel Development.

            


    


    
      
         


      

      
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Agreement - Page 5

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (c)

            	
              The
      authorized capital of HD consists of the units of Membership Interest
      listed on Exhibit
      3.1(c) which are validly issued and outstanding. There is no other
      class of capital authorized or issued by HD.  HD is the sole
      General Partner of Hotel Development.  All of the issued and
      outstanding Membership Interest of HD are owned by the Sellers and are
      fully paid and non-assessable.  None of the Membership Interests
      issued are in violation of any preemptive rights.  HD has no
      obligation to repurchase, reacquire, or redeem any of its outstanding
      Membership Interest.  There are no outstanding securities
      convertible into or evidencing the right to purchase or subscribe for any
      Membership Interest of HD, there are no outstanding or authorized options,
      warrants, calls, subscriptions, rights, commitments or any other
      agreements of any character obligating HD to issue any Membership Interest
      or any securities convertible into or evidencing the right to purchase or
      subscribe for any Membership Interest, and there are no agreements or
      understandings with respect to the voting, sale, transfer or registration
      of any Membership Interest of HD.

            


    

    


    Section
3.2    Ownership of the Partnership
Interest.  The Sellers own, beneficially and of record, all of
the Partnership Interest of Hotel Development free and clear of any liens,
claims, equities, charges, options, rights of first refusal, or
encumbrances.  The Sellers have the unrestricted right and power to
transfer, convey and deliver full ownership of the Partnership Interest without
the consent or agreement of any other person and without any designation,
declaration or filing with any governmental authority.  Upon the
transfer of the Partnership Interest to Buyer as contemplated herein, Buyer will
receive good and valid title thereto, free and clear of any liens, claims,
equities, charges, options, rights of first refusal, encumbrances or other
restrictions (except those imposed by applicable securities laws).

    


    Section
3.3    Ownership of the Membership
Interest.  The Sellers own, beneficially and of record, all of
the Membership Interest of HD free and clear of any liens, claims, equities,
charges, options, rights of first refusal, or encumbrances.  The
Sellers have the unrestricted right and power to transfer, convey and deliver
full ownership of the Membership Interest without the consent or agreement of
any other person and without any designation, declaration or filing with any
governmental authority.  Upon the transfer of the Membership Interest
to Buyer as contemplated herein, Buyer will receive good and valid title
thereto, free and clear of any liens, claims, equities, charges, options, rights
of first refusal, encumbrances or other restrictions (except those imposed by
applicable securities laws).

    


    Section
3.4    Ownership of the Real
Property.  DPC owns, beneficially and of record, the Real
Property free and clear of any liens, claims, equities, charges, options, rights
of first refusal, or encumbrances as evidenced by the title commitment for the
Real Property to be issued to RCI prior to Closing and as evidenced by a title
policy provided to RCI at the time of Closing.  DPC has the
unrestricted right and power to transfer, convey and deliver full ownership of
the Real Property without the consent or agreement of any other person and
without any designation, declaration or filing with any governmental
authority.  Upon the transfer of the Real Property to RCI as
contemplated herein, RCI will receive good and valid title thereto, free and
clear of any liens, claims, equities, charges, options, rights of first refusal,
encumbrances or other restrictions.


    
      
         


      

      
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Agreement - Page 6

        
          

        

      

      
         


      

    


    Section
3.5    Authorization.  Hotel
Development, HD, Illusions and DPC have all requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby.  All
action on the part of Hotel Development, HD, Illusions and DPC necessary for the
authorization, execution, delivery and performance of this Agreement and all
documents related to consummate the transactions contemplated herein have been
taken or will be taken prior to the Closing Date by Hotel Development, HD,
Illusions and DPC. This Agreement, when duly executed and delivered in
accordance with its terms, will constitute legal, valid and binding obligations
of Hotel Development, HD, Illusions and DPC enforceable against them in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization and other similar laws of general application affecting
creditors’ rights generally or by general equitable principles.

    


    Each of
the Sellers represents that he is a person of full age of majority, with full
power, capacity, and authority to enter into this Agreement and perform the
obligations contemplated hereby by and for himself and his spouse (if
applicable).  All action on the part of the Sellers necessary for the
authorization, execution, delivery and performance of this Agreement by him has
been taken and will be taken prior to Closing Date.  This Agreement,
when duly executed and delivered in accordance with its terms, will constitute
legal, valid and binding obligations of the Sellers enforceable against each of
them in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization and other similar laws of general application
affecting creditors’ rights generally or by general equitable
principles.

    


    Section
3.6    Consents.  No
consent of, approval by, order or authorization of, or registration, declaration
or filing by Hotel Development, HD, Illusions, DPC or the Sellers with any court
or any governmental or regulatory agency or authority having jurisdiction over
the Hotel Development, HD, Illusions or DPC, or any of their respective property
or assets is required on the part of Hotel Development,  HD,
Illusions, DPC or the Sellers (a) in connection with the consummation of the
transactions contemplated by this Agreement or (b) as a condition to the
legality, validity or enforceability as against Hotel Development, HD, Illusions
or DPC of this Agreement, excluding any registration, declaration or filing, the
failure to effect which would not have a material adverse effect on the
financial condition of Hotel Development, HD or Illusions.

    


    Section
3.7    Acquisition of Stock for
Investment.  Each of the Sellers and DPC understand that any
issuance of the Shares (as referenced in Section 1.4 herein) will not have been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state securities acts, and accordingly, are restricted securities, and each of
the Sellers and DPC represent and warrant to the Buyer, RCI and Rick’s that the
present intention of Sellers and DPC is to receive and hold the Shares for
investment only and not with a view to the distribution or resale
thereof.


    
      
         


      

      
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Agreement - Page 7

        
          

        

      

      
         


      

    


    Additionally,
each of the Sellers and DPC understand that any sale of any the Shares issued,
under current law, will require either (a) the registration of the Shares under
the Act and applicable state securities acts; (b) compliance with Rule 144 of
the Act; or (c) the availability of an exemption from the registration
requirements of the Act and applicable state securities acts.

    


    To assist
in implementing the above provisions, each of the Sellers and DPC hereby consent
to the placement of the legend, or a substantially similar legend, set forth
below, on all certificates representing ownership of the Shares acquired hereby
until the Shares have been sold, transferred, or otherwise disposed of, pursuant
to the requirements hereof.  The legend shall read substantially as
follows:

     

    
      “THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES ACTS.  THESE SECURITIES
HAVE BEEN ACQUIRED FOR INVESTMENT, ARE
RESTRICTED AS TO TRANSFERABILITY, AND MAY NOT BE SOLD, HYPOTHECATED, OR
OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION AND QUALIFICATION
PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREFROM.”

    

    


    Section
3.8    Access to
Information.  Each of the Sellers and DPC hereby confirm and
represent that they (a) have received a copy of Rick’s Form 10-KSB filed with
the Securities and Exchange Commission (the “SEC”) for the year ended September
30, 2007, and a copy of Rick’s Form 10-QSB for the quarter ended December 31,
2007, as filed with the SEC; (b) a copy of Rick’s Form 14C filed with the SEC on
June 27, 2007; (c) a copy of the Form 8-K’s filed with the SEC on January 28,
2008, February 11, 2008 and February 13, 2008; (d) have been afforded the
opportunity to ask questions of and receive answers from representatives
of  Rick’s concerning the business and financial condition,
properties, operations and prospects of Rick’s; (e) have such knowledge and
experience in financial and business matters so as to be capable of evaluating
the relative merits and risks of the transactions contemplated hereby; (f) have
had an opportunity to engage and is represented by an attorney of his choice;
(g) have had an opportunity to negotiate the terms and conditions of this
Agreement; (h) have been given adequate time to evaluate the merits and risks of
the transactions contemplated hereby; and (i) have been provided with and given
an opportunity to review all current information about Rick’s.  The
Sellers and DPC have asked such questions to representatives of Rick’s about
Rick’s as they desire to ask and all such questions have been answered to the
full satisfaction of each of the Sellers and DPC.  The forms filed by
Rick’s with the SEC as set forth in Section 3.8(a), (b) and (c) are hereafter
collectively referred to as “SEC Reports”.

    


    Section
3.9    Purchase for
Investment.  Each of the Sellers and DPC are acquiring the
Shares for their own accounts, for investment purposes only and not with view to
any public resale or other distribution thereof.  Each of the Sellers
and DPC represent and warrant that each   is an Accredited
Investor as that term is defined in Rule 501(a) of Regulation D of the
Securities Act of 1933, as amended.  Each of the Sellers, DPC and
their respective representatives have received, or have had access to, and have
had sufficient opportunity to review, all books, records, financial information
and other information which each of the Sellers and DPC consider necessary or
advisable to enable him to make a decision concerning its acquisition of the
Shares, and that each of them possesses such knowledge and experience in
financial and business matters that each is capable of evaluating the merits and
risks of his investment hereunder.


    
      
         


      

      
        Purchase
Agreement - Page 8

        
          

        

      

      
         


      

    


    Section
3.10    No
Default.  None of Hotel Development, HD, Illusions or DPC is
(a) in violation of any provision of its Articles of Organization or Regulations
or (b) in default under any term or condition of any instrument evidencing,
creating or securing any indebtedness of Hotel Development, HD, Illusions or
DPC, and there has been no default in any material obligation to be performed by
Hotel Development, HD, Illusions or DPC under any other contract, lease,
agreement, commitment or undertaking to which either of them is a party or by
which they or their assets or properties are bound, nor has Hotel Development,
HD, Illusions or DPC waived any material right under any such contract, lease,
agreement, commitment or undertaking.

    


    Section
3.11    Taxes.  Hotel
Development, HD, Illusions and DPC have timely and accurately filed all federal,
state, foreign and local tax returns and reports required to be filed prior to
such dates and have timely paid all taxes shown on such returns as owed for the
periods of such returns, including all sales taxes and withholding or other
payroll related taxes shown on such returns and any taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
creditor or independent contractor.  Hotel Development, HD, Illusions
and DPC have made adequate provision for the payment of all taxes accruable for
all periods ending on or before the Closing Date to any taxing authority and are
not delinquent in the payment of any tax or governmental charge of any
nature.  No assessments or notices of deficiency or other
communications have been received by Hotel Development, HD, Illusions, DPC or
the Sellers with respect to any tax return which has not been paid, discharged
or fully reserved against and no amendments or applications for refund have been
filed or are planned with respect to any such return.  None of Hotel
Development, HD, Illusions, DPC or any of the Sellers has knowledge of any
action by any taxing authority in connection with assessing additional taxes
against or in respect of it for any past period.  There are no
agreements between Hotel Development, HD, Illusions or DPC and any taxing
authority waiving or extending any statute of limitations with respect to any
tax return.

    


    Section
3.12    Financial
Statements.  The Sellers and DPC have delivered to Buyer and
RCI the financial information available relating to Hotel Development, HD and
DPC, respectively (the “Financial Information”).  Such Financial
Information, are in accordance with the books and records of Hotel Development,
HD and DPC, and fairly represent the financial position of Hotel Development, HD
and DPC, and the results of operations and changes in financial position of
Hotel Development,  HD and DPC as of the dates and for the periods
indicated.  Except as set forth in Exhibit
3.12, none of Hotel Development, HD or DPC, as of the date of the
Financial Information, has any material liability or obligation of any nature,
whether absolute, accrued, continued or otherwise.  As of the Closing
Date, the Sellers and DPC represent there have been no adverse changes in the
financial condition or other operations, business, properties or assets of Hotel
Development,  HD or DPC, respectively, from that reflected in the
latest Financial Information of Hotel Development, HD or DPC as furnished
pursuant to this Agreement.

    


    Section
3.13    Labor
Matters.  Neither Hotel Development nor HD is a party or
otherwise subject to any collective bargaining agreement with any labor union or
association.  Neither Hotel Development nor HD is a party to any
written or oral contract, agreement or understanding for the employment of any
officer, director or employee of Hotel Development or HD.  Neither
Hotel Development nor HD is a party to any employee benefits plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended) or any other fringe or employee benefits plan, programs or
arrangements.


    
      
         


      

      
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    Section
3.14    Compliance with Laws;
Permits.  Except as set forth in Exhibit 3.14, Hotel
Development, HD, Illusions  and DPC are, and at all times prior to the
date hereof have been in compliance with all statutes, orders, rules, ordinances
and regulations applicable to each of them or to the ownership of their
respective assets or the operation of their respective businesses. Except as set
forth in Exhibit
3.14, Hotel Development, HD and Illusions will own, hold or possess, or
will own, hold or posses prior to the Closing Date, all permits and licenses
which are in any manner necessary for the Club to conduct a sexually oriented
business, including the right to serve alcoholic beverages.

    


    Section
3.15    No
Conflicts.  The execution and delivery by Hotel Development,
HD, Illusions, DPC and the Sellers of this Agreement does not, and the
performance and consummation by Hotel Development, HD, Illusions, DPC and the
Sellers of the transactions contemplated hereby will not (i) conflict with the
articles of organization or regulations of Hotel Development, HD, Illusions or
DPC; (ii) conflict with or result in a breach or violation of, or default under,
or give rise to any right of acceleration or termination of, any of the terms,
conditions or provisions of any note, bond, lease, license, agreement or other
instrument or obligation to which Hotel Development, HD, Illusions or DPC is a
party or by which the assets or properties of Hotel Development, HD, Illusions
or DPC are bound; (iii) result in the creation of any encumbrance on any of the
assets or properties of Hotel Development, HD or DPC; or (iv) violate any law,
rule, regulation or order applicable to Hotel Development, HD, Illusions, DPC or
the Sellers or any of the  assets or properties of Hotel Development,
HD, Illusions or DPC.

    


    Section
3.16   Title to Properties;
Encumbrances.  Hotel Development and HD have good and
marketable title to all of the personal property and assets, that are used in
the business that are material to the condition (financial or otherwise),
business, operations or prospects of Hotel Development and HD, free and clear of
all mortgages, claims, liens, security interests, charges, leases, encumbrances
and other restrictions of any kind and nature, except (i) as disclosed in the
Financial Statements of Hotel Development and HD, (ii) statutory liens not yet
delinquent, and (iii) such liens consisting of zoning or planning restrictions,
imperfections of title, easements, pledges, charges and encumbrances, if any, as
do not materially detract from the value or materially interfere with the
present use of the property or assets subject thereto or affected
thereby.  Neither Hotel Development nor HD owns any real
property.  With the exception of the items listed on Exhibit
3.16 all of which will be paid in full prior to Closing, DPC has good and
marketable title to the Real Property, free and clear of all mortgages, claims,
liens, security interests, charges, leases, encumbrances and other restrictions
of any kind and nature.

    


    Section
3.17    No Pending
Transactions.  Except for the transactions contemplated by this
Agreement, none of Hotel Development, HD, Illusions, DPC or the Sellers is a
party to or bound by or the subject of any agreement, undertaking, commitment or
discussions or negotiations with any person that could result in (i) the sale,
merger, consolidation or recapitalization of Hotel Development, HD, Illusions or
DPC, (ii) the sale of any of the assets of Hotel Development, HD,
or  Illusions except in the ordinary course of business, (iii) the
sale of the Real Property by DPC, (iv) the sale of any outstanding Partnership
Interest of Hotel Development or outstanding Membership Interest of HD, (v) the
acquisition by Hotel Development or HD of any operating business or the capital
stock of any other person or entity, (vi) the borrowing of money by Hotel
Development or HD, whether secured or unsecured, or (vii) any agreement with any
of the respective officers, managers or affiliates of Hotel Development, HD,
Illusions or DPC.


    
      
         


      

      
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    Section
3.18    Contracts and
Leases.  Except as set forth in Exhibit
3.18, neither Hotel Development nor HD (i) has any leases of personal
property relating to the assets of Hotel Development or HD, whether as lessor or
lessee; (ii) has any contractual or other obligations relating to the assets of
Hotel Development or HD, whether written or oral; and (iii) have given any power
of attorney to any person or organization for any purpose relating to the assets
of Hotel Development or HD.  Hotel Development and HD have provided
Buyer access to each and every contract, lease or other document relating to the
assets of Hotel Development and HD to which they are subject or are a party or a
beneficiary.  To the knowledge of each of the Sellers, such contracts,
leases or other documents are valid and in full force and effect according to
their terms and constitutes a legal, valid and binding obligation of Hotel
Development and HD and the other respective parties thereto and are enforceable
in accordance with their terms.  None of the Sellers have knowledge of
any default or breach under such contracts, leases or other documents or of any
pending or threatened claims under any such contracts, leases or other
documents.

    


    Section
3.19    No
Default.  None of Hotel Development, HD, Illusions or DPC is
(a) in violation of any provision of its articles of organization or regulations
or (b) in default under any term or condition of any instrument evidencing,
creating or securing any indebtedness of Hotel Development, HD, Illusions or
DPC.  Further, there has been no default in any material obligation to
be performed by Hotel Development, HD, Illusions or DPC under any other
contract, lease, agreement, commitment or undertaking to which it is a party or
by which it or its assets or properties are bound, nor has Hotel Development,
HD, Illusions or DPC waived any material right under any such contract, lease,
agreement, commitment or undertaking.

    


    Section
3.20    Books and
Records.  The books of account, minute books, stock record
books or other records of Hotel Development and HD that exist are accurate and
complete and have been maintained in accordance with sound business practices
and will be located at the Premises upon Closing.

    


    Section
3.21    Insurance Policies.  Copies
of all insurance policies maintained by Hotel Development, HD and Illusions
relating to the operation of the Club have been delivered or made available to
Buyer.  The policies of insurance held by Hotel Development, HD and
Illusions are in such amounts, and insure against such losses and risks, as
Hotel Development, HD and Illusions reasonably deem appropriate for their
respective property and business operations.  All such insurance
policies are in full force and effect, and all premiums due thereon have been
paid.  Valid policies for such insurance will be outstanding and duly
in force at all times prior to the Closing.


    
      
         


      

      
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    Section
3.22    Pending
Claims.  Except as set forth in Exhibit
3.22, there are no claims, suits, arbitrations, investigations, actions
or other proceedings, whether judicial, administrative or otherwise, now pending
or, to the best knowledge of  Hotel Development, HD, Illusions, DPC or
any of the Sellers, threatened before any court, arbitration, administrative or
regulatory body or any governmental agency which may result in any judgment,
order, award, decree, liability or other determination which will or could
reasonably be expected to have any effect upon Hotel Development, HD or
Illusions, the business of the Club, the transfer of the Partnership Interest or
the Membership Interest by the Sellers to Buyer under this Agreement, the
operation of the Club after the Closing Date, or the transfer of the Real
Property, nor is there any basis known to Hotel Development, HD, Illusions, DPC
or any of the Sellers for any such action. Except as set forth in Exhibit
3.22, no litigation is pending, or, to the knowledge of Hotel
Development, HD, Illusions, DPC or any of the Sellers, threatened against Hotel
Development, HD or Illusions, or the business of the Club, DPC, the Real
Property, or the assets or properties of Hotel Development, HD, Illusions or DPC
which seeks to restrain or enjoin the execution and delivery of this Agreement
or any of the documents referred to herein or the consummation of any of the
transactions contemplated thereby or hereby.  None of Hotel
Development, HD, Illusions, DPC or any of the Sellers is subject to any judicial
injunction or mandate or any quasi-judicial or administrative order or
restriction directed to or against them which would affect Hotel Development, HD
or Illusions, or the business of the Club, the Partnership Interest, the
Membership Interest or the Real Property to be transferred under this
Agreement.

    


    Section
3.23    No Liabilities. As of
the Closing Date, neither Hotel Development nor HD shall have any obligations or
liability (contingent or otherwise) to any third party.

    


    Section
3.24    Unpaid
Bills.  As of the Closing, there will be no unpaid bills or
claims in connection with any repair of the Premises or other work performed or
materials purchased in connection with the repair of the Premises.

    


    Section 3.25    Notices.  Neither the
Sellers, Hotel Development, HD or DPC have received any written notice (i) from
any insurance companies, governmental agencies or from any other parties of any
condition, defects or inadequacies with respect to the Premises which, if not
corrected, would result in termination of insurance coverage or increase its
cost, (ii) from any governmental agencies or any other third parties with
respect to any violations of any building codes and/or zoning ordinances or any
other governmental laws, regulations or orders affecting the Premises,
including, without limitation, the Americans With Disabilities Act, (iii) of any
pending or threatened condemnation proceedings with respect to the Premises, or
(iv) of any proceedings which could or would cause the change, redefinition or
other modification of the zoning classification of the Premises.

    


    Section 3.26    Proceedings Relating to
Premises.  Except as set forth on Exhibit
3.26 hereto, there is no pending, or, to the best of Sellers, Hotel
Development, HD or DPC knowledge, threatened, judicial, municipal or
administrative proceedings with respect to, or in any manner affecting the
Premises or any portion thereof, including, without limitation, proceedings for
or involving tenant evictions, collections, condemnations, eminent domain,
alleged building code or zoning violations, personal injuries or property damage
alleged to have occurred on the Premises or by reason of the use and operation
of the Premises, or written notice of any attachments, executions, assignments
for the benefit of creditors, receiverships, conservatorships or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other debtor relief
laws pending or threatened against the seller of the Premises or the Premises
itself, or the taking of the Premises for public needs.


    
      
         


      

      
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    Section 3.27    Public
Improvements.  None of the Sellers, Hotel Development, HD or
DPC has knowledge of any existing or proposed public improvements which involve
or which may result in any charge being levied or assessed against the Premises
or which will or could result in the creation of any lien upon the Premises or
any part thereof.

    


    Section 3.28    Certificates.  To
the best of Sellers, Hotel Development, HD or DPC knowledge, all certificates of
occupancy, licenses, permits, authorizations and approvals required by law or by
any governmental authority having jurisdiction over the Premises have been
obtained and are in full force and effect.

    


    Section 3.29    Material
Defect.  None of the Sellers, Hotel Development, HD or DPC has
knowledge of any material defects to the Premises which have not been disclosed
in writing to RCI.

    


    Section 3.30    Flooding.  None
of the Sellers, Hotel Development, HD or DPC has knowledge of any flooding which
has occurred on the Premises.

    


    Section 3.31    Environmental.  To
the best of Sellers, Hotel Development, HD or DPC knowledge, the Premises is not
in violation of any state, local or federal statutes, laws, regulations,
ordinances, or rules pertaining to health or the environment requirements
affecting the Premises and none of the Sellers, Hotel Development, HD or DPC
have received any citation, directive, letter or other communication, written or
oral, or any notice of any proceeding, claim or lawsuit relating to any
environmental issue at the Real Property.

    


    Section
3.32    Brokerage
Commission.  No broker or finder has acted for the Hotel
Development, HD, Illusions, DPC or the Sellers in connection with this Agreement
or the transactions contemplated hereby, and no person is entitled to any
brokerage or finder’s fee or compensation in respect thereof based in any way on
agreements, arrangements or understandings made by or on behalf of Hotel
Development, HD, Illusions, DPC or the Sellers.

    


    Section 3.33    Banks and Brokerage
Accounts.  Exhibit
3.33 sets forth (a) a true and complete list of the names and locations
of all banks, trust companies, securities brokers and other financial
institutions at which Hotel Development, HD and Illusions have an account or
safe deposit box or maintains a banking, custodial, trading or other similar
relationship, and (b) a true and complete list and description of each such
account, box and relationship, indicating in each case the account number and
the names of the respective officers, employees, agents or other similar
representatives of Hotel Development, HD or Illusions having signatory power
with respect thereto.

    


    Section
3.34    Disclosure.  No
representation or warranty of Hotel Development, HD, Illusions, DPC or the
Sellers contained in this Agreement (including the exhibits hereto) contains any
untrue statement or omits to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.


    
      
         


      

      
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    ARTICLE
IV

    REPRESENTATIONS
AND WARRANTIES

    OF
BUYER AND RCI

    


    Buyer
hereby represents and warrants to Hotel Development, HD, Illusions, DPC and the
Sellers as follows:

    


    Section
4.1    Organization, Good Standing
and Qualification.  Buyer and RCI (i) are entities duly
organized, validly existing and in good standing under the laws of the state of
Texas, (ii) have all requisite power and authority to carry on its business, and
(iii) are duly qualified to transact business and are in good standing in all
jurisdictions where their ownership, lease or operation of property or the
conduct of their business requires such qualification, except where the failure
to do so would not have a material adverse effect to Buyer and/or
RCI.

    


    Section
4.2    Authorization.  Buyer
is a corporation duly organized in the state of Texas and has full power,
capacity, and authority to enter into this Agreement and perform the obligations
contemplated hereby.  RCI is a limited liability company duly
organized in the state of Texas and has full power, capacity, and authority to
enter into this Agreement and perform all the obligations contemplated
hereby.  All action on the part of Buyer and RCI necessary for the
authorization, execution, delivery and performance of this Agreement by it has
been or will be taken before Closing.  This Agreement, when duly
executed and delivered in accordance with its terms, will constitute legal,
valid, and binding obligations of Buyer and RCI enforceable against Buyer and
RCI in accordance with its terms, except as may be limited by bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally or by
general equitable principles.

    


    Section
4.3    Consents.  No
permit, consent, approval or authorization of, or designation, declaration or
filing with, any governmental authority or any other person or entity is
required on the part of Buyer or RCI in connection with the execution and
delivery by Buyer and RCI of this Agreement or the consummation and performance
of the transactions contemplated hereby other than as may be required under the
federal securities laws.

    


    Section
4.4    Disclosure.  No
representation or warranty of Buyer or RCI contained in this Agreement
(including the exhibits hereto) contains any untrue statement or omits to state
a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.

    


    Section
4.5    Brokerage
Commission.  No broker or finder has acted for the Buyer or RCI
in connection with this Agreement or the transactions contemplated hereby, and
no person is entitled to any brokerage or finder’s fee or compensation in
respect thereof based in any way on agreements, arrangements or understandings
made by or on behalf of Buyer or RCI.


    
      
         


      

      
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    ARTICLE
V

    REPRESENTATIONS
AND WARRANTIES

    OF
RICK’S

    


    Rick’s
hereby represents and warrants to Hotel Development, HD, Illusions, DPC and the
Sellers as follows:

    


    Section
5.1    Organization, Good Standing
and Qualification.  Rick’s (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas, (ii)
has all requisite power and authority to carry on its business, and (iii) is
duly qualified to transact business and is in good standing in all jurisdictions
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except where the failure to do so would
not have a material adverse effect to Rick’s.

    


    Section
5.2    Authorization.  Rick’s
is a corporation duly organized in the state of Texas and has full power,
capacity, and authority to enter into this Agreement and perform the obligations
contemplated hereby.  All action on the part of Rick’s necessary for
the authorization, execution, delivery and performance of this Agreement by it
has been or will be taken.  This Agreement, when duly executed and
delivered in accordance with its terms, will constitute legal, valid, and
binding obligations of Rick’s enforceable against it in accordance with its
terms, except as may be limited by bankruptcy, insolvency, and other similar
laws affecting creditors' rights generally or by general equitable
principles.

    


    Section
5.3    Consents.  No
permit, consent, approval or authorization of, or designation, declaration or
filing with, any governmental authority or any other person or entity is
required on the part of the Buyer or Rick’s in connection with the execution and
delivery by Rick’s of this Agreement or the consummation and performance of the
transactions contemplated hereby other than as may be required under the federal
securities laws.

    


    Section
5.4    Disclosure.  No
representation or warranty of Rick’s contained in this Agreement (including the
exhibits hereto) contains any untrue statement or omits to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.

    


    Section
5.5    Brokerage
Commission.  No broker or finder has acted for Rick’s in
connection with this Agreement or the transactions contemplated hereby, and no
person is entitled to any brokerage or finder’s fee or compensation in respect
thereof based in any way on agreements, arrangements or understandings made by
or on behalf of Rick’s.


    
      
         


      

      
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    ARTICLE
VI

    COVENANTS
OF HOTEL DEVELOPMENT,

    HD,
ILLUSIONS, DPC AND THE SELLERS

    


    Section
6.1    Stand
Still.  To induce Buyer, RCI and Ricks to proceed with this
Agreement, Hotel Development, HD, Illusions, DPC and the Sellers agree that
until the Closing Date or the termination of this Agreement, none of the
representatives of Hotel Development, HD, Illusions, DPC or the Sellers will
offer to sell or solicit any offer to purchase or engage in any discussions or
activities of any nature whatsoever, directly or indirectly, involving in any
manner the actual or potential sale, transfer, encumbrance, pledge,
collateralization or hypothecation of any assets of Hotel Development, HD or
Illusions, or any Partnership Interest or Membership Interest of the Sellers, or
the Real Property.  Hotel Development, HD, Illusions, DPC and the
Sellers hereby agree to advise the Buyer, RCI and Ricks of any contact from any
third party regarding the acquisition of any Partnership Interest or Membership
Interest of the Sellers or other investment in Hotel Development, HD or
Illusions, the acquisition of the Real Property, or of any contact which would
relate to the transactions contemplated by this Agreement.

    


    Section 6.2    Access; Due
Diligence.  Between the date of this Agreement and the Closing
Date, Hotel Development, HD, Illusions, DPC and the Sellers shall (a) provide
Buyer, RCI, Rick’s and/or their authorized representatives reasonable access to
all plants, offices, warehouse and other facilities and properties of Hotel
Development, HD, DPC and Illusions, and to the books and records of Hotel
Development, HD, DPC and Illusions; (b) permit the Buyer, RCI, Rick’s and/or
their authorized representatives to make inspections thereof; and (c) cause the
officers and advisors of Hotel Development, HD, DPC and Illusions to furnish the
Buyer with such financial and operating data and other information with respect
to the business and properties of Hotel Development, HD, DPC and Illusions, and
to discuss with the Buyer or RCI and their authorized representatives the
affairs of Hotel Development, HD, DPC and Illusions as the Buyer or RCI may from
time to time reasonably request.

    


    Section
6.3    Conduct of
Business.  From the date of the execution hereof until the
Closing Date, Hotel Development, HD and Illusions shall operate the business of
the Club in the ordinary course of business, and:

    


    
      	
               
      

            	
              (a)

            	
              None
      of Hotel Development, HD and Illusions will authorize, declare, pay or
      effect any dividend except as is consistent with past practices of Hotel
      Development, HD and/or Illusions, or liquidation or other distribution in
      respect of the units of Partnership Interest of Hotel Development or
      Membership Interest of HD, or any other equity interest or any direct or
      indirect redemption, purchase or other acquisition of any equity interest
      of Hotel Development, HD or
Illusions;

            


    

    


    
      	
               
      

            	
              (b)

            	
              None
      of Hotel Development, HD and Illusions will make any changes in their
      condition (financial or otherwise), liabilities, assets, or business or in
      any of their business relationships, including relationships with
      suppliers or customers, that, when considered individually or in the
      aggre­gate, might reasonably be expected to have a material adverse
      effect on Hotel Development, HD or Illusions or the results of operations
      of the Club;

            


    


    
      
         


      

      
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              (c)

            	
              None
      of Hotel Development, HD and Illusions will increase the salary or other
      compensation payable or to become payable by Hotel Development, HD and/or
      Illusions to any employee, or the declaration, payment, or commitment or
      obligation of any kind for the pay­ment by Hotel Development, HD
      and/or Illusions of a bonus or other additional salary or compensation to
      any such person except in the normal course of business, consistent with
      past practices of Hotel Development, HD and/or
  Illusions;

            


    

    


    
      	
               
      

            	
              (d)

            	
              None
      of Hotel Development, HD or Illusions will sell, lease, transfer or assign
      any of their assets, tangible or intangible, other than for a fair
      consideration in the ordinary course of
  business;

            


    

    


    
      	
               
      

            	
              (e)

            	
              None
      of Hotel Development, HD or Illusions will accelerate, terminate, modify
      or cancel any agreement, contract, lease or license (or series of related
      agreements, contracts, leases and licenses) involving more than $1,000 to
      which Hotel Development, HD or Illusions is a
  party;

            


    

    


    
      	
               
      

            	
              (f)

            	
              None
      of Hotel Development, HD or Illusions will make any loans to any person or
      entity, or guarantee any loan, absent the consent of the
      Buyer;

            


    

    


    
      	
               
      

            	
              (g)

            	
              None
      of Hotel Development, HD or Illusions will waive or release any right or
      claim held by Hotel Development, HD or Illusions, absent the consent of
      the Buyer;

            


    

    


    
      	
               
      

            	
              (h)

            	
              Hotel
      Development, HD and Illusions will operate their respective businesses in
      the ordinary course and consistent with past practices so as to preserve
      their business organization intact, to retain the ser­vices of their
      employees and to preserve their goodwill and relationships with suppliers,
      creditors, cus­tomers, and others having business relationships with
      them;

            


    

    


    
      	
               
      

            	
              (i)

            	
              None
      of Hotel Development, HD or Illusions will issue any note, bond or other
      debt security or create, incur or assume, or guarantee any indebtedness
      for borrowed money or capitalized lease
  obligations;

            


    

    


    
      	
               
      

            	
              (j)

            	
              None
      of Hotel Development, HD or Illusions will delay or postpone the payment
      of accounts payable and other liabilities outside the ordinary course of
      business;

            


    

    


    
      	
               
      

            	
              (k)

            	
              None
      of Hotel Development, HD or Illusions will make any loan to, or enter into
      any other transaction with, any of their directors, officers, and
      employees, outside the ordinary course of
  business;

            


    

    


    
      	
               
      

            	
              (l)

            	
              None
      of Hotel Development, HD or Illusions will make any change in any method,
      practice, or principle of accounting involving the business of Hotel
      Development, HD and/or Illusions, or the assets of Hotel Development, HD
      and/or Illusions;

            


    


    
      
         


      

      
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              (m)

            	
              Hotel
      Development will not issue, sell or otherwise dispose of any of its
      Partnership Interests, or create, sell or dispose of any options, rights,
      conversion rights or other agreements or commitments of any kind relating
      to the issuance, sale or disposition of any of its Partnership
      Interests;

            


    

    


    
      	
               
      

            	
              (n)

            	
              HD
      will not issued, sell or otherwise dispose of any of its Membership
      Interests, or create, sell or dispose of any options, rights, conversion
      rights or other agreements or commitments of any kind relating to the
      issuance, sale or disposition of any of its Membership
      Interests;

            


    

    


    
      	
               
      

            	
              (o)

            	
              Hotel
      Development will not reclassify, split up or otherwise change any of its
      Partnership Interests;

            


    

    


    
      	
               
      

            	
              (p)

            	
              HD
      will not reclassify, split up or otherwise changes of its Membership
      Interests;

            


    

    


    
      	
               
      

            	
              (q)

            	
              None
      of Hotel Development, HD or Illusions will be a party to any merger,
      consolidation or other business combination;
and

            


    

    


    
      	
               
      

            	
              (r)

            	
              None
      of Hotel Development, HD or Illusions will agree to take any action
      described in this Section 6.3.

            


    

    


    


    ARTICLE
VII

    CONDITIONS
TO CLOSING

    


    The obligations of the parties to
effect the transactions contemplated hereby are subject to the satisfaction at
or prior to the Closing of the following conditions:

    


    Section
7.1    Conditions to Obligations of
Buyer, RCI and Rick’s.

    


    
      	
               
      

            	
              (a)

            	
              Representations and
      Warranties of Hotel Development, HD, Illusions, DPC and the
      Sellers.  The representations and warranties of Hotel
      Development, HD, Illusions, DPC and the Sellers shall be true and correct
      on the date hereof and on and as of the Closing Date, as though made on
      and as of the Closing Date;

            


    

    


    
      	
               
      

            	
              (b)

            	
              Covenants.  All
      covenants, agreements and conditions contained in this Agreement to be
      performed by Hotel Development, HD, Illusions, DPC and the Sellers on or
      prior to the Closing Date shall have been performed or complied with in
      all respects;

            


    

    


    
      	
               
      

            	
              (c)

            	
              Delivery of
      Certificates.  The Sellers, Hotel Development, HD,
      Illusions and DPC shall provide to Buyer, RCI and Rick’s certificates,
      dated as of the Closing Date and signed by each of the Sellers and by
      representatives of Hotel Development, HD, Illusions and DPC, respectively,
      to effect set forth in Section 7.1(a) and 7.1(b) for the purpose of
      verifying the accuracy of such representations and warranties and the
      performance and satisfaction of such covenants and
    conditions;

            


    


    
      
         


      

      
        Purchase
Agreement - Page 18

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (d)

            	
              Resolutions.  Hotel
      Development, HD, DPC and Illusions shall have delivered resolutions of
      Hotel Development, HD DPC and Illusions, which authorize the execution,
      delivery and performance of this Agreement and the documents referred to
      herein to which it is or is to be a party dated as of the Closing
      Date;

            


    

    


    
      	
               
      

            	
              (e)

            	
              Delivery of
      Partnership Interest and Membership Interest.  The
      Sellers shall deliver or cause to be delivered to Buyer (i) originally
      issued certificate representing the Partnership Interest of Hotel
      Development and (ii) the originally issued certificate representing the
      Membership Interest of HD duly endorsed over to the Buyer in a form
      satisfactory to the Buyer;

            


    

    


    
      	
               
      

            	
              (f)

            	
              Delivery of Real
      Property.  DPC shall deliver or cause to be delivered to
      RCI a General Warranty Deed and any other documents necessary to convey
      good and marketable title to the Real Property, free and clear of all
      encumbrances;

            


    

    


    
      	
               
      

            	
              (g)

            	
              Management
      Agreement.  The Management Agreement between Illusions
      and Hotel Development shall be in full force and
  effect;

            


    

    


    
      	
               
      

            	
              (h)

            	
              Legal
      Opinion.  Illusions shall deliver to Buyer, RCI and
      Rick’s a legal opinion confirming the validity of the actions to be taken
      by Illusions hereunder in a form mutually acceptable to the parties hereto
      ;

            


    

    


    
      	
               
      

            	
              (i)

            	
              Related
      Transactions.  The Related Transactions set forth in
      Section 2.3 shall be consummated concurrently with the
      Closing;

            


    

    


    
      	
               
      

            	
              (j)

            	
              Permits.  Buyer
      shall possess all necessary permits and other authorizations, whether
      city, county, state or federal, which may be needed to conduct topless
      entertainment with the sale of alcoholic beverages on the Premises and all
      such permits and authorizations shall be in good order, and, unless
      otherwise waived by the Buyer and Rick’s, without any administrative
      actions pending or concluded that may challenge or present an obstacle to
      the continued performance of topless entertainment and sale of alcoholic
      beverages at the Club and the Certificate of Occupancy issued by the City
      of Dallas which zones the Premises for an adult oriented business shall be
      in full force and effect;

            


    

    


    
      	
               
      

            	
              (k)

            	
              Zoning.  Illusions
      shall continue to hold any and all permits, zoning classifications or
      authorizations necessary to sell alcoholic beverages at the Club and the
      Buyer shall have been issued any permits, zoning classifications or
      authorizations necessary to conduct topless entertainment at the Club and
      these permits, zoning classifications or authorizations shall be held
      and/or issued to Buyer at or prior to the
  Closing.

            


    

    


    
      	
               
      

            	
              (l)

            	
              Financial
      Records.  The financial records of Hotel Development and
      HD shall be maintained and exist in such a manner as to allow for a
      certified audit as determined by
Rick’s;

            


    


    
      
         


      

      
        Purchase
Agreement - Page 19

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (m)

            	
              Liabilities.  None
      of Hotel Development, HD or Illusions shall have any liabilities as of the
      date of Closing except for any contingent liabilities which may exist as
      set forth in Exhibit
      3.22;

            


    

    


    
      	
               
      

            	
              (n)

            	
              Financing.  RCI
      shall have obtained bank financing acceptable to it in its sole discretion
      in an amount of not less than $3,200,000 in connection with the financing
      of the Property;

            


    

    


    
      	
               
      

            	
              (o)

            	
              Third-Party
      Consents.  Any and all consents or waivers required from
      third parties relating to this Agreement or any of the other transactions
      contemplated hereby shall have been
obtained;

            


    

    


    
      	
               
      

            	
              (p)

            	
              Satisfactory
      Diligence.  Buyer shall have concluded its due diligence
      investigation of Hotel Development and HD and their respective assets and
      properties, RCI shall have concluded to its satisfaction its due diligence
      investigation related to the title to the Real Property, and all other
      matters related to the foregoing, and shall be satisfied, in its absolute
      and sole discretion, with the results
thereof;

            


    

    


    
      	
               
      

            	
              (q)

            	
              No Actions or
      Proceedings.  No claim, action, suit, investigation or
      proceeding shall be pending or threatened before any court or governmental
      agency which presents a substantial risk of the restraint or prohibition
      of the transactions contemplated by this
  Agreement;

            


    

    


    
      	
               
      

            	
              (r)

            	
              Government
      Approvals.  All authorizations, permits, consents,
      orders, licenses or approvals of, or declarations or filings with, or
      expiration of waiting periods imposed by, any governmental entity
      necessary for the consummation of the transactions contemplated by this
      Agreement shall have been filed, occurred or been obtained;
      and

            


    

    


    
      	
               
      

            	
              (s)

            	
              Appointment of
      Manager/Officer/Resignations.  At Closing, (i) Eric
      Langan shall have been appointed as President/Chief Executive Officer of
      Hotel Management and HD; (ii) Buyer shall have been appointed as Manager
      of HD; (iii)the Board of Directors of Illusions shall have caused a
      membership meeting to have occurred wherein the then existing Board of
      Directors will resign and nominate three new members as chosen by the
      Buyer to serve on the new Board of Directors of Illusions; and (iv) each
      of the Sellers shall resign any and all officer positions held in Hotel
      Development and/or HD.

            


    

    


    Section
7.2            Conditions to Obligations of
Hotel Development, HD, Illusions, DPC and the Sellers

    


    
      	
               
      

            	
              (a)

            	
              Representations,
      Warranties and Agreements of Buyer, RCI and Rick’s.  The
      representations and warranties of Buyer, RCI and Rick’s shall be true and
      correct on the date hereof and on and as of the Closing Date, as though
      made on and as of the Closing
Date;

            


    


    
      
         


      

      
        Purchase
Agreement - Page 20

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (b)

            	
              Covenants.  All
      covenants, agreements and conditions contained in this Agreement to be
      performed by the Buyer, RCI or Rick’s on or prior to the Closing Date
      shall have performed or complied with in all
  respects;

            


    

    


    
      	
               
      

            	
              (c)

            	
              Delivery of
      Certificates.  Buyer, RCI and Rick’s shall provide to
      Hotel Development, HD, Illusions, DPC and the Sellers certificates dated
      as of the Closing Date and signed by a representative of the Buyer, RCI
      and Rick’s to the effect set forth in Section 7.2(a) and 7.2(b) for the
      purpose of verifying the accuracy of such representations and warranties
      and the performance and satisfaction of such covenants and
      conditions;

            


    

    


    
      	
               
      

            	
              (d)

            	
              Resolutions.  Buyer,
      RCI and Rick’s shall deliver resolutions of the Buyer, RCI and Rick’s,
      which authorize the execution, delivery and performance of this Agreement
      and the documents referred to herein to which it is or is to be a party
      dated as of the Closing Date;

            


    

    


    
      	
               
      

            	
              (e)

            	
              Payment of Purchase
      Price.  (i) Buyer and RCI shall have tendered the cash
      portions of the Purchase Price set forth in Section 1.2 and 1.4, and (ii)
      Rick’s shall have delivered the Shares representing the stock portions of
      the Purchase Price to the Sellers as set forth in Section 1.2 and 1.4 or
      shall deliver a letter of instruction to the transfer agent instructing
      the issuance of the Shares to the
Sellers;

            


    

    


    
      	
               
      

            	
              (f)

            	
              Related
      Transactions.  The Related Transaction set forth in
      Section 2.3 shall be consummated concurrently with the
      Closing;

            


    

    


    
      	
               
      

            	
              (g)

            	
              Consents; Transfer of
      Licenses.  All necessary transfers of licenses and leases
      required for the operation of the business of Hotel Development and HD
      shall have been obtained.  The Certificate of Occupancy issued
      by the City of Dallas which zones the Premises for an adult oriented
      business shall be in full force and
effect;

            


    

    


    
      	
               
      

            	
              (h)

            	
              Third Party
      Consents.  Any and all consents or waivers required from
      third parties relating to this Agreement or any of the other transactions
      contemplated hereby shall have been
obtained;

            


    

    


    
      	
               
      

            	
              (i)

            	
              No Actions or
      Proceedings.  No claim, action, suit, investigation or
      proceeding shall be pending or threatened before any court or governmental
      agency which presents a substantial risk of the restraint or prohibition
      of the transactions contemplated by this Agreement;.
  and

            


    

    


    
      	
               
      

            	
              (j)

            	
              Government
      Approvals.  All authorizations, permits, consents, orders
      or approvals of, or declarations or filings with, or expiration of waiting
      periods imposed by, any governmental entity necessary for the consummation
      of the transactions contemplated by this Agreement shall have been filed,
      occurred or been obtained.

            


    


    
      
         


      

      
        Purchase
Agreement - Page 21

        
          

        

      

      
         


      

    


    ARTICLE
VIII

    INDEMNIFICATION

    


    Section
8.1    Indemnification from the
Sellers Illusions and DPC.  Each of the Sellers, Illusions and
DPC, jointly and severally,  hereby agree to and shall indemnify,
defend (with legal counsel reasonably acceptable to Buyer), and hold Buyer, RCI,
Rick’s, their officers, directors, shareholders, employees, affiliates, parent,
agents, legal counsel, successors and assigns  (collectively, the
“Buyer’s Group”) harmless at all times after the date of this Agreement, from
and against any and all actions, suits, claims, demands, debts, liabilities,
obligations, losses, damages, costs, expenses, penalties or
injury  (including reasonable attorneys fees and costs of any suit
related thereto) (collectively, “Indemnifiable Loss” or “Indemnifiable Losses”)
suffered or incurred by any or all of  the Buyer’s Group arising from:
(a) any material misrepresentation by, or material breach of any covenant or
warranty of  the Sellers, DPC, Illusions, HD or Hotel Development
contained in this Agreement, or any exhibit, certificate, or other instrument
furnished or to be furnished by the Sellers, DPC, Illusions, HD or Hotel
Development hereunder; (b) any nonfulfillment of any material agreement on the
part of  the Sellers, DPC, Illusions, HD or Hotel Development under
this Agreement;  or
(c) from any liability or obligation due to any third party by Hotel
Development, HD, DPC, Illusions and/or the Sellers incurred prior to the Closing
Date, including all damages resulting to the Buyer’s Group from the Sellers’,
DPC’s, Illusions’, HD’s or Hotel Development’s breach of any of any contracts
occurring prior to the Closing Date; or (d) any liabilities of Hotel
Development, HD or DPC incurred prior to the Closing Date.

    


    Section
8.2    Indemnification from Buyer,
RCI and Rick’s.  Buyer, RCI and Rick’s agree to and shall
indemnify, defend (with legal counsel reasonably acceptable to Company) and hold
the Sellers, DPC and Illusions and their agents, officers, directors,
shareholders, employees, affiliates, parent, agents, legal counsel, successors
and assigns, (collectively, the "Sellers’ Group") harmless at all times after
the date of the Agreement from and against any and all actions, suits, claims,
demands, debts, liabilities, obligations, losses, damages, costs, expenses,
penalties or injury (including reasonably attorneys fees and costs of any suit
related thereto) suffered or incurred by any or all of Sellers’ Group, arising
from (a) any material misrepresentation by, or material breach of any covenant
or warranty of Buyer, RCI or Rick’s  contained in this Agreement or
any exhibit, certificate, or other agreement or instrument furnished or to be
furnished by Buyer, RCI or Rick’s hereunder; (b) any nonfulfillment of any
material agreement on the part of Buyer, RCI or Rick’s under this Agreement; or
(c) any liabilities of HD or Hotel Development incurred subsequent to the
Closing Date.

    


    Section
8.3    Defense of
Claims.  If any lawsuit or enforcement action is filed against
any party entitled to the benefit of indemnity hereunder, written notice thereof
shall be given to the indemnifying party as promptly as practicable (and in any
event not less than fifteen (15) days prior to any hearing date or other date by
which action must be taken); provided that the failure of any indemnified party
to give timely notice shall not affect rights to indemnification hereunder
except to the extent that the indemnifying party demonstrates actual damage
caused by such failure.  After such notice, the indemnifying party
shall be entitled, if it so elects, to take control of the defense and
investigation of such lawsuit or action and to employ and engage attorneys of
its own choice to handle and defend the same, at the indemnifying party's cost,
risk and expense; and such indemnified party shall cooperate in all reasonable
respects, at its cost, risk and expense, with the indemnifying party and such
attorneys in the investigation, trial and defense of such lawsuit or action and
any appeal arising therefrom; provided, however, that the indemnified party may,
at its own cost, participate in such investigation, trial and defense of such
lawsuit or action and any appeal arising therefrom.  The indemnifying
party shall not, without the prior written consent of the indemnified party,
effect any settlement of any proceeding in respect of which any indemnified
party is a party and indemnity has been sought hereunder unless such settlement
of a claim, investigation, suit, or other proceeding only involves a remedy for
the payment of money by the indemnifying party and includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such proceeding.


    
      
         


      

      
        Purchase
Agreement - Page 22

        
          

        

      

      
         


      

    


    Section
8.4    Default of Indemnification
Obligation.  If an entity or individual having an
indemnification, defense and hold harmless obligation, as above provided, shall
fail to assume such obligation, then the party or entities or both, as the case
may be, to whom such indemnification, defense and hold harmless obligation is
due shall have the right, but not the obligation, to assume and maintain such
defense (including reasonable counsel fees and costs of any suit related
thereto) and to make any settlement or pay any judgment or verdict as the
individual or entities deem necessary or appropriate in such individual’s or
entities’ absolute sole discretion and to charge the cost of any such
settlement, payment, expense and costs, including reasonable attorneys fees, to
the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.

    


    


    ARTICLE
IX

    MISCELLANEOUS

    


    Section
9.1    Amendment;
Waiver.  Neither this Agreement nor any provision hereof may be
amended, modified or supplemented unless in writing, executed by all the parties
hereto.  Except as otherwise expressly provided herein, no waiver with
respect to this Agreement shall be enforceable unless in writing and signed by
the party against whom enforcement is sought.  Except as otherwise
expressly provided herein, no failure to exercise, delay in exercising, or
single or partial exercise of any right, power or remedy by any party, and no
course of dealing between or among any of the parties, shall constitute a waiver
of, or shall preclude any other or further exercise of, any right, power or
remedy.

    


    Section
9.2    Notices.  Any
notices or other communications required or permitted hereunder shall be
sufficiently given if in writing and delivered in person, transmitted by
facsimile transmission (fax) or sent by registered or certified mail (return
receipt requested) or recognized overnight delivery service, postage pre-paid,
addressed as follows, or to such other address has such party may notify to the
other parties in writing:


    
      
         


      

      
        Purchase
Agreement - Page 23

        
          

        

      

      
         


      

    


    


    
      	
              (a)

            	
              if
      to the Sellers:

            	
              The
      Address listed on Exhibit
      9.2(a)

            
	
               
      

            	
               
      

            	 
      
	 
      	
              with
      a copy to:

            	
              Karen
      S.  Hockstad

            
	 
      	 
      	
              Hockstad
      Law Office, Ltd.

            
	 
      	 
      	
              5003
      Horizons Drive, Suite 200

            
	 
      	 
      	
              Columbus,
      Ohio  43220

            
	 
      	 
      	
              Fax:
      (614) 451-3156

            
	 
      	 
      	 
      
	
              (b)

            	
              if
      to Illusions:

            	
              Illusions-Dallas
      Private Club, Inc.

            
	 
      	 
      	
              8550
      N. Stemmons Freeway

            
	 
      	 
      	
              Dallas,
      Texas  75226

            
	 
      	 
      	 
      
	 
      	
              With
      a copy to:

            	
              Roger
      Albright

            
	 
      	 
      	
              Law
      Offices of Roger Albright

            
	 
      	 
      	
              3301
      Elm Street

            
	 
      	 
      	
              Dallas,
      Texas  75226-2562

            
	 
      	 
      	
              Fax:
      (214) 939-9229

            
	 
      	 
      	 
      
	
              (c)

            	
              if
      to Buyer, RCI or Rick’s:

            	
              RCI
      Entertainment (Dallas), Inc.

            
	 
      	 
      	
              Attn:  Eric
      Langan, President

            
	 
      	 
      	
              10959
      Cutten Road

            
	 
      	 
      	
              Houston,
      Texas  77066

            
	 
      	 
      	
              Fax:  (281)
      397-6765

            
	 
      	 
      	 
      
	 
      	
              with
      a copy to:

            	
              Robert
      D. Axelrod

            
	 
      	 
      	
              Axelrod
      Smith & Kirshbaum

            
	 
      	 
      	
              5300
      Memorial Drive, Suite 700

            
	 
      	 
      	
              Houston,
      Texas  77007

            
	 
      	 
      	
              Fax:  (713)
      552-0202

            


    

    


    A notice
or communication will be effective (i) if delivered in person or by overnight
courier, on the business day it is delivered, (ii) if transmitted by telecopier,
on the business day of actual confirmed receipt by the addressee thereof, and
(iii) if sent by registered or certified mail, three (3) business days after
dispatch.

    


    Section
9.3    Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.

    


    Section
9.4    Assignment; Successors and
Assigns.  Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors and
permitted assigns of the parties hereto.  No party hereto may assign
its rights or delegate its obligations under this Agreement without the prior
written consent of the other parties hereto, which consent will not be
unreasonably withheld.


    
      
         


      

      
        Purchase
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    Section
9.5    Entire
Agreement.  This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof and thereof and
supersede and cancel all prior representations, alleged warranties, statements,
negotiations, undertakings, letters, acceptances, understandings, contracts and
communications, whether verbal or written among the parties hereto and thereto
or their respective agents with respect to or in connection with the subject
matter hereof.

    


    Section
9.6    Jurisdiction.  This
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.  The parties agree that venue for purposes of construing or
enforcing this Agreement shall be proper in Harris County, Texas.

    


    Section
9.7    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.

    


    Section
9.8    Costs and
Expenses.   Each party shall pay their own respective
fees, costs and disbursements incurred in connection with this
Agreement.

    


    Section
9.9    Section
Headings.  The section and subsection headings in this
Agreement are used solely for convenience of reference, do not constitute a part
of this Agreement, and shall not affect its interpretation.

    


    
      Section
9.10   No Third-Party
Beneficiaries.  Nothing in this Agreement will confer any third
party beneficiary or other rights upon any person (specifically including any
employees of Hotel Development) or any entity that is not a party to this
Agreement.



    Section
9.11   Attorneys’
Review.  In connection with the negotiation and drafting of
this Agreement, the parties represent and warrant to each other they have had
the opportunity to be advised by attorneys of their own choice.

    


    Section 9.12   Further
Assurances.  Each party covenants that at any time, and from
time to time, after the Closing Date, it will execute such additional
instruments and take such actions as may be reasonably be requested by the other
parties to confirm or perfect or otherwise to carry out the intent and purposes
of this Agreement.

    


    Section
9.13   Survival of Representations,
Warranties and Covenants.  The respective representations,
warranties, covenants and indemnities given by the parties to each other
pursuant to this Agreement shall survive the Closing for a period ending
twenty-four (24) months from the Closing Date hereof (“Survival Date”).
Notwithstanding anything to the contrary contained herein, no claim for
indemnification may be made against the party required to indemnify (the “Indemnitor”) under
this Agreement unless the party entitled to indemnification (the “Indemnitee”) shall
have given the Indemnitor written notice of such claim as provided herein on or
before the Survival Date.  Any claim for which notice has been given
prior to the expiration of the Survival Date shall not be barred
hereunder.


    
      
         


      

      
        Purchase
Agreement - Page 25

        
          

        

      

      
         


      

    


    Section
9.14   Public
Announcements.   The parties hereto agree that prior to
making any public announcement or statement with respect to the transactions
contemplated by this Agreement, the party desiring to make such public
announcement or statement shall consult with the other parties hereto and
exercise their best efforts to (i) agree upon the text of a joint public
announcement or statement to be made by all of such parties or (ii) obtain
approval of the other parties hereto to the text of a public announcement or
statement to be made solely by the party desiring to make such public
announcement; provided, however, that if any party hereto is required by law to
make such public announcement or statement, then such announcement or statement
may be made without the approval of the other parties.

    


    Section
9.15   Validity.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect.

    


    Section 9.16   Exhibits Not
Attached.  Any exhibits not attached hereto on the date of
execution of this Agreement shall be deemed to be and shall become a part of
this Agreement as if executed on the date hereof upon each of the parties
initialing and dating each such exhibit, upon their respective acceptance of its
terms, conditions and/or form.

    


    


    


    [SIGNATURES
APPEAR ON THE FOLLOWING PAGES.]


    
      
         


      

      
        Purchase
Agreement - Page 26

        
          

        

      

      
         


      

    


    IN WITNESS WHEREOF, the undersigned
have executed this Purchase Agreement to become effective as of the date first
set forth above.

    


    
      	 
      	
              RCI
      ENTERTAINMENT (DALLAS), INC.

            
	 
      	 
      
	 
      	
              /s/ Eric
      Langan

            
	 
      	
              By:  Eric
      Langan, President

            
	 
      	
              Date:
      March 4, 2008

            
	 
      	 
      
	 
      	 
      
	 
      	
              RICK’S
      CABARET INTERNATIONAL, INC.

            
	 
      	 
      
	 
      	
              /s/ Eric
      Langan

            
	 
      	
              By:  Eric
      Langan, President

            
	 
      	
              Date:
      March 4, 2008

            
	 
      	 
      
	 
      	 
      
	 
      	
              RCI
      HOLDINGS, INC.

            
	 
      	 
      
	 
      	
              /s/ Eric
      Langan

            
	 
      	
              By:  Eric
      Langan, President

            
	 
      	
              Date:
      March 4, 2008

            
	 
      	 
      
	 
      	 
      
	 
      	
              THE
      SELLERS

            
	 
      	 
      
	 
      	
              /s/ Jerry W.
      Golding

            
	 
      	
              Jerry
      W. Golding, Individually

            
	 
      	
              Date:  February
      29, 2008

            
	 
      	 
      
	 
      	 
      
	 
      	
              /s/ Kenneth L.
      Meyer

            
	 
      	
              Kenneth
      L. Meyer, Individually

            
	 
      	
              Date:  March
      3, 2008

            
	 
      	 
      
	 
      	 
      
	 
      	
              /s/ Charles A.
      McClure

            
	 
      	
              Charles
      A. McClure, Individually

            
	 
      	
              Date:  March
      3, 2008

            


    


    
      
         


      

      
        Purchase
Agreement - Page 27

        
          

        

      

      
         


      

    

     

    
      	 
      	
              HOTEL
      DEVELOMENT – TEXAS, LTD

            
	 
      	
               
      

            	
              By:  HD
      Texas Management, LLC

            
	 
      	 
      	
              Its:  General
      Partner

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              /s/ Charles A.
      McClure

            
	 
      	
              By:  Charles
      A. McClure

            
	 
      	
              Its:  Co-Chief
      Executive Officer

            
	 
      	
              Date:
      March 4, 2008

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              HD
      TEXAS MANAGEMENT, LLC

            
	 
      	 
      	
              By:

            
	 
      	 
      	
              Its:  Manager

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              /s/ Charles A.
      McClure

            
	 
      	
              By:  Charles
      A. McClure

            
	 
      	
              Its:  Co-Chief
      Executive Officer

            
	 
      	
              Date:
      March 4, 2008

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              ILLUSIONS-DALLAS
      PRIVATE CLUB, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              /s/ Charles A.
      McClure

            
	 
      	
              By:  Charles
      A. McClure

            
	 
      	
              Its:  President

            
	 
      	
              Date:
      March 4, 2008

            


    

     

     

    Purchase Agreement-Page
28