ex10_1.htm


    
      

    

    Exhibit
      10.1

     

    
      [FORM
        OF]

      


      COMMON
        STOCK PURCHASE

      


      AGREEMENT

      
 

      Dated
        as of November __, 2007


      


      by
        and among


      


      RICK’S
        CABARET INTERNATIONAL, INC.


      


      and


      


      THE
        PURCHASERS LISTED ON EXHIBIT A

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS


      
        	 	 	 	
                Page

              
	
                COMMON
                  STOCK PURCHASE AGREEMENT 

              	
                1

              
	
                ARTICLE
                  I

              	
                Purchase
                  and Sale of Common Stock

              	
                1

              
	
                Section
                  1.1

              	
                 

              	
                Purchase
                  and Sale of Common Stock

              	
                1

              
	
                Section
                  1.2

              	
                 

              	
                Purchase
                  Price and Closing

              	
                1

              
	
                ARTICLE
                  II

              	
                Representations
                  and Warranties

              	
                2

              
	
                Section
                  2.1

              	
                 

              	
                Representations
                  and Warranties of the Company

              	
                2

              
	
                Section
                  2.2

              	
                 

              	
                Representations
                  and Warranties of the Purchasers

              	
                9

              
	
                ARTICLE
                  III

              	
                Covenants

              	
                13

              
	
                Section
                  3.1

              	
                 

              	
                Securities
                  Compliance

              	
                13

              
	
                Section
                  3.2

              	
                 

              	
                Registration
                  and Listing

              	
                13

              
	
                Section
                  3.3

              	
                 

              	
                Compliance
                  with Laws

              	
                13

              
	
                Section
                  3.4

              	
                 

              	
                Keeping
                  of Records and Books of Account

              	
                13

              
	
                Section
                  3.5

              	
                 

              	
                Reporting
                  Requirements

              	
                13

              
	
                Section
                  3.6

              	
                 

              	
                Other
                  Agreements

              	
                14

              
	
                Section
                  3.7

              	
                 

              	
                Use
                  of Proceeds

              	
                14

              
	
                Section
                  3.8

              	
                 

              	
                Disclosure
                  of Material Information

              	
                14

              
	
                ARTICLE
                  IV

              	
                Conditions

              	
                14

              
	
                Section
                  4.1

              	
                 

              	
                Conditions
                  Precedent to the Obligation of the Company to Close and to Sell
                  the
                  Securities

              	
                14

              
	
                Section
                  4.2

              	
                 

              	
                Conditions
                  Precedent to the Obligation of the Purchasers to Close and to Purchase
                  the
                  Securities

              	
                15

              
	
                ARTICLE
                  V

              	
                Certificate
                  Legend

              	
                16

              
	
                Section
                  5.1

              	
                 

              	
                Legend

              	
                16

              
	
                ARTICLE
                  VI

              	
                Indemnification

              	
                16

              
	
                Section
                  6.1

              	
                 

              	
                General
                  Indemnity

              	
                16

              
	
                Section
                  6.2

              	
                 

              	
                Indemnification
                  Procedure

              	
                17

              
	
                ARTICLE
                  VII

              	
                Miscellaneous

              	
                18

              
	
                Section
                  7.1

              	
                 

              	
                Fees
                  and Expenses

              	
                18

              
	
                Section
                  7.2

              	
                 

              	
                Specific
                  Performance; Consent to Jurisdiction; Venue

              	
                18

              
	
                Section
                  7.3

              	
                 

              	
                Entire
                  Agreement; Amendment

              	
                18

              
	
                Section
                  7.4

              	
                 

              	
                Notices

              	
                19

              
	
                Section
                  7.5

              	
                 

              	
                Waivers

              	
                19

              


      

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        TABLE
          OF
          CONTENTS

        (continued)

         

      

      
        	 	 	
                Page

              
	
                Section
                  7.6

              	
                Headings

              	
                20

              
	
                Section
                  7.7

              	
                Successors
                  and Assigns

              	
                20

              
	
                Section
                  7.8

              	
                No
                  Third Party Beneficiaries

              	
                20

              
	
                Section
                  7.9

              	
                Governing
                  Law

              	
                20

              
	
                Section
                  7.10

              	
                Survival

              	
                20

              
	
                Section
                  7.11

              	
                Execution

              	
                20

              
	
                Section
                  7.12

              	
                Publicity

              	
                20

              
	
                Section
                  7.13

              	
                Severability

              	
                20

              
	
                Section
                  7.14

              	
                Further
                  Assurances

              	
                21

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        COMMON
          STOCK PURCHASE AGREEMENT

         

        This
          COMMON STOCK PURCHASE AGREEMENT this (“Agreement”), dated as of November
          __, 2007 by and between Rick’s Cabaret International, Inc., a Texas corporation
          (the "Company"), and the purchasers listed on Exhibit A hereto
          (each a "Purchaser" and collectively, the "Purchasers"), for the
          purchase and sale of shares of the Company’s Common Stock, par value $0.01 per
          share (the “Common Stock”) by the Purchasers.

        


        The
          parties hereto agree as follows:

         

        ARTICLE
          I

         

        Purchase
          and Sale of Common Stock

         

        Section
          1.1           Purchase
          and Sale of Common Stock.  Upon the following terms and
          conditions, the Company shall issue and sell to the Purchasers, and the
          Purchasers shall purchase from the Company, an aggregate of up to 1,165,000
          shares of Common Stock (the “Shares”) at a price per share of $____ (the
“Per Share Purchase Price”) for an aggregate purchase price of up to
          $____________ (the “Purchase Price”). The Shares are sometimes referred
          to herein as the “Securities.”  The Company and the Purchasers
          are executing and delivering this Agreement in accordance with and in reliance
          upon the exemption from securities registration afforded by Section 4(2)
          of the
          U.S. Securities Act of 1933, as amended, and the rules and regulations
          promulgated thereunder (the "Securities Act"), including Regulation D
          ("Regulation D"), and/or upon such other exemption from the registration
          requirements of the Securities Act as may be available with respect to
          any or
          all of the investments to be made hereunder. 

         

        Section
          1.2           Purchase
          Price and Closing.  Subject to the terms and conditions hereof,
          the Company agrees to issue and sell to the Purchasers and, in consideration
          of
          and in express reliance upon the representations, warranties, covenants,
          terms
          and conditions of this Agreement, the Purchasers, severally but not jointly,
          agree to purchase the number of Shares set forth opposite their respective
          names
          on Exhibit A.  The closing of the purchase and sale of the
          Shares to be acquired by the Purchasers from the Company under this Agreement
          shall take place at the offices of Merriman Curhan Ford & Co., 520 Madison
          Avenue, Suite 902, New York, New York 10022 (the “Closing”) at 10:00
          a.m., New York time (i) on or before November __, 2007, provided, that
          all of the conditions set forth in Article IV hereof and applicable to
          the
          Closing shall have been fulfilled or waived in accordance herewith, or
          (ii) at
          such other time and place or on such date as the Purchasers and the Company
          may
          agree upon (the "Closing Date").  Subject to the terms and
          conditions of this Agreement, at the Closing the Company shall deliver
          or cause
          to be delivered to each Purchaser a certificate registered in the name
          of such
          Purchaser representing the number of Shares that such Purchaser is purchasing
          pursuant to the terms hereof as is set forth opposite the name of such
          Purchaser
          on Exhibit A or shall issue an irrevocable letter of instruction to its
          transfer agent to issue the Shares.  At the Closing, each Purchaser
          shall deliver its Purchase Price by wire transfer to an account designated
          by
          the Company.

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

         

        ARTICLE
          II

         

        Representations
          and Warranties

         

        Section
          2.1          Representations
          and Warranties of the Company.  The Company hereby represents and
          warrants to the Purchasers as follows, as of the date hereof and the Closing
          Date, except as set forth on the Schedule of Exceptions attached hereto
          with
          each numbered Schedule corresponding to the section number herein:

         

        (a)           Organization,
          Good Standing and Power.  The Company is a corporation duly
          incorporated, validly existing and in good standing under the laws of the
          State
          of Texas and has the requisite corporate power to own, lease and operate
          its
          properties and assets and to conduct its business as it is now being
          conducted.  The Company does not have any Subsidiaries (except as set
          forth in Schedule 2.1(g) and in the Commission Documents), as defined in
          Section
          2.1(f) of this Agreement.  The Company and each such Subsidiary (as
          defined in Section 2.1(g)) is qualified to do business as a foreign corporation
          and is in good standing in every jurisdiction in which the nature of the
          business conducted or property owned by it makes such qualification necessary
          except for any jurisdiction(s) (alone or in the aggregate) in which the
          failure
          to be so qualified will not have a Material Adverse Effect.  For the
          purposes of this Agreement, "Material Adverse Effect" means any effect on
          the business, operations, properties, prospects or financial condition
          of the
          Company that is material and adverse to the Company and its Subsidiaries,
          taken
          as a whole, and any condition, circumstance or situation that would prohibit
          the
          Company from entering into and performing any of its obligations hereunder
          and
          under the Registration Rights Agreement (as defined below).

         

        (b)           Authorization;
          Enforcement.  The Company has the requisite corporate power and
          authority to enter into and perform this Agreement and that certain Registration
          Rights Agreement by and among the Company and the Purchasers, dated as
          of the
          date hereof, substantially in the form of Exhibit B attached hereto (the
“Registration Rights Agreement” and, together with this Agreement, the
          "Transaction Documents") and to issue and sell the Securities in
          accordance with the terms hereof.  The execution, delivery and
          performance of the Transaction Documents by the Company and the consummation
          by
          it of the transactions contemplated thereby have been duly and validly
          authorized by all necessary corporate action, and, no further consent or
          authorization of the Company, its Board of Directors or stockholders is
          required.  When executed and delivered by the Company, each of the
          Transaction Documents shall constitute a valid and binding obligation of
          the
          Company enforceable against the Company in accordance with its terms, except
          as
          such enforceability may be limited by applicable bankruptcy, reorganization,
          moratorium, liquidation, conservatorship, receivership or similar laws
          relating
          to, or affecting generally the enforcement of, creditor's rights and remedies
          or
          by other equitable principles of general application.

         

        (c)           Capitalization.  The
          authorized capital stock and capital structure of the Company is set forth
          in
          the Company’s (A) Form 10-KSB for the fiscal year ended September 30, 2006 and
          (B) Form 10-QSB for the Company’s quarter ended June 30, 2007, except for shares
          subsequently issued which do not have a Material Adverse Effect.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

        (d)           Issuance
          of Securities.  The Shares to be issued at the Closing have been
          duly authorized by all necessary corporate action and, when paid for and
          issued
          in accordance with the terms hereof, the Shares will be validly issued,
          fully
          paid and nonassessable and free and clear of all liens, encumbrances and
          rights
          of refusal of any kind (other than restrictions on transfer under applicable
          securities laws or other such restrictions imposed under the Transaction
          Documents) and the holders shall be entitled to all rights accorded to
          a holder
          of Common Stock.

         

        (e)           No
          Conflicts.  The execution, delivery and performance of the
          Transaction Documents by the Company and the consummation by the Company
          of the
          transactions contemplated hereby and thereby do not and will not (i) violate
          any
          provision of the Company's Articles of Incorporation or Bylaws, each as
          amended
          to date, or any Subsidiary's comparable charter documents, (ii) conflict
          with,
          or constitute a default (or an event which with notice or lapse of time
          or both
          would become a default) under, or give to others any rights of termination,
          amendment, acceleration or cancellation of, any agreement, mortgage, deed
          of
          trust, indenture, note, bond, license, lease agreement, instrument or obligation
          to which the Company or any of its Subsidiaries is a party or by which
          the
          Company or any of its Subsidiaries' respective properties or assets are
          bound,
          or (iii) result in a violation of any federal, state, local or foreign
          statute,
          rule, regulation, order, judgment or decree (including federal and state
          securities laws and regulations) applicable to the Company or any of its
          Subsidiaries or by which any property or asset of the Company or any of
          its
          Subsidiaries are bound or affected, except, in all cases, other than violations
          pursuant to clauses (i) or (iii) above with respect to federal and state
          securities laws, for such conflicts, defaults, terminations, amendments,
          acceleration, cancellations and violations as would not, individually or
          in the
          aggregate, have a Material Adverse Effect.  The business of the
          Company and its Subsidiaries is not being conducted in violation of any
          laws,
          ordinances or regulations of any governmental entity, except for possible
          violations, which singularly or in the aggregate do not and will not have
          a
          Material Adverse Effect.  Neither the Company nor any of its
          Subsidiaries is required under federal, state, foreign or local law, rule
          or
          regulation to obtain any consent, authorization or order of, or make any
          filing
          or registration with, any court or governmental agency in order for it
          to
          execute, deliver or perform any of its obligations under the Transaction
          Documents or issue and sell the Securities in accordance with the terms
          hereof
          (other than any filings, consents and approvals which may be required to
          be made
          by the Company under applicable state and federal securities laws, rules
          or
          regulations, or the Nasdaq Global Market, prior to or subsequent to the
          Closing,
          or any registration provisions provided in the Registration Rights
          Agreement).

         

        (f)           Commission
          Documents, Financial Statements.  The Common Stock of the Company
          is registered pursuant to Section 12(b) or 12(g) of the Securities Exchange
          Act
          of 1934, as amended (the "Exchange Act"), and during the two year period
          preceding the Closing Date, the Company has timely filed all reports, schedules,
          forms, statements and other documents required to be filed by it with the
          Securities and Exchange Commission (the “Commission”) pursuant to the
          reporting requirements of the Exchange Act (all of the foregoing including
          filings incorporated by reference therein being referred to herein as the
          "Commission Documents").  At the time of their respective
          filing, the Form 10-QSB for the fiscal quarter ended June 30, 2007 (the
          "Form
          10-QSB") and the Form 10-KSB for the fiscal year ended September 30, 2006
          (the “Form 10-KSB”) complied in all material respects with the
          requirements of the Exchange Act and the rules and regulations of the Commission
          promulgated thereunder and other federal, state and local laws, rules and
          regulations applicable to such documents, and the Form 10-QSB and Form
          10-KSB
          did not contain any untrue statement of a material fact or omit to state
          a
          material fact required to be stated therein or necessary in order to make
          the
          statements therein, in light of the circumstances under which they were
          made,
          not misleading.  As of their respective dates, the financial
          statements of the Company included in the Commission Documents complied
          as to
          form in all material respects with applicable accounting requirements and
          the
          published rules and regulations of the Commission or other applicable rules
          and
          regulations with respect thereto.  Such financial statements have been
          prepared in accordance with generally accepted accounting principles
          ("GAAP") applied on a consistent basis during the periods involved
          (except (i) as may be otherwise indicated in such financial statements
          or the
          Notes thereto or (ii) in the case of unaudited interim statements, to the
          extent
          they may not include footnotes or may be condensed or summary statements),
          and
          fairly present in all material respects the financial position of the Company
          and its Subsidiaries as of the dates thereof and the results of operations
          and
          cash flows for the periods then ended (subject, in the case of unaudited
          statements, to normal year-end audit adjustments).

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        (g)           Subsidiaries.  Schedule
          2.1(g) hereto sets forth each Subsidiary of the Company, showing the
          jurisdiction of its incorporation or organization and showing the percentage
          of
          the Company’s ownership of the outstanding stock or other interests of such
          Subsidiary.  For the purposes of this Agreement, "Subsidiary" shall
          mean any corporation or other entity of which at least a majority of the
          securities or other ownership interest having ordinary voting power (absolutely
          or contingently) for the election of directors or other persons performing
          similar functions are at the time owned directly or indirectly by the Company
          and/or any of its other Subsidiaries.  All of the outstanding shares
          of capital stock of each Subsidiary have been duly authorized and validly
          issued, and are fully paid and nonassessable.

         

        (h)           No
          Material Adverse Change.  Since June 30, 2007, the Company has not
          experienced or suffered any Material Adverse Effect.

         

        (i)           No
          Undisclosed Liabilities.  Since June 30, 2007, neither the Company
          nor any of its Subsidiaries has incurred any liabilities, obligations,
          claims or
          losses (whether liquidated or unliquidated, secured or unsecured, absolute,
          accrued, contingent or otherwise) other than those incurred in the ordinary
          course of the Company's or its Subsidiaries respective businesses and which,
          individually or in the aggregate, are not reasonably likely to have a Material
          Adverse Effect.

         

        (j)           No
          Undisclosed Events or Circumstances.  Since June 30, 2007, except
          as disclosed on Schedule 2.1(j) hereto, no event or circumstance has
          occurred or exists with respect to the Company or its Subsidiaries or their
          respective businesses, properties, prospects, operations or financial condition,
          which, under applicable law, rule or regulation, requires public disclosure
          or
          announcement by the Company but which has not been so publicly announced
          or
          disclosed.

         

        (k)           Indebtedness.  The
          Commission Documents or Schedule 2.1(k) hereto sets forth as of the date
          hereof all outstanding secured and unsecured Indebtedness of the Company
          or any
          Subsidiary, or for which the Company or any Subsidiary has
          commitments.  For the purposes of this Agreement,
“Indebtedness” shall mean (a) any liabilities for borrowed money or
          amounts owed in excess of $300,000 (other than trade accounts payable incurred
          in the ordinary course of business), (b) all guaranties, endorsements and
          other
          contingent obligations in respect of Indebtedness of others in excess of
          $100,000, whether or not the same are or should be reflected in the Company’s
          balance sheet (or the notes thereto), except guaranties by endorsement
          of
          negotiable instruments for deposit or collection or similar transactions
          in the
          ordinary course of business; and (c) the present value of any lease payments
          in
          excess of $25,000 due under leases required to be capitalized in accordance
          with
          GAAP.  Neither the Company nor any Subsidiary is in default with
          respect to any Indebtedness.

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        (l)           Title
          to Assets.  Each of the Company and the Subsidiaries has good and
          marketable title to all of its real and personal property reflected in
          the
          Commission Documents, free and clear of any mortgages, pledges, charges,
          liens,
          security interests or other encumbrances, except as reflected in the Commission
          Documents or such that, individually or in the aggregate, do not cause
          a
          Material Adverse Effect.  All said leases of the Company and each of
          its Subsidiaries are valid and subsisting and in full force and
          effect.

         

        (m)           Actions
          Pending.  There is no action, suit, claim, investigation,
          arbitration, alternate dispute resolution proceeding or other proceeding
          pending
          or, to the knowledge of the Company, threatened against the Company or
          any
          Subsidiary which questions the validity of this Agreement or any of the
          other
          Transaction Documents or any of the transactions contemplated hereby or
          thereby
          or any action taken or to be taken pursuant hereto or thereto.  Except
          as set forth in the Commission Documents, there is no action, suit, claim,
          investigation, arbitration, alternate dispute resolution proceeding or
          other
          proceeding pending or, to the knowledge of the Company, threatened, against
          or
          involving the Company, any Subsidiary or any of their respective properties
          or
          assets, which individually or in the aggregate, could reasonably be expected
          to
          have a Material Adverse Effect.  Except as described in the Commission
          Documents, there are no outstanding orders, judgments, injunctions, awards
          or
          decrees of any court, arbitrator or governmental or regulatory body against
          the
          Company or any Subsidiary or any officers or directors of the Company or
          Subsidiary in their capacities as such, which individually or in the aggregate,
          could reasonably be expected to have a Material Adverse Effect.

         

        (n)           Compliance
          with Law.  The business of the Company and the Subsidiaries has
          been and is presently being conducted in accordance with all applicable
          federal,
          state and local governmental laws, rules, regulations and ordinances, except
          as
          set forth in the Commission  Documents or such that, individually or
          in the aggregate, the noncompliance therewith could not reasonably be expected
          to have a Material Adverse Effect.  The Company and each of its
          Subsidiaries have all franchises, permits, licenses, consents and other
          governmental or regulatory authorizations and approvals necessary for the
          conduct of its business as now being conducted by it unless the failure
          to
          possess such franchises, permits, licenses, consents and other governmental
          or
          regulatory authorizations and approvals, individually or in the aggregate,
          could
          not reasonably be expected to have a Material Adverse Effect.

         

        (o)           Taxes.  Except
          as set forth on Schedule 2.1(o) hereto, the Company and each of the
          Subsidiaries has accurately prepared and filed all federal, state and other
          tax
          returns required by law to be filed by it, has paid or made provisions
          for the
          payment of all taxes shown to be due and all additional assessments, and
          adequate provisions have been and are reflected in the financial statements
          of
          the Company and the Subsidiaries for all current taxes and other charges
          to
          which the Company or any Subsidiary is subject and which are not currently
          due
          and payable.  Except as disclosed on Schedule 2.1(o) hereto,
          none of the federal income tax returns of the Company or any Subsidiary
          have
          been audited by the Internal Revenue Service.  The Company has no
          knowledge of any additional assessments, adjustments or contingent tax
          liability
          (whether federal or state) of any nature whatsoever, whether pending or
          threatened against the Company or any Subsidiary for any period, nor of
          any
          basis for any such assessment, adjustment or contingency.

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

        (p)           Certain
          Fees.  The Company shall be responsible for the payment of all
          broker or finders’ fees incurred or any liability for any brokerage or
          investment banking fees, commissions, finders' structuring fees, financial
          advisory fees or other similar fees in connection with the Transaction
          Documents.

         

        (q)           Disclosure.  To
          the best of the Company's knowledge, neither this Agreement or the Schedules
          hereto nor any other documents, certificates or instruments furnished to
          the
          Purchasers by or on behalf of the Company or any Subsidiary in connection
          with
          the transactions contemplated by this Agreement contain any untrue statement
          of
          a material fact or omit to state a material fact necessary in order to
          make the
          statements made herein or therein, in the light of the circumstances under
          which
          they were made herein or therein, not misleading.

         

        (r)           Operation
          of Business.  The Company and each of the Subsidiaries owns or
          possesses sufficient legal rights to use all trademarks, domain names (whether
          or not registered), websites and intellectual property rights relating
          thereto,
          service marks, trade names, copyrights, licenses and authorizations currently
          used in the Company’s operation of its business, without any known infringement
          of the rights of others.

         

        (s)           Environmental
          Compliance.  The Company and each of its Subsidiaries have
          obtained all material approvals, authorization, certificates, consents,
          licenses, orders and permits or other similar authorizations of all governmental
          authorities, or from any other person, that are required under
          any  Environmental Laws.  "Environmental Laws" shall mean
          all applicable laws relating to the protection of the environment including,
          without limitation, all requirements pertaining to reporting, licensing,
          permitting, controlling, investigating or remediating emissions, discharges,
          releases or threatened releases of hazardous substances, chemical substances,
          pollutants, contaminants or toxic substances, materials or wastes, whether
          solid, liquid or gaseous in nature, into the air, surface water, groundwater
          or
          land, or relating to the manufacture, processing, distribution, use, treatment,
          storage, disposal, transport or handling of hazardous substances, chemical
          substances, pollutants, contaminants or toxic substances, material or wastes,
          whether solid, liquid or gaseous in nature.  The Company has all
          necessary governmental approvals required under all Environmental Laws
          and used
          in its business or in the business of any of its Subsidiaries, except for
          such
          instances as would not individually or in the aggregate have a Material
          Adverse
          Effect.  The Company and each of its Subsidiaries are also in
          compliance with all other limitations, restrictions, conditions, standards,
          requirements, schedules and timetables required or imposed under all
          Environmental Laws.  Except for such instances as would not
          individually or in the aggregate have a Material Adverse Effect, there
          are no
          past or present events, conditions, circumstances, incidents, actions or
          omissions relating to or in any way affecting the Company or its Subsidiaries
          that violate or would be reasonably likely to violate any Environmental
          Law
          after the Closing or that would be reasonably likely to give rise to any
          environmental liability, or otherwise form the basis of any claim, action,
          demand, suit, proceeding, hearing, study or investigation (i) under any
          Environmental Law, or (ii) based on or related to the manufacture, processing,
          distribution, use, treatment, storage (including, without limitation,
          underground storage tanks), disposal, transport or handling, or the emission,
          discharge, release or threatened release of any hazardous
          substance.  "Environmental Liabilities" means all liabilities of a
          person (whether such liabilities are owed by such person to governmental
          authorities, third parties or otherwise) whether currently in existence
          or
          arising hereafter which arise under or relate to any Environmental
          Law.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

        (t)           Books
          and Records; Internal Accounting Controls.  The records and
          documents of the Company and its Subsidiaries accurately reflect in all
          material
          respects the information relating to the business of the Company and the
          Subsidiaries, the location and collection of their assets, and the nature
          of all
          transactions giving rise to the obligations or accounts receivable of the
          Company or any Subsidiary.  The Company and each of its Subsidiaries
          maintain a system of internal accounting controls sufficient, in the judgment
          of
          the Company's board of directors, to provide reasonable assurance that
          (i)
          transactions are executed in accordance with management's general or specific
          authorizations, (ii) transactions are recorded as necessary to permit
          preparation of financial statements in conformity with generally accepted
          accounting principles and to maintain asset accountability, (iii) access
          to
          assets is permitted only in accordance with management's general or specific
          authorization and (iv) the recorded accountability for assets is compared
          with
          the existing assets at reasonable intervals and appropriate actions are
          taken
          with respect to any differences.

         

        (u)           Transactions
          with Affiliates.  Except as set forth in the Commission Documents
          (or the definitive proxy statement described below), to the Company’s knowledge,
          there are no loans, leases, agreements, contracts, royalty agreements,
          management contracts or arrangements or other continuing transactions between
          (a) the Company, any Subsidiary or any of their respective customers or
          suppliers on the one hand, and (b) on the other hand, any officer, employee,
          consultant or director of the Company, or any of its Subsidiaries, or any
          person
          owning any capital stock of the Company or any Subsidiary or any member
          of the
          immediate family of such officer, employee, consultant, director or stockholder
          or any corporation or other entity controlled by such officer, employee,
          consultant, director or stockholder, or a member of the immediate family
          of such
          officer, employee, consultant, director or stockholder which, in each case,
          is
          required to be disclosed in the Commission Documents or in the Company’s most
          recently filed definitive proxy statement on Schedule 14A, that is not
          so
          disclosed in the Commission Documents or in such proxy statement.

         

        (v)           Securities
          Act of 1933.  Based in material part upon the representations
          herein of the Purchasers, the Company has complied and will comply with
          all
          applicable federal and state securities laws in connection with the offer,
          issuance and sale of the Securities hereunder.  Neither the Company
          nor anyone acting on its behalf, directly or indirectly, has or will sell,
          offer
          to sell or solicit offers to buy any of the Securities or similar securities
          to,
          or solicit offers with respect thereto from, or enter into any negotiations
          relating thereto with, any person, or has taken or will take any action
          so as to
          bring the issuance and sale of any of the Securities under the registration
          provisions of the Securities Act and applicable state securities laws,
          and
          neither the Company nor any of its affiliates, nor any person acting on
          its or
          their behalf, has engaged in any form of general solicitation or general
          advertising (within the meaning of Regulation D under the Securities Act)
          in
          connection with the offer or sale of any of the Securities.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

           

        

        (w)           Governmental
          Approvals.  Except for the filing of any notice prior or
          subsequent to the Closing that may be required under applicable state and/or
          federal securities laws or the Nasdaq Global Market, no authorization,
          consent,
          approval, license, exemption of, filing or registration with any court
          or
          governmental department, commission, board, bureau, agency or instrumentality,
          domestic or foreign, is or will be necessary for, or in connection with,
          the
          execution or delivery of the Securities, or for the performance by the
          Company
          of its obligations under the Transaction Documents.

        


        (x)           Employees.  Neither
          the Company nor any Subsidiary has any collective bargaining arrangements
          covering any of its employees.

         

        (y)           Absence
          of Certain Developments.  Since the filing of its Form 10-QSB for
          the quarter ended June 30, 2007, the Company has not experienced or suffered
          any
          Material Adverse Effect.

        


        (z)           Public
          Utility Holding Company Act and Investment Company Act
          Status.  The Company is not a “holding company” or a “public
          utility company” as such terms are defined in the Public Utility Holding Company
          Act of 1935, as amended.  The Company is not, and as a result of and
          immediately upon the Closing will not be, an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment
          Company Act of 1940, as amended.

        


        (aa)           ERISA.  No
          liability to the Pension Benefit Guaranty Corporation has been incurred
          with
          respect to any Plan by the Company or any of its Subsidiaries which is
          or would
          be materially adverse to the Company and its Subsidiaries.  The
          execution and delivery of this Agreement and the issuance and sale of the
          Shares
          and the Warrants will not involve any transaction which is subject to the
          prohibitions of Section 406 of ERISA or in connection with which a tax
          could be
          imposed pursuant to Section 4975 of the Internal Revenue Code of 1986,
          as
          amended, provided that, if any of the Purchasers, or any person or entity
          that
          owns a beneficial interest in any of the Purchasers, is an “employee pension
          benefit plan” (within the meaning of Section 3(2) of ERISA) with respect to
          which the Company is a “party in interest” (within the meaning of Section 3(14)
          of ERISA), the requirements of Sections 407(d)(5) and 408(e) of ERISA,
          if
          applicable, are met.  As used in this Section 2.1(bb), the term “Plan”
shall mean an “employee pension benefit plan” (as defined in Section 3 of ERISA)
          which is or has been established or maintained, or to which contributions
          are or
          have been made, by the Company or any Subsidiary or by any trade or business,
          whether or not incorporated, which, together with the Company or any Subsidiary,
          is under common control, as described in Section 414(b) or (c) of the
          Code.

         

        (bb)           Delisting
          Notification.  The Company has not received notice (written or
          oral) from the Nasdaq Global Market to the effect that the Company is not
          in
          compliance with the listing or maintenance requirements of such
          market.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

           

        

        (cc)           Independent
          Nature of Purchasers.  The Company acknowledges that the
          obligations of each Purchaser under the Transaction Documents are several
          and
          not joint with the obligations of any other Purchaser, and no Purchaser
          shall be
          responsible in any way for the performance of the obligations of any other
          Purchaser under the Transaction Documents.  The Company acknowledges
          that all Purchasers have been provided with the same terms and Transaction
          Documents.

         

        (dd)           No
          Integrated Offering.  To the knowledge of the Company, neither the
          Company, nor any of its affiliates, nor any person acting on its or their
          behalf, has directly or indirectly made any offers or sales of any security
          or
          solicited any offers to buy any security under circumstances that would
          cause
          the offering of the Securities pursuant to this Agreement to be integrated
          with
          prior offerings by the Company for purposes of the Securities Act which
          would
          prevent the Company from selling the Securities pursuant to Regulation
          D and
          Rule 506 thereof under the Securities Act, or any applicable exchange-related
          stockholder approval provisions, nor will the Company or any of its affiliates
          or subsidiaries take any action or steps that would cause the offering
          of the
          Securities to be integrated with other offerings.  The Company does
          not have any registration statement pending before the Commission or currently
          under the Commission’s review.

         

        (ee)           Sarbanes-Oxley
          Act.  The Company is in substantial compliance with the applicable
          provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the
          rules and regulations promulgated thereunder, that are effective and for
          which
          compliance by the Company is required as of the date hereof.

         

        Section
          2.2           Representations
          and Warranties of the Purchasers.  Each of the Purchasers hereby
          represents and warrants to the Company with respect solely to itself and
          not
          with respect to any other Purchaser as follows as of the date hereof and
          as of
          the Closing Date:

         

        (a)           Organization
          and Standing of the Purchasers.  If the Purchaser is an entity,
          such Purchaser is a corporation, limited liability company or partnership
          duly
          incorporated or organized, validly existing and in good standing under
          the laws
          of the jurisdiction of its incorporation or organization.

         

        (b)           Authorization
          and Power.  Each Purchaser has the requisite power and authority
          to enter into and perform the Transaction Documents and to purchase the
          Securities being sold to it hereunder.  The execution, delivery and
          performance of the Transaction Documents by each Purchaser and the consummation
          by it of the transactions contemplated hereby have been duly authorized
          by all
          necessary corporate or partnership action, and no further consent or
          authorization of such Purchaser or its Board of Directors, stockholders,
          or
          partners, as the case may be, is required.  When executed and
          delivered by the Purchasers, the other Transaction Documents shall constitute
          valid and binding obligations of each Purchaser enforceable against such
          Purchaser in accordance with their terms, except as such enforceability
          may be
          limited by applicable bankruptcy, insolvency, reorganization, moratorium,
          liquidation, conservatorship, receivership or similar laws relating to,
          or
          affecting generally the enforcement of, creditor's rights and remedies
          or by
          other equitable principles of general application.

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

           

        

        (c)           No
          Conflict.  The execution, delivery and performance of the
          Transaction Documents by the Purchaser and the consummation by the Purchaser
          of
          the transactions contemplated thereby and hereby do not and will not (i)
          violate
          any provision of the Purchaser’s charter or organizational documents, (ii)
          conflict with, or constitute a default (or an event which with notice or
          lapse
          of time or both would become a default) under, or give to others any rights
          of
          termination, amendment, acceleration or cancellation of, any agreement,
          mortgage, deed of trust, indenture, note, bond, license, lease agreement,
          instrument or obligation to which the Purchaser is a party or by which
          the
          Purchaser’s respective properties or assets are bound, or (iii) result in a
          violation of any federal, state, local or foreign statute, rule, regulation,
          order, judgment or decree (including federal and state securities laws
          and
          regulations) applicable to the Purchaser or by which any property or asset
          of
          the Purchaser are bound or affected, except, in all cases, other than violations
          pursuant to clauses (i) or (iii) above with respect to federal and state
          securities laws, for such conflicts, defaults, terminations, amendments,
          acceleration, cancellations and violations as would not, individually or
          in the
          aggregate, materially and adversely affect the Purchaser’s ability to perform
          its obligations under the Transaction Documents.

         

        (d)           Acquisition
          for Investment.  Each Purchaser is purchasing the Shares solely
          for its own account for the purpose of investment and not with a view to
          or for
          sale in connection with distribution.  Each Purchaser does not have a
          present intention to sell any of the Shares, nor a present arrangement
          (whether
          or not legally binding) or intention to effect any distribution of any
          of the
          Shares to or through any person or entity; provided, however, that
          by making the representations herein, such Purchaser does not agree to
          hold the
          Shares for any minimum or other specific term and reserves the right to
          dispose
          of the Shares at any time in accordance with Federal and state securities
          laws
          applicable to such disposition.  Each Purchaser acknowledges that it
          (i) has such knowledge and experience in financial and business matters
          such
          that Purchaser is capable of evaluating the merits and risks of Purchaser's
          investment in the Company, (ii) is able to bear the financial risks associated
          with an investment in the Securities and (iii) has been given full access
          to
          such records of the Company and the Subsidiaries and to the officers of
          the
          Company and the Subsidiaries as it has deemed necessary or appropriate
          to
          conduct its due diligence investigation.

         

        (e)           Rule
          144.  Each Purchaser understands that the Securities must be held
          indefinitely unless such Shares are registered under the Securities Act
          or an
          exemption from registration is available.  Each Purchaser acknowledges
          that such person is familiar with Rule 144 of the rules and regulations
          of the
          Commission, as amended, promulgated pursuant to the Securities Act ("Rule
          144"), and that such Purchaser has been advised that Rule 144 permits
          resales only under certain circumstances.  Each Purchaser understands
          that to the extent that Rule 144 is not available, such Purchaser will
          be unable
          to sell any Securities without either registration under the Securities
          Act or
          the existence of another exemption from such registration
          requirement.

         

        (f)           General.  Each
          Purchaser understands that the Securities are being offered and sold in
          reliance
          on a transactional exemption from the registration requirements of federal
          and
          state securities laws and the Company is relying upon the truth and accuracy
          of
          the representations, warranties, agreements, acknowledgments and understandings
          of such Purchaser set forth herein in order to determine the applicability
          of
          such exemptions and the suitability of such Purchaser to acquire the
          Securities.  Each Purchaser understands that no United States federal
          or state agency or any government or governmental agency has passed upon
          or made
          any recommendation or endorsement of the Securities.

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

           

        

        (g)           No
          General Solicitation.  Each Purchaser acknowledges that the
          Securities were not offered to such Purchaser by means of any form of general
          or
          public solicitation or general advertising, or publicly disseminated
          advertisements or sales literature, including (i) any advertisement, article,
          notice or other communication published in any newspaper, magazine, or
          similar
          media, or broadcast over television or radio, or (ii) any seminar or meeting
          to
          which such Purchaser was invited by any of the foregoing means of
          communications.  Each Purchaser, in making the decision to purchase
          the Securities, has relied upon independent investigation made by it and
          the
          representations, warranties and agreements set forth in the Transaction
          Documents and has not relied on any information or representations made
          by third
          parties.

         

        (h)           Accredited
          Investor.  Each Purchaser is an “accredited investor” (as defined
          in Rule 501 of Regulation D), and such Purchaser has such experience in
          business
          and financial matters that it is capable of evaluating the merits and risks
          of
          an investment in the Securities.  Such Purchaser is not required to be
          registered as a broker-dealer under Section 15 of the Exchange Act and
          such
          Purchaser is not a broker-dealer.  Each Purchaser acknowledges that an
          investment in the Securities is speculative and involves a high degree
          of
          risk.  Each Purchaser has completed or caused to be completed the
          Investor Questionnaire Certification attached hereto as Exhibit C
          certifying as to its status as an “accredited investor” and understands that the
          Company is relying upon the truth and accuracy of the Purchaser set forth
          therein to determine the suitability of such Purchaser to acquire the
          Securities.

         

        (i)           Certain
          Fees.  The Purchasers have not employed any broker or finder or
          incurred any liability for any brokerage or investment banking fees,
          commissions, finders' structuring fees, financial advisory fees or other
          similar
          fees in connection with the Transaction Documents.

         

        (j)           Independent
          Investment.  No Purchaser has agreed to act with any other
          Purchaser for the purpose of acquiring, holding, voting or disposing of
          the
          Securities purchased hereunder for purposes of Section 13(d) under the
          Exchange
          Act, and each Purchaser is acting independently with respect to its investment
          in the Securities.  The decision of each Purchaser to purchase
          Securities pursuant to this Agreement has been made by such Purchaser
          independently of any other purchase and independently of any information,
          materials, statements or opinions as to the business, affairs, operations,
          assets, properties, liabilities, results of operations, condition (financial
          or
          otherwise) or prospects of the Company or of its Subsidiaries which may
          have
          been made or given by any other Purchaser or by any agent or employee of
          any
          other Purchaser, and no Purchaser or any of its agents or employees shall
          have
          any liability to any Purchaser (or any other person) relating to or arising
          from
          any such information, materials, statements or opinions.  Each
          Purchaser shall be entitled to independently protect and enforce its rights,
          including without limitation, the rights arising out of this Agreement
          or the
          Transaction Documents, and it shall not be necessary for any other Purchaser
          to
          be joined as an additional party in any proceeding for such
          purpose.  Nothing contained herein, or in any Transaction Document,
          and no action taken by any Purchaser pursuant hereto or thereto, shall
          be deemed
          to constitute the Purchasers as a partnership, an association, a joint
          venture
          or any other kind of entity, or create a presumption that the Purchasers
          are in
          any way acting in concert or as a group with respect to such obligations
          or the
          transactions contemplated by the Transaction Documents.

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        (k)          Patriot
          Act.  If the Purchaser is an individual, the Purchaser certifies
          that he or she is not nor to his or her knowledge has been designated,
          a
“suspected terrorist” as defined in Executive Order 13224.  If the
          Purchaser is a corporation, trust, partnership, limited liability company
          or
          other organization, the Purchaser certifies that, to the best of Purchaser’s
          knowledge, the Purchaser has not been designated, and is not owned or
          controlled, by a “suspected terrorist” as defined in Executive Order
          13224.  The Purchaser hereby acknowledges that the Company seeks to
          comply with all applicable laws concerning money laundering and related
          activities.  In furtherance of those efforts, the Purchaser hereby
          represents, warrants and agrees that to its knowledge: (i) none of the
          cash or
          property that the Purchaser will pay or will contribute to the Company
          has been
          or shall be derived from, or related to, any activity that is deemed criminal
          under United States law; and (ii) no contribution or payment by the Purchaser
          to
          the Company, to the extent that they are within the Purchaser’s control shall
          cause the Company to be in violation of the United States Bank Secrecy
          Act, the
          United States International Money Laundering Control Act of 1986 or the
          United
          States International Money Laundering Abatement and Anti-Terrorist Financing
          Act
          of 2001.  The Purchaser shall promptly notify the Company if any of
          these representations ceases to be true and accurate regarding the
          Purchaser.  The Purchaser agrees to provide the Company any additional
          information regarding the Purchaser that the Company deems necessary or
          convenient to ensure compliance with all applicable laws concerning money
          laundering and similar activities.  The Purchaser understands and
          agrees that if at any time it is discovered that any of the foregoing
          representations are incorrect, or if otherwise required by applicable law
          or
          regulation related to money laundering similar activities, the Company
          may
          undertake appropriate actions to ensure compliance with applicable law
          or
          regulation, including but not limited to segregation and/or redemption
          of the
          Purchaser’s investment in the Company.  In the event that the Company
          is requested or required (by deposition, interrogatory, request for documents,
          subpoena, civil investigative demand or similar legal, judiciary or regulatory
          process or as otherwise required by applicable law or regulation) to disclose
          any confidential information about a Purchaser, the Company shall (A) provide
          the Purchaser with prompt prior written notice of such request or requirement
          and (B) cooperate with the Purchaser so that the Purchaser may seek a protective
          order or other appropriate remedy.  In the event that such protective
          order or other remedy is not obtained, the Company and their respective
          representatives shall disclose only that portion of the confidential information
          that such person is advised by legal counsel in writing is legally required
          to
          be disclosed, and provided that the Company uses reasonable efforts to
          obtain reliable assurance that confidential treatment will be accorded
          any
          confidential information so disclosed.

         

        (l)           Trading
          Activities.  Each Purchaser’s trading activities with respect to
          the Shares shall be in compliance with all applicable federal and state
          securities laws.  No Purchaser or any of its affiliates has an open
          short position in the Common Stock, each Purchaser agrees that it shall
          not, and
          that it will cause its affiliates not to, engage in any short sales with
          respect
          to the Common  Stock.

        


        (m)         Legend.  Each
          Purchaser acknowledges and understands that the Shares are “restricted
          securities” (as such term is defined in the Securities Act), and, as such, the
          certificates evidencing the Shares will bear the legend as reflected in
          Section
          5.1 herein.

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        ARTICLE
          III

         

        Covenants

         

        The
          Company covenants with each Purchaser as follows, which covenants are for
          the
          benefit of each Purchaser and their respective permitted assignees.

         

        Section
          3.1           Securities
          Compliance.  The Company shall file a Form 8-K with the Commission
          in accordance with its rules and regulations regarding the transactions
          contemplated by the Transaction Documents.

         

        Section
          3.2           Registration
          and Listing.  The Company shall use its reasonable best efforts to
          cause its Common Stock to continue to be registered under Sections 12(b)
          or
          12(g) of the Exchange Act, to comply in all respects with its reporting
          and
          filing obligations under the Exchange Act, to comply with all requirements
          related to any registration statement filed pursuant to the Registration
          Rights
          Agreement, and to not take any action or file any document (whether or
          not
          permitted by the Securities Act or the rules promulgated thereunder) to
          terminate or suspend such registration or to terminate or suspend its reporting
          and filing obligations under the Exchange Act or Securities Act, except
          as
          permitted herein or as contemplated under the Registration Rights
          Agreement.  The Company shall use its reasonable best efforts to
          continue the listing or trading of its Common Stock on the Nasdaq Global
          Market
          or any successor market.  If required, the Company will promptly file
          the "Listing Application" for, or in connection with, the issuance and
          delivery
          of the Shares.

         

        Section
          3.3           Compliance
          with Laws.  The Company shall use its best efforts to comply, and
          cause each Subsidiary to comply, with all applicable laws, rules, regulations
          and orders, noncompliance with which would be reasonably likely to have
          a
          Material Adverse Effect.

         

        Section
          3.4           Keeping
          of Records and Books of Account.  The Company shall keep adequate
          records and books of account, in which complete entries will be made in
          accordance with GAAP consistently applied, reflecting all financial transactions
          of the Company and its Subsidiaries on a consolidated basis, and in which,
          for
          each fiscal year, all proper reserves for depreciation, depletion, obsolescence,
          amortization, taxes, bad debts and other purposes in connection with its
          business shall be made.

         

        Section
          3.5           Reporting
          Requirements.  If the Commission shall cease making the Company’s
          periodic reports available via the Internet without charge, then the Company
          shall furnish the following to each Purchaser so long as such Purchaser
          shall be
          obligated hereunder to purchase the Securities or shall beneficially own
          Shares:

         

        (a)           Quarterly
          Reports filed with the Commission on Form 10-QSB as soon as available,
          and in
          any event within forty-five (45) days after the end of each of the first
          three
          fiscal quarters of the Company;

         

        (b)           Annual
          Reports filed with the Commission on Form 10-KSB as soon as available,
          and in
          any event within ninety (90) days after the end of each fiscal year of
          the
          Company; and

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        (c)           Copies
          of all notices, information and proxy statements in connection with any
          meetings, that are, in each case, provided to holders of shares of Common
          Stock,
          contemporaneously with the delivery of such notices or information to such
          holders of Common Stock.

         

        Section
          3.6           Other
          Agreements.  The Company shall not enter into any agreement in
          which the terms of such agreement would restrict or impair the right or
          ability
          of the Company to perform its obligations under any Transaction
          Document.

         

        Section
          3.7           Use of
          Proceeds.  The proceeds from the sale of the Shares will be used
          by the Company for (i) acquisitions and (ii) working capital and general
          corporate purposes.

         

        Section
          3.8           Disclosure
          of Material Information.  The Company covenants and agrees that
          neither it nor any other person acting on its behalf has provided or will
          provide any Purchaser or its agents or counsel with any information that
          the
          Company believes constitutes material non-public information, unless prior
          thereto such Purchaser shall have executed a written agreement regarding
          the
          confidentiality and use of such information.  The Company understands and
          confirms that each Purchaser shall be relying on the foregoing representations
          in effecting transactions in securities of the Company.

         

        ARTICLE
          IV

         

        Conditions

         

        Section
          4.1           Conditions
          Precedent to the Obligation of the Company to Close and to Sell the
          Securities.  The obligation hereunder of the Company to close and
          issue and sell the Securities to the Purchasers on the Closing Date is
          subject
          to the satisfaction or waiver, at or before the Closing of the conditions
          set
          forth below.  These conditions are for the Company's sole benefit and
          may be waived by the Company at any time in its sole discretion.

         

        (a)           Accuracy
          of the Purchasers’ Representations and Warranties.  The
          representations and warranties of each Purchaser shall be true and correct
          in
          all material respects as of the date when made and as of the Closing Date
          as
          though made at that time, except for representations and warranties that
          are
          expressly made as of a particular date, which shall be true and correct
          in all
          material respects as of such date.

         

        (b)           Performance
          by the Purchasers.  Each Purchaser shall have performed, satisfied
          and complied in all material respects with all covenants, agreements and
          conditions required by this Agreement to be performed, satisfied or complied
          with by the Purchasers at or prior to the Closing Date.

         

        (c)           No
          Injunction.  No statute, rule, regulation, executive order,
          decree, ruling or injunction shall have been enacted, entered, promulgated
          or
          endorsed by any court or governmental authority of competent jurisdiction
          which
          prohibits the consummation of any of the transactions contemplated by this
          Agreement.

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

        (d)           Delivery
          of Purchase Price.  The Purchase Price for the Shares shall have
          been delivered to the Company on the Closing Date.

         

        (e)           Delivery
          of Transaction Documents.  The Transaction Documents shall have
          been duly executed and delivered by the Purchasers to the Company.

         

        Section
          4.2          Conditions
          Precedent to the Obligation of the Purchasers to Close and to Purchase
          the
          Securities.  The obligation hereunder of the Purchasers to
          purchase the Securities and consummate the transactions contemplated by
          this
          Agreement is subject to the satisfaction or waiver, at or before the Closing
          Date, of each of the conditions set forth below.  These conditions are
          for the Purchasers’ sole benefit and may be waived by the Purchasers at any time
          in their sole discretion.

         

        (a)           Accuracy
          of the Company's Representations and Warranties.  Each of the
          representations and warranties of the Company in this Agreement and the
          Registration Rights Agreement shall be true and correct in all material
          respects
          as of the Closing Date, except for representations and warranties that
          speak as
          of a particular date, which shall be true and correct in all material respects
          as of such date.

         

        (b)           Performance
          by the Company.  The Company shall have performed, satisfied and
          complied in all material respects with all covenants, agreements and conditions
          required by this Agreement to be performed, satisfied or complied with
          by the
          Company at or prior to the Closing Date.

         

        (c)           No
          Suspension, Etc.  Trading in the Common Stock shall not have been
          suspended by the Commission or the Nasdaq Global Market (except for any
          suspension of trading of limited duration agreed to by the Company, which
          suspension shall be terminated prior to the Closing).

         

        (d)           No
          Injunction.  No statute, rule, regulation, executive order,
          decree, ruling or injunction shall have been enacted, entered, promulgated
          or
          endorsed by any court or governmental authority of competent jurisdiction
          which
          prohibits the consummation of any of the transactions contemplated by this
          Agreement.

         

        (e)           Shares.  At
          or prior to the Closing, the Company shall have delivered to the Purchasers
          certificates representing the Shares (in such denominations as each Purchaser
          may request) being acquired by the Purchasers at the Closing or shall issue
          an
          irrevocable letter of instruction to its transfer agent to issue the
          Shares.

         

        (f)           Officer's
          Certificate.  On the Closing Date, the Company shall have
          delivered to the Purchasers a certificate signed by an executive officer
          on
          behalf of the Company, dated as of the Closing Date, confirming the accuracy
          of
          the Company's representations, warranties and covenants as of the Closing
          Date.

         

        (g)           Registration
          Rights Agreement.  As of the Closing Date, the Company shall have
          duly executed and delivered the Registration Rights Agreement in the form
          of
Exhibit B attached hereto.

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

        (h)           Material
          Adverse Effect.  No Material Adverse Effect shall have occurred at
          or before the Closing Date.

         

        (i)           Minimum
          Purchase.  The Purchasers shall have purchased in the aggregate
          1,165,000 Shares.

         

        ARTICLE
          V

         

        Certificate
          Legend

         

        Section
          5.1           Legend.  Each
          certificate representing the Securities shall be stamped or otherwise imprinted
          with a legend substantially in the following form (in addition to any legend
          required by applicable state securities or "blue sky" laws):

         

        THE
          SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE NOT
          BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
          ACT")
          OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
          DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
          STATE SECURITIES LAWS OR RICK’S CABARET INTERNATIONAL, INC. SHALL HAVE RECEIVED
          AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
          SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
          LAWS IS
          NOT REQUIRED.

         

        The
          Company agrees to enter into
          customary agreements and take such other actions as requested by the Purchasers
          in order to expedite or facilitate the disposition or resale of the Shares,
          including providing its transfer agent with a legal opinion within three
          (3)
          business days subsequent to the effectiveness of the Registration Statement
          to
          be filed pursuant to the Registration Rights Agreement (of which the Purchasers
          will be selling shareholders) which shall provide that at any time while
          the
          Registration Statement remains effective, the Shares, upon their resale
          by the
          Purchasers, may be issued without restrictive legend.

         

        ARTICLE
          VI

         

        Indemnification

         

        Section
          6.1           General
          Indemnity.  The Company agrees to indemnify and hold harmless each
          Purchaser (and its respective directors, officers, affiliates, agents,
          successors and assigns) from and against any and all losses, liabilities,
          deficiencies, costs, damages and expenses (including, without limitation,
          reasonable attorneys' fees, charges and disbursements) (“Losses”)
          incurred by each Purchaser as a result of any inaccuracy in or breach of
          the
          representations, warranties or covenants made by the Company
          herein.  The Purchasers severally but not jointly agree to indemnify
          and hold harmless the Company and its directors, officers, affiliates,
          agents,
          successors and assigns from and against any and all Losses incurred by
          the
          Company as result of any inaccuracy in or breach of the representations,
          warranties or covenants made by the Purchasers herein.  The maximum
          liability of each Purchaser pursuant to its indemnification obligations
          under
          this Article VI shall not exceed the portion of the Purchase Price paid
          by such
          Purchaser hereunder.

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

        Section
          6.2          Indemnification
          Procedure.  Any party entitled to indemnification under this
          Article VI (an "indemnified party") will give written notice to the indemnifying
          party of any matters giving rise to a claim for indemnification; provided,
          that
          the failure of any party entitled to indemnification hereunder to give
          notice as
          provided herein shall not relieve the indemnifying party of its obligations
          under this Article VI except to the extent that the indemnifying party
          is
          actually prejudiced by such failure to give notice.  In case any such
          action, proceeding or claim is brought against an indemnified party in
          respect
          of which indemnification is sought hereunder, the indemnifying party shall
          be
          entitled to participate in and, unless in the reasonable judgment of the
          indemnifying party a conflict of interest between it and the indemnified
          party
          exists with respect to such action, proceeding or claim (in which case
          the
          indemnifying party shall be responsible for the reasonable fees and expenses
          of
          one separate counsel for the indemnified parties), to assume the defense
          thereof
          with counsel reasonably satisfactory to the indemnified party.  In the
          event that the indemnifying party advises an indemnified party that it
          will not
          contest such a claim for indemnification hereunder, or fails, within thirty
          (30)
          days of receipt of any indemnification notice to notify, in writing, such
          person
          of its election to defend, settle or compromise, at its sole cost and expense,
          any action, proceeding or claim (or discontinues its defense at any time
          after
          it commences such defense), then the indemnified party may, at its option,
          defend, settle or otherwise compromise or pay such action or
          claim.  In any event, unless and until the indemnifying party elects
          in writing to assume and does so assume the defense of any such claim,
          proceeding or action, the indemnified party's costs and expenses arising
          out of
          the defense, settlement or compromise of any such action, claim or proceeding
          shall be losses subject to indemnification hereunder.  The indemnified
          party shall cooperate fully with the indemnifying party in connection with
          any
          negotiation or defense of any such action or claim by the indemnifying
          party and
          shall furnish to the indemnifying party all information reasonably available
          to
          the indemnified party which relates to such action or claim.  The
          indemnifying party shall keep the indemnified party fully apprised at all
          times
          as to the status of the defense or any settlement negotiations with respect
          thereto.  If the indemnifying party elects to defend any such action
          or claim, then the indemnified party shall be entitled to participate in
          such
          defense with counsel of its choice at its sole cost and expense.  The
          indemnifying party shall not be liable for any settlement of any action,
          claim
          or proceeding effected without its prior written
          consent.  Notwithstanding anything in this Article VI to the contrary,
          the indemnifying party shall not, without the indemnified party's prior
          written
          consent, settle or compromise any claim or consent to entry of any judgment
          in
          respect thereof which imposes any future obligation on the indemnified
          party or
          which does not include, as an unconditional term thereof, the giving by
          the
          claimant or the plaintiff to the indemnified party of a release from all
          liability in respect of such claim.  The indemnification required by
          this Article VI shall be made by periodic payments of the amount thereof
          during
          the course of investigation or defense, as and when bills are received
          or
          expense, loss, damage or liability is incurred, so long as the indemnified
          party
          irrevocably agrees to refund such moneys if it is ultimately determined
          by a
          court of competent jurisdiction that such party was not entitled to
          indemnification.  The indemnity agreements contained herein shall be
          in  addition to (a) any cause of action or similar rights of the
          indemnified party against the indemnifying party or others, and (b) any
          liabilities the indemnifying party may be subject to pursuant to the
          law.

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

        ARTICLE
          VII

         

        Miscellaneous

         

        Section
          7.1           Fees and
          Expenses.  Each party shall pay the fees and expenses of its
          advisors, counsel, accountants and other experts, if any, and all other
          expenses, incurred by such party incident to the negotiation, preparation,
          execution, delivery and performance of this Agreement.  

         

        Section
          7.2           Specific
          Performance; Consent to Jurisdiction; Venue.  

         

        (a)           The
          Company and the Purchasers acknowledge and agree that irreparable damage
          would
          occur in the event that any of the provisions of this Agreement or the
          other
          Transaction Documents were not performed in accordance with their specific
          terms
          or were otherwise breached.  It is accordingly agreed that the parties
          shall be entitled to an injunction or injunctions to prevent or cure breaches
          of
          the provisions of this Agreement or the Transaction Documents and to enforce
          specifically the terms and provisions hereof or thereof, this being in
          addition
          to any other remedy to which any of them may be entitled by law or
          equity.

         

        (b)           The
          parties agree that venue for any dispute arising under this Agreement will
          lie
          exclusively in the state or federal courts located in Harris County, Texas,
          and
          the parties irrevocably waive any right to raise forum non conveniens
          or any other argument that Texas is not the proper venue.  The parties
          irrevocably consent to personal jurisdiction in the state and federal courts
          of
          the state of Texas.  The Company and each Purchaser consent to process
          being served in any such suit, action or proceeding by mailing a copy thereof
          to
          such party at the address in effect for notices to it under this Agreement
          and
          agrees that such service shall constitute good and sufficient service of
          process
          and notice thereof.  Nothing in this Section 7.2 shall affect or limit
          any right to serve process in any other manner permitted by law.  The
          Company and the Purchasers hereby agree that the prevailing party in any
          suit,
          action or proceeding arising out of or relating to the Securities, this
          Agreement or the Registration Rights Agreement, shall be entitled to
          reimbursement for reasonable legal fees from the non-prevailing
          party.

         

        Section
          7.3          Entire Agreement;
          Amendment.  This Agreement and the Registration Rights Agreement
          contain the entire understanding and agreement of the parties with respect
          to
          the matters covered hereby and, except as specifically set forth herein
          or in
          the Registration Rights Agreement, neither the Company nor any Purchaser
          make
          any representation, warranty, covenant or undertaking with respect to such
          matters, and they supersede all prior understandings and agreements with
          respect
          to said subject matter, all of which are merged herein.  No provision
          of this Agreement may be waived or amended other than by a written instrument
          signed by the Company and the Purchasers holding at least a majority of
          all
          Shares then held by the Purchasers.  Any amendment or waiver effected
          in accordance with this Section 7.3 shall be binding upon each Purchaser
          (and
          their permitted assigns) and the Company.  

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

        Section
          7.4           Notices.  Any
          notice, demand, request, waiver or other communication required or permitted
          to
          be given hereunder shall be in writing and shall be effective (a) upon
          hand
          delivery by telecopy or facsimile at the address or number designated below
          (if
          delivered on a business day during normal business hours where such notice
          is to
          be received), or the first business day following such delivery (if delivered
          other than on a business day during normal business hours where such notice
          is
          to be received) or (b) on the second business day following the date of
          mailing
          by express courier service, fully prepaid, addressed to such address, or
          upon
          actual receipt of such mailing, whichever shall first occur.  The
          addresses for such communications shall be:

         

        
          	
                  If
                    to the Company:

                	
                  Rick’s
                    Cabaret International, Inc.

                
	 	
                  10959
                    Cutten Road

                
	 	
                  Houston,
                    Texas 77066

                
	 	
                  Attention:
                    Eric Langan

                
	 	
                  Tel.
                    No.: (281) 397-6730

                
	 	
                  Fax
                    No.:  (281) 397-6765

                


        

        


        
          	
                  with
                    copies (which copies shall
                    not constitute notice to
                    the Company) to:

                	 
	
                   

                	 
	 	
                  Axelrod,
                    Smith & Kirshbaum

                
	 	
                  5300
                    Memorial Drive, Suite 700

                
	 	
                  Houston,
                    Texas 77007

                
	 	
                  Attention:  Robert
                    D. Axelrod

                
	 	
                  Fax
                    No.:  (713) 552-0202

                


        

        


        
          	
                  If
                    to any Purchaser:

                	
                  At
                    the address of such Purchaser set forth on Exhibit A to this
                    Agreement.

                
	 	 
	 	
                  with
                    copies to:

                
	 	 
	 	 
	 	 
	 	
                  Attention:

                
	 	
                  Tel
                    No.: (  )

                
	 	
                  Fax
                    No.: (  )

                


        

        


        Any
          party
          hereto may from time to time change its address for notices by giving written
          notice of such changed address to the other party hereto.

         

        Section
          7.5           Waivers.  No
          waiver by either party of any default with respect to any provision, condition
          or requirement of this Agreement shall be deemed to be a continuing waiver
          in
          the future or a waiver of any other provision, condition or requirement
          hereof,
          nor shall any delay or omission of any party to exercise any right hereunder
          in
          any manner impair the exercise of any  such right accruing to it
          thereafter.

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        Section
          7.6           Headings.  The
          article, section and subsection headings in this Agreement are for convenience
          only and shall not constitute a part of this Agreement for any other purpose
          and
          shall not be deemed to limit or affect any of the provisions
          hereof.

         

        Section
          7.7          Successors and
          Assigns.  This Agreement shall be binding upon and inure to the
          benefit of the parties and their successors and assigns.  After the
          Closing, the assignment by a party to this Agreement of any rights hereunder
          shall not affect the obligations of such party under this
          Agreement.  Subject to Section 5.1 hereof, the Purchasers may assign
          the Securities and its rights under this Agreement and the other Transaction
          Documents and any other rights hereto and thereto without the consent of
          the
          Company.

         

        Section
          7.8           No Third
          Party Beneficiaries.  This Agreement is intended for the benefit
          of the parties hereto and their respective permitted successors and assigns
          and
          is not for the benefit of, nor may any provision hereof be enforced by,
          any
          other person.

         

        Section
          7.9          Governing
          Law.  This Agreement shall be governed by and construed in
          accordance with the internal laws of the State of Texas, without giving
          effect
          to the choice of law provisions.  This Agreement shall not interpreted
          or construed with any presumption against the party causing this Agreement
          to be
          drafted.

         

        Section
          7.10         Survival.  The
          representations and warranties of the Company and the Purchasers shall
          survive
          the execution and delivery hereof and the Closing until the second anniversary
          of the Closing Date, except the agreements and covenants set forth in Articles
          I, III, V, VI and VII of this Agreement shall survive the execution and
          delivery
          hereof and the Closing hereunder.

         

        Section
          7.11         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
          7.12         Publicity.  The
          Company agrees that it will not disclose, and will not include in any public
          announcement, the names of the Purchasers without the consent of the Purchasers,
          which consent shall not be unreasonably withheld or delayed, or unless
          and until
          such disclosure is required by law, rule or applicable regulation, and
          then only
          to the extent of such requirement. 

         

        Section
          7.13        Severability.  The
          provisions of this Agreement are severable and, in the event that any court
          of
          competent jurisdiction shall determine that any one or more of the provisions
          or
          part of the provisions contained in this Agreement shall, for any reason,
          be
          held to be invalid, illegal or unenforceable in any respect, such invalidity,
          illegality or unenforceability shall not affect any other provision or
          part of a
          provision of this Agreement and this Agreement shall be reformed and construed
          as if such invalid or illegal or unenforceable provision, or part of such
          provision, had never been contained herein, so that such provisions would
          be
          valid, legal and enforceable to the maximum extent possible.

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

        Section
          7.14         Further
          Assurances.  From and after the date of this Agreement, upon the
          request of the Purchasers or the Company, the Company and each Purchaser
          shall
          execute and deliver such instruments, documents and other writings as may
          be
          reasonably necessary or desirable to confirm and carry out and to effectuate
          fully the intent and purposes of this Agreement, the Warrants and the
          Registration Rights Agreement.

         

        [REMAINDER
          OF PAGE INTENTIONALLY LEFT BLANK]

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        IN
          WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
          executed by their respective authorized officers as of the date first above
          written.

         

        


        
          	 	
                  RICK’S
                    CABARET INTERNATIONAL, INC. 

                
	 	 	 
	 	 	 
	 	
                  By:

                	
                    

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                
	 	 	 
	 	 	 
	 	
                  PURCHASER: 

                
	 	 	 
	 	 	 
	 	
                  By:

                	
                   
                    

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                
	 	 	 
	 	 	 
	 	
                  PURCHASER: 

                
	 	 	 
	 	 	 
	 	
                  By:

                	
                   
                    

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                
	 	 	 
	 	 	 
	 	
                  PURCHASER: 

                
	 	 	 
	 	 	 
	 	
                  By:

                	
                   
                    

                
	 	 	
                  Name:

                
	 	 	
                  Title: