Document:

ex10_1.htm

    
      

    

    
      Exhibit
10.1

      

      STOCK PURCHASE
AGREEMENT

      

      

      This
Stock Purchase Agreement (the “Agreement”) is made and entered into this ___ day
of September, 2009, by and among Cabaret North, Inc., a Texas
corporation (the “Company”), David “Skeeter” Wells
(“Wells”), Jerry Wayne
Godsey (“Godsey”), Chris
A. Hutchinson (“Hutchinson”), George Clifton Henthorn
(“Henthorn”) (Wells, Godsey, Hutchinson and Henthorn are referred to
collectively herein as the “Sellers”) and RCI Entertainment (North FW),
Inc., a Texas corporation (the “Purchaser”).

      

      WHEREAS, the Sellers own the
shares of common stock of the Company as reflected and listed on Exhibit “A”;
and

      

      WHEREAS, the shares of common
stock of the Company owned by Wells, Godsey, Hutchinson and Henthorn represent
100% of the shares of common stock of the Company and are hereinafter
collectively referred to as the “Shares”; and

      

      WHEREAS, the Company owns and
operates an adult entertainment cabaret known as Cabaret North (“Cabaret North”)
located at 5316 Superior Parkway, Fort Worth, Texas 76106 (the “Premises”);
and

      

      WHEREAS, the Sellers desire to
sell the Shares of the Company on the terms and conditions set forth herein;
and

      

      WHEREAS, the Purchaser desires
to purchase the Shares of the Company on the terms and conditions set forth
herein; and

      

      WHEREAS, the acquisition of
100% of the Shares of the Company by the Purchaser shall sometimes be referred
to herein as the “Acquisition”.

      

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

      

      ARTICLE
I

      PURCHASE
AND SALE OF THE SHARES

      

      Section
1.1       Sale of the
Shares.  Subject to the terms and conditions set forth in this
Agreement, at the Closing (as hereinafter defined) the Sellers hereby agree to
sell, transfer, convey and deliver to Purchaser all of the Shares of common
stock of the Company, free and clear of all encumbrances, which represents all
of the outstanding capital stock of the Company, and shall deliver to Purchaser
stock certificates representing the Shares, duly endorsed to
Purchaser.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Section
1.2      Purchase
Price.  As consideration for the purchase of the Shares,
Purchaser shall pay to Sellers a total aggregate consideration of $2,300,000
(the “Purchase Price”).  The Purchase Price shall be payable at
Closing by cashier’s check, certified funds or wire transfer, as
follows:

      

      
        	
                 
      

              	
                (i)

              	
                $140,000
      directly to the Company for the payment of outstanding liabilities to
      third parties in accordance with the schedule provided to the Purchaser as
      set forth in Exhibit 1.2(i);

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                $2,000,000
      to Messrs. Wells, Godsey, Hutchinson and Henthorn in the amounts set forth
      in Exhibit “1.2(ii)”; and

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                $160,000
      shall be paid into an escrow account as provided for in Section
      9.3.  To the extent that any or all of the $160,000 is not paid
      to any third party or to the Purchaser in accordance with Section 9.3 then
      such amount shall be distributed to the Sellers on a pro rata basis
      consistent with and in accordance with their ownership interest as set
      forth in Exhibit “A”.

              

      

      

      ARTICLE
II

      CLOSING

      

      Section
2.1       The
Closing.  The closing of the transactions contemplated by this
Agreement shall take place on or before September 30, 2009 (the “Closing Date”),
at the Law Office of Steven H. Swander, 505 Main Street, Suite 250, Fort Worth,
Texas 76102, or at such other time and place as agreed upon among the parties
hereto (the “Closing”).

      

      Section
2.2       Delivery and
Execution.  At the Closing: (a) the Sellers shall deliver to
Purchaser certificates evidencing the Shares of the Company, free and clear of
any liens, claims, equities, charges, options, rights of first refusal or
encumbrances, duly endorsed to Purchaser or accompanied by duly executed stock
powers in form and substance satisfactory to Purchaser against delivery by
Purchaser to the Sellers of payment in an amount equal to the Purchase Price of
the Shares being purchased in the manner set forth in Section 1.2 above; and (b)
the Related Transactions (as defined below) shall be consummated concurrently
with the Closing.

      

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

      

      
        	
                 
      

              	
                (a)

              	
                Each
      of the Sellers will enter into a five (5) year covenant not to compete
      pursuant to the terms of which each of the Sellers will agree not to
      compete, either directly of indirectly, with Purchaser by operating an
      establishment featuring live adult entertainment featuring live female
      nude or semi-nude (topless) entertainment in Tarrant County, Texas or any
      county surrounding Tarrant County, Texas.  The form of
      Non-Competition Agreement is attached hereto as Exhibit
      2.3(a).

              

      

      
        
           

        

        
          Stock
Purchase Agreement - 2

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (b)

              	
                The
      Company shall have obtained the consent of Clubwise Finance, LP (the
      “Lessor”) who is the Lessor of the Premises, to the sale of the Shares of
      the Company by the Sellers to the Purchaser and shall have entered into an
      addendum to the Lease Agreement by and between the Company and the Lessor
      of the Premises (the “Lease
Agreement”).

              

      

      

      
        ARTICLE
III

      

      REPRESENTATIONS
AND WARRANTIES

      OF
WELLS, GODSEY, HUTCHINSON AND THE COMPANY

      

      Wells,
Godsey, Hutchinson and the Company, jointly and severally, hereby represent and
warrant to Purchaser as follows:

      

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

      

      At
Closing, the authorized capital stock of the Company consists of 35,000 shares
of common stock, $1.00 par value, of which 35,000 shares are validly issued and
outstanding. There are no shares of preferred stock authorized or issued and
there is no other class of capital stock authorized or issued by the
Company.  All of the issued and outstanding shares of common stock of
the Company  are owned by the Sellers and are fully paid and
non-assessable.  None of the Shares issued are in violation of any
preemptive rights.  The Company has no obligation to repurchase,
reacquire, or redeem any of its outstanding capital stock.  There are
no outstanding securities convertible into or evidencing the right to purchase
or subscribe for any shares of capital stock of the Company , there are no
outstanding or authorized options, warrants, calls, subscriptions, rights,
commitments or any other agreements of any character obligating the Company to
issue any shares of its capital stock or any securities convertible into or
evidencing the right to purchase or subscribe for any shares of such stock, and
there are no agreements or understandings with respect to the voting, sale,
transfer or registration of any shares of capital stock of the
Company.

      

      Section
3.2        Subsidiaries.  The
Company has no subsidiaries.

      

      Section
3.3       Ownership of the
Shares.  The Sellers own, beneficially and of record, all of
the Shares of the Company free and clear of any liens, claims, equities,
charges, options, rights of first refusal, or encumbrances.

      

      Section
3.4      Authorization.  All
corporate action on the part of the Company necessary for the authorization,
execution, delivery and performance of this Agreement by the Company has been
taken or will be taken prior to the Closing.  The Company has the
requisite corporate power and authority to execute, deliver and perform this
Agreement.  This Agreement, when duly executed and delivered in
accordance with its terms, will constitute a valid and binding obligation of the
Company,  enforceable against the Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization, and
other similar laws of general application relating to or affecting creditors’
rights and to general equitable principles.

      
        
           

        

        
          Stock
Purchase Agreement - 3

          
            

          

        

        
           

        

      

      Section
3.5       No Breaches or
Defaults.  Except as set forth in Exhibit 3.5, the execution,
delivery, and performance of this Agreement by the Sellers and the Company does
not:  (i) conflict with, violate, or constitute a breach of or a
default under, (ii) result in the creation or imposition of any lien, claim, or
encumbrance of any kind upon the Shares, or (iii) require any authorization,
consent, approval, exemption, or other action by or filing with any third party
or Governmental Authority under any provision of:  (a) any applicable
Legal Requirement, or (b) any credit or loan agreement, promissory note, or any
other agreement or instrument to which the Sellers or the Company is a party or
by which the Shares may be bound or affected.  For purposes of this
Agreement, "Governmental Authority" means any foreign governmental authority,
the United States of America, any state of the United States, and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau, court, or similar entity, having jurisdiction over the parties
hereto or their respective assets or properties.  For purposes of this
Agreement, "Legal Requirement" means any law, statute,  injunction,
decree, order or judgment (or interpretation of any of the foregoing) of, and
the terms of any license or permit issued by, any Governmental
Authority.

      

      Section
3.6       Consents.  Except
as set forth in Exhibit 3.6, no permit, consent, approval or authorization of,
or designation, declaration or filing with, any Governmental Authority or any
other person or entity is required on the part of the Sellers or the Company in
connection with the execution and delivery by the Sellers or the Company of this
Agreement or the consummation and performance of the transactions contemplated
hereby.

      

      Section
3.7       Pending
Claims.  There is no claim, suit, arbitration, investigation,
action, litigation or other proceeding, whether judicial, administrative or
otherwise, now pending or, to the Sellers’ or  the Company’s
knowledge, contemplated or threatened against the Sellers or the Company before
any court, arbitration, administrative or regulatory body or any governmental
agency which may result in any judgment, order, award, decree, liability or
other determination which will or could reasonably be expected to have any
material effect upon Sellers or the Company or the transfer by Sellers to
Purchaser of the Shares under this Agreement, nor is there any basis known to
Sellers or the Company for any such action.  No litigation is pending,
or, to Sellers’ or the Company’s  knowledge, threatened against
Sellers or the Company, or their assets or properties which seeks to restrain or
enjoin the execution and delivery of this Agreement or any of the documents
referred to herein or the consummation of any of the transactions contemplated
thereby or hereby.  Neither Sellers nor the Company is subject to any
judicial injunction or mandate or any quasi-judicial or administrative order or
restriction directed to or against them or which would affect the Company, the
Shares to be transferred under this Agreement.

      

      Section
3.8       Taxes. Except for the
filing of the franchise tax report and payment of franchise taxes, which shall
be filed and paid on or prior the Closing Date, the Company has timely and
accurately prepared and filed all federal, state, foreign and local tax returns
and reports required to be filed prior to such dates and have timely paid all
taxes shown on such returns as owed for the periods of such returns, including
all sales taxes and withholding or other payroll related taxes shown on such
returns.  The Company is not delinquent in the payment of any tax or
governmental charge of any nature.  The Sellers have no knowledge of
any liability for any tax to be imposed by any taxing authorities as of the date
of this Agreement and as of the Closing that is not adequately provided
for.  No assessments or notices of deficiency or other communications
have been received by the Sellers or the Company with respect to any tax return
which has not been paid, discharged or fully reserved against and no amendments
or applications for refund have been filed or are planned with respect to any
such return.  None of the federal, state, foreign and local tax
returns of the Company have been audited by any taxing authority.  The
Sellers have 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 for any period, nor of any
basis for any such assessment, adjustment or contingency.  There are
no agreements between the Company and any taxing authority, including, without
limitation, the Internal Revenue Service, waiving or extending any statute of
limitations with respect to any tax return.

      
        
           

        

        
          Stock
Purchase Agreement - 4

          
            

          

        

        
           

        

      

      Section
3.9       Financial
Statements.  Sellers and the Company have delivered to
Purchaser the unaudited balance sheets of the Company as of August 31, 2009,
together with the related unaudited statements of income, for the periods then
ended (collectively referred to as the “Financial Statements”). Such Financial
Statements, including the related notes, are in accordance with the books and
records of the Company and fairly represent the financial position of the
Company and the results of operations and changes in financial position of the
Company as of the dates and for the periods indicated, in each case in
conformity with generally accepted accounting principles applied on a consistent
basis.  Except as, and to the extent reflected or reserved against in
the Financial Statements, the Company, as of the date of the Financial
Statements, has no material liability or obligation of any nature, whether
absolute, accrued, continued or otherwise, not fully reflected or reserved
against in the Financial Statements.

      

      Section
3.10    No Material Adverse
Change.  Since the date of the Financial Statements, the
Company has conducted its business in the ordinary course, consistent with past
practice, and there has been no (i) change that has had or would reasonably be
expected to have a material adverse effect upon the assets or business or the
financial condition or other operations of the Company, (ii) acquisition or
disposition of any material asset by the Company or any contract or arrangement
therefore, otherwise then for fair value in the ordinary course of business,
(iii) material change in the Company’s accounting principles, practices or
methods or (iv) incurrence of any material indebtedness.

      

      Section
3.11    Labor Matters. The
Company is not a party or otherwise subject to any collective bargaining
agreement with any labor union or association.  There are no
discussions, negotiations, demands or proposals that are pending or have been
conducted or made with or by any labor union or association, and there are not
pending or threatened against the Company any labor disputes, strikes or work
stoppages.  To the best of Sellers’ and the Company’s knowledge, the
Company is in compliance with all federal and state laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and, to their knowledge, is not engaged in any unfair labor
practices.  The Company is not a party to any written or oral
contract, agreement or understanding for the employment of any officer, director
or employee of the Company.

      

      Section
3.12     Compliance with
Laws.  The Company is, and at all times prior to the date
hereof has been in compliance with all statutes, orders, rules, ordinances and
regulations applicable to it or to the ownership of its assets or the operation
of its businesses, except for failures to be in compliance that would not have a
material adverse effect on the business, properties, condition (financial or
otherwise) or prospects of the Company.  Neither the Sellers nor the
Company have any basis to expect, nor have they received, any order or notice of
any such violation or claim of violation of any such statute, order, rule,
ordinance or regulation by the Company.  Exhibit 3.12 sets forth all
licenses and permits held by the Company used in the operation of its
businesses, all of which are in good standing and in effect as of the Closing
Date.  These licenses and permits represent all of the licenses and
permits required by the Company for the operation of its
business.

      
        
           

        

        
          Stock
Purchase Agreement - 5

          
            

          

        

        
           

        

      

      Section
3.13      Title to Properties;
Encumbrances.  The Company has good and marketable title to all
of its properties and assets, real and personal, tangible and intangible, that
are material to the condition (financial or otherwise), business, operations or
prospects of the Company, free and clear of all mortgages, claims, liens,
security interests, charges, leases, encumbrances and other restrictions of any
kind and nature, except (i) as disclosed in the Financial Statements of the
Company, (ii) statutory liens not yet delinquent, and (iii) such liens
consisting of zoning or planning restrictions, imperfections of title, easements
and encumbrances, if any, as do not materially detract from the value or
materially interfere with the present use of the property or assets subject
thereto or affected thereby.   At the time of Closing, the assets
of the Company shall include, but shall not be limited to, the assets set forth
in the Company’s 2008 corporate income tax return, along with all equipment and
fixtures located on the premises at Cabaret North as of the Closing
Date.

      

      Section
3.14      No
Liabilities.  As of the Closing Date, the Company does not and
shall not have any obligation or liability (contingent or otherwise) or unpaid
bill to any third party.

      

      Section
3.15      Contracts and
Leases.  Except as disclosed on Exhibit 3.15, there are no
adverse changes in the financial condition or other operations, business,
properties or assets of the Company.  The Company does not (i) have
any leases of personal property relating to the assets of the Company, whether
as lessor or lessee; (ii) have any contractual or other obligations relating to
the assets of the Company, whether written or oral; and (iii) have given any
power of attorney to any person or organization for any purpose relating to the
business or assets of the Company.  The Company has an existing real
estate lease agreement covering the real property where Cabaret North operates
its adult entertainment cabaret located at 5316 Superior Parkway, Fort Worth,
Texas.  The Company has previously provided to Purchaser each and
every contract, lease or other document relating to the assets of the Company to
which it is subject or is a party or a beneficiary.  To Sellers’ or
the Company’s knowledge, such contracts, leases or other documents are valid and
in full force and effect according to their terms and constitute legal, valid
and binding obligations of the Company and the other respective parties thereto
and are enforceable in accordance with their terms.  Sellers and the
Company have no knowledge of any default or breach under such contracts, leases
or other documents or of any pending or threatened claims under any such
contracts, leases or other documents.  Neither the execution of this
Agreement, nor the consummation of all or any of the transactions contemplated
under this Agreement, will constitute a breach or default under any such
contracts, leases or other documents which would have a material adverse effect
on the financial condition of the Company or the operation of Cabaret North
after the Closing.

      

      Section
3.16     No Pending
Transactions.  Except for the transactions contemplated by this
Agreement and the Related Transaction contemplated in Section 2.3 herein, the
Company is not a party to or bound by or the subject of any agreement,
undertaking, commitment or discussions or negotiations with any person that
could result in: (i) the sale, merger, consolidation or recapitalization of the
Company; (ii) the sale of any of the assets of the Company; (iii) the sale of
any outstanding capital stock of the Company; (iv) the acquisition by the
Company of any operating business or the capital stock of any other person or
entity; (v) the borrowing of money; (vi) any agreement with any of the
respective officers, managers or affiliates of the Company; or (vii) the
expenditure of more than $1,000, in the aggregate, or the performance by the
Company extending for a period more than one year from the date hereof, other
than in the ordinary course of business.

      
        
           

        

        
          Stock
Purchase Agreement - 6

          
            

          

        

        
           

        

      

      Section
3.17     Material Agreements;
Action.    Except for the transactions contemplated
by this Agreement and the Related Transaction contemplated in Section 2.3
herein, there are no material contracts, agreements, commitments, understandings
or proposed transactions, whether written or oral, to which Sellers or the
Company are a party or by which they are bound that involve or relate to (i) any
of the respective officers, directors, stockholders or partners of the Company
or (ii) covenants of Sellers or the Company not to compete in any line of
business or with any person in any geographical area or covenants of any other
person not to compete with the Company in any line of business or in any
geographical area.

      

      Section
3.18     Insurance Policies.  Copies
of all insurance policies maintained by the Company relating to the operation of
Cabaret North have been delivered or made available to Purchaser.  The
policies of insurance held by the Company are in such amounts, and insure
against such losses and risks, as the Company reasonably deems appropriate for
their property and business operations.  All such insurance policies
are in full force and effect, and all premiums due thereon have been
paid.  Valid policies for such insurance will be outstanding and duly
in force at all times prior to the Closing.

      

      Section
3.19      No
Default.  Neither Sellers nor the Company is in default under
any term or condition of any instrument evidencing, creating or securing any
indebtedness of  the Company, and there has been no default in any
material obligation to be performed by Sellers or the Company  under
any other contract, lease, agreement, commitment or undertaking to which the
Company is a party or by which it or its assets or properties are bound, nor
have Sellers or the Company waived any material right under any such contract,
lease, agreement, commitment or undertaking.

      

      Section
3.20    Books and
Records.  The books of account, minute books, stock record
books and other records of the Company, all of which have been made available to
Purchaser, are accurate and complete and have been maintained in accordance with
sound business practices.  Upon Closing, all books and records will be
in the possession of Sellers or the Company.

      

      Section
3.21      Environmental.  The
Company has not received any citation, directive, letter or other communication,
written or oral, or any notice of any proceeding, claim or lawsuit relating to
any environmental issue arising out of the ownership or occupation of the
Premises, and there is no basis known to the Sellers or the Company for any such
action.

      

      Section
3.22      Banks and Brokerage
Accounts.  Exhibit 3.22 sets forth (a) a true and complete list
of the names and locations of all banks, trust companies, securities brokers and
other financial institutions at which the Company has an account or safe deposit
box or maintains a banking, custodial, trading or other similar relationship,
and (b) a true and complete list and description of each such account, box and
relationship, indicating in each case the account number and the names of the
respective officers, employees, agents or other similar representatives of the
Company having signatory power with respect thereto.

      
        
           

        

        
          Stock
Purchase Agreement - 7

          
            

          

        

        
           

        

      

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

      

      Section
3.24      Employee Benefit
Plans.  The Company is not a party to any employee-benefit
plan.

      

      Section
3.25      Brokerage
Commission.  Except as set forth in Exhibit 3.25, no broker or
finder has acted on behalf of the Sellers or the Company in connection with this
Agreement or the transactions contemplated hereby and no person is entitled to
any brokerage or finder’s fee or compensation in respect thereto based in any
way on agreements, arrangements or understandings made by or on behalf of the
Sellers or the Company.

      

      

      ARTICLE
IV

      REPRESENTATIONS
AND WARRANTIES

      OF
THE SELLERS

      

      Each of
the Sellers, severally and not jointly, hereby makes the following
representations  and warranties to the Puchaser, which representations
and warranties shall be true and correct on the date hereof and on and as of the
Closing Date:

      

      Section
4.1       Ownership of the
Shares.  Each of the Sellers owns, beneficially and of record,
the number of Shares as listed on Exhibit “A” free and clear of any liens,
claims, equities, charges, options, rights of first refusal, or
encumbrances.  Each of  the Sellers has the unrestricted
right and power to transfer, convey and deliver full ownership of the Shares
without the consent or agreement of any other person and without any
designation, declaration or filing with any governmental
authority.  Upon the transfer of the Shares to Purchaser as
contemplated herein, Purchaser will receive good and valid title thereto, free
and clear of any liens, claims, equities, charges, options, rights of first
refusal, encumbrances or other restrictions (except those imposed by applicable
securities laws and as provided in the Amended Shareholders Agreement which
restriction was waived in connection with this transaction).

      

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

      
        
           

        

        
          Stock
Purchase Agreement - 8

          
            

          

        

        
           

        

      

      Section
4.3       Consents.  No
consent, approval or authorization of, or designation, declaration or filing
with, any other person or entity (other than governmental entities) is required
on the part of the Seller in connection with the execution and delivery by the
Seller of this Agreement or the consummation and performance of the transactions
contemplated hereby.

      

      Section
4.4        No Solicitation or Pending
Transactions.  Except for the transactions contemplated by this
Agreement, the Seller is not a party to or bound by or the subject of any
agreement, undertaking, commitment or discussions or negotiations with any
person that could result in the sale of any of the Shares.  Each
Seller agrees that from the date of his execution of this Agreement until the
Closing Date, he will not offer to sell or solicit any offer to purchase or
engage in any discussions or activities of any nature whatsoever, directly or
indirectly, involving in any manner the actual or potential sale, transfer,
encumbrance, pledge, collateralization or hypothecation of the Shares, or any
assets of the Company.  Each Seller hereby agrees to advise Purchaser
of any contact from any third party regarding the acquisition of the Shares or
other investment in the Company, or of any contact which would relate to the
transactions contemplated by this Agreement.

      

      Section
4.5       Disclosure.  No
representation or warranty of the Seller contained in this Article IV contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein in light of the
circumstances under which they were made, not misleading.

      

      Section
4.6       Consent to Sell
Shares.  Each Seller by their execution of this Agreement hereby
give their written consent to all other Sellers to sell, transfer and convey
their ownership interest in the Company, respectively, to the
Purchaser.

      

      

      ARTICLE
V

      REPRESENTATIONS
AND WARRANTIES

      OF
PURCHASER

      

      Purchaser
hereby represents and warrants to the Sellers and the Company as
follows:

      

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

      

      Section 5.2        No Breaches or
Defaults.  The execution, delivery, and performance of this
Agreement by Purchaser does not:  (i) conflict with, violate, or
constitute a breach of or a default under or (ii) require any authorization,
consent, approval, exemption, or other action by or filing with any third party
or Governmental Authority under any provision of:  (a) any applicable
Legal Requirement, or (b) any credit or loan agreement, promissory note, or any
other agreement or instrument to which Purchaser is a party.

      
        
           

        

        
          Stock
Purchase Agreement - 9

          
            

          

        

        
           

        

      

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

      

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

      

      Section
5.5       Brokerage
Commission.  Except as set forth in Exhibit 3.25, no broker or
finder has acted on behalf of the Purchaser in connection with this Agreement or
the transactions contemplated hereby and no person is entitled to any brokerage
or finder’s fee or compensation in respect thereto based in any way on
agreements, arrangements or understandings made by or on behalf of the
Purchaser.

      

      

      ARTICLE
VI

      CONDITIONS
TO CLOSING OF

      SELLERS
AND THE COMPANY

      

      Each
obligation of Sellers and the Company to be performed on the Closing Date shall
be subject to the satisfaction of each of the conditions stated in this Article
VI, except to the extent that such satisfaction is waived by Sellers and the
Company in writing.

      

      Section
6.1        Representations and
Warranties Correct.  The representations and warranties made by
Purchaser contained in this Agreement shall be true and correct as of the
Closing Date.

      

      Section
6.2        Covenants.  All
covenants, agreements and conditions contained in this Agreement to be performed
by Purchaser on or prior to the Closing Date shall have been performed or
complied with in all respects.

      

      Section
6.3        Delivery of
Certificate.  Purchaser shall provide to Sellers and the
Company  certificates, dated the Closing Date and signed by the
President of Purchaser to the effect set forth in Section 6.1 and 6.2 for the
purpose of verifying the accuracy of such representations and warranties and the
performance and satisfaction of such covenants and conditions.

      

      Section
6.4        Payment of Purchase
Price.  Purchaser shall have tendered the Purchase Price for
the Shares as referenced in Section 1.2 to the Sellers concurrently with the
Closing.

      
        
           

        

        
          Stock
Purchase Agreement - 10

          
            

          

        

        
           

        

      

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

      

      Section
6.6       Corporate
Resolutions.  Purchaser shall provide corporate resolutions of
the Board of Directors of Purchaser which approve the transactions contemplated
herein and authorize the execution, delivery and performance of this Agreement
and the documents referred to herein to which it is or is to be a party dated as
of the Closing Date.

      

      Section
6.7       Absence of
Proceedings.  No action, suit or proceeding by or before any
court or any governmental or regulatory authority shall have been commenced and
no investigation by any governmental or regulatory authority shall have been
commenced seeking to restrain, prevent or challenge the transactions
contemplated hereby or seeking judgments against Purchaser.

      

      

      
        ARTICLE
VII

      

      CONDITIONS
TO CLOSING OF

      PURCHASER

      

      Each
obligation of Purchaser to be performed on the Closing Date shall be subject to
the satisfaction of each of the conditions stated in this Article VII, except to
the extent that such satisfaction is waived by Purchaser in
writing.

      

      Section
7.1        Representations and
Warranties Correct.  The representations and warranties made by
the Sellers and the Company hereof shall be true and correct as of the Closing
Date.

      

      Section
7.2       Covenants.  All
covenants, agreements and conditions contained in this Agreement to be performed
by the Sellers and the Company on or prior to the Closing Date shall have been
performed or complied with in all respects.

      

      Section
7.3       Delivery of
Certificate.  Sellers and the Company shall provide to
Purchaser certificates, dated the Closing Date and signed by the Sellers and by
the President of the Company, respectively, to the effect set forth in Section
7.1 and 7.2 for the purpose of verifying the accuracy of such representations
and warranties and the performance and satisfaction of such covenants and
conditions.

      

      Section
7.4       Delivery of
Shares.  Sellers shall have delivered certificates evidencing
the Shares of the Company duly endorsed to Purchaser or accompanied by duly
executed stock powers in form and substance satisfactory to the
Purchaser.

      

      Section
7.5       Corporate
Resolutions.  The Company shall provide to Purchaser a
corporate resolution of the Shareholders of the Company which approve all of the
transactions contemplated herein and authorizes the execution, delivery and
performance of this Agreement and the documents referred to herein to which it
is or is to be a party dated as of the Closing Date.

      

      Section
7.6       Consents; Status of Permits
and Licenses.  Purchaser shall possess all necessary permits,
zoning classifications and other authorizations, whether city, county, state or
federal, which may be needed to conduct adult topless entertainment with the
sale of alcoholic beverages on the Premises, without any interruption, and all
such permits, zoning classifications and authorizations shall be in good order,
without any administrative actions pending or concluded that may challenge or
present an obstacle to the continued performance of adult topless entertainment
or sale of alcoholic beverages at Cabaret North.  All necessary
transfers of licenses and leases required for the continued operation of the
business of the Company shall have been obtained.  The Specialized
Certificate of Occupancy of Cabaret North and the Company (which has been
previously provided to the Purchaser) shall be in full force and
effect.

      
        
           

        

        
          Stock
Purchase Agreement - 11

          
            

          

        

        
           

        

      

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

      

      Section
7.8       Ability to
Audit.  The financial records of the Company shall be
maintained and exist in such a manner as to allow for a certified audit as
determined by Purchaser.

      

      Section
7.9       Satisfactory
Diligence.  Purchaser shall have concluded its due diligence
investigation of the Company and the business of Cabaret North and its
respective assets and properties and all other matters related to the foregoing,
and shall be satisfied, in its sole discretion, with the results
thereof.

      

      Section
7.10      Resignations.  The
Officers of the Company shall have provided to Purchaser their written
resignations.

      

      Section
7.11     Landlord’s
consent.  The Company shall have obtained the Landlord’s
consent to the sale of the Shares to Purchaser and shall have entered into an
addendum to the Lease Agreement by and between the Company and the Lessor of the
Premises.

      

      Section
7.12     Absence of
Proceedings.  No action, suit or proceeding by or before any
court or any governmental or regulatory authority shall have been commenced and
no investigation by any governmental or regulatory authority shall have been
commenced seeking to restrain, prevent or challenge the transactions
contemplated hereby or seeking judgments against the Company or any of its
assets.

      

      ARTICLE
VIII

      COVENANTS
OF THE SELLERS

       AND
THE COMPANY

      

      Section
8.1       Stand
Still.  To induce Purchaser to proceed with this Agreement, the
Company and Sellers agree that until the Closing Date or the termination of this
Agreement, no representative of the Company or any representative of the Sellers
will offer to sell or solicit any offer to purchase or engage in any discussions
or activities of any nature whatsoever, directly or indirectly, involving in any
manner the actual or potential sale, transfer, encumbrance, pledge,
collateralization or hypothecation of any assets of the Company or Cabaret
North.  The Company and the Sellers hereby agree to advise the
Purchaser of any contact from any third party regarding the acquisition or other
investment in the Company, or of any contact which would relate to the
transactions contemplated by this Agreement.

      
        
           

        

        
          Stock
Purchase Agreement - 12

          
            

          

        

        
           

        

      

      Section
8.2       Access; Due
Diligence.  Between the date of this Agreement and the Closing
Date, the Company shall (a) provide Purchaser and their authorized
representatives reasonable access to all plants, offices, warehouse and other
facilities and properties of the Company, and to the books and records of the
Company; (b) permit the Purchaser to make inspections thereof; and (c) cause the
officers and advisors of the Company to furnish the Purchaser with such
financial and operating data and other information with respect to the business
and properties of the Company and to discuss with the Purchaser and their
authorized representatives the affairs of the Company as the Purchaser may from
time to time reasonably request.

      

      Section
8.3       Conduct of
Business.  From the date of the execution hereof until the
Closing Date, the Company shall operate the Company and Cabaret North in the
ordinary course consistent with past practices, and:

      

      
        	
                 
      

              	
                (a)

              	
                The
      Company will not authorize, declare, pay or effect any dividends or
      liquidate or distribute any common stock of the Company or other equity
      interest or undertake any direct or indirect redemption, purchase or other
      acquisition of any equity interest of the
  Company;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                The
      Company will not make any changes in its condition (financial or
      otherwise), liabilities, assets, or business or in any of its business
      relationships, including relationships with suppliers or customers, that,
      when considered individually or in the aggre­gate, might reasonably be
      expected to have a material adverse effect on the
  Company;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                The
      Company will not increase the salary or other compensation payable or to
      become payable by the Company to any employee, or the declaration,
      payment, or commitment or obligation of any kind for the pay­ment by
      the Company of a bonus or other additional salary or compensation to any
      such person except in the normal course of business, consistent with past
      practices of the Company;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                The
      Company will not sell, lease, transfer or assign any of their assets,
      tangible or intangible;

              

      

      

      
        	
                 
      

              	
                (e)

              	
                The
      Company will not accelerate, terminate, modify or cancel any agreement,
      contract, lease or license (or series of related agreements, contracts,
      leases and licenses) involving more than $1,000 to which the Company is a
      party;

              

      

      

      
        	
                 
      

              	
                (f)

              	
                The
      Company will not make any loans to any person or entity, or guarantee any
      loan, absent the consent of the
Purchaser;

              

      

      

      
        	
                 
      

              	
                (g)

              	
                The
      Company will not waive or release any right or claim held by the Company,
      absent the consent of the
Purchaser;

              

      

      
        
           

        

        
          Stock
Purchase Agreement - 13

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (h)

              	
                The
      Company will operate its business in the ordinary course and consistent
      with past practices so as to preserve its business organization intact, to
      retain the ser­vices of their employees and to preserve their goodwill
      and relationships with suppliers, creditors, cus­tomers, and others
      having business relationships with
them;

              

      

      

      
        	
                 
      

              	
                (i)

              	
                The
      Company will not issue any note, bond or other debt security or create,
      incur or assume, or guarantee any indebtedness for borrowed money or
      capitalized lease obligations;

              

      

      

      
        	
                 
      

              	
                (j)

              	
                The
      Company will not delay or postpone the payment of accounts payable and
      other liabilities outside the ordinary course of
  business;

              

      

      

      
        	
                 
      

              	
                (k)

              	
                The
      Company will not make any loan to, enter into an employment agreement
      with, or enter into any other transaction with, any of its directors,
      officers, and employees;

              

      

      

      
        	
                 
      

              	
                (l)

              	
                The
      Company will not make any change in any method, practice, or principle of
      accounting involving the Company’s business or the assets of the
      Company;

              

      

      

      
        	
                 
      

              	
                (m)

              	
                The
      Company will not issue, sell or otherwise dispose of any of its capital
      stock or create, sell or dispose of any options, rights, conversion rights
      or other agreements or commitments of any kind relating to the issuance,
      sale or disposition of any of its equity
  interests;

              

      

      

      
        	
                 
      

              	
                (n)

              	
                The
      Company will not reclassify, split up or otherwise change any of its
      common stock or capital structure;

              

      

      

      
        	
                 
      

              	
                (o)

              	
                The
      Company will not be a party to any merger, consolidation or other business
      combination;

              

      

      

      
        	
                 
      

              	
                (p)

              	
                The
      Company shall perform in all material respects all of its obligations
      under material contracts, leases and other documents relating to or
      affecting any of its assets, property or its business or the business of
      Cabaret North; and

              

      

      

      
        	
                 
      

              	
                (q)

              	
                The
      Company will agree not to take any action described in this Section
      8.3.

              

      

      

      

      ARTICLE
IX

      TAX
COVENANTS; CLOSING ADJUSTMENTS; ESCROW AGREEMENT

      

      Section
9.1        Tax
Covenants.

      

      (a)           The
Sellers shall be responsible for, and shall pay or cause to be paid, and shall
indemnify and hold the Company and Purchaser harmless from and against any and
all federal, state and local income and property (real and personal) taxes,
including penalties and interest, if any, thereon (individually, a “Tax” and
collectively, “Taxes”) that may be imposed on or assessed against the Company
and/or Purchaser on account of taxes imposed upon the Company or its assets
prior to the Closing Date, including all taxes due on income received by the
Company prior to the Closing Date and real property taxes due under its Lease
Agreement for the Premises.  The Sellers shall also pay or cause to be
paid and shall indemnify and hold harmless the Company and Purchaser against all
losses, damages and reasonable third party costs and expenses (including
reasonable attorney, accountant and expert witness fees and disbursements)
(“Related Costs”) incurred in connection with the Taxes for which the Sellers
indemnify the Company and Purchaser pursuant to this Section 9.1 (a)(or any
asserted deficiency, claim demand or assessment, including the defense or
settlement thereof) or the enforcement of this Section 9.1(a).  Any
payment required to be made by the Sellers pursuant to this Section 9.1(a) shall
be made within 30 days of written notice from the Purchaser.

      
        
           

        

        
          Stock
Purchase Agreement - 14

          
            

          

        

        
           

        

      

      (b)           The
Purchaser shall be responsible for, and shall pay or cause to be paid, and shall
indemnify and hold the Sellers harmless from and against, any and all Taxes that
may be imposed on or assessed against the Sellers on account of Taxes imposed on
the Company or its assets following the Closing Date, including all taxes due on
income received by the Company beginning after the Closing Date.  The
Purchaser shall also pay or cause to be paid and shall indemnify and hold
harmless the Sellers from and against all Related Costs of the Sellers incurred
in connection with the Taxes for which the Purchaser indemnifies the Sellers
pursuant to this Section 9.1(b) (or any asserted deficiency, claim, demand or
assessment, including the defense or settlement thereof) or the enforcement of
this Section 9.1(b).  Any payment required to be made by the Purchaser
pursuant to this Section 9.1(b) shall be made within 30 days of written notice
from the Sellers.

      

      (c)           For
purposes of this Article IX, Taxes for the period up to and including the
Closing Date (“Sellers’ Taxes”) shall be determined on the basis of an interim
closing of the books as of the Closing Date; provided, however, that in
the case of any Tax not based on income or receipts, such Sellers’ Taxes shall
be equal to the amount of such Tax for the taxable year multiplied by a
fraction, the numerator
of which shall be the number of days from the beginning of the taxable year
through the day prior to the Closing Date, and the denominator of which shall be
the number of days in the taxable year.

      

      (d)           Sellers
shall be responsible for filing or causing to be filed all tax returns
(specifically including the 2008 federal income tax return and Texas franchise
tax report for the 2009 privilege period) required to be filed by or on behalf
of the Company on or before the Closing Date, which tax returns shall be timely
filed.  Purchaser shall be responsible for filing or causing to be
filed all tax returns required to be filed by or on behalf of the Company after
the Closing Date (other than tax returns for periods ending on or before the
Closing Date but not due until after the Closing Date).

      

      (e)           The
Sellers and the Purchaser shall cooperate fully with each other and make
available to each other in a timely fashion such Tax data and other information
and personnel as may be reasonably required for the payment of any estimated
Taxes and the preparation of any tax returns required to be prepared
hereunder.  The Sellers and the Purchaser shall make available to the
other, as reasonably requested, all information, records or documents in their
possession relating to Tax liabilities of the Company for all taxable periods
thereof ending on, before or including the Closing Date and shall preserve all
such information, records and documents until the expiration of any applicable
Tax statute of limitations or extensions thereof; provided, however, that if a
proceeding has been instituted for which the information, records or documents
are required prior to the expiration of the applicable statute of limitations,
then such information, records or documents shall be retained until there is a
final determination with respect to such proceeding.

      
        
           

        

        
          Stock
Purchase Agreement - 15

          
            

          

        

        
           

        

      

      (f)           The
Purchaser and the Sellers shall promptly notify each other in writing upon
receipt by the Purchaser or the Sellers, as the case may be, of any notice of
any tax audits of or assessments against the Company for taxable periods ending
on or before the Closing Date.  The failure of one party promptly to
notify the other party of any such audit or assessment shall not forfeit the
right to indemnity except to the extent that a party is materially prejudiced as
a result.  The Purchaser shall have the sole right to represent the
Company's interests in any tax proceeding relating to such tax audits or
assessments and to employ counsel of its choice at its expense.  The
Purchaser, on the one hand, and the Sellers, on the other, each agree to
cooperate fully with the other and its or their respective counsel in the
defense against or compromise of any claim in any tax proceeding.

      

      (g)           Notwithstanding
anything to the contrary contained elsewhere in this Agreement, all obligations
under this Article IX shall survive the Closing hereunder and continue until 30
days following the expiration of the statute of limitations on assessment of the
relevant Tax.

      

      Section
9.2        Closing
Adjustments.  The Sellers, the Company and the Purchaser agree
that there shall be an adjustment made within sixty (60) days of the Closing
Date to adjust for any liabilities that are found to exist of the Company as of
the Closing Date so that the Sellers shall be responsible and liable to the
Purchaser for the liabilities of the Company that exist as of the Closing Date,
less any credit which Sellers would be entitled to for cash on hand, credit card
receivables or pro rata portion of prepaid items.

      

      Section
9.3       Escrow
Agreement. At the Closing, Sellers and Purchaser shall escrow with
Robert D. Axelrod, P.C., as Escrow Agent, the total sum of $160,000 from the
proceeds of the Purchase Price, which amount (the “Escrow Cash”) shall be held
by the Escrow Agent in its IOLTA account as follows:

      

      (i)          
 $60,000 shall be held for a period of not more than ninety (90) days to be
used to pay any sums due to the Purchaser pursuant to Sections 9.1 or 9.2
above or to pay any
liabilities or obligations of the Company which were incurred but unpaid as of
the Closing Date; and

      

      (ii)           $100,000
shall be held until a final non-appealable determination has been made by the
state courts in Texas or federal courts (collectively the “Courts”) as to the
constitutionality of the state of Texas Patron Tax (“Patron Tax”) which was
implemented by the Texas legislature.  The $100,000 Escrow Cash shall
be dispersed (A) to the Sellers, on a pro rata basis as set forth in Exhibit
“A”, if the Courts determine that the Patron Tax is unconstitutional or if there
is a determination not to seek to collect the Patron Tax or (B) to the Purchaser
if the Courts determine that the Patron Tax is constitutional or if there is a
determination to seek to collect the Patron Tax.

      

      On or
before the end of ninety (90) days, if it is determined that pursuant to the
terms set forth in Section 9.1 and 9.2 above that the Purchaser is not entitled
to all or any portion of the $60,000 Escrow Cash, and if any portion of the
$60,000 Escrow Cash is remaining after the payment of any liabilities or
obligations of the Company which were incurred but unpaid as of the Closing
Date, then the remaining portion of the $60,000 of Escrow Cash as set forth in
Section 9.3(i) shall be paid to the Sellers, on a pro rata basis, as set forth
in Exhibit “A”.

      
        
           

        

        
          Stock
Purchase Agreement - 16

          
            

          

        

        
           

        

      

      Notwithstanding
the foregoing, the Purchaser shall be entitled to utilize all or any portion of
the $100,000 Escrow Cash set aside in Section 9.3(ii) to pay any such
liabilities or obligations of the Company which were incurred but unpaid as of
the Closing Date.

      

      ARTICLE
X

      INDEMNIFICATION

      

      Section
10.1     Indemnification from
Sellers.  Sellers, jointly and severally, hereby agree to and
shall indemnify, defend (with legal counsel reasonably acceptable to Purchaser),
and hold Purchaser, its officers, directors, employees, affiliates, parent,
agents, legal counsel, successors and assigns (collectively, the "Purchaser
Group") harmless at all times after the date of this Agreement, from and against
any and all actions, suits, claims, demands, debts, liabilities, obligations,
losses, damages, costs, expenses, penalties or injury  (including
reasonable attorneys=
fees and costs of any suit related thereto) suffered or incurred by any of the
Purchaser Group arising from: (a) any misrepresentation by, or breach of any
covenant or warranty of the Sellers or the Company contained in this Agreement,
or any exhibit, certificate, or other instrument furnished or to be furnished by
Sellers or  the Company hereunder; (b) any nonfulfillment of any
agreement on the part of Sellers or the Company under this Agreement; (c) any
liability or obligation due to any third party by the Company incurred at or
prior to the Closing Date; (d) any suit, action, proceeding, claim or
investigation against Purchaser which arises from or which is based upon or
pertaining to Sellers’ or the Company’s conduct or the operation or liabilities
of the business of the Company prior to the Closing Date or (e) any suit,
action, proceeding, claim or investigation against any of the Purchaser Group
arising out of or resulting in any claims by the Landlord that the Company
failed to fulfill any of its obligations under the Lease Agreement at any time
prior to the Closing Date of this Agreement.

      

      Section
10.2      Indemnification from
Purchaser.  Purchaser agrees to and shall indemnify, defend
(with legal counsel reasonably acceptable to the Sellers) and hold each Seller
and their affiliates, agents, legal counsel, successors and assigns
(collectively, the "Sellers Group") harmless at all times after the date of the
Agreement from and against any and all actions, suits, claims, demands, debts,
liabilities, obligations, losses, damages, costs, expenses, penalties or injury
(including reasonably attorney’s fees and costs of any suit related
thereto)  suffered or incurred by any of the Sellers Group, arising
from (a) any misrepresentation by, or breach of any covenant or warranty of
Purchaser contained in this Agreement or any exhibit, certificate, or other
agreement or instrument furnished or to be furnished by Purchaser hereunder; (b)
any nonfulfillment of any agreement on the part of Purchaser under this
Agreement; (c) any liability or obligation due to any third party by the Company
incurred subsequent to the Closing Date; or (d) any suit, action, proceeding,
claim or investigation against Sellers which arises from or which is based upon
or pertaining to Purchaser’s conduct or the operation of the business of the
Company subsequent to the Closing Date.

       

      Section
10.3     Defense of
Claims.  If any lawsuit enforcement action or any attempt to
collect on an alleged liability is filed against any party entitled to the
benefit of indemnity hereunder, written notice thereof shall be given to the
indemnifying party within ten (10) business days after receipt
of  notice or other date by which action must be taken; provided that
the failure of any indemnified party to give timely notice shall not affect
rights to indemnification hereunder except to the extent that the indemnifying
party demonstrates damage caused by such failure.  After such notice,
the indemnifying party shall be entitled, if it so elects, to take control of
the defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense; and such indemnified party shall cooperate in
all reasonable respects, at its cost, risk and expense, with the indemnifying
party and such attorneys in the investigation, trial and defense of such lawsuit
or action and any appeal arising therefrom; provided, however, that the
indemnified party may, at its own cost, participate in such investigation, trial
and defense of such lawsuit or action and any appeal arising
therefrom.  The indemnifying party shall not, without the prior
written consent of the indemnified party, effect any settlement of any
proceeding in respect of which any indemnified party is a party and indemnity
has been sought hereunder unless such settlement of a claim, investigation,
suit, or other proceeding only involves a remedy for the payment of money by the
indemnifying party and includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.

      
        
           

        

        
          Stock
Purchase Agreement - 17

          
            

          

        

        
           

        

      

      Section
10.4     Default of Indemnification
Obligation.  If an entity or individual having an
indemnification, defense and hold harmless obligation, as above provided, shall
fail to assume such obligation, then the party or entities or both, as the case
may be, to whom such indemnification, defense and hold harmless obligation is
due shall have the right, but not the obligation, to assume

      and
maintain such defense (including reasonable counsel fees and costs of any suit
related thereto) and to make any settlement or pay any judgment or verdict as
the individual or entities deem necessary or appropriate in such individuals or
entities absolute sole discretion and to charge the cost of any such settlement,
payment, expense and costs, including reasonable attorneys=
fees, to the entity or individual that had the obligation to provide such
indemnification, defense and hold harmless obligation and same shall constitute
an additional obligation of the entity or of the individual or both, as the case
may be.

      

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

      

      ARTICLE
XI

      MISCELLANEOUS

      

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

      
        
           

        

        
          Stock
Purchase Agreement - 18

          
            

          

        

        
           

        

      

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

      

      
        	
                 
      

              	
                (a)

              	
                If
      to Wells:

              	 

      

      
        	
                 
      

              	
                 

              

      

      

      
        	
                 
      

              	
                (b)

              	
                If
      to Godsey:

              	
                 

              

      

      
        	
                 
      

              	
                 

              

      

      

      
        	
                 
      

              	
                (c)

              	
                If
      to Hutchinson:

              	
                 

              

      

      
        	
                 
      

              	
                 

              

      

      

      
        	
                 
      

              	
                (d)

              	
                If
      to Henthorn:

              	
                 

              

      

      
        	
                 
      

              	
                 

              

      

      

      
        	
                 
      

              	
                (e)

              	
                If
      to the Company:

              	
                 

              

      

      
        	
                 
      

              	
                 

              

      

      

      
        	
                 
      

              	
                with
      a copy to:

              	
                Steven
      H. Swander

              

      

      
        	
                 
      

              	
                Law
      Office of Steven H. Swander

              

      

      
        	
                 
      

              	
                505
      Main Street, #250

              

      

      
        	
                 
      

              	
                Fort
      Worth, Texas 76102

              

      

      

      
        	
                 
      

              	
                (f)

              	
                If
      to Purchaser:

              	
                RCI
      Entertainment (North FW), Inc.

              

      

      
        	
                 
      

              	
                Attn:  Eric
      Langan, President

              

      

      
        	
                 
      

              	
                10959
      Cutten Road

              

      

      
        	
                 
      

              	
                Houston,
      Texas  77066

              

      

      

      
        	
                 
      

              	
                with
      a copy to:

              	
                Robert
      D. Axelrod

              

      

      
        	
                 
      

              	
                Axelrod,
      Smith & Kirshbaum

              

      

      
        	
                 
      

              	
                5300
      Memorial Drive, Suite 700

              

      

      
        	
                 
      

              	
                Houston,
      Texas  77007

              

      

      

      A notice
or communication will be effective (i) if delivered in Person or by overnight
courier, on the business day it is delivered and (ii) if sent by registered or
certified mail, three (3) business days after dispatch.

      

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

      
        
           

        

        
          Stock
Purchase Agreement - 19

          
            

          

        

        
           

        

      

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

      

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

      

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

      

      Section
11.7     Choice of
Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas, without regard to principles of
conflict of laws.  In any action between or among any of the parties,
whether arising out of this Agreement or otherwise, each of the parties
irrevocably consents to the exclusive jurisdiction and venue of the federal and
state courts located in Harris County, Texas.

      

      

      Section
11.8      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
11.9      Costs and
Expenses.   Each party shall pay their own respective
fees, costs and disbursements incurred in connection with this
Agreement.

      

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

      
        
           

        

        
          Stock
Purchase Agreement - 20

          
            

          

        

        
           

        

      

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

      

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

      

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

      

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

      

      Section
11.15   Termination of
Agreement.  This Agreement shall terminate and be of no force
and effect and all other agreements executed herewith shall be of no force and
effect if:  (i) the transactions contemplated by this Agreement are
not consummated on or before September 30, 2009, unless all of the parties
hereto agree in writing to extend the Agreement or (ii) all of the parties agree
in writing to terminate this Agreement sooner.

      

      Section
11.16    Attorney Review -
Construction.  In connection with the negotiation and drafting
of this Agreement, the parties represent and warrant to each other that they
have had the opportunity to be advised by attorneys of their own choice and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments hereto.

      

      Section
11.17    Gender.  All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter gender and the singular shall
include the plural and vice versa, wherever appropriate.

      

      

      [SIGNATURES
APPEAR ON THE FOLLOWING PAGE.]

      
        
           

        

        
          Stock
Purchase Agreement - 21

          
            

          

        

        
           

        

      

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

      

      
        	 
      	
                RCI
      ENTERTAINMENT (NORTH FW), INC.

              
	 
      	 
      	 
      
	 
      	/s/ Eric Langan 
	 
      	
                By:

              	
                Eric
      Langan, President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                CABARET
      NORTH, INC.

              
	 
      	 
      	 
      
	 
      	/s/
      David J. Wells
	 
      	
                By:

              	
                David
      J. Wells, President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                SELLERS:

              
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      David J. Wells
	 
      	 
      	
                David
      “Skeeter” Wells, Individually

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Jerry Godsey
	 
      	 
      	
                Jerry
      Wayne Godsey, Individually

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      C.A. Hutchinson
	 
      	 
      	
                Chris
      A. Hutchinson, Individually

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      George Henthorn
	 
      	 
      	
                George
      Clifton Henthorn, Individually

              

      

      
        
           

        

        
          Stock
Purchase Agreement - 22

          
            

          

        

        
           

        

      

      EXHIBITS

    

     

     

      Stock Purchase Agreement -
23ex10_2.htm

    
      

    

    
      Exhibit
10.2

      

      [FORM
OF]

      

      NON-COMPETITION
AGREEMENT

      

      This
Non-Competition Agreement dated September __, 2009 (the "Non-Competition
Agreement"), is by and among RCI Entertainment (North FW), Inc., a Texas
corporation, (“RCI Entertainment“) and David “Skeeter” Wells, an
individual residing in Texas (“Wells”).

      

      W
I T N E S S E T H:

      

      WHEREAS, Wells, together with
Jerry Wayne Godsey (“Godsey”), Chris A. Hutchinson (“Hutchinson”), George
Clifton Henthorn (“Henthorn”) (Wells,
Godsey, Hutchinson and Henthorn are referred to collectively herein as the
“Sellers”), own 100% of the outstanding shares of common stock of Cabaret North,
Inc., a Texas corporation (the “Company”), which owns and operates an adult
entertainment cabaret known as Cabaret North (the “Club”) located at 5316
Superior Parkway, Fort Worth, Texas 76106; and

      

      WHEREAS, the parties entered
into a Stock Purchase Agreement dated September __, 2009, between Wells, Godsey,
Hutchinson, Henthorn, the Company and RCI Entertainment (the “Stock Purchase
Agreement”), pursuant to which the Sellers have agreed to sell to RCI
Entertainment 100% of the outstanding shares of common stock of the Company (the
“Transaction”); and

      

      WHEREAS, Wells will benefit
from the Transaction; and

      

      WHEREAS, in connection with
the Transaction, RCI Entertainment has agreed to pay Wells cash consideration,
as more fully described in the Stock Purchase Agreement; and

      

      WHEREAS, RCI Entertainment
requires that Wells enter into this Non-Competition Agreement as a condition to
RCI Entertainment entering into the Transaction; and

      

      WHEREAS, to induce RCI
Entertainment to enter into the Stock Purchase Agreement and to complete the
Transaction, Wells agreed to enter into this Non-Competition Agreement;
and

      

      NOW, THEREFORE, in
consideration of the premises, the closing of the Transaction and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Wells and RCI Entertainment agree as follows:

      

      1.          
 Covenants.     For
a period of five (5) years from the date of execution hereof (such five (5) year
period being referred to herein as the “Restricted Period”), Wells shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, investor or in any
other individual or representative capacity, whether for compensation or
not:

      

      
        	
                 
      

              	
                (a)

              	
                Own,
      or have any rights of conversion to own, or share in the earnings of,
      carry on, manage, operate, control, be engaged in, render services to or
      solicit customers for any business engaged in the operation of an
      establishment featuring live female nude or semi-nude entertainment within
      Tarrant County, Texas or any adjacent county (the “Prohibited Area”);
      or

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (b)

              	
                Solicit
      or induce, or attempt to solicit or induce, wherever located, any
      employee, independent contractor, or agent or consultant of the Company,
      the Club, RCI Entertainment or any of their affiliates to leave his or her
      employment or terminate his or her agreement or relationship with the
      Company, the Club, RCI Entertainment or any of their
      affiliates.

              

      

      

      
        	
                 
      

              	
                2.

              	
                Wells’
      Acknowledgments and Agreements.  Wells
      acknowledges and agrees that:

              

      

      

      
        	
                 
      

              	
                (a)

              	
                Due
      to the nature of the Company and RCI Entertainment’s business, the
      foregoing covenants place no greater restraint upon Wells than is
      reasonably necessary to protect the business and goodwill of the Company
      and RCI Entertainment;

              

      

      

      
        	
                 
      

              	
                (b)

              	
                These
      covenants protect a legitimate interest of the Company and RCI
      Entertainment and do not serve solely to limit the future competition of
      the Company or RCI Entertainment;

              

      

      

      
        	
                 
      

              	
                (c)

              	
                This
      Non-Competition Agreement is not an invalid or unreasonable restraint of
      trade;

              

      

      

      
        	
                 
      

              	
                (d)

              	
                A
      breach of these covenants by Wells would cause irreparable damage to the
      Company and RCI Entertainment;

              

      

      

      
        	
                 
      

              	
                (e)

              	
                These
      covenants will not preclude Wells from obtaining reasonable business
      relationships or becoming gainfully employed following the closing of the
      Stock Purchase Agreement;

              

      

      

      
        	
                 
      

              	
                (f)

              	
                These
      covenants are reasonable in scope and are reasonably necessary to protect
      the business and goodwill and valuable and extensive trade which the
      Company and RCI Entertainment have established through their own expense
      and effort;

              

      

      

      
        	
                 
      

              	
                (g)

              	
                The
      signing of this Non-Competition Agreement is necessary as part of the
      consummation of the Transaction previously discussed;
  and

              

      

      

      
        	
                 
      

              	
                (h)

              	
                Wells
      has carefully read and considered all provisions of this Non-Competition
      Agreement and that all of the restrictions set forth are fair and
      reasonable and are reasonably required for the protection of the interests
      of the Company and RCI
Entertainment.

              

      

      

      3.           
Remedies,
Injunction.  In the event of
Well’s actual breach of any provisions of this Non-Competition Agreement, Wells
agrees that the Company and RCI Entertainment shall be entitled to a temporary
restraining order, preliminary injunction and/or permanent injunction
restraining and enjoining Wells from violating the provisions
herein.  Nothing in this Non-Competition Agreement shall be construed
to prohibit the Company or RCI Entertainment from pursuing any other available
remedies for such breach or threatened breach, including the recovery of damages
from Wells.  Wells further agrees that, for the purpose of any such
injunction proceeding, it shall be presumed that the Company’s and RCI
Entertainment's legal remedies would be inadequate and that the Company and RCI
Entertainment would suffer irreparable harm as a result of Wells’ violation of
the provisions of this Non-Competition Agreement.

      
        
           

        

        
          Non-Competition
Agreement - Page 2 of 5

          
            

          

        

        
           

        

      

      4.            Severability.  In the event that
any of the provisions of this Non-Competition Agreement are held to be invalid
or unenforceable in whole or in part, those provisions to the extent enforceable
and all other provisions shall nevertheless continue to be valid and enforceable
as though the invalid or unenforceable parts had not been included in this
Non-Competition Agreement.  In the event that any provision relating
to the time period or scope of a restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period or scope such court
deems reasonable and enforceable, then the time period or scope of the
restriction deemed reasonable and enforceable by the court shall become and
shall thereafter be the maximum time period or the applicable scope of the
restriction.  Wells further agrees that such covenants and/or any
portion thereof are severable, separate and independent, and should any specific
restriction or the application thereof, to any person, firm, corporation, or
situation be held to be invalid, that holding shall not affect the remainder of
such provisions or covenants.

      

      5.             General
Provisions.

      

      
        	
                 
      

              	
                (a)

              	
                Notices.  Any
      notices to be given hereunder by either party to the other may be effected
      either by personal delivery in writing or by mail, registered or
      certified, postage prepaid with return receipt requested or by a
      recognized overnight delivery service.  Mailed notices shall be
      addressed to the parties at the addresses set forth below, but each party
      may change their address by written notice in accordance with this
      Paragraph 5(a).  A notice or communication will be effective (i)
      if delivered in Person or by overnight courier, on the business day it is
      delivered and (ii) if sent by registered or certified mail, three (3)
      business days after dispatch.

              

      

      

      
        	
                 
      

              	
                If
      to RCI Entertainment:

              	
                Eric
      Langan, President

              

      

      
        	
                 
      

              	
                10959
      Cutten Road

              

      

      
        	
                 
      

              	
                Houston,
      Texas 77066

              

      

      

      
        	
                 
      

              	
                With
      a copy to:

              	
                Robert
      D. Axelrod

              

      

      
        	
                 
      

              	
                Axelrod,
      Smith & Kirshbaum

              

      

      
        	
                 
      

              	
                5300
      Memorial Drive, Suite 700

              

      

      
        	
                 
      

              	
                Houston,
      Texas 77007

              

      

      

      
        	
                 
      

              	
                If
      to Wells:

              	
                David
      “Skeeter” Wells

              

      

      
      

      
      

      

      
        	
                 
      

              	
                With
      a copy to:

              	
                Steven
      H. Swander

              

      

      
        	
                 
      

              	
                Law
      Office of Steven H. Swander

              

      

      
        	
                 
      

              	
                505
      Main Street, #250

              

      

      
        	
                 
      

              	
                Fort
      Worth, Texas 76102

              

      

      
        
           

        

        
          Non-Competition
Agreement - Page 3 of 5

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (b)

              	
                Law Governing Non-Competition
      Agreement and Venue.  This Non-Competition Agreement
      shall be governed by, and construed in accordance with, the laws of the
      State of Texas, without regard to principles of conflict of
      laws.  In any action between or among any of the parties,
      whether arising out of this Non-Competition Agreement or otherwise, each
      of the parties irrevocably consents to the exclusive jurisdiction and
      venue of the federal and state courts located in Harris County,
      Texas.

              

      

      

      
        	
                 
      

              	
                (c)

              	
                Contract Terms to be
      Exclusive.  This Non-Competition Agreement contains the
      sole and entire agreement between the parties and shall supersede any and
      all other agreements between the parties with respect to the Seller’s and
      Wells’ agreement not to compete with the Company and RCI
      Entertainment.

              

      

      

      
        	
                 
      

              	
                (d)

              	
                Waiver or Modification
      Ineffective Unless in Writing.  It is further agreed that
      no waiver or modification of this Non-Competition Agreement or of any
      covenant, condition, or limitation herein contained shall be valid unless
      in writing and duly executed by each of the parties hereto and that no
      evidence of any waiver or modification shall be offered or received in
      evidence in any proceeding or litigation between the parties hereto
      arising out of or affecting this Non-Competition Agreement, or the rights
      or obligations of any party hereunder, unless such waiver or modification
      is in writing, duly executed by each of the parties
  hereto.

              

      

      

      
        	
                 
      

              	
                (e)

              	
                Assignment.  The
      rights and benefits of the Company and RCI Entertainment under this
      Non-Competition Agreement shall inure to the benefit of and be binding
      upon the successors and assigns of the Company and RCI
      Entertainment.  The rights of Wells hereunder are personal and
      nontransferable except that the rights and benefits hereof shall inure to
      the benefit of the heirs, executors and legal representatives of
      Wells.

              

      

      

      
        	
                 
      

              	
                (f)

              	
                Binding
      Effect.  Except as otherwise provided herein, this
      Non-Competition Agreement shall be binding upon and inure to the benefit
      of the parties hereto and their respective successors and
      assigns.

              

      

      

      
        	
                 
      

              	
                (g)

              	
                Execution.  This
      Non-Competition 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.

              

      

      

      

      [SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

      
        
           

        

        
          Non-Competition
Agreement - Page 4 of 5

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, this Non-Competition Agreement has been executed as of the ___
day of September, 2009.

      

      

      
        	 
      	
                RCI
      ENTERTAINMENT (NORTH FW), INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
	 
      	 
      	
                Eric
      Langan, President

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
	 
      	
                DAVID
      “SKEETER” WELLS, Individually

              

      

      

       

    

    
      Non-Competition Agreement -
Page 5 of 5

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