Document:

ex10_3.htm

    
      

    

    Exhibit
      10.3

     

    
      PLEDGE
        AND SECURITY AGREEMENT

      (Common
        Stock)

      

      This
        Pledge and Security Agreement
        (this “Agreement") is made effective as of November 30, 2007 ("Effective Date"),
        by and between RICK’S CABARET INTERNATIONAL, INC., a Texas
        corporation (“Pledgor”), and the Sellers identified on the
        signature pages hereto (each, a “Seller” and collectively, the “Sellers”) and
RICHARD STANTON and NORMAN HICKMORE, as agents for the Sellers
        (in such capacity, together with its successors in such capacity, the
“Agent”).

       

      

      RECITALS:

      

       

      WHEREAS,
        Pledgor and Sellers have
        entered into a Stock Purchase Agreement dated November 30, 2007 (the “Purchase
        Agreement”), pursuant to which Pledgor will acquire 100% of the issued and
        outstanding common stock (the “Stellar Stock”) of Stellar Management
        Corporation, a Florida corporation (“Stellar”) and 100% of the issued and
        outstanding common stock (the “MGSO Stock”) of Miami Gardens Square One, Inc., a
        Florida corporation (“MGSO”) which owns and operates an adult entertainment
        cabaret known as “Tootsie’s Cabaret” located at 150 NW 183rd Street,
        Miami
        Gardens, Florida 33169 (“Tootsie’s”) ; and

      

      WHEREAS,
        pursuant to the Purchase Agreement and as part of the Purchase Price thereunder,
        Pledgor will pay $25,000,000 for the MGSO Stock and the Stellar Stock,
        $10,000,000 of which amount is payable and evidenced by a series of 14% Secured
        Promissory Notes in the aggregate original principal amount of $10,000,000
        bearing interest at the rate of fourteen percent (14%) per annum payable
        to
        Sellers (the “Notes”) pursuant to which the principal amount will be payable in
        a lump sum payment on the three (3) year anniversary of the Notes as more
        fully
        described in the Purchase Agreement; and

      

      WHEREAS,
        the Notes provide that the
        Pledgor shall pledge and grant a security interest in the Collateral (as
        hereinafter defined) as security for the Obligations (as hereinafter defined)
        under the Notes; and

      

      WHEREAS,
        as part of the Purchase Price
        for the MGSO Stock and Stellar Stock, this Agreement shall have been executed
        and delivered by Pledgor; and

      

      WHEREAS,
        Pledgor has determined that Pledgor's execution, delivery and performance
        of
        this Agreement may reasonably be expected to provide substantial benefit
        to
        Pledgor, directly or indirectly, and to be in the best interests of
        Pledgor.

       

      NOW,
        THEREFORE, FOR VALUE RECEIVED, the sufficiency of which is acknowledged by
        the
        parties, the parties hereto agree as follows:

      
        
          
          

        

        
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      ARTICLE
        I

      Security
        Interest and Pledge

      

      Section
        1.01.  Defined
        Terms and
        Related Matters.

      

      (a)           Capitalized
        terms used and not otherwise defined herein that are defined in the Notes
        shall
        have the meanings specified therein.  Capitalized terms used and not
        otherwise defined herein or in the Notes that are defined in the Purchase
        Agreement shall have the meanings specified therein.  Terms defined in
        the singular include the plural and terms defined in the plural include the
        singular.

      

      (b)           The
        words "hereof", "herein" and "hereunder" and words of similar import when
        used
        in this Agreement shall refer to this Agreement as a whole and not to any
        particular provision of this Agreement.

      

      (c)           Unless
        otherwise defined herein or in the Purchase Agreement, the terms defined
        in
        Articles 8 and 9 of the Uniform Commercial Code as enacted in the State of
        Florida as in effect from time to time (the "Code"), are used herein as therein
        defined.

      

      (d)           "Pledged
        Securities" means (i) 2,000 shares of common stock of MGSO which represents
        100% of the issued and outstanding common stock of MGSO; and (ii) 100 shares
        of
        the common stock of Stellar which represents 100% of the issued and outstanding
        common stock of Stellar, all of which Pledgor acquired pursuant to the Purchase
        Agreement.

      

      Section
        1.02  Security
        Interest and
        Pledge.  Subject to the terms of this
        Agreement, Pledgor hereby pledges and delivers to the Sellers, and hereby
        grants
        to the Sellers, pro rata  as listed in Schedule “A” to the Purchase
        Agreement, a lien on and security interest in and to all of Pledgor's rights,
        titles, interests and privileges in and with respect to the Pledged Securities,
        whether now owned or hereafter acquired, including, without limitation: (a)
        the
        MGSO Stock and the Stellar Stock; (b) all certificates or instruments
        representing Pledged Securities and all proceeds, income and profits thereon,
        and all interest, dividends and other payments, property, revenues, and
        distributions with respect thereto; (c) all proceeds received or receivable
        by
        Pledgor in cash, stock or otherwise, from any recapitalization,
        reclassification, merger, dissolution, liquidation or other termination of
        the
        existence of MGSO or Stellar relating to the Pledged Securities; and (d)
        all
        other proceeds or assets received or receivable by Pledgor in respect of
        its
        status as the owner of the MGSO Stock or the Stellar Stock with respect to
        the
        Pledged Securities (all such property, collectively, the
        "Collateral").

      

      Section
        1.03.  Obligations
        Secured.  This Agreement secures: (a)
        all obligations under the Notes, including the full and prompt payment of
        the
        principal of, interest on, and all other amounts due with respect to the
        Notes
        from time to time outstanding, as and when such amounts shall become due
        and
        payable, whether by lapse of time, upon redemption, prepayment or purchase,
        by
        extension or by acceleration or declaration or otherwise; (b) the full and
        prompt payment, performance and observance by Pledgor of all obligations,
        covenants, conditions and agreements contained in this Agreement; and (c)
        the
        full and prompt payment, upon demand by the Sellers, of all costs and expenses
        (including, without limitation, reasonable attorneys' fees), if any, as shall
        have been expended or incurred by the Sellers in the protection or enforcement
        of any right or privilege under the Notes or this Agreement, or in the
        protection or enforcement of any rights, privileges or liabilities thereunder
        (all such obligations, covenants, conditions and agreements described in
        the
        foregoing clauses (a), (b) and (c) being hereinafter collectively referred
        to as
        the "Obligations”.

      
        
          
          

        

        
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      Section
        1.04.  Formalities.

      

      (a)           All
        certificates and instruments representing the Pledged Securities have been,
        or,
        in the case of all Pledged Securities hereafter acquired, immediately upon
        acquisition shall be, delivered to and shall be held by the Agent on behalf
        of
        the Sellers pursuant hereto in suitable form for transfer by delivery, or
        accompanied by undated stock powers or other instruments of transfer or
        assignment, duly executed in blank, all in form and substance satisfactory
        to
        the Agent.

      

      (b)           Notwithstanding
        anything to the contrary contained in clause (a) above, if any Pledged
        Securities (whether now owned or hereafter acquired) are uncertificated
        securities, Pledgor shall promptly notify the Agent, and shall promptly,
        without
        the need for any request from the Agent, take all actions required to perfect
        the security interest of the Sellers under applicable law (including, in
        any
        event, under the provisions of Article 8 or 9 of the Code, if
        applicable).  Pledgor further agrees to take such actions as the Agent
        deems necessary or desirable to effect the foregoing and to permit the Agent
        to
        exercise any rights and remedies on behalf of the Sellers
        hereunder.

      

      (c)           The
        Agent shall have the right, at any time in its reasonable discretion and
        without
        notice to any Pledgor, to (i) transfer to any of its nominees any or all
        of the
        Collateral, subject only to the revocable rights set forth in Section 4.01
        hereof and applicable law, and (ii) so long as an Event of Default shall
        have
        occurred and be continuing, to register any or all of the Collateral in Agent’s
        or Sellers’ own names.  In addition, the Agent shall have the right at
        any time to exchange certificates or instruments representing or evidencing
        Collateral for certificates or instruments of smaller or larger
        denominations.

      

      (d)           Pledgor
        hereby authorizes the Agent, at the expense of Pledgor (including the fees
        and
        expenses of counsel to the Agent on behalf of the Sellers), to file one or
        more
        financing or continuation statements, and amendments thereto, relating to
        all or
        any part of the Collateral without the signature of Pledgor where permitted
        by
        law.  A photocopy or other reproduction of this Agreement or any
        financing statement covering the Collateral or any part thereof shall be
        sufficient as a financing statement where permitted by law.  Pledgor
        understands and agrees that even though the Agent has no obligation to do
        so,
        with respect to any financing statement, the Agent intends to file (at the
        expense of Pledgor, including the fees and expenses of counsel to the Agent
        on
        behalf of the Sellers) any continuation statement or amendment where failure
        to
        so file could reasonably be expected to result in the potential lapse of
        such
        financing statement at any time within three months of any such proposed
        filing.

      

      (e)           Each
        Seller hereby agrees to appoint Richard Stanton and Norman Hickmore as its
        Agent
        for purposes of this Agreement.  The Agent may employ agents and
        attorneys-in-fact in connection herewith and shall not be responsible for
        the
        negligence or misconduct of any such agents or attorneys-in-fact selected
        by it
        in good faith.

      
        
          
          

        

        
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      (f)           Each
        of the Sellers hereby, severally and not jointly, covenants and agrees to
        reimburse, INDEMNIFY and hold the Agent harmless from and
        against any and all claims, actions, judgments, damages, losses, liabilities,
        costs, transfer or other taxes, and expenses (including, without limitation,
        reasonable attorneys’ fees and expenses) incurred or suffered without any bad
        faith, gross negligence or willful misconduct by the Agent, arising out of
        or
        incident to this Agreement or the administration of the Agent’s duties
        hereunder, or resulting from its actions or inactions as Agent.

       

      ARTICLE
        II

      Representations
        and Warranties

      

      Section
        2.01  Representations and Warranties. Pledgor
        represents, warrants, and covenants to Sellers as follows:

      

      (a)           The
        Pledged Securities outstanding on the date hereof: (i) are described in
Schedule A hereto; (ii) have been duly and validly issued; and (iii) are
        subject to no options, warrants, calls, liens, pledges, or commitments of
        any
        character whatsoever relating thereto.

      

      (b)           Any
        instruments of transfer or assignment relating to certificates representing
        or
        evidencing the Pledged Securities, executed in blank and delivered by Pledgor
        to
        the Agent herewith, have been duly executed by Pledgor and vest in the Sellers
        the authority that they purport to confer.

      

      (c)           The
        principal place of business and chief executive office of Pledgor and the
        sole
        location where the records of Pledgor with respect to the Collateral are
        kept
        are located at the address set forth on Schedule B attached
        hereto.  Pledgor shall not move its chief executive office, principal
        place of business, or such location of records unless it shall have given
        to the
        Agent not less than twenty (20) days' prior written notice of its intention
        so
        to do, clearly describing such new location and providing such other information
        in connection therewith as the Agent may reasonably request.

      

      (d)           The
        jurisdiction of organization of Pledgor is as set forth on Schedule B
        attached hereto.  As of the date hereof, Pledgor does not have or
        operate under, nor has it had or operated under, in any jurisdiction at any
        time
        prior to the date hereof, any name except its legal name as set forth on
        the
        signature pages hereto, nor has Pledgor ever been organized under the laws
        of
        any jurisdiction other than the jurisdiction specified on Schedule B attached
        hereto.  Pledgor shall not change its legal name, assume or operate in
        any jurisdiction under any trade, fictitious or other name or change its
        jurisdiction of organization unless (i) it shall have given to the Agent
        not
        less than twenty (20) days' prior written notice of its commencing to do
        so,
        clearly describing such new name and the jurisdictions in which such new
        name
        shall be used or such new jurisdiction of organization and providing such
        other
        information in connection therewith as the Agent may reasonably request and
        (ii)
        with respect to such new name or jurisdiction of organization, Pledgor shall
        have taken all reasonable action, reasonably satisfactory to the Agent, to
        maintain the security interest of the Sellers in the Collateral intended
        to be
        granted hereby at all times fully perfected and in full force and
        effect.

      
        
          
          

        

        
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      (e)           Pledgor
        is the legal and beneficial owner of the Collateral free and clear of any
        lien
        or security interest (except the liens and security interests created herein),
        and Pledgor has not sold, granted any option with respect to, assigned,
        transferred or otherwise disposed of any of its rights or interests in or
        to
        such Collateral.

      

      (f)           Except
        as set forth in Exhibit 2.01(f), no effective financing statement or other
        document similar in effect covering all or any part of Pledgor's portion
        of the
        Collateral is on file in any recording office, except such as may have been
        filed in favor of the Sellers relating to this Agreement, and Pledgor has
        not
        authorized the filing of any such financing statement or other
        document.  Pledgor will not, without the prior written consent of the
        Agent, authorize or authenticate any such financing statements after the
        date
        hereof, and there will not ever be on file in any public office, any enforceable
        financing statement or statements covering any or all of the Collateral,
        except
        financing statements filed or to be filed in favor of the Sellers.

      

      (g)           No
        consent, authorization, approval or other action by, and no notice to or
        filing
        with, any governmental authority or any other Person is required: (i) for
        the
        valid execution, delivery and performance by Pledgor of this Agreement; (ii)
        for
        the pledge by Pledgor of a security interest in the Collateral or for the
        granting, perfection and maintenance of the liens and security interests
        created
        hereby and the first priority nature of such liens and security interests
        (other
        than the timely and proper filing of financing statements and continuation
        statements related thereto); or (iii) for the exercise by the Agent of the
        voting or other rights provided for in this Agreement or the remedies in
        respect
        of Pledgor's portion of the Collateral pursuant to this Agreement (except
        as may
        be required in connection with such disposition by laws affecting the offering
        and sale of securities generally).

      

      (h)           This
        Agreement has been duly authorized, executed and delivered by Pledgor and
        constitutes a legal, valid and binding obligation of Pledgor, enforceable
        against Pledgor in accordance with its terms, except to the extent that the
        enforceability hereof may be limited by applicable bankruptcy, insolvency,
        reorganization, moratorium or other similar laws affecting creditors' rights
        generally and by equitable principles (regardless of whether enforcement
        is
        sought in equity or at law).

      

      (i)           The
        execution, delivery and performance of this Agreement is not in conflict
        with
        and does not violate any instrument or agreement to which Pledgor is a party
        or
        by which Pledgor is bound.

      

      (j)           Pledgor
        covenants and agrees that it will defend the Sellers’ right, title and security
        interest in and to the Collateral and the proceeds thereof against the claims
        and demands of all persons whomsoever, and Pledgor covenants and agrees that
        it
        will have like title to and right to pledge any other property at any time
        hereafter pledged by Pledgor to the Sellers as Collateral hereunder and will
        likewise defend the right thereto and the security interest therein of the
        Sellers.

      

      (k)           Except
        as permitted by the Agent, Pledgor will not sell, assign, or otherwise dispose
        of, grant any option with respect to, or pledge, grant a security interest
        in or
        otherwise encumber any of the Collateral or any interest therein, or suffer
        any
        of the same to exist, and any sale, assignment, option, pledge, security
        interest or other encumbrance or disposition of any nature whatsoever made
        in
        violation of this covenant shall be a nullity and of no force and effect,
        and
        upon demand of the Agent, shall forthwith be canceled or satisfied by an
        appropriate instrument in writing.

      
        
          
          

        

        
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      The
        representations and warranties set forth in this Section 2.01 shall survive
        the
        execution and delivery of this Agreement.

      

      ARTICLE
        III

      Affirmative
        and Negative Covenants

      

      Pledgor
        covenants and agrees with
        Sellers that until the Obligations are satisfied and performed in
        full:

      

      Section
        3.01.  Encumbrances.  Pledgor
        shall not create, permit, or suffer to exist, and shall defend the Collateral
        against, any lien, security interest, or other encumbrance on the Collateral
        except the pledge and security interest of Sellers hereunder and the pledge
        and
        security interests referenced in Section 1.02 above, and shall defend Pledgor's
        rights in the Collat­eral and Sellers’ security interest in the
        Collater­al against the claims of all persons or entities
        whatsoever.

      

      Section
        3.02.  Sale of
        Collateral.  Pledgor shall not sell,
        assign, or otherwise dispose of the Collateral or any part thereof, or attempt
        to sell, assign, or otherwise dispose of the Collateral or any part thereof,
        without the prior written consent of the Agent.

      

      Section
        3.03.  Further
        Assurances.

      

      (a)           At
        any time and from time to time, upon the request of the Agent, and at the
        sole
        expense of Pledgor, Pledgor shall promptly execute and deliver all such further
        instruments and documents and take such further action as the Agent may deem
        necessary or desirable to preserve and perfect its security interest in the
        Collateral and carry out the provisions and purposes of this Agreement,
        including, without limitation, the execution and/or filing of such financing
        statements as the Agent may require (and any such filing is hereby authorized
        by
        Pledgor).  A carbon, photographic, or other reproduction of this
        Agreement or of any financing statement covering the Collateral or any part
        thereof shall be sufficient as a financing statement and may be filed as
        a
        financing statement.

      

      (b)  In
        addition to
        performing its obligations under Section 3.03 (a) above, Pledgor will, upon
        acquiring any additional Pledged Securities, promptly (and in any event within
        ten business days) deliver to the Agent a Supplement to Pledge Agreement,
        duly
        executed by the Pledgor, in substantially the form of Annex A hereto
        (each, a "Supplement to Pledge Agreement"), identifying such additional Pledged
        Securities.  Pledgor hereby authorizes the Agent to attach each
        Supplement to Pledge Agreement to this Agreement and agrees that all additional
        Pledged Securities listed on any Supplement to Pledge Agreement (including
        any
        schedules(s) thereto) delivered to the Agent shall for all purposes hereunder
        constitute Collateral.

      

      Section
        3.04.  Obligations.  Pledgor
        shall duly and punc­tually pay and perform the Obligations, including
        without limita­tion, the obligations of Pledgor under this
        Agreement.

      
        
          
          

        

        
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      Section
        3.05.  Notification.  Pledgor
        shall promptly notify the Agent of any lien, security interest, encumbrance
        or
        claim made or threatened against the Collateral.

      

      Section
        3.06.  Compliance
        with
        Laws.  Pledgor shall comply with all
        applicable laws, rules, regulations, and orders of any court or governmental
        authority.

      

      ARTICLE
        IV

      Rights
        of Sellers and Pledgor

      

      Section
        4.01.  Voting
        Rights. So long as no Event of Default (as
        hereinafter defined) shall have occurred and be continuing and this Agreement
        is
        in force and effect, Pledgor shall be entitled to exercise any voting and
        other
        consensual rights relating or pertaining to the Collateral or any part
        thereof  provided, however, that no vote shall be cast or consent,
        waiver or ratification given or action taken that would be inconsistent with
        or
        violate any provision of this Agreement.  Upon the occurrence and
        during the continuance of an Event of Default, at the sole option of the
        Agent,
        all voting rights shall thereupon become vested in the Sellers or their
        assignee, who shall thereupon have the sole right to exercise or to assign
        the
        right to exercise such voting and other consensual rights.

      

      Section
        4.02.  Dividends;
        Distributions. Until an Event of Default occurs and is continuing,
        Pledgor shall be entitled to receive, retain and use any and all dividends,
        distributions and other payments paid in respect of the Collateral to the
        extent
        not otherwise prohibited hereby; provided, however, that any and
        all

      

      (A)           dividends,
        distributions and other amounts paid or payable other than in cash in respect
        of, and instruments and other property (including, without limitation, capital
        stock in MGSO or Stellar) received, receivable or otherwise distributed in
        respect of, or in exchange for, any of the Collateral;

      

      (B)           dividends
        or distributions hereafter paid or payable in cash in respect of any of the
        Collateral in connection with a partial or total liquidation or dissolution;
        and

      

      (C)           cash
        paid, payable or otherwise distributed in redemption of, or in exchange for,
        any
        Pledgor's portion of the Collateral;

      

      shall
        be,
        and shall be forthwith delivered to the Agent to hold as Collateral and shall,
        if received by Pledgor, be received in trust for the benefit of the Sellers,
        be
        segregated from the other property or funds of Pledgor and be forthwith
        delivered to the Agent as Collateral in the same form as so received (with
        any
        necessary endorsement).

      

      4.03.  Exercise
        of
        Rights.  Upon the occurrence and during the continuance
        of an Event of Default:

      

      (i)           the
        Agent shall, without notice to Pledgor, transfer or register in the name
        of the
        Sellers or any of their nominees any or all certificates, if any, of the
        Collateral held by the Agent on behalf of the Sellers hereunder, and the
        Agent
        may thereafter, after delivery of notice to Pledgor, exercise all voting
        or
        other corporate rights with respect to the Collateral (in each such case
        whether
        exercisable at any meeting of the issuer of that Collateral or by written
        consent or otherwise) and any and all rights of conversion, exchange,
        subscription or any other rights, privileges or options pertaining to any
        of the
        Collateral, as if it were the absolute owner thereof, including, without
        limitation, the right to exchange at its discretion any and all of the
        Collateral upon the merger, consolidation, reorganization, recapitalization
        or
        other readjustment of the issuer of that Collateral or upon the exercise
        by the
        applicable Pledgor or the Agent of any right, privilege or option pertaining
        to
        any certificates of the Collateral, and in connection therewith, to deposit
        and
        deliver any and all of the Collateral with any committee, depositary, transfer
        agent, registrar or other designated agency upon such terms and conditions
        as it
        may determine, all without liability except to account for property actually
        received by it, but the Agent shall have no duty to exercise any of the
        aforesaid rights, privileges or options, and the Agent shall not be responsible
        for any failure to do so or delay in so doing.

      
        
          
          

        

        
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      (ii)           All
        rights of the Pledgor to exercise the voting and other consensual rights
        which
        it would otherwise be entitled to exercise pursuant to Section 4.01 hereof
        and
        to receive the dividends, distributions and other payments which it would
        otherwise be authorized to receive and retain pursuant to Section 4.02 hereof
        shall cease, and all such rights shall thereupon become vested in the Agent
        which shall thereupon have the sole right to exercise such voting and other
        consensual rights and to receive and hold as Collateral such dividends,
        distributions and other payments on behalf of the Sellers.

      

      (iii)           All
        dividends, distributions or other payments which are received by Pledgor
        contrary to the provisions of this Article shall be received in trust for
        the
        benefit of the Sellers, shall be segregated from other funds of Pledgor,
        and
        shall be forthwith paid over to the Agent for the benefit of the Sellers
        as
        Collateral in the same form as so received (with any necessary
        endorsement).

      

      (iv)           Pledgor
        shall execute and deliver (or cause to be executed and delivered) to the
        Agent
        all such instruments as the Agent may reasonably request for the purpose
        of
        enabling the Agent to exercise the voting and other rights to which it is
        entitled to exercise on behalf of the Sellers pursuant to this Article and
        to
        receive the dividends, distributions or other payments which it is entitled
        to
        receive and retain on behalf of the Sellers pursuant to this
        Article.

      

      Section
        4.04.  Agent Appointed
        Attorney-in-Fact.  Pledgor hereby irrevocably designates,
        makes, constitutes and appoints the Agent as Pledgor's attorney-in-fact,
        with
        full authority in the place and stead of Pledgor and in the name of Pledgor
        or
        otherwise, from time to time in the Agent's discretion, to take any action
        and
        to execute any agreement, document or instrument which the Agent may deem
        necessary or advisable to accomplish the purposes of this Agreement, including,
        without limitation:

      

      (a)           upon
        the occurrence and during the continuance of an Event of Default, to ask,
        demand, collect, sue for, recover, compromise, receive and give acquittance
        and
        receipts for monies due and to become due under or in connection with the
        Collateral;

      

      (b)           upon
        the occurrence and during the continuance of an Event of Default, to receive,
        indorse and collect any drafts or other instruments, documents and chattel
        paper, in connection therewith; and

      
        
          
          

        

        
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      (c)           upon
        the occurrence and during the continuance of an Event of Default, to file
        any
        claims or take any action or institute any proceedings that the Agent may
        deem
        necessary or desirable for the collection of any of the Collateral or otherwise
        to enforce the rights of the Sellers with respect to any of the
        Collateral.

      

      Section
        4.05.  Performance
        by Agent
        of Pledgor's Obligations.  If Pledgor
        fails to perform or comply with any of the agreements contained herein and
        Agent
        shall cause performance of or compliance with such agreement, the expenses
        of
        Agent, together with interest thereon at the Default Rate (as defined in
        the
        Notes) shall be payable by Pledgor to Agent on demand and shall consti­tute
        Obligations secured by this Agreement.

      

      Section
        4.06.  Possession;
        Reasonable
        Care.  The powers conferred on the Agent hereunder are
        solely to protect its interest in the Collateral and shall not impose any
        duty
        upon Agent to exercise any such powers.  Except for the safe custody
        of any Collateral in its possession and the accounting for monies actually
        received by it hereunder, the Agent shall have no duty as to any Collateral
        or
        as to the taking of any necessary steps to preserve rights against prior
        parties
        or any other rights pertaining to any Collateral.  The Agent shall
        hold in its possession all Collateral pledged, assigned or transferred
        hereunder, except as from time to time any documents or instruments may be
        required for recordation or for the purpose of enforcing or realizing upon
        any
        right or value thereby represented.  The Agent may, from time to time,
        in its sole discretion, appoint one or more agents to hold physical custody,
        for
        the account of the Sellers, of any or all of the Collateral.  The
        Agent shall be deemed to have exercised reasonable care in the custody and
        preservation of any Collateral in its possession if such Collateral is accorded
        treatment substantially equal to that which the Agent accords its own property,
        it being understood that the Agent shall not have any responsibility for
        (a)
        ascertaining or taking action with respect to calls, conversions, warrants,
        exchanges, maturities, tenders or other matters relative to any Collateral,
        whether or not the Agent has or is deemed to have knowledge of such matters,
        or
        (b) taking any necessary steps to preserve rights against any parties with
        respect to any Collateral.

      

      Section
        4.07.  Release
        of
        Collateral. The Agent shall release the
        Collateral upon the terms and conditions set forth in the Notes.

      

      ARTICLE
        V

      Default

      

      Section
        5.01.  Events of
        Default.  Each of the following shall be
        deemed an "Event of Default":

      

      (a)  an
        Event
        of Default occurs under terms of the Notes;

      

      (b)  Any
        representation or warranty made or deemed made by Pledgor in this Agreement
        or
        in any certificate, report, notice, or statement furnished at any time in
        connection with this Agreement or the Notes is false or misleading in any
        material respect on the date when made or deemed to have been
        made.

      
        
          
          

        

        
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      (c)  Pledgor
        shall fail to perform, observe, or comply with any covenant, agreement or
        term,
        other than a monetary default, contained in this Agreement and such failure
        continues, without cure, for twenty (20) business days after written notice
        to
        Pledgor.

      

      (d)  Pledgor,
        MGSO or Stellar (or any of same) shall commence a voluntary proceeding seeking
        liquidation, reorga­nization, or other relief with respect to itself or its
        debts under any bankruptcy, insolvency or other similar law now or hereafter
        in
        effect or seeking the appointment of a trustee, receiver, liquidator, custodian,
        or other similar official of it or a substantial part of its property or
        shall
        consent to any such relief or to the appointment of or taking possession
        by any
        such official in an involuntary case or other proceeding commenced against
        it or
        shall make a general assignment for the benefit of creditors or shall take
        any
        corporate action to authorize any of the foregoing.

      

      (e)  An
        involuntary proceeding shall be commenced against Pledgor, MGSO or Stellar
        seeking liquidation, reorganization, or other relief with respect to it or
        its
        debts under any bankruptcy, insolvency or other similar law now or hereafter
        in
        effect or seeking the appointment of a trustee, receiver, liquidator,
        custodi­an or other similar official of it or a substantial part of its
        property, and such involuntary proceeding shall remain undismissed and unstayed
        for a period of sixty (60) days after commencement.

      

      Section
        5.02.  Rights and
        Remedies.  Upon the occurrence of an
        Event of Default, and subject to the notice and opportunity to cure (if any)
        required by the Notes, the Agent shall have all of the rights and remedies
        set
        forth in this Agreement and the Notes, and additionally shall have the following
        rights and remedies:

      

      (i)  The
        Agent
        may declare the Obligations or any part thereof immediately due and payable,
        without demand, presentment, notice of dishonor, notice of acceleration,
        notice
        of intent to accelerate, notice of intent to demand, protest, or any other
        notice whatsoever, all of which are hereby expressly waived by Pledgor;
        provided, however, that upon the occurrence of an Event of Default under
        Section
        5.01(d) or Section 5.01(e) of this Agreement, the Obligations shall become
        immediately due and payable without demand, presentment, notice of dishonor,
        notice of accel­eration, notice of intent to accelerate, notice of intent to
        demand, protest, or any other notice whatsoever, all of which are hereby
        expressly waived by Pledgor;

      

      (ii)  In
        addition to all other rights and remedies granted to the Sellers in this
        Agreement and in any other instrument or agreement securing, evidencing,
        or
        relating to the Obligations, the Agent shall have all of the rights and remedies
        of a secured party under the Uniform Commercial Code in force in the State
        of
        Florida as of the date of this Agreement.  Without limiting the
        generality of the foregoing, the Agent may (A) without demand or notice to
        Pledgor, collect, receive, or take possession of the Collateral or any part
        thereof, (B) sell or otherwise dispose of the Collateral, or any part
        thereof, in one or more parcels at public or private sale or sales, at the
        Agent’s offices or elsewhere, for cash or on credit, and/or (C) bid and
        become a purchaser at any sale free of any right or equity of redemption
        in
        Pledgor, which right or equity is hereby expressly waived and released by
        Pledgor.  Upon the request of the Agent, Pledgor shall assemble the
        Collat­eral and make it available to the Agent at any place designated by
        the Agent.  Pledgor agrees that the Agent shall not be obligated to
        give more than ten (10) business days written notice of the time and place
        of
        any public sale or of the time after which any private sale may take place
        and
        that such notice shall constitute reasonable notice of such
        matters.  The Agent shall not be obligated to make any sale of the
        Collateral regardless of notice of sale having been given.  The Agent
        may adjourn any public or private sale from time to time by announcement
        at the
        time and place fixed therefor, and such sale may, without further notice,
        be
        made at the time and place to which it was so adjourned.  Any cash
        held by the Agent as Collateral and all cash proceeds received by the Agent
        in
        respect of any sale of, collection from, or other realization upon all or
        any
        part of the Collateral may, in the discretion of the Agent, be held by the
        Agent
        as collateral for, and/or be applied then or at any time thereafter to the
        Obligations in the order and manner as Agent may elect.  Any surplus
        of such cash or cash proceeds held by the Agent and remaining after payment
        in
        full of all the Obligations shall be paid over to Pledgor or to whomever
        may be
        lawfully entitled to receive such surplus.  Pledgor shall be liable
        for all expenses of retaking, holding, preparing for sale, or the like, and
        all
        attorneys' fees and other expenses incurred by Agent in connection with the
        collection of the Obligations and the enforcement of Sellers’ rights under this
        Agreement, all of which expenses and fees shall constitute additional
        Obligations secured by this Agreement.  Pledgor shall remain liable
        for any deficiency if the proceeds of any sale or disposition of the Collateral
        are insufficient to pay the Obligations;

      
        
          
          

        

        
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      (iii)  The
        Agent
        may cause any or all of the Collat­eral held by it to be transferred into
        the name of the Sellers or the name or names of the Sellers’ nominee or
        nominees;

      

      (iv)  The
        Agent
        shall be entitled to receive all cash and non-cash dividends payable in respect
        of the Collateral on behalf of the Sellers;

      

      (v)  The
        Agent
        shall have the right, but shall not be obligated to, exercise or cause to
        be
        exercised all voting rights and corporate powers in respect of the
        Collat­eral on behalf of the Sellers, and Pledgor shall deliver to the
        Agent, if re­quested by the Agent, irrevocable proxies with respect to the
        Collateral in form satisfactory to the Agent;

      

      (vi)  Pledgor
        hereby acknowledges and confirms that the Agent may be unable to effect a
        public
        sale of any or all of the Collateral by reason of certain prohibitions contained
        in the Securities Act of 1933, as amended, and applicable state securities
        laws
        and may be compelled to resort to one or more private sales thereof to a
        restricted group of purchasers who will be obligated to agree, among other
        things, to acquire any shares of the Collateral for their own respective
        accounts for investment and not with a view to distribution or resale
        thereof.  Pledgor further acknowledges and confirms that any such
        private sale may result in prices or other terms less favorable to Pledgor
        or
        other seller than if such sale were a public sale and, notwithstanding such
        circumstances, agree that any such private sale shall be deemed to have been
        made in a commercially reasonable manner, and the Agent shall be under no
        obligation to take any steps in order to permit the Collateral to be sold
        at a
        public sale.  The Agent shall be under no obligation to delay a sale
        of any of the Collateral for any period of time necessary to permit any issuer
        thereof to register such Collateral for public sale under the Secu­rities
        Act of 1933, as amended, or under applicable state securities laws, or to
        delay
        a sale of any of the Collateral for any other reason.  Pledgor hereby
        waives any claims against the Agent or Sellers arising by reason of the fact
        that the price at which the Collateral may have been sold at such private
        sale
        was less than the price which might have been obtained at a public sale or
        was
        less than the Obligations even if the Agent accepts the first offer received
        and
        does not offer the Collateral to more than one offeree (and the Agent, the
        Sellers or any affiliates of the Sellers may be the only offeree and the
        purchaser of the Collateral); and

      
        
          
          

        

        
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      (vii)  On
        any
        sale of the Collateral, the Agent is hereby authorized to comply with any
        limitation or re­striction compliance with which is necessary, in the view
        of the Agent's counsel, in order to avoid any violation of applicable law
        or in
        order to obtain any required approval of the purchaser or purchasers by any
        applicable govern­mental authority.

      

      Section
        5.03.  Security
        Interest
        Absolute. All rights of the Sellers hereunder
        and in and to the Collateral, and all obligations of Pledgor hereunder, shall
        be
        absolute and unconditional irrespective of:

      

      (a)  any
        lack
        of validity or enforceability of the Notes, any agreement with respect to
        any of
        the Obligations or any other agreement or instrument relating to any of the
        foregoing;

      

      (b)  any
        change in the time, manner or place of payment of, or in any other term of,
        all
        or any of the Obligations or any other amendment or waiver of or any consent
        to
        any departure from this Agreement or any other agreement or instrument;
        or

      

      (c)  any
        sale,
        exchange, release or nonperfection of any other collateral, or any release
        of
        any guarantor or any person liable in any manner for the collection of any
        of
        the Obligations or any amendment or waiver of or consent to or departure
        from
        the Notes or any guaranty for all or any of the Obligations.

      

      Section
        5.04.  Waiver and
        Consent.

      

      (a)  Pledgor
        consents and agrees that the Agent may in its absolute and sole discretion,
        at
        any time and from time to time, without notice or demand, and without affecting
        the enforceability or security hereof:  (i) create new Obligations or
        supplement, modify, amend, extend, increase, decrease, renew, accelerate
        or
        otherwise change the Obligations or any of their terms; (ii) supplement,
        modify,
        amend, or waive any provision of, or enter into or give any agreement, approval
        or consent with respect to the Notes; (iii) accept new or additional
        instruments, documents or agreements in exchange for or relative to any of
        the
        Obligations or any part thereof or for the Notes; (iv) accept payments on
        the
        Obligations; (v) receive and hold additional security or guaranties for the
        Obligations or any part thereof; (vi) release, reconvey, terminate, waive,
        abandon, fail to perfect, subordinate, exchange, substitute, transfer or
        enforce
        any security or guarantees and apply any security and direct the order or
        manner
        of sale thereof; (vii) release any person from any personal liability with
        respect to the Obligations or any part thereof; and (viii) settle, release
        on
        terms satisfactory to the Agent or by operation of applicable laws or otherwise
        liquidate or enforce any Obligations and any security or guaranty in any
        manner,
        and consent to the transfer of any security.

      
        
          
          

        

        
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      (b)  Upon
        the
        occurrence and during the continuance of an Event of Default, and subject
        to the
        notice and opportunity to cure (if any) required by the Notes, the Agent
        may
        enforce this Agreement independently from any other document and independently
        of any other remedy, security or guaranty the Sellers at any time may have
        or
        hold in connection with the Obligations, and it shall not be necessary for
        the
        Agent to marshal assets in favor of Pledgor or any other person or to proceed
        upon or against and/or exhaust my other security or remedy before proceeding
        to
        enforce this Agreement.  Pledgor expressly agrees that the Agent may
        proceed against any or all of the Collateral or guaranties for the Obligations
        in such order and in such manner as Agent shall determine in Agent’s sole and
        absolute discretion.  The Agent may file a separate action or actions
        against Pledgor, whether action is brought or prosecuted with respect to
        any
        other security or against any other person, or whether any other person is
        joined in any such action or actions. Pledgor agrees that the Agent and other
        guarantor, if any, of the Obligations ("Other Guarantor") may deal with each
        other in connection with the Obligations or otherwise, or alter any contracts
        or
        agreements now or hereafter existing between or among any of them, in any
        manner
        whatsoever, all without in any way altering or affecting the security of
        this
        Agreement.  Pledgor expressly waives the benefit of any statute(s) of
        limitations affecting its liability hereunder or the enforcement of the
        Obligations or the lien or security interest created or granted
        herein.  The Sellers’ rights hereunder shall be reinstated and
        revived, and the enforceability of this Agreement shall continue, with respect
        to any amount at any time paid on account of the Obligations that thereafter
        shall be required to be restored or returned by the Sellers upon the bankruptcy,
        insolvency or reorganization of Pledgor, MGSO or Stellar, or other any other
        Person, all as though such amount had not been paid.

      

      (c)  Pledgor
        expressly waives any and all defenses now or hereafter arising or asserted
        by
        reason of (i) any disability or other defense of any Other Guarantor with
        respect to the Obligations (ii) the failure of priority of any security for
        the
        Obligations (iii) the cessation from any cause whatsoever of the liability
        of
        any Other Guarantor (other than by reason of the full payment and performance
        of
        all Obligations, (iv) any defect in any notice that may be given in connection
        with any sale or disposition of any property securing the Obligations, (v)
        any
        act or omission of the Agent or others that directly or indirectly results
        in or
        aids the discharge or release of any Other Guarantor or the Obligations or
        any
        other security or guaranty therefor by operation of law or otherwise, (vi)
        any
        law that provides that the obligation of a surety or guarantor must neither
        be
        larger in amount nor in other respects more burdensome than that of the
        principal or that reduces a surety's or guarantor's obligation in proportion
        to
        the principal's obligation, (vii) any failure of the Agent to file or enforce
        a
        claim in any bankruptcy or other proceeding with respect to any person, (viii)
        the election by the Agent, in any bankruptcy proceeding of any person, of
        the
        application or nonapplication of Section 1111(b)(2) of the United States
        Bankruptcy Code, (ix) any extension of credit or the grant of any lien under
        Section 364 of the United States Bankruptcy Code, (x) any use of cash collateral
        under Section 363 of the United States Bankruptcy Code, (xi) any agreement
        or
        stipulation with respect to the provision of adequate protection in any
        bankruptcy proceeding of any person, (xii) the avoidance of any bankruptcy,
        insolvency, reorganization, arrangement, readjustment of debt, liquidation
        or
        dissolution proceeding of any Person, including any discharge of, or bar
        or stay
        against collecting, all or any of the Obligations in or as a result of any
        such
        proceeding, or (xiii) any action taken by the Agent that is authorized by
        this
        Section, this Agreement, or any other provision of the
        Notes.

      
        
          
          

        

        
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      ARTICLE
        VI

      Miscellaneous

      

      Section
        6.01.  Expenses;
        Indemnification.  Pledgor agrees to pay
        on demand all costs and expenses incurred by the Agent in connection with
        the
        preparation, negotiation, and execution of any and all amendments,
        modifications, and supplements to this Agreement.  Pledgor agrees to
        pay and to hold Sellers and Agent harmless from and against all excise, sales,
        stamp, or other taxes and all fees payable in connection with this Agreement
        or
        the transactions contemplated hereby, and agree to hold the Sellers and Agent
        harmless from and against any and all present or future claims or liabilities
        with respect to or resulting from Pledgor performing or delaying in performing
        their obligations under this Agreement.

      

      Section
        6.02.  No Waiver;
        Cumulative
        Remedies.  No failure on the part of the
        Agent to exercise and no delay in exercis­ing, and no course of dealing with
        respect to, any right, power, or privilege under this Agreement shall operate
        as
        a waiver thereof, nor shall any single or partial exercise of any right,
        power,
        or privilege under this Agreement preclude any other or further exercise
        thereof
        or the exercise of any other right, power, or privilege.  The rights
        and remedies provided for in this Agreement are cumulative and not exclusive
        of
        any rights and remedies provided by law.

      

      Section
        6.03.  Successors
        and
        Assigns.  This Agreement shall be
        binding upon and inure to the benefit of Pledgor and Sellers and their
        respective heirs, successors, and assigns, except that Pledgor may not assign
        any of its rights or obligations under this Agreement without the prior written
        consent of the Agent, which written consent shall not be unreasonably
        withheld.  The Agent may not assign this Agreement to any assignee or
        transferee.  Each Seller, however, may assign its rights and
        obligations under this Agreement to any assignee or transferee to which its
        Notes is assigned or transferred in compliance with the terms of such
        Notes.

      

      Section
        6.04.  Amendment;
        Entire
        Agreement.  This Agreement embodies the
        entire agreement among the parties hereto and supersedes all prior agreements
        and understandings, if any, relating to the subject matter
        hereof.  The provisions of this Agreement may be amended or waived
        only by an instrument in writing signed by the parties hereto.

      

      Section
        6.05.  Notices.  Any
        notice, consent, or other communication required or permitted to be given
        under
        this Agreement to the Agent or Sellers or Pledgor shall be in writing and
        shall
        be deemed to have been duly given if delivered personally or sent by registered
        or certified mail, return receipt requested, postage prepaid, or nationally
        recognized overnight air courier guaranteeing next day delivery as
        follows:

      

      
        	 	
                To
                  Agents:

              	
                Richard
                  Stanton

              
	 	 	
                Norman
                  Hickmore

              
	 	 	
                150
                  NW 183rd
                  Street, Suite 200

              
	 	 	
                Miami
                  Gardens, Florida  33169

              

      

       

      
        
          
          

        

        
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                To
                  Sellers:

              	
                Richard
                  Stanton

              
	 	 	
                150
                  NW 183rd
                  Street, Suite 200

              
	 	 	
                Miami
                  Gardens, Florida  33169

              
	 	 	 
	 	 	
                Norman
                  Hickmore

              
	 	 	
                150
                  NW 183rd
                  Street, Suite 200

              
	 	 	
                Miami
                  Gardens, Florida  33169

              
	 	 	 
	 	
                To
                  Pledgor:

              	
                Rick’s
                  Cabaret International, Inc.

              
	 	 	
                Attn:  Eric
                  Langan, President/CEO

              
	 	 	
                10959
                  Cutten Road

              
	 	 	
                Houston,
                  Texas 77066

              
	 	 	
                Fax:  (281)
                  397-6765

              

      

      

      Any
        such
        notice, consent, or other communication shall be deemed to have been duly
        given:  at the time delivered by hand, if personally delivered; three
        days after being deposited in the mail, postage prepaid, sent certified mail,
        return receipt requested, if mailed; and the next day after timely delivery
        to
        the courier, if sent by overnight air courier guaranteeing next day
        delivery.  If a notice or communication is mailed in the manner
        provided above within the time prescribed, it is duly given, whether or not
        the
        addressee receives it.

      

      Section
        6.06.  Choice
        of Law.  This Agreement shall be governed by, and
        construed in accordance with, the laws of the State of Florida, 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  Dade County,
        Florida.

      

      Section
        6.07.  Headings.  The
        headings, captions, and arrangements used in this Agreement are for convenience
        only and shall not affect the interpretation of this Agreement.

      

      Section
        6.08.  Survival
        of
        Representations and Warranties.  All
        representations and warranties made in this Agreement or in any certificate
        delivered pursuant hereto shall survive the execution and delivery of this
        Agreement, and no inves­tigation by the Agent shall affect the
        representations and warranties made by Pledgor or the right of Agent to rely
        upon them.

      

      Section
        6.09.  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
        6.10.  Severability.  Any
        provision of this Agreement which is prohibited or unenforceable in any
        jurisdic­tion shall, as to such jurisdiction, be ineffective to the extent
        of such prohibition or unenforceability without invalidating the remaining
        provisions of this Agreement, and any such prohibition or unenforceability
        in
        any jurisdiction shall not invalidate or render unenforceable such provision
        in
        any other jurisdiction.

      
        
          
          

        

        
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                Executed
                  as of the Effective Date above written.

              
	 	 	 	 
	 	
                PLEDGOR

              	
                RICK’S
                  CABARET INTERNATIONAL, INC.

              
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Eric Langan

              
	 	 	 	
                Eric
                  Langan, President and CEO

              
	 	 	 	 
	 	 	 	 
	 	
                AGENTS

              	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Richard Stanton

              
	 	 	 	
                Richard
                  Stanton, as Agent

              
	 	 	 	 
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  Norman Hickmore

              
	 	 	 	
                Norman
                  Hickmore, as Agent

              
	 	 	 	 
	 	 	 	 
	 	
                SELLERS

              	 	 
	 	 	
                /s/
                  Richard Stanton

              
	 	 	
                Richard
                  Stanton, Individually

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	
                /s/
                  Richard Stanton

              
	 	 	
                Richard
                  Stanton,
                  Individually

              

      

      
        
          
          

        

        
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      ACCEPTANCE
        AND ACKNOWLEDGMENT

      

      Rick’s
        Cabaret International, Inc.
        hereby accepts and acknowledges the Agent, on behalf of and for the benefit
        of
        the Sellers, as the assignee, pursuant to this Agreement, of the following
        shares of common stock:

      

      
        	
              	
                (a)

              	
                2,000
                  shares of common stock of Miami Square Gardens One, Inc., a Florida
                  corporation (“MSGO”, which represents 100% of the issued and outstanding
                  common stock of MSGO ; and

              

      

      
        	
              	
                (b)

              	
                100
                  shares of common stock of Stellar Management Corporation, a Florida
                  corporation (“Stellar”), which represents 100% of the issued and
                  outstanding common stock of Stellar

              

      

      

      which
        is
        owned by Rick’s Cabaret International, Inc.  Further, Rick’s Cabaret
        International, Inc. agrees that the interests of the Agent, on behalf of
        and for
        the benefit of the Sellers, shall be promptly and duly registered in the
        books
        and records of MSGO and Stellar.

      

      
        
          	 	Rick’s
                  Cabaret International, Inc.
	 	 	 
	 	 	 
	 	By: 
                  	
                  /s/
                    Eric Langan

                
	 	Eric
                  Langan, President/CEO

        

        
          
            
            

          

          
            Signature
              Page to Pledge and Security
              Agreement

            
              

            

          

          
            
            

          

        

      Schedule
        A

       

       

      Pledged
        Securities

      

      

      
        	
                
                  Entity

                

              	 	
                
                  Percentage of Issued and
                    Outstanding Shares of
                    Capital
                    Stock

                

              	 	
                
                  Certificate
                    No(s).,
                    if any

                

              	 
	 	 	 	 	 	 	 	 
	
                Miami
                  Gardens Square One, Inc.

              	 	 	
                100.00%

              	 	 	
                13

              	 
	 	 	 	 	 	 	 	 
	
                Stellar
                  Management Corporation

              	 	 	
                100.00%

              	 	 	
                4

              	 

      

       

      

      Pro
        Rata Security Interest and Pledge Securities

      

      
        	
                
                  Entity

                

              	 	
                
                  Secured
                    Party

                

              	 	
                
                  Pro rata 
                    Security
                    Interest

                

              	 
	 	 	 	 	 	 	 
	
                Miami
                  Gardens Square One, Inc.

              	 	
                Norman
                  Hickmore

              	 	 	
                50%

              	 
	 	 	 	 	 	 	 
	 	 	
                 Richard
                  Stanton

              	 	 	
                50%

              	 
	 	 	 	 	 	 	 
	
                Stellar
                  Management Corporation

              	 	
                Norman
                  Hickmore

              	 	 	
                50%

              	 
	 	 	 	 	 	 	 
	 	 	
                 Richard
                  Stanton

              	 	 	
                50%

              	 

      

       

      
        
          
          

        

        
          Schedule
            A to
            PledgeAgreement

          
            

          

        

        
          
          

        

      

      Schedule
        B

       

      

      Principal
        Place of Business; Chief Executive Office; Location of Records;

      Jurisdiction
        of Organization

       

      Principal
        Place of Business, Chief Executive Office and Location of Records:

       

      Rick’s
        Cabaret International,
        Inc.

      10959
        Cutten Road

      Houston,
        TX  77066

      

      Jurisdiction
        of
        Organization:  Texas

      
        
          
          

        

        
          Scedule
            B Pledge Agreement

          
            

          

        

        
          
          

        

      

       

      Annex
        A

       

      SUPPLEMENT
        TO PLEDGE AGREEMENT

       

      This
        Supplement to Pledge Agreement, dated as of ____________ ___ 20___, is delivered
        pursuant to Section __ of the Pledge Agreement referred to below.

       

      RECITALS

       

      A.           RICK’S
        CABARET INTERNATIONAL, INC., a Texas corporation (the
        "Pledgor"), has executed and delivered that certain Pledge and
        Security Agreement, dated as of November ___, 2007, in favor of _____________,
        as Agent on behalf of all Sellers (as the same may be amended, supplemented
        or
        otherwise modified from time to time, including without limitation by this
        and
        any other Supplements to Pledge Agreement executed from time to time, the
        "Agreement").  Capitalized terms used but not defined
        herein have the meanings assigned to such terms in the Agreement.

       

      B.           Pursuant
        to Section 3.03(b) of the Agreement, Pledgor has agreed, upon obtaining any
        additional Pledged Securities, to promptly execute and deliver a Supplement
        to
        Pledge Agreement in order to identify such additional Pledged Securities
        which
        have been pledged pursuant to the Agreement.

       

      C.           The
        undersigned desires to execute and deliver this Supplement to Pledge Agreement
        to satisfy such requirement.

       

      NOW,
        THEREFORE, IT IS AGREED:

       

      1.           Collateral.  The
        undersigned agrees that the securities listed on Schedule A attached
        hereto are part of the Collateral and are subject to the pledge and security
        interest created by the Agreement.

       

      2.           Representations
        and Warranties.  The undersigned hereby certifies that the
        representations and warranties set forth in Article II of the Agreement are
        true
        and correct as to the Pledged Securities listed on Schedule A hereto on
        and as of the date hereof.

       

      
        	 	
                RICK’S
                  CABARET INTERNATIONAL, INC.

              
	 	 	 
	 	 	 
	 	
                By:

              	
                  
                  

              
	 	 	
                Eric
                  Langan, President/CEO

              

      

      
        
          
          

        

        
          Annex
            A to Pledge Agreement

          
            

          

        

        
          
          

        

      

      SCHEDULE
        A TO SUPPLEMENT TO PLEDGE AGREEMENT

      

       

      Pledged
        Securities

      

      

      
        	
                
                   

                  Percentage
                    of Ownership

                

              	 	
                
                  
                  

                  Class
                    of Interest

                

              	 	 	
                
                  
                  

                

                
                  Certificate
                    No(s)., if any

                

              	 	 	
                
                  
                  

                

                
                  Number
                    of Interests

                

              	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

      

    

     

     

    Schedule
      A
      -- Annex A to Pledge Agreementex10_4.htm

    
      

    

    Exhibit
      10.4

    [FORM
      OF]

    

    

    NON-COMPETITION
      AGREEMENT

    

    This
      Non-Competition Agreement dated November 30, 2007 (the "Non-Competition
      Agreement"), is by and among Rick’s Cabaret International, Inc., a Texas
      corporation, (the ”Company“) and [Name], an individual residing in
      Florida  ([“Name”]).

    

    W
      I T N E S S E T H:

    

    WHEREAS,
      simultaneously herewith, [Name] has entered into a Stock Purchase Agreement
      (the
“Stock Purchase Agreement”) with the Company to sell to the Company (i) ______
      shares of common stock, no par value, of Miami Gardens Square One, Inc., a
      Florida corporation (“MGSO”) which shares represent 50.05% of the issued and
      outstanding shares of MGSO and (ii) 50 shares of common stock, $.01 par value,
      of Stellar Management Corporation, a Florida corporation  (“Stellar”)
      which shares represent 50% of the issued and outstanding shares of Stellar
      (collectively, the “Transaction”); and

    

    WHEREAS,
      [Name] is the [Title] of MGSO and [Title] of Stellar; and

    

    WHEREAS,
      MGSO owns and operates an adult entertainment cabaret known as an “Tootsie’s
      Cabaret” (“Tootsie’s” or the “Club”) located at 150 NW 183rd Street,
      Miami
      Gardens, Florida  33169 (the “Premises”); and

    

    WHEREAS,
      [Name] will benefit from the Transaction; and

    

    WHEREAS,
      the Company
      requires that [Name] enter into this Non-Competition Agreement as a condition
      to
      the Company entering into the Transaction; and

    

    WHEREAS,
      to induce the Company to enter into the Stock Purchase Agreement and to complete
      the Transaction, [Name] 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, the Seller and the Company agree
      as follows:

    

    1.    
        Covenants.  For
      a period of five (5) years following the Closing
      Date set forth in the Stock Purchase Agreement (such five (5) year period being
      referred to herein as the “Restricted Period”), [Name] 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,
                solicit customers for any business engaged in the operation of an
                establishment featuring live female nude or semi-nude entertainment
                within
                a twenty (20) mile radius of the Premises (the “Prohibited Area”), with
                the exception of the existing business known as “Alley Cat” which is
                operated at 2875 Shipping Avenue, Miami, Florida;
                or

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (b)

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

            

    

    

    2.
                 [Name]’s
      Acknowledgments and Agreements.  [Name]
      acknowledges and agrees that:

    

    
      	
               

            	
              (a)

            	
              Due
                to the nature of MGSO’s, Stellar’s and the Company’s business, the
                foregoing covenants place no greater restraint upon [Name] than is
                reasonably necessary to protect the business and goodwill of MGSO,
                Stellar
                and the Company;

            

    

    

    
      	
               

            	
              (b)

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

            

    

    

    
      	
               

            	
              (c)

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

            

    

    

    
      	
               

            	
              (d)

            	
              A
                breach of these covenants by [Name] would cause irreparable damage
                to
                MGSO, Stellar and the Company;

            

    

    

    
      	
               

            	
              (e)

            	
              These
                covenants will not preclude [Name] 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
                MGSO,
                Stellar and the Company 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)

            	
              [Name]
                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 MGSO, Stellar and the Company.

            

    

    

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

    
      
        
        

      

      
        Non-Competition
          Agreement - Page
          2

        
          

        

      

      
        
        

      

    

    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.  [Name] 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 (a).  Notices delivered person­ally shall be
                deemed communicated as of actual receipt; mailed notices shall be
                deemed
                communicated as of three (3) days after mailing; and overnight delivery
                service shall be deemed delivered one (1) day after depositing with
                the
                overnight delivery service.

            

    

    

    If
      to
      Company:                              Eric
      Langan, President

    10959
      Cutten Road

    Houston,
      Texas 77066

    

    With
      a
      copy
      to:                             Mr.
      Robert D. Axelrod

    Axelrod,
      Smith &
Kirshbaum

    5300
      Memorial Drive, Suite
      700

    Houston,
      Texas 77007

    

    If
      to
      [Name]:                                  150
      NW 183rd
      Street, Suite 200

    Miami
      Gardens,
      Florida  33169

    

    
      	
               

            	
              (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 Florida, 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 Dade County,
                Florida.

            

    

    
      
        
        

      

      
        Non-Competition
          Agreement - Page
          3

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              (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 [Name]’s agreement not to compete with MGSO and the
                Company.

            

    

    

    
      	
               

            	
              (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 the party to
                be
                charged therewith 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 as
                aforesaid.

            

    

    

    
      	
               

            	
              (e)

            	
              Assignment.  The
                rights and benefits of MGSO, Stellar and the Company under this
                Non-Competition Agreement shall inure to the benefit of and be binding
                upon the successors and assigns of MGSO, Stellar and the
                Company.  The rights of [Name] 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
                the
                Seller and [Name].

            

    

    

    
      	
               

            	
              (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
                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

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, this Non-Competition Agreement has been executed as of the
      30th
      day of November, 2007.

    

    

    
      	 	
              RICK’S
                CABARET INTERNATIONAL, INC.

            
	 	 	 
	 	 	 
	 	
              By:  
                

            	
               

            
	 	 	
              Eric
                Langan, President

            
	 	 	 
	 	 	 
	 	 	 
	 	
               

            
	 	
               [NAME],
                INDIVIDUALLY

            

    

     

     

    Non-Competition
      Agreement - Page 5

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