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Sample Business Contracts

Asset Purchase Agreement - Amusement Center Inc., Buns & Roses II Inc., Larry Holmberg and Rick's Cabaret International Inc.

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                            ASSET PURCHASE AGREEMENT

         This Asset Purchase  Agreement  ("Agreement")  is made this 24th day of
December,  1996, by and between Amusement Center, Inc., a Minnesota  corporation
with  its  principal  place  of  business  located  at  300  South  3rd  Street,
Minneapolis,  Minnesota  55415  ("Amusement  Center"),  Buns & Roses II, Inc., a
Minnesota  corporation with its principal place of business located at 300 South
3rd  Street,  Minneapolis,  Minnesota  55415  ("B&R  II"),  Larry  Holmberg,  an
individual with his principal place of business located at 300 South 3rd Street,
Minneapolis,  Minnesota  55415  ("Holmberg")  and Rick's Cabaret  International,
Inc., a Texas corporation,  whose address is 3113 Bering Drive,  Houston,  Texas
77057 or its designees  ("Buyer").  Amusement  Center and B&R II are hereinafter
collectively referred to as "Seller(s)".

                                R E C I T A L S:

         WHEREAS,  Seller is the  owner of all of the  tangible  and  intangible
assets  associated  or  used  in  connection  with  the  operation  of an  adult
entertainment  restaurant  and bar  known  as "Buns & Roses"  at 300  South  3rd
Street, Minneapolis, Minnesota 55415 ("Buns & Roses"); and

         WHEREAS, Holmberg is the sole stockholder of the Seller; and

         WHEREAS,  Holmberg  owns all of the real estate upon which Buns & Roses
is located,  as more fully described herein,  and all improvements  thereon (the
"Property"); and

         WHEREAS,  Seller  desires  to  sell  and  transfer  all of  the  assets
associated or used in connection with the operation of Buns & Roses; and

         WHEREAS, Holmberg desires to sell and convey the Property; and

         WHEREAS, the Buyer or its designee desires to acquire all of the assets
of the Seller and the Property,  upon and subject to the terms and conditions of
this Agreement.

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
and  agreements  set forth herein and in reliance upon the  representations  and
warranties contained herein, the parties hereto covenant and agree as follows:

                                    ARTICLE I
                    PURCHASE AND SALE OF ASSETS AND PROPERTY

         1.1 ASSETS OF SELLER TO BE  TRANSFERRED  TO BUYER.  On the Closing Date
(as defined in Article VI hereof),  and subject to the terms and  conditions set
forth in this  Agreement,  Seller shall sell,  convey,  transfer and assign,  or
cause to be sold,  conveyed,  transferred and assigned to Buyer, and Buyer shall
acquire  all of the assets of the  Seller,  including  but not  limited  to, the
following assets (the "Purchased Assets"):

<PAGE>

         (i)      all furniture,  fixtures,  equipment,  appliances,  machinery,
                  computer  hardware and peripherals,  computer software,  sound
                  equipment, audio speakers,  lighting fixtures, cash registers,
                  video  equipment,  lockers  and  other  personal  property  of
                  whatever  nature owned or leased by Seller in connection  with
                  the  operation of Buns & Roses,  including  but not limited to
                  those  items more fully  described  on Exhibit  1.1(i) of this
                  Agreement (the "Personal Property");

         (ii)     all of Seller's inventory of supplies, accessories and any and
                  all other items of personal property of whatever nature,  sold
                  by  the  Seller  in  the   operation  of  Buns  &  Roses  (the
                  "Inventory"), as more fully described in Exhibit 1.1(ii);

         (iii)    all  supplies  (other than  Inventory)  and other  "consumable
                  supplies"  used in  connection  with the  operation  of Buns &
                  Roses (the  "Supplies"),  as more fully  described  in Exhibit
                  1.1(iii);

         (iv)     all of Seller's right, title, and interest,  as lessee, of any
                  and all equipment leased by Seller and located at Buns & Roses
                  (the "Leased Equipment");

         (v)      all  right,   title  and  interest  in  and  to  any  and  all
                  trademarks,  tradenames,  trade dress, service marks, slogans,
                  logos,  corporate  or  partnership  names (and any existing or
                  possible  combination or derivation of any or all of the same)
                  and general intangibles,  including,  without limitation,  the
                  goodwill and intellectual property rights,  associated with or
                  used in  connection  with the  operation or business of Buns &
                  Roses,  including all rights, title and interest in and to the
                  following   tradename  and  trademark   "Buns  &  Roses"  (the
                  "Intellectual Property"),  provided however that Holmberg will
                  retain the right to use the tradename  "Buns & Roses"  outside
                  the corporate city limits of Minneapolis, Minnesota;

         (vi)     all right,  title,  and  interest  of Seller to the use of the
                  telephone  numbers  presently being used by Seller,  including
                  all rotary extensions  thereto,  and all advertisements in the
                  "Yellow   Pages",   "City   Directory"   and   other   similar
                  publications (the "Telephone  Numbers") and after the Closing,
                  Buyer shall assume all expenses for the Telephone  Numbers and
                  advertising; and

         (vii)    all of Seller's lists of suppliers,  and any and all copies of
                  books, records,  papers, files,  memoranda and other documents
                  in Seller's  possession  relating to or compiled in connection
                  with the  operation  of Buns & Roses  which are  requested  by
                  Buyer (the "Records").

         Specifically  excluded from the term "Purchased  Assets" as used herein
are  cash  equivalents,  investment  securities,  federal  income  tax  refunds,
corporate seals, books and records relating solely to corporate governance,  and
any motor vehicle used for personal or family  activities by any  shareholder of
Seller (hereinafter collectively referred to as the "Excluded Assets").

<PAGE>

         1.2 SALE OF PROPERTY TO BUYER.  On the Closing Date, and subject to the
terms and conditions set forth in this Agreement,  Holmberg shall sell,  convey,
transfer and assign, or cause to be sold, conveyed,  transferred and assigned to
Buyer or its designee the Property whose address is generally known as 300 South
3rd Street, Minneapolis,  Minnesota 55415 and all improvements thereon, pursuant
to General  Warranty  Deed which shall convey good and  marketable  title to the
Property,  free and clear of all claims,  liens or  encumbrances.  Holmberg  and
Buyer shall enter into an Earnest  Money  Contract by and between  Holmberg  and
Buyer which shall be executed and delivered simultaneously with the execution of
this  Agreement,  in the form  attached  hereto as Exhibit 1.2  ("Earnest  Money
Contract").

         1.3 PURCHASE PRICE. As  consideration  for the Purchased Assets and the
Property,  Buyer  shall  pay,  at  Closing  to Seller  and  Holmberg,  the total
aggregate sum of $3,000,000.00 ("Purchase Price"), payable as follows:

         (i)      $500,000.00  payable by cashier's  check,  certified  funds or
                  wire  transfer  at  Closing  of  which  $250,000.00  shall  be
                  allocated  to the  purchase of the  Property  and  $250,000.00
                  shall be allocated to the  purchase of the  Purchased  Assets;
                  and

         (ii)     the  remaining  $2,500,000.00  of the Purchase  Price shall be
                  paid  by  Buyer's   execution   and  delivery  of  a  Mortgage
                  Promissory  Note in the form  attached  hereto as Exhibit  1.3
                  (ii)(a) in the  amount of  $500,000.00  ("Mortgage  Promissory
                  Note") and a Promissory  Note in the form  attached  hereto as
                  Exhibit 1.3 (ii)(b) in the amount of  $2,000,000.00  amortized
                  over 20 years,  bearing  interest at the rate of nine  percent
                  (9%) per annum,  payable in 119 equal  monthly  principal  and
                  interest installments, with a final balloon payment due on the
                  120th monthly  installment  payment  ("Promissory  Note"). The
                  Mortgage Promissory Note will be secured by the First Mortgage
                  Deed in the form attached hereto as Exhibit 1.3(ii)(c) and the
                  Promissory Note will be secured by a Security Agreement in the
                  form attached hereto as Exhibit 1.3(ii)(d).

         1.4  PAYMENT OF  EARNEST  MONEY.  Buyer  shall  pay,  as earnest  money
("Earnest  Money"),  upon execution and delivery of this  Agreement,  the sum of
$60,000.00,  pursuant  to the terms of the Ernest  Money  Contract.  The Earnest
Money shall be deposited with a title company mutually agreeable to the parties,
as escrow agent,  which Earnest Money shall be applied,  subject to Closing,  to
the Purchase  Price.  In the event this  Agreement is terminated and the Closing
does not occur,  the Earnest Money,  together with any earned interest  thereon,
shall be delivered in the manner set forth in Article 9 hereof.

         1.5 NO  ASSUMPTION OF  LIABILITIES.  The Buyer shall have no obligation
and shall not assume or agree to pay, perform or discharge,  nor shall the Buyer
be directly or indirectly responsible or obligated for, any debts,  obligations,
contracts or liabilities of the Seller, wherever or however incurred, except for
leases  assumed by Buyer,  which monthly  expenses  shall be pro rated as of the
Closing.  All real and personal  property taxes on the Purchased  Assets and the
Property  will be paid in full by the Seller or Holmberg  for all years prior to
the  Closing  Date and for the year of Closing  will be pro rated to the Closing
Date.

         1.6 ALLOCATION OF PURCHASE  PRICE.  The Purchase Price of the Purchased
Assets and the Property  shall be allocated  among the Purchased  Assets and the
Property in accordance  with a schedule which shall be agreed upon and signed by
all of the parties hereto at or prior to the Closing Date.

<PAGE>

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES
                           OF THE SELLER AND HOLMBERG

         The Seller and Holmberg,  jointly and severally,  represent and warrant
to Buyer as follows;

         2.1 ORGANIZATION AND CAPITALIZATION OF SELLER.  Seller is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Minnesota, with full power and authority and all necessary governmental
and regulatory  licenses,  permits and authorizations to carry on the businesses
in which it is engaged,  to own the  properties  that it owns currently and will
own at the Closing,  and to perform its obligations  under this  Agreement.  The
authorized capital stock of Amusement Center and B&R II, each, consists of 1,000
shares of common  stock,  $1.00 par value,  of which  1,000  shares are  validly
issued and  outstanding.  All of such  issued and  outstanding  shares of common
stock of Seller is owned by Holmberg and are fully paid and non-assessable.

         2.2  AUTHORIZATION  OF AGREEMENT.  Seller has all  requisite  corporate
power and  authority  to execute and deliver this  Agreement  and to perform its
obligations  hereunder.  The execution and delivery by Seller of this  Agreement
and the  performance by Seller of its  obligations  hereunder (a) have been duly
and  validly  authorized  by all  requisite  corporate  action  and (b) will not
violate its charter or bylaws or any order, writ, injunction,  decree,  statute,
rule or regulations  applicable to it or any of its properties or assets,  or be
in conflict with,  result in a breach of or constitute a default under any note,
bond,  indenture,   mortgage,  lease,  license,  franchise  agreement  or  other
agreement,  instrument or obligation, or result in the creation or imposition of
any lien, charge or encumbrance of any kind or nature whatsoever upon any of the
properties or assets of Seller.  This  Agreement  and each and every  agreement,
document, exhibit and instrument to be executed,  delivered and performed by the
Seller or Holmberg in connection  herewith constitute or will, when executed and
delivered,  constitute the valid and legally  binding  obligations of the Seller
and Holmberg, as the case may be, enforceable against each of them in accordance
with  their  respective  terms,  except  as  enforceability  may be  limited  by
applicable  equitable principles or by bankruptcy,  insolvency,  reorganization,
moratorium,  or  similar  laws  from  time  to  time  in  effect  affecting  the
enforcement of creditors' rights generally.

         2.3  CONSENTS.  Except as set forth on  Exhibit  2.3,  no  consent  of,
approval by, order or authorization  of, or registration,  declaration or filing
by Seller or Holmberg with, any court or any  governmental or regulatory  agency
or  authority  having  jurisdiction  over  Seller  or  Holmberg  or any of their
property  or  assets or any other  person  is  required  on the part of Buyer in
connection  with  the  consummation  of the  transactions  contemplated  by this
Agreement,  excluding  any  registration,  declaration  or filing the failure to
effect which would not have a material adverse effect on the financial condition
of Buyer or the operation of its business after the Closing.

         2.4 TITLE TO  PURCHASED  ASSETS AND  PROPERTY.  The Seller and Holmberg
will have at Closing good and  marketable  title to all of the Purchased  Assets
and Property,  respectively, which are being sold to Buyer under this Agreement,
free and clear of all liens, claims, charges,

<PAGE>

encumbrances, restrictions or security interests, except as set forth in Exhibit
2.4,  which  obligations  will be paid in full at Closing.  All of the Purchased
Assets which are to be acquired by Buyer are in the possession of Seller and are
generally  in good  operating  condition  and  repair  (ordinary  wear  and tear
excepted).  Neither Seller nor Holmberg is a party to any contract or obligation
whereby  there has been  granted to anyone an  absolute or  contingent  right to
purchase,  obtain or acquire any rights in the Property or in any of the assets,
properties or  operations  of Seller or used in connection  with the business of
Seller.

         2.5  CONTRACTS AND LEASES.  Except as disclosed in Exhibit 2.5,  Seller
(i) has no leases of personal property relating to the Purchased Assets, whether
as lessor or lessee;  (ii) has no contractual or other  obligations  relating to
the Purchased Assets, whether written or oral; and (iii) has not given any power
of  attorney  to any person or  organization  for any  purpose  relating  to the
Purchased  Assets.  Except as  disclosed  in Exhibit  2.5,  Holmberg has no real
estate lease on the Property in which he is the landlord or lessor.  Exhibit 2.5
sets forth a complete  list,  including  any amendment of each lease or contract
which are part of the Purchased  Assets to be acquired by the Buyer.  Seller has
furnished Buyer a copy of each contract, lease or other document relating to the
Purchased  Assets to which  they are  subject  or are a party or a  beneficiary,
which is to be assumed or acquired by Buyer. Except as disclosed on Exhibit 2.5,
to Seller's and Holmberg's knowledge, such contracts,  leases or other documents
are valid and in full force and effect  according to their terms and constitutes
a legal,  valid and  binding  obligation  of Seller  or  Holmberg  and the other
respective  parties  thereto and is enforceable in accordance  with their terms,
and neither Seller nor Holmberg has any knowledge of any default or breach under
such contract,  lease or other  document or of any pending or threatened  claims
under  any such  contract,  lease or other  document.  Neither  the  signing  or
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 contract, lease or other document.

         2.6  LITIGATION.  Except as disclosed in Exhibit 2.6, there is no suit,
claim,  arbitration,  investigation,  action or proceeding entered against,  now
pending or, to the  Seller's or  Holmberg's  knowledge,  threatened  against the
Purchased Assets or the Property, before any court, arbitration,  administrative
or regulatory body or any governmental  agency which may result in any judgment,
order,  award,  decree,  liability  or other  determination  which will or could
reasonably be expected to have any effect upon the Purchased Assets or Property,
nor is there any basis known to Seller or Holmberg for any such action.  Neither
Seller nor  Holmberg  is subject to any  judicial  injunction  or mandate or any
quasi-judicial or administrative  order or restriction directed to or against it
or him or which would affect the Purchased Assets or Property.

         2.7 TAXES.  Seller and Holmberg  have timely and  accurately  filed all
federal,  state,  foreign and local tax returns and reports required to be filed
by them prior to such dates and have timely paid all taxes shown on such returns
as owed for the periods of such  returns,  including  all  withholding  or other
payroll  related  taxes shown on such  returns.  Seller and  Holmberg  have made
adequate provision for the payment of all taxes accruable for all periods ending
on or before the Closing Date to any taxing  authority and are not delinquent in
the  payment  of any  material  tax or  governmental  charge of any  nature.  No
assessments or notices of deficiency or other  communications have been received
by Seller or Holmberg  with  respect to any tax return  which has not been paid,
discharged or fully reserved against and no amendments or applications

<PAGE>

for refund have been filed or are planned with respect to any such return. There
are  no  agreements  between  Seller  or  Holmberg  and  any  taxing  authority,
including,   without  limitation,  the  Internal  Revenue  Service,  waiving  or
extending any statute of limitations with respect to any tax return.

         2.8      FINANCIAL INFORMATION.

                  (a) Buyer has been  provided  with true,  correct and complete
         copies of the Federal  Income Tax Returns  (Form  1120S) for  Amusement
         Center for the years ended  December  30,  1994 and 1995,  respectively
         ("Tax Returns). Buyer has also received true and complete copies of the
         unaudited  balance  sheet as of  November  30,  1996,  and the  related
         unaudited statements of income for the eleven months period then ending
         (the "Financial  Statement") for Amusement Center and B & R II. The Tax
         Returns and the Financial  Statements are in accordance  with the books
         and  records of Amusement  Center and B & R II  and fairly  present the
         financial position of the corporations and the result of operations and
         changes in financial  position of the  corporations as of the dates and
         for  the  periods  indicated,  in  each  case in  conformity  with  the
         compilation by the corporations' certified public accountant,  compiled
         on a consistent basis.

                  (b) Seller has no liability or  obligation  (whether  accrued,
         absolute,  contingent or otherwise) which is of a nature required to be
         reflected  in  financial  statements  prepared in  conformity  with the
         compilation by the corporations' certified public accountant,  compiled
         on a consistent  basis,  except for (i) the liabilities and obligations
         which are disclosed, or reserved against in the Financial Statements or
         Exhibit 2.8(b) hereto, to the extent and in the amounts so disclosed or
         reserved  against,  and (ii)  liabilities  incurred  or  accrued in the
         ordinary  course of business  since  December 1, 1996 and which do not,
         either individually or in the aggregate,  have an adverse effect on the
         business, assets or operations of the Seller.

                  (c) Except as disclosed in the Interim Financial Statements or
         Exhibit  2.8(c),   Seller  is  not  in  default  with  respect  to  any
         liabilities  or  obligations,  and all such  liabilities or obligations
         shown or  reflected  in the  Interim  Financial  Statements  or Exhibit
         2.8(c) and such liabilities  incurred or accrued subsequent to December
         1, 1996 have been,  or are being,  paid and  discharged  as they become
         due, and all such  liabilities  and  obligations  were  incurred in the
         ordinary course of business.

         2.9 COMPLIANCE WITH LAWS.  Seller is and at all times prior to the date
hereof has been, in compliance with all statutes, orders, rules, and regulations
applicable  to it or to the  ownership  of its  assets or the  operation  of its
business, 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 Seller,  and Seller  and  Holmberg  have no basis to expect to
receive,  and have not  received,  any order or notice of any such  violation or
claim of violation of any such statute, order, rule, ordinance or regulation.

         2.10 ENTERTAINMENT LICENSE. A Place of Entertainment License for Seller
issued by the City of  Minneapolis,  Minnesota  is in full  force and effect and
will remain in full force and effect until the Closing.

<PAGE>

         2.11 INTELLECTUAL PROPERTY. The Seller is the owner of all right, title
and interest in and to all of the Intellectual  Property used in connection with
the operation of Buns & Roses. Such  Intellectual  Property is free and clear of
any material liens, mortgages, judgments, or other encumbrances of any kind, and
no rights or licenses of any kind respecting the Intellectual property have been
granted to any third party. There are no outstanding,  or, to the best knowledge
of the Seller or Holmberg,  threatened claims of infringement  against Seller or
Holmberg  respecting the use of any of the  Intellectual  Property in connection
with the  operations  or business of the Seller and it has no  knowledge  of any
trademark,  service mark, trade name,  assumed name,  copyright,  patent,  trade
secret,  contractual or other rights of any third party which may be violated or
infringed  by the use of any of the  Intellectual  Property in  connection  with
Seller's operations or business.

         2.12 INSURANCE  POLICIES.  Exhibit 2.12 contains a complete and correct
list of the insurance coverage maintained by the Seller.  Copies of all policies
relating to such insurance  carried by the Seller have been delivered or will be
made  available to Buyer.  The policies of insurance  held by Seller are in such
amounts,  and insure against such losses and risks, as Seller  reasonably  deems
appropriate  for its  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.

         2.13 LABOR MATTERS.  Seller 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  Seller  any labor  disputes,  strikes  or work
stoppages.  To the best of  Seller's  and  Holmberg's  knowledge,  Seller  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 its
knowledge,  is not engaged in any unfair labor practices.  Seller is not a party
to any written or oral contract,  agreement or understanding  for the employment
of any officer, director or employee of the Seller.

         2.14  ENVIRONMENTAL  MATTERS.  Except  as set  forth in  Exhibit  2.14,
neither the Seller nor any other party to this  Agreement is now, nor has in the
past,  used or is using the Property  for the  handling,  treatment,  storage or
disposal of any Hazardous  Substance  (as  hereinafter  defined).  Except as set
forth in Exhibit  2.14,  no  release,  discharge,  spillage  or  disposal of any
Hazardous  Substance  and no  soil  or  water  contamination  by  any  Hazardous
Substance  has  occurred or is occurring  in or on the  Property.  Except as set
forth in Exhibit 2.14,  the Seller and Holmberg have complied with all reporting
requirements under any applicable federal, state or local environmental laws and
permits,  and there are no existing  violations by the Seller or Holmberg of any
such environmental  laws or permits.  Except as set forth in Exhibit 2.14, there
are no claims,  actions,  suits,  proceedings or  investigations  related to the
presence, release, discharge, spillage or disposal of any Hazardous Substance or
contamination of soil or water by any Hazardous  Substance pending or threatened
with respect to the Property or otherwise  against the Seller or Holmberg in any
court or before  any  state,  federal  or other  governmental  agency or private
arbitration  tribunal  and to the best of the  knowledge of Seller and any other
party to this  Agreement,  there is no basis for any such claim,  action,  suit,
proceeding  or  investigation.  To the best of  their  knowledge,  there  are no
underground  storage tanks on the  Property.  Neither the Seller nor Holmberg is
aware of any building or other improvement included in the Property

<PAGE>

which  contains  any  asbestos  or any  asbestos-containing  materials.  For the
purposes of this Agreement,  "Hazardous  Substance"  shall mean any hazardous or
toxic substance or waste as those terms are defined by any applicable federal or
state  law  or  regulation  including,  without  limitation,  the  Comprehensive
Environmental  Recovery  Compensation and Liability Act, 42 U.S.C.  9601 and the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 and petroleum,  petroleum
products and oil.

         2.15 NO DEFAULT.  Seller is not in default  under any term or condition
of any instrument  evidencing,  creating or securing any indebtedness of Seller,
and there has been no default in any  material  obligation  to be  performed  by
Seller under any other contract, lease, agreement,  commitment or undertaking to
which it is a party or by which it or its assets or  properties  are bound,  nor
has Seller waived any material right under any such contract,  lease, agreement,
commitment or undertaking.

         2.16  ABSENCE  OF CHANGE.  Neither  the  Seller  nor  Holmberg  has any
knowledge of any present or future  condition or state of facts or circumstances
which would  materially and adversely  affect the business of the Seller.  Since
December 1, 1996,  the Seller has conducted its business in the ordinary  course
of business.

         2.17 DISCLOSURE.  No  representation  or warranty of Seller or Holmberg
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.

         2.18 NO  BROKERAGE  COMMISSION.  No broker or finder  has acted for the
Seller  in  connection  with this  Agreement  or the  transactions  contemplated
hereby,  and  no  person  is  entitled  to  any  brokerage  or  finder's  fee or
compensation in respect thereof based in any way on agreements,  arrangements or
understandings made by or on behalf of the Seller.


                                   ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer hereby represents and warrants to Seller and Holmberg as follows:

         3.1  ORGANIZATION  OF BUYER.  Buyer is a  corporation  duly  organized,
validly  existing and in good  standing in the laws of the state of Texas,  with
full power and authority to carry on the  businesses in which it is engaged,  to
own the properties  that it owns  currently and will own at the Closing,  and to
perform its obligations under this Agreement.

         3.2 AUTHORIZATION OF AGREEMENT. Buyer has all requisite corporate power
and  authority  to  execute  and  deliver  this  Agreement  and to  perform  its
obligations hereunder. The execution and delivery by Buyer of this Agreement and
the  performance  by Buyer of its  obligations  hereunder (a) have been duly and
validly  authorized by all requisite  corporate  action and (b) will not violate
its charter or bylaws or any order, writ, injunction,  decree,  statute, rule or
regulations  applicable  to it or any  of its  properties  or  assets,  or be in
conflict  with,  result in a breach of or  constitute a default  under any note,
bond, indenture, mortgage, lease, license,

<PAGE>

franchise agreement or other agreement,  instrument or obligation,  or result in
the creation or imposition  of any lien,  charge or  encumbrance  of any kind or
nature  whatsoever upon any of the properties or assets of Buyer. This Agreement
and each and every agreement,  document,  exhibit and instrument to be executed,
delivered and performed by the Buyer in connection  herewith constitute or will,
when  executed  and  delivered,   constitute  the  valid  and  legally   binding
obligations  of the  Buyer  enforceable  against  it in  accordance  with  their
respective  terms,  except  as  enforceability  may  be  limited  by  applicable
equitable principles or by bankruptcy, insolvency,  reorganization,  moratorium,
or  similar  laws from  time to time in  effect  affecting  the  enforcement  of
creditors' rights generally.

         3.3  DISCLOSURE.  No  representation  or warranty of Buyer 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.

         3.4 INSURANCE.  Buyer shall maintain insurance at such amounts and such
liabilities of hazards as is customarily maintained by other companies operating
similar  businesses.  Buyer shall  deliver  Certificates  of such  insurance  to
Sellers and Holmberg,  and such Certificates  shall be specified to all policies
of  insurance  in effect  and shall not be  canceled  except  upon 10 days prior
written  notice to Seller and Holmberg;  such  insurance  shall include  general
comprehensive  liability  insurance and coverage amount not less than $1,000,000
per occurrence and per person;  the insurance on the Property shall include fire
and extended  coverages in the amount not less than the Purchase  Price assigned
to the Property; and all policies of insurance shall name Seller and Holmberg as
an additional insured thereunder.

         3.5  DISPOSITION OF ASSETS.  Buyer may sell or dispose of any inventory
assets in the usual and ordinary course of business,  and may sell or dispose of
equipment  provided the same shall be replaced  with new  equipment of like kind
and quality. All of the Buyer's assets shall be maintained in good working order
and repair.

         3.6 BROKERAGE  COMMISSION.  No broker or finder has acted for the Buyer
in connection with this Agreement or the transactions  contemplated  hereby, and
no person is  entitled  to any  brokerage  or finder's  fee or  compensation  in
respect thereof based in any way on agreements,  arrangements or  understandings
made by or on behalf of the Buyer, except the obligation of Buyer to pay for the
services to Gilbert Kopolow, with Gilbert Kopolow and Associates Investments.

                                   ARTICLE IV
                                    COVENANTS

         4.1  CONSENTS  AND FURTHER  ACTIONS.  As soon as  practicable,  Seller,
Holmberg and Buyer will jointly commence to take all reasonable  action required
to obtain all  consents,  approvals  and  agreements of any third parties at the
expense of Buyer.  Specifically,  without  limiting  the  foregoing,  Buyer will
commence to take all  reasonable  action  required to obtain the issuance of any
and  all  permits  necessary  to  operate  Buns  &  Roses  as a  female  topless
entertainment  facility,  including the issuance of a liquor license duly issued
and approved by the City of Minneapolis  which will allow for the sale of liquor
by Buyer at Buns & Roses. Seller,

<PAGE>

Holmberg  and  Buyer  each will keep the  other  informed  of the  status of any
inquiries made of such party by any governmental  agency or authority or members
of their  respective  staffs with respect to this Agreement or the  transactions
contemplated  hereby.  In addition,  subject to the terms and conditions  herein
provided,  each of  Seller,  Holmberg  and  Buyer  covenants  and  agrees to use
reasonable efforts to take, or cause to be taken, all action, or do, or cause to
be done, all things,  necessary,  proper or advisable under  applicable laws and
regulations to consummate and make effective the  transactions  contemplated  by
this Agreement.

         4.2 CONDUCT OF BUSINESS OF SELLER.  The Seller and Holmberg  agree that
during the period from the date of this Agreement to the Closing Date, except as
expressly  contemplated  by this  Agreement  or to the  extent  that  Buyer  may
otherwise consent in writing,  which consent shall not be unreasonably withheld,
Seller and Holmberg  shall cause Buns & Roses (a) to conduct its business in the
ordinary and usual  course;  (b) to make no material  changes in its  operations
except as expressly contemplated by this Agreement;  (c) to use its best efforts
to maintain and preserve its business  organization,  employees,  customers  and
relationships;  (d) to enter into no employment agreement with any person and to
grant no changes in  compensation  of  employees;  (e) to pay and  discharge all
bills and monetary  obligations  in the ordinary  course and timely and properly
perform all of its obligations and commitments under all existing  contracts and
agreements pertaining to the business,  except as to amounts or obligations that
Seller contests in good faith; (f) not to sell, lease or otherwise dispose of or
agree to sell,  lease or otherwise  dispose of any of its assets,  except in the
ordinary course of business; (g) not to declare or pay any dividends or make any
distribution  on any of its capital  stock,  except for Regulation S corporation
distributions;  (h) to make no capital expenditures in excess of $10,000; (I) to
make no loans or advances to officers of Seller;  (j) to make no  guaranties  of
the obligations or debts of others;  (k) to incur no debts or obligations of any
other corporation or entity;  (l) to purchase no stock of or otherwise invest in
any other corporation or entity; and (m) to issue no additional capital stock.

         4.3 ACCESS TO  INFORMATION.  Between the date of this Agreement and the
Closing Date,  Seller shall give Buyer and its authorized  representatives  full
access, at all reasonable times, to its businesses,  properties and assets,  and
all of its financial books and records,  agreements and records  relating to the
ownership and operation of Seller as shall be reasonably requested.  Seller will
permit  Buyer  and its  representatives  to make  such  inspections  as they may
require  and will  cause  the  officers  of Seller to  cooperate  with  Buyer in
connection with such inspection.

         4.4  PROHIBITED  NEGOTIATIONS.  Subsequent  to  the  execution  of  the
Agreement,  and prior to the Closing Date of the  Agreement,  neither the Seller
nor Holmberg  shall solicit or encourage  inquiries or proposals with respect to
or furnish any  information  relating to or participate in any  negotiations  or
discussions  concerning,   any  sale  or  conveyance  of  the  Property  or  any
acquisition or purchase of all or a substantial  portion of the assets of Seller
or of a equity  interest in Seller,  or any  business  combination  with Seller.
Seller  and/or  Holmberg  hereby  agree to advise  Buyer of any contact from any
third party  regarding the  acquisition  of the Property or the  acquisition  or
other  investment  in  Seller  or of  any  contact  which  would  relate  to the
transactions contemplated by this Agreement.

         4.5  PUBLIC  ANNOUNCEMENTS.   Each  party  shall  promptly  advise  and
cooperate  with the other prior to issuing,  or permitting any of its directors,
officers, employees or agents to issue,

<PAGE>

any press  release or other  information  to the press or otherwise  for general
release with respect to this Agreement or the transactions  contemplated hereby.
Seller  and  Holmberg  shall  have the right to  advise  its  employees  of this
transaction as of the date the Liquor License is applied for.

         4.6  FINDERS  AND  BROKERS  FEES.  Each  party  shall be liable for any
finder's or broker's  fees for which it has  contracted  or which may arise from
its  conduct.  Each party  shall  indemnify  and hold  harmless  the other party
against any liability,  damage, cost or expense involving a finder's or broker's
fee and arising out of the  conduct of such party.  Any  expenses or fees due to
Mr. Gilbert Kopolow shall be at the expense of Buyer.

                                    ARTICLE V
                              CONDITIONS TO CLOSING

         5.1  CONDITIONS  TO  THE  OBLIGATIONS  OF  SELLER  AND  HOLMBERG.   The
obligations of Seller and Holmberg to consummate the  transactions  contemplated
hereby shall be subject to the  satisfaction,  on or before the Closing Date, of
each and every one of the following  conditions,  unless waived,  in whole or in
part, by Seller and Holmberg for purposes of consummating such transaction.

                  (a) The  representations  and warranties of Buyer set forth in
         this  Agreement  shall be true and correct in all material  respects on
         the  Closing  Date with the same  force and  effect as if they had been
         made on the Closing Date;

                  (b)  Buyer  shall  have   performed   and  complied  with  all
         agreements,  obligations,  covenants  and  conditions  required by this
         Agreement to be performed or complied with on or prior to the Closing;

                  (c) The Seller and Holmberg shall have received a certificate,
         dated the Closing Date and signed by the  president of the Buyer to the
         effect  set forth in  Section  5.1(a)  and  5.1(b)  for the  purpose of
         verifying the accuracy of such  representations  and warranties and the
         performance and satisfaction of such covenants and conditions;

                  (d) Execution and delivery of the Mortgage Promissory Note and
         the Promissory Note by Buyer;

                  (e) Execution  and delivery of the First  Mortgage Deed on the
         Property to Holmberg;

                  (f)      Execution and delivery of the Security Agreement;

                  (g) Axelrod, Smith & Kirshbaum,  counsel for Buyer, shall have
         delivered to Seller and Holmberg the written  opinion,  dated as of the
         Closing  Date,  in form and  substance  satisfactory  to Seller and its
         counsel, to the effect set forth on Exhibit 5.1.(g) and containing such
         other provisions as the parties may agree; and

                  (h) 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

<PAGE>

         governmental or regulatory  authority shall have been commenced seeking
         to restrain,  prevent or challenge the transactions contemplated hereby
         or seeking judgments against Buyer.

         5.2  CONDITIONS TO THE  OBLIGATIONS  OF BUYER.  The  obligations of the
Buyer to effect the  transactions  contemplated  hereby  shall be subject to the
satisfaction,  on or  before  the  Closing  Date,  of each and  every one of the
following conditions,  unless waived, in whole or in part, by Buyer for purposes
of consummating such transaction.

                  (a) The  representations and warranties of Seller and Holmberg
         set forth herein shall be true and correct in all material  respects on
         the  Closing  Date with the same  force and  effect as if they had been
         made on the Closing Date;

                  (b)  Seller  shall  have   performed  and  complied  with  all
         agreements,  obligations,  covenants  and  conditions  required by this
         Agreement to be performed or complied with by Seller on or prior to the
         Closing;

                  (c) The Buyer  shall have  received a  certificate,  dated the
         Closing  Date and signed by the  president  of the Seller to the effect
         set forth in Section 5.2(a) and 5.2(b) for the purpose of verifying the
         accuracy of such representations and warranties and the performance and
         satisfaction of such covenants and conditions;

                  (d)  Approval  and  issuance to the Buyer of a liquor  license
         duly issued,  approved and authorized by the City of Minneapolis  which
         will  allow for the sale of liquor by the Buyer at the  premises  where
         Buns & Roses is located;

                  (e) Buyer shall have obtained all  necessary  permits or other
         authorizations which may be needed to conduct topless  entertainment on
         the Property;

                  (f) Buyer shall have received from Holmberg a General Warranty
         Deed  conveying  good and  marketable  title to the Property,  free and
         clear of any liens, charges or encumbrances (except a first lien on the
         Property  to Holmberg by Buyer) and all  contingencies  and  conditions
         pursuant to the Earnest Money Contract shall have been fulfilled;

                  (g) Written  termination  of the  existing  Real Estate  Lease
         between Holmberg and Amusement Center for the lease of the Property and
         the Sublease between Amusement Center and B&R II;

                  (h) Holmberg  shall have  executed and  delivered to Buyer the
         Non-Competition Agreement required by Section 6.2(a);

                  (i) Seller shall have  delivered to Buyer all  instruments  of
         assignment  and bills of sale  necessary  to transfer to Buyer good and
         marketable title to the Purchased Assets;

                  (j) The independent  certified public accountants of the Buyer
         shall be satisfied  that the Seller's  books and records can be audited
         for the fiscal  years  ended 1994 and 1995 and for the  current  fiscal
         year of 1996;

<PAGE>

                  (k) Bernick and Lifson P.A.,  counsel for Seller and Holmberg,
         shall have  delivered  to Buyer the  written  opinion,  dated as of the
         Closing  Date,  in form and  substance  satisfactory  to Buyer  and its
         counsel,  to the effect set forth on Exhibit 5.2(k) and containing such
         other provisions as the parties may agree; and

                  (l) 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 Seller.


                                   ARTICLE VI
                                   THE CLOSING

         6.1 TIME AND PLACE OF CLOSING. The Closing of the transactions provided
for in this  Agreement  ("Closing")  shall be held at the  offices of Messerli &
Kramer P.A., 1800 5th Street Towers, Minneapolis, Minnesota 55402, commencing at
10:00 a.m.  Central  Daylight  Time on the sooner of (i) April 30,  1997 or (ii)
five (5) business  days after the  issuance and approval of a liquor  license to
Buyer,  unless the liquor  license is not  approved and issued to Buyer by April
30, 1997,  in which event the Closing  shall occur five (5) business  days after
such  approval is  obtained.  In the event that the liquor  license has not been
approved  and  issued to Buyer by 5:00 p.m.  Central  Daylight  Time on July 31,
1997, then,  unless otherwise  provided below,  either party may provide written
notice to the other that this  Agreement  is canceled  and  terminated.  In such
event, the Earnest Money, together with any accrued interest, shall be delivered
in the manner set forth in Article 9 hereof.  In the event that the Closing does
not  occur by July 31,  1997,  the  Seller  shall  have the  right,  but not the
obligation,  to extend the date of  Closing,  on a month to month  basis,  until
October 31, 1997, by the payment to the Seller,  on a month to month basis, of a
$25,000.00  extension  fee for each month  extended.  The Buyer  shall make such
$25,000.00  extension  fee  payment to the Seller on or before two days prior to
the end of the  month  preceding  the  month  for  which an  extension  is to be
obtained.  The day on which  the  Closing  occurs is  referred  to herein as the
"Closing Date."

         6.2 RELATED  TRANSACTION.  In addition to the  purchase and sale of the
Purchased  Assets  and the  Property,  the  following  action  shall  take place
contemporaneously at the Closing:

                  (a) Holmberg shall enter into a  Non-Competition  Agreement to
         be dated  the  Closing  Date and to be in the form of  Exhibit  6.2(a),
         attached hereto (the "Non-Competition Agreement"); and

                  (b)  Holmberg  and Buyer shall have duly  performed,  complied
         with and  satisfied all  covenants,  agreements,  terms and  conditions
         required by the Earnest Money  Contract to be performed,  complied with
         or satisfied by them at the Closing Date.

<PAGE>

         6.3 CLOSING  DOCUMENTS OF SELLER AND HOLMBERG.  At the Closing,  Seller
and Holmberg shall deliver or cause to be delivered to Buyer the following:

                  (a) all  instruments of assignment and bills of sale necessary
         to transfer to Buyer good and marketable  title to the Purchased Assets
         free and clear of all liens, charges or encumbrances;

                  (b) Buyer shall have received from Holmberg a General Warranty
         Deed conveying good and marketable title to the Property free and clear
         of all  liens,  charges  or  encumbrances  (except a first  lien on the
         Property to Holmberg by Buyer);

                  (c) Written termination  agreement of the existing Real Estate
         Lease  between  Holmberg  and  Amusement  Center  for the  lease of the
         Property and the Sublease between Amusement Center and B&R II;

                  (d) officers certificate required by Section 5.2(c); and

                  (e) opinion of Bernick and Lifson, P.A., counsel to Seller and
         Holmberg, substantially in the form attached hereto as Exhibit 5.2(e).

         6.4 CLOSING DOCUMENTS OF BUYER. At the Closing,  Buyer shall deliver or
cause to be delivered to Seller and Holmberg, the following:

                  (a) $440,000.00,  payable in certified  check,  bank check, or
         "Fed Funds" wire transfer;

                  (b) $60,000.00 to be transferred from the Earnest Money Escrow
         Account as set forth in Section 1.4 and in the Earnest Money Contract;

                  (c) Mortgage Promissory Note in the amount of $500,000.00, the
         form of which is set forth as Exhibit 1.3 (ii)(a);

                  (d) Promissory Note in the amount of  $2,000,000.00,  the form
         of which is set forth as Exhibit 1.3 (ii)(b);

                  (e)  First  Mortgage  Deed  on  the  Property  from  Buyer  to
         Holmberg, the form of which is set forth as Exhibit 1.3 (ii)(c);

                  (f)  Security  Agreement,  the form of  which is set  forth as
         Exhibit 1.3 (ii)(d);

                  (g)      officers certificate required by Section 5.1(c); and

                  (h) opinion of Axelrod, Smith & Kirshbaum,  counsel for Buyer,
         substantially in the form attached hereto as Exhibit 5.1(g).

<PAGE>

                                   ARTICLE VII
                                 INDEMNIFICATION

         7.1  INDEMNIFICATION  FROM THE  SELLER  AND  HOLMBERG.  The  Seller and
Holmberg  agree to and shall  indemnify,  defend (with legal counsel  reasonably
acceptable to Buyer),  and hold Buyer,  its officers,  directors,  shareholders,
employees,  agents, affiliates, and assigns harmless at all times after the date
of this  Agreement,  from and against and in respect of, any  liability,  claim,
deficiency,  loss,  damage or  injury,  and all  reasonable  costs and  expenses
(including  reasonable  attorneys'  fees and costs of any suit related  thereto)
suffered or  incurred by Buyer  arising  from (a) any  misrepresentation  by, or
breach of any  covenant  or warranty  of Seller or  Holmberg  contained  in this
Agreement, or any Exhibit,  certificate,  or other instrument furnished or to be
furnished  by  Seller  or  Holmberg  hereunder,  or any  claim by a third  party
(regardless  of whether the  claimant is  ultimately  successful)  which if true
would be such a  misrepresentation  or  breach;  (b) any  nonfulfillment  of any
agreement on the part of Seller or Holmberg  under this  Agreement,  or from any
material  misrepresentation  in or material  omission from,  any  certificate or
other instrument  furnished or to be furnished to Buyer  hereunder;  and (c) any
suit, action, proceeding, claim or investigation,  pending or threatened against
or affecting Seller or Holmberg which arises from, which arose from, or which is
based upon any matter or state of facts existing prior to Closing.

         7.2  INDEMNIFICATION  FROM THE  BUYER.  The  Buyer  agrees to and shall
indemnify,  defend  (with  legal  counsel  reasonably  acceptable  to Seller and
Holmberg) and hold Seller and Holmberg, its officers,  directors,  shareholders,
employees,  agents and  assigns  harmless at all times after the date of Closing
from and against,  and in respect of any  liability,  claim,  deficiency,  loss,
damage, or injury, and all reasonable costs and expenses  (including  reasonably
attorneys' fees and costs of any suit related  thereto)  suffered or incurred by
Seller  and  Holmberg,  from (a) any  misrepresentation  by,  or  breach  of any
covenant or warranty of, the Buyer  contained in this  Agreement or any Exhibit,
certificate,  or other  agreement or instrument  furnished or to be furnished by
Buyer  hereunder,  or any claim by a third  party  (regardless  of  whether  the
claimant  is   ultimately   successful),   which  if  true,   would  be  such  a
misrepresentation or breach; (b) any nonfulfillment of any agreement on the part
of Buyer  under this  Agreement,  or from any  misrepresentation  in or omission
from,  any  certificate  or other  agreement  or  instrument  furnished or to be
furnished to Seller or Holmberg hereunder; and (c) any suit, action, proceeding,
claim or  investigation  which  arises from or which is based upon any matter or
state of facts subsequent to Closing.

         7.3 DEFENSE OF CLAIMS.  If any lawsuit or  enforcement  action is filed
against any party entitled to the benefit of indemnity hereunder, written notice
thereof shall be given to the indemnifying party as promptly as practicable (and
in any event not less than  fifteen (15) days prior to any hearing date or other
date  by  which  action  must  be  taken);  provided  that  the  failure  of any
indemnified   party  to  give  timely   notice   shall  not  affect   rights  to
indemnification  hereunder  except to the  extent  that the  indemnifying  party
demonstrates  actual damage caused by such  failure.  After such notice,  if the
indemnifying  party shall  acknowledge in writing to such indemnified party that
this  Agreement  applies  with  respect  to such  lawsuit  or  action,  then 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

<PAGE>

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  parties,  effect any
settlement of any  proceeding in respect of which any  indemnified  parties 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  parties from all liability on claims that are the subject matter of
such proceeding.

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

                                  ARTICLE VIII
                                   INTEGRATION

         The  parties  acknowledge  and agree  that all  agreements,  documents,
obligations and transactions contemplated by this Agreement shall be integrated.
Accordingly, if there shall be a default, nonperformance or breach of any of the
same, or any  obligation  exists 30 days after notice of such default (five days
if for nonpayment),  non-performance  or breach is given to the party committing
the same, the same shall constitute a material breach of all obligations and all
of such agreements,  documents, obligations and transactions,  entitling Seller,
Holmberg,  or Buyer to pursue any or all  available  legal  remedies  at law, in
equity or by any of such  agreements.  All remedies  shall be cumulative and the
failure  or choice by  Seller,  Holmberg  or Buyer to  exercise  any one or more
remedies  shall not preclude or prevent the later  exercise of any such remedies
from time to time. The party committing such default,  nonperformance  or breach
shall be responsible  for the reasonable  attorneys'  fees incurred by the other
party  as a result  of such  default,  nonperformance  or  breach,  even if such
default, nonperformance or breach is subsequently cured.

                                   ARTICLE IX
                                  MISCELLANEOUS

         9.1  NOTICES.  All  communications  required  or  permitted  under this
Agreement shall be in writing and any communication or delivery  hereunder shall
be deemed to have been duly made if actually delivered or sent by electronic fax
or if mailed by registered or certified mail, postage prepaid,  addressed to the
party being  notified as set forth below.  All such  notices and  communications
shall be deemed to have been  received  on the date of  delivery or on the third
business  day after the mailing  thereof.  Any party may,  by written  notice so
delivered to the other, change the address to which delivery shall thereafter be
made. Notices to the parties

<PAGE>

hereto shall be made at the addresses set forth below:

                  (a)      If to Seller or Holmberg, to:

                                    Mr. Larry Holmberg
                                    Amusement Center, Inc.
                                    300 South 3rd Street
                                    Minneapolis, Minnesota 55415
                                    Fax: ______________


                  With a copy to:

                                    Bernick & Lifson, P.A.
                                    Attn: Mr. Saul Bernick
                                    5500 Wayzata Blvd., Ste. 1200
                                    Minneapolis, Minnesota 55416
                                    Fax: (612) 546-1003

                  (b)      If to Buyer, to:

                                    Mr. Robert L. Watters
                                    Rick's Cabaret International, Inc.
                                    3113 Bering Drive
                                    Houston, Texas 77057
                                    Fax: (713) 785-2593

                           With a copy to:

                                    Mr. Robert D. Axelrod
                                    Axelrod, Smith & Kirshbaum
                                    5300 Memorial Drive, Suite 700
                                    Houston, Texas 77007
                                    Fax:  (713) 552-0202

         9.2 ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations  hereunder  shall be assigned by any of the parties  (except that
Buyer may assign its rights to an entity which is wholly owned by Buyer) without
the prior  written  consent  of the other  parties,  which  consent  will not be
unreasonably withheld. This Agreement will be binding upon, inure to the benefit
of and be  enforceable  by the  parties  and their  respective  heirs,  personal
representatives, successors and assigns.

         9.3 COUNTERPARTS.  This  Agreement  may be  executed  in any number of
counterparts,  which taken together shall constitute one and the same instrument
and each of which shall be considered an original for all purposes.

         9.4 SECTION HEADINGS.  The section headings contained in this Agreement
are for convenient reference only and shall not in any way affect the meaning or
interpretation of this Agreement.

<PAGE>

         9.5 ENTIRE AGREEMENT;  AMENDMENT.  This Agreement,  the documents to be
executed  hereunder  and the  exhibits  attached  hereto  constitute  the entire
agreement  among the parties hereto  pertaining to the subject matter hereof and
supersede all prior  agreements,  understandings,  negotiations and discussions,
whether oral or written, of the parties pertaining to the subject matter hereof,
and there  are no  warranties,  representations  or other  agreements  among the
parties in connection with the subject matter hereof except as specifically  set
forth  herein  or  in  documents   delivered  pursuant  hereto.  No  supplement,
amendment,  alteration,  modification,  waiver or  termination of this Agreement
shall be binding unless  executed in writing by the parties  hereto.  All of the
exhibits  referred  to in this  Agreement  are  hereby  incorporated  into  this
Agreement by reference and constitute a part of this Agreement.

         9.6 SURVIVAL.  All warranties and representations  herein shall survive
the  Closing  and shall be true and  correct as of the date hereof and as of the
Closing  Date.  In  addition,  Buyer's  warranties  shall be true and correct in
accordance  with their terms until all  obligations  have been fully and finally
performed. The respective representations,  warranties, covenants and agreements
set forth in this  Agreement  shall  survive the Closing for the maximum  period
allowed by law.

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

         9.8 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.

         9.9 WAIVER.  No waiver by any party of any  default or  non-performance
shall be deemed a waiver of any subsequent  default or  non-performance,  and no
waiver of any kind shall be effective  unless set forth in writing and signed by
the party against whom such waiver is to be charged.

         9.10 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  requested by the other
parties to confirm or perfect or  otherwise to carry out the intent and purposes
of this Agreement.

         9.11 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

<PAGE>

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.

         9.12  EXPENSES.   All  expenses  incurred  by  the  parties  hereto  in
connection  with or related to the  authorization,  preparation and execution of
this Agreement and the Closing of the transactions contemplated hereby, shall be
borne solely and entirely by the party which has incurred the same.

         9.13 ATTORNEYS' REVIEW. 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.

         9.14 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, whenever appropriate.

         9.15  JURISDICTION.  This  Agreement  was  entered  into in the City of
Minneapolis,  State of Minnesota,  and the laws of the State of Minnesota  shall
govern  and  be  applicable  to  this  Agreement  and  any   interpretation   or
construction thereto.

         9.16 RETURN OF EARNEST MONEY.  In the event there is no Closing on this
Agreement  based upon this Agreement  being canceled and terminated as permitted
in either Section 5.1 or Section 5.2, then the Earnest Money,  together with any
accrued  interest shall be refunded to Buyer as soon as is practicable (not more
than five (5)  business  days) after either party  cancels and  terminates  this
Agreement by providing  written notice of such  cancellation  and termination to
the other party.  Notwithstanding  the foregoing,  if the Closing does not occur
for a reason other than the  cancellation  or termination as permitted in either
Section 5.1 or Section  5.2,  or if the Closing  does not occur as a result of a
determination  by the Board of  Directors  of the Buyer  not to  consummate  the
transactions  contemplated  hereby,  then  the  Sellers  and  Shareholder  shall
receive,  in the  aggregate,  $50,000.00  of the  Earnest  Money  as  liquidated
damages, which shall be their sole and exclusive remedy.




         IN WITNESS  WHEREOF,  the parties  hereto have  executed or caused this
Agreement to be executed effective as of the day and year first above written.




                             AMUSEMENT CENTER, INC.


                             By: /s/ LARRY HOLMBERG
                                 -----------------------------
                                     Larry Holmberg, President

<PAGE>

                              BUNS & ROSES II, INC.

                              By: /s/ LARRY HOLMBERG
                                  -----------------------------
                                      Larry Holmberg, President


                                  /s/ LARRY HOLMBERG
                                  --------------------------------
                                      LARRY HOLMBERG, Individually




                               RICK'S CABARET INTERNATIONAL, INC.


                               By: /s/ ROBERT L. WATTERS
                                   --------------------------------
                                       Robert L. Watters, President