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Sample Business Contracts

Stock Purchase Agreement - Rick's Cabaret International Inc. and Robert L. Watters

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                            STOCK PURCHASE AGREEMENT
                            ------------------------


     This  STOCK  PURCHASE  AGREEMENT (the "Agreement") is made and entered into
this 29th day of March, 1999, by and among RICK'S CABARET INTERNATIONAL, INC., a
Texas  corporation  (the  "Seller")  and  ROBERT  L.  WATTERS  ("Watters").

     WHEREAS,  the  Seller  owns  200  shares of common stock, no par value (the
"Shares")  of  RCI  Entertainment Louisiana, Inc., a Louisiana corporation ("RCI
Louisiana")  which  Shares  represent  all  of the shares of common stock of RCI
Louisiana  presently  outstanding;  and

     WHEREAS, Watters is the President and Chief Executive Officer of the Seller
and  of  RCI  Louisiana;  and

     WHEREAS,  the Seller desires to sell the Shares of RCI Louisiana to Watters
on  the  terms
and  conditions  set  forth  herein;  and

     WHEREAS,  Watters  desires  to  purchase  the  Shares of RCI Louisiana from
Seller  on  the  terms  and  conditions  set  forth  herein.

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

                                    ARTICLE I
                         PURCHASE AND SALE OF THE SHARES

     Section  1.1     Sale  of  the Shares.  Subject to the terms and conditions
                      --------------------
set  forth in this Agreement, at the Closing (as hereinafter defined) the Seller
hereby agrees to sell, transfer, convey and deliver to Watters all of the Shares
of common stock of RCI Louisiana and shall deliver to Watters stock certificates
representing  the  Shares,  duly  endorsed  to  Watters  or  accompanied by duly
executed  stock  powers  in  form  and  substance  satisfactory  to  Watters.

     Section  1.2     Purchase  Price.  As consideration for the purchase of the
                      ---------------
Shares,  Watters shall pay to Seller total consideration of $2,200,000 being the
aggregate  of  the  following  components  (the  "Purchase  Price"):

     (a)     An  amount  equal  to  $2,200,000,  payable  as  follows:

(i)     $1,057,327.39  in  cash,  cashier's  check,  or  wire  transfer;  and

(ii)    assignment  of  a $652,744.61  promissory note from Ralph McElroy issued
to  Watters,  (the  "Secured  Promissory  Note")  in the form attached hereto as
Exhibit  1.2(a)(ii);  and

                        Stock Purchase Agreement - Page 1
<PAGE>
     Stock  Purchase  Agreement  -  Page  12
(iii)     Execution  and  delivery  by  Watters  of  a  promissory note, bearing
interest  at the rate of eight percent (8%) per annum and payable in forty-eight
(48)  equal monthly installments (the "Additional Promissory Note"), in the form
attached  hereto  as  Exhibit  1.2(a)(iii),  in  a  principal  amount  equal  to
$326,773.32.

(b)     Release  by  Watters  of  indebtedness  of  Seller  in  the  amount  of
$163,154.68.

     Section  1.3     Allocation  of  Purchase  Price.  The  $2,200,000 Purchase
                      -------------------------------
Price  shall  be  allocated  first  to the net book value of RCI Louisiana as of
February  28,  1999,  and the balance, if any, shall be allocated to the License
Agreement  referred  to  in  Section  2.3(i).

                                   ARTICLE II
                                     CLOSING

     Section  2.1     The Closing.  The closing of the transactions contemplated
                      -----------
by  this  Agreement  shall take place on March 29, 1999 (the "Closing Date"), at
the  offices  of  Axelrod,  Smith  &  Kirshbaum, 5300 Memorial Drive, Suite 700,
Houston,  Texas  77007, or at such other time and place as agreed upon among the
parties  hereto  (the  "Closing").

     Section  2.2     Delivery  and  Execution.  At  the Closing: (a) the Seller
                      ------------------------
shall  deliver  to  Watters certificates evidencing the Shares of RCI Louisiana,
duly  endorsed  to  Watters or accompanied by duly executed stock powers in form
and  substance satisfactory to Watters against delivery by Watters to the Seller
of  payment  in  an  amount  equal  to  the  Purchase  Price of the Shares being
purchased  by  Watters  in  the  manner  set  forth  herein;  (b)  the  Related
Transactions  (as  defined  below)  shall  be  consummated concurrently with the
Closing;  and  (c)  the  Conditions  to Closing of the Seller and Watters as set
forth  in Article V and VI, respectively, shall have been satisfied or waived in
writing  by  the  party  authorized  to  waive  such  condition.

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

(i)     The  Seller  will enter into a License Agreement with Watters which will
license the use of the name "Rick's" (plus appropriate trademarks) in the states
of  Louisiana,  Florida, Alabama and Mississippi, in the form attached hereto as
Exhibit  2.3(i);

(ii)     E.S.  Langan,  L.P.  and Ralph McElroy will enter into a Stock Purchase
Agreement  with  Watters  to  acquire  all  of his shares of common stock of the
Seller  on  the  terms  and  conditions  set  forth  in  that  Agreement;

(iii)     The  Seller  and  Watters  will  enter  into  a  Termination  and
Non-Competition  Agreement in the form attached hereto as Exhibit 2.3(iii) which
will,  among  other  things,  terminate  all  outstanding  options of the Seller
presently  held  by  Watters;

                        Stock Purchase Agreement - Page 2
<PAGE>
(iv)     The  Seller  and  Erich  Norton  White  ("White")  will  enter  into  a
Termination and Non-Competition Agreement in the form attached hereto as Exhibit
2.3(iv) which will, among other things, terminate all outstanding options of the
Seller  presently  held  by  White;  and

(v)     The  Seller  will  enter  into an Indemnification Agreement with Watters
which  will  indemnify Watters against certain potential liabilities in the form
attached  hereto  as  Exhibit  2.3(v).


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES
                                  OF THE SELLER

     The  Seller  hereby  represents  and  warrants  to  Watters  as  follows:

     Section  3.1.     Organization,  Good  Standing and Qualification.  Each of
                       ------------------------------------------------
the  Seller  and RCI Louisiana (i) is an entity duly organized, validly existing
and  in  good  standing  under the laws of the jurisdiction of its organization,
(ii)  has  all requisite power and authority to carry on its business, and (iii)
is  duly  qualified  to  transact  business  and  is  in  good  standing  in all
jurisdictions where its ownership, lease or operation of property or the conduct
of  its  business requires such qualification, except where the failure to do so
would  not  have  a  material  adverse  effect  to  the Seller or RCI Louisiana,
respectively.  The  authorized  capital  stock  of RCI Louisiana consists of 200
shares of common stock, no par value, of which 200 shares are validly issued and
outstanding.  All  of  the  issued and outstanding shares of common stock of RCI
Louisiana  are  owned by the Seller and are fully paid and non-assessable. There
are  no  existing warrants, options, rights of first refusal, conversion rights,
calls,  commitments  or  other agreements of any character pursuant to which RCI
Louisiana  is  or  may become obligated to issue any of its stock or securities.

Section  3.2     Ownership  of the Shares.  The Seller owns, beneficially and of
                 ------------------------
record  the  Shares  free  and  clear  of  any liens, claims, equities, charges,
options,  rights  of  first  refusal,  or  encumbrances.   The  Seller  has  the
unrestricted  right  and power to transfer, convey and deliver full ownership of
the  Shares without the consent or agreement of any other person and without any
designation,  declaration or filing with any governmental authority and upon the
transfer  of  the Shares to Watters as contemplated herein, Watters will receive
good  and  valid  title  thereto, free and clear of any liens, claims, equities,
charges,  options,  rights  of first refusal, encumbrances or other restrictions
(except  those  imposed  by  applicable  securities  laws).

                        Stock Purchase Agreement - Page 3
<PAGE>
     Section  3.3     Authorization.  The  Seller  is  a  corporation  with full
                      -------------
power,  capacity,  and  authority  to  enter into this Agreement and perform the
obligations  contemplated  hereby  by and for itself.  All action on the part of
the  Seller necessary for the authorization, execution, delivery and performance
of  this  Agreement  by  the  Seller  has  been  taken or will be taken prior to
Closing. This Agreement, when duly executed and delivered in accordance with its
terms,  will  constitute  legal,  valid,  and  binding obligations of the Seller
enforceable  against  the  Seller in accordance with its terms, except as may be
limited  by  bankruptcy, insolvency, and other similar laws affecting creditors'
rights  generally  or  by  general  equitable  principles.

     Section  3.4     No  Breaches  or Defaults.  Except as set forth in Exhibit
                      -------------------------
3.4,  the  execution,  delivery, and performance of this Agreement by the Seller
does  not:  (i)  conflict  with, violate, or constitute a breach of or a default
under,  (ii)  result  in  the  creation  or  imposition  of  any lien, claim, or
encumbrance  of  any  kind  upon the Shares, or (iii) require any authorization,
consent,  approval, exemption, or other action by or filing with any third party
or  Governmental  Authority  under  any  provision of:  (a) any applicable Legal
Requirement,  or (b) any credit or loan agreement, promissory note, or any other
agreement  or  instrument  to which the Seller is a party or by which the Shares
may  be  bound  or  affected.  For  purposes  of  this  Agreement, "Governmental
Authority"  means  any  foreign  governmental  authority,  the  United States of
America, any state of the United States, and any political subdivision of any of
the  foregoing, and any agency, department, commission, board, bureau, court, or
similar  entity, having jurisdiction over the parties hereto or their respective
assets or properties.  For purposes of this Agreement, "Legal Requirement" means
any  law,  statute,  injunction, decree, order or judgment (or interpretation of
any  of the foregoing) of, and the terms of any license or permit issued by, any
Governmental  Authority.

     Section  3.5     Consents.  Except  as set forth in Exhibit 3.5, no permit,
                      --------
consent,  approval  or  authorization  of, or designation, declaration or filing
with,  any  Governmental  Authority or any other person or entity is required on
the  part  of  the  Seller  in connection with the execution and delivery by the
Seller of this Agreement or the consummation and performance of the transactions
contemplated  hereby  other  than as required under the federal securities laws.

     Section  3.6     Pending  Claims.  There  is  no  claim,  suit,  action  or
                      ---------------
proceeding,  whether  judicial,  administrative or otherwise, pending or, to the
best  of  the  Seller's  knowledge,  threatened  with respect to the transfer to
Watters  of  the  Shares  or  the  performance  of this Agreement by the Seller.

     Section  3.7      Disclosure.  No  representation or warranty of the Seller
                       ----------
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.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                                   OF WATTERS

Watters  hereby  represents  and  warrants  to  the  Seller  as  follows:

                        Stock Purchase Agreement - Page 4
<PAGE>
     Section  4.1     Ownership  of  the Secured Promissory Note.  Watters owns,
                      ------------------------------------------
beneficially  and  of  record, the Secured Promissory Note free and clear of any
liens,  claims,  equities,  charges,  options,  rights  of  first  refusal,  or
encumbrances.   Watters has the unrestricted right and power to transfer, convey
and deliver full ownership of the Secured Promissory Note without the consent or
agreement of any other person and without any designation, declaration or filing
with  any governmental authority and upon the transfer of the Secured Promissory
Note  to  the  Seller  as  contemplated herein, the Seller will receive good and
valid  title  thereto,  free  and clear of any liens, claims, equities, charges,
options,  rights  of  first  refusal,  encumbrances  or  other  restrictions.

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

     Section  4.3     Purchase for Investment.  Watters is purchasing the Shares
                      -----------------------
for  his  own  account,  for  investment  purposes only and not with view to any
public resale or other distribution thereof.  Watters acknowledges that he is an
Accredited  Investor  as  that term is defined in Rule 501(a) of Regulation D of
the  Securities  Act  of 1933, as amended.  Watters and his representatives have
received,  or have had access to, and have had sufficient opportunity to review,
all  books,  records,  financial information and other information which Watters
considers necessary or advisable to enable him to make a decision concerning his
purchase  of  the Shares, and that he possesses such knowledge and experience in
financial  and  business matters that he is capable of evaluating the merits and
risks  of  his  investment  hereunder.

     Section  4.4     No  Breaches  or Defaults.  Except as set forth in Exhibit
                      -------------------------
3.4,  the execution, delivery, and performance of this Agreement by Watters does
not:  (i)  conflict with, violate, or constitute a breach of or a default under,
(ii)  result in the creation or imposition of any lien, claim, or encumbrance of
any  kind  upon the Secured Promissory Note, or (iii) require any authorization,
consent,  approval, exemption, or other action by or filing with any third party
or  Governmental  Authority  under  any  provision of:  (a) any applicable Legal
Requirement,  or (b) any credit or loan agreement, promissory note, or any other
agreement  or  instrument  to  which  Watters is a party or by which the Secured
Promissory  Note  may  be  bound  or  affected.

     Section  4.5     Corporate  Documents.   Watters has inspected and is fully
                      --------------------
satisfied  with:  (i)  copies of the articles of incorporation and bylaws of RCI
Louisiana; (ii) the minute book of RCI Louisiana containing all records required
to  be  set  forth  of  all  proceedings, consents, actions, and meetings of the
shareholders  and boards of directors of RCI Louisiana; (iii) the stock transfer
books of RCI Louisiana setting forth all transfers of any common stock; and (iv)
the  financial  statements  and  financial  condition  of  RCI  Louisiana.

     Section  4.6     Liabilities  of  RCI Louisiana.  Watters hereby represents
                      ------------------------------
that  RCI  Louisiana  has  made  adequate  provision  for all liabilities of RCI
Louisiana  (real  and  contingent)  and  RCI Louisiana will discharge all of its
liabilities  on  a  timely  basis.  To  the  extent that there is any claim made
against  Seller  arising  out  of  any  liabilities (real and contingent) of RCI
Louisiana,  Watters  hereby  agrees to indemnify Seller for all such liabilities
(real  and  contingent).

                        Stock Purchase Agreement - Page 5
<PAGE>
     Section  4.7     Consents.  Except  as set forth in Exhibit 3.5, no permit,
                      --------
consent,  approval  or  authorization  of, or designation, declaration or filing
with,  any  Governmental  Authority or any other person or entity is required on
the  part of Watters in connection with the execution and delivery by Watters of
this  Agreement  or  the  consummation  and  performance  of  the  transactions
contemplated  hereby  other  than as required under the federal securities laws.

     Section  4.8     Pending  Claims.  There  is  no  claim,  suit,  action  or
                      ---------------
proceeding,  whether  judicial,  administrative or otherwise, pending or, to the
best  of  Watters'  knowledge,  threatened  with  respect to the transfer to the
Seller  of  the  Secured  Promissory Note owned by Watters or the performance of
this  Agreement  by  Watters.

     Section 4.9     No Additional Representations.  Watters, in his capacity as
                     -----------------------------
President  and  Chief Executive Officer of the Seller and RCI Louisiana, has had
access  to  and  knowledge of the Seller's and RCI Louisiana's books and records
and  financial  statements  and  condition  and,  except for the representations
contained  in  Sections  3.1 through 3.7 herein, Watters is acquiring the Shares
solely  as a result of such access to and knowledge of the books and records and
financial  statements  and  condition  or  RCI  Louisiana.  Watters  further
acknowledges  that  the  Seller  has  made  no  representations or warranties to
Watters  as  to the financial condition or otherwise of RCI Louisiana other than
as  contained  in  Sections  3.1  through  3.7.

Section  4.10      Disclosure.  No  representation  or  warranty  of  Watters
                   ----------
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.


                                    ARTICLE V
                         CONDITIONS TO CLOSING OF SELLER

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

     Section  5.1     Representations  and  Warranties  Correct.  The
                      -----------------------------------------
representations  and  warranties  made  by Watters in Article IV hereof shall be
true  and  correct  as  of  the  Closing  Date.

     Section  5.2     Covenants.  All  covenants,  agreements  and  conditions
                      ---------
contained  in  this  Agreement  to  be  performed  by Watters on or prior to the
Closing  Date  shall  have  been  performed  or  complied  with in all respects.

     Section  5.3     Consents.  All  of  the  consents described in Exhibit 3.5
                      --------
shall  have  been  obtained.

     Section 5.4     Payment of Purchase Price.  Watters shall have tendered the
                     -------------------------
Purchase  Price  for  the  Shares  to  the  Seller.

                        Stock Purchase Agreement - Page 6
<PAGE>
     Section  5.5     Related  Transactions.  The  Related  Transactions  as set
                      ---------------------
forth  in  Section  2.3  shall  be  consummated  concurrently  with the Closing.

Section 5.6     Fairness Opinion.  The Seller shall have received a satisfactory
                ----------------
fairness opinion from Chaffe & Associates, Inc. on the transactions contemplated
hereby.

     Section  5.7     Corporate  Resolutions.  The  Board  of  Directors  of the
                      ----------------------
Seller  shall  have approved and authorized the transactions contemplated herein
and  in  the  Related  Transactions  to  which  it  is  a  party.

     Section  5.8     Transfer of Seller's Obligations to Watters.  Prior to the
                      -------------------------------------------
Closing,  the  Seller  shall  transfer  to RCI Louisiana and RCI Louisiana shall
assume  all  of the existing indebtedness of the Seller to Watters in the amount
of  $163,154.68, which represents all outstanding principal and accrued interest
on  the  prior  loan from Watters to the Seller.  Watters does hereby agree that
such  transfer  shall constitute full and final satisfaction of all liability of
Seller  to  Watters  with  respect  to  such  indebtedness.

     Section  5.9     Release  of  Liability.  The  Seller shall have received a
                      ----------------------
release  of  its  liability  from  the  Whitney  National  Bank  in New Orleans,
Louisiana  (the "Whitney Bank"), relating to all of the loans at Whitney Bank to
which  the  Seller  is  the  Maker  or  Guarantor.

     Section  5.10     Consent  to  Transaction.  A  consent  to the transaction
                       ------------------------
contemplated  by  this  Agreement  shall  have  been  obtained from 315 Bourbon,
L.L.C.,  the  landlord  of  the leased premises occupied by RCI Louisiana at 315
Bourbon  Street, New Orleans, Louisiana, pursuant to the lease agreement between
RCI  Louisiana  and  315  Bourbon,  L.L.C.

     Section  5.11     Resignation.  Watters  shall  provide  to  the Seller his
                       -----------
written  resignation  as  an  officer  of  the  Seller.

     Section  5.12     Absence of Proceedings.  No action, suit or proceeding by
                       ----------------------
or  before any court or any governmental or regulatory authority shall have been
commenced  and  no  investigation  by  any  governmental or regulatory authority
shall  have  been  commenced  seeking  to  restrain,  prevent  or  challenge the
transactions  contemplated  hereby or seeking judgments against Seller or any of
its  subsidiaries  or  assets.

                                   ARTICLE VI
                        CONDITIONS TO CLOSING OF WATTERS

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

     Section  6.1     Representations  and  Warranties  Correct.  The
                      -----------------------------------------
representations and warranties made by the Seller in Article III hereof shall be
true  and  correct  as  of  the  Closing  Date.

                        Stock Purchase Agreement - Page 7
<PAGE>
     Section  6.2     Covenants.  All  covenants,  agreements  and  conditions
                      ---------
contained  in  this  Agreement  to be performed by the Seller on or prior to the
Closing  Date  shall  have  been  performed  or  complied  with in all respects.

     Section  6.3     Delivery  of Certificates. The Seller shall have delivered
                      -------------------------
certificates evidencing the Shares of RCI Louisiana, duly endorsed to Watters or
accompanied  by duly executed stock powers in form and substance satisfactory to
Watters.

Section  6.4     Consents.  All  of  the consents described in Exhibit 3.5 shall
                 --------
have  been  obtained.

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

     Section  6.6     Fairness  Opinion.  The  Seller  shall  have  received  a
                      -----------------
satisfactory fairness opinion from Chaffe & Associates, Inc. on the transactions
contemplated  hereby.

     Section  6.7     Release  of  Liability.  The  Seller shall have received a
                      ----------------------
release  of  its  liability  from  the  Whitney  Bank in New Orleans, Louisiana,
relating to all of the loans at Whitney Bank to which the Seller is the Maker or
Guarantor.

     Section  6.8     Consent  to  Transaction.  A  consent  to  the transaction
                      ------------------------
contemplated  by  this  Agreement  shall  have  been  obtained from 315 Bourbon,
L.L.C.,  the  landlord  of  the leased premises occupied by RCI Louisiana at 315
Bourbon  Street, New Orleans, Louisiana, pursuant to the lease agreement between
RCI  Louisiana  and  315  Bourbon,  L.L.C.

     Section  6.9     Absence  of Proceedings.  No action, suit or proceeding by
                      -----------------------
or  before any court or any governmental or regulatory authority shall have been
commenced  and  no  investigation  by  any  governmental or regulatory authority
shall  have  been  commenced  seeking  to  restrain,  prevent  or  challenge the
transactions  contemplated hereby or seeking judgments against Watters or any of
his  assets.

                                   ARTICLE VII
                                 INDEMNIFICATION

                        Stock Purchase Agreement - Page 8
<PAGE>
     Section  7.1     Indemnification from the Seller.  The Seller hereby agrees
                      -------------------------------
to  and  shall  indemnify,  defend  (with legal counsel reasonably acceptable to
Watters),  and hold Watters, his affiliates, assigns, agents and legal counsel (
the  "Watters  Group")  harmless  at all times after the date of this Agreement,
from  and  against  any  and  all  actions,  suits,  claims,  demands,  debts,
liabilities,  obligations, losses, damages, costs, expenses, penalties or injury
(including  reasonable  attorneys'  fees  and costs of any suit related thereto)
suffered  or  incurred  by  any  of  the  Watters  Group  arising  from  (a) any
misrepresentation  by,  or  breach  of  any  covenant  or warranty of the Seller
contained  in  this  Agreement, or any exhibit, certificate, or other instrument
furnished  or to be furnished by the Seller hereunder, (b) any nonfulfillment of
any  agreement  on  the part of the Seller under this Agreement, or (c) from any
material  misrepresentation  in  or  material  omission from, any certificate or
other  instrument  furnished  or  to  be  furnished  to  Watters  hereunder.

     Section  7.2     Indemnification from Watters.  Watters agrees to and shall
                      ----------------------------
indemnify,  defend  (with legal counsel reasonably acceptable to the Seller) and
hold  the  Seller,  its  officers,  directors, employees, agents, legal counsel,
successors  and  assigns  (the  "Sellers Group") harmless at all times after the
date  of  the  Agreement  from  and  against any and all actions, suits, claims,
demands,  debts,  liabilities,  obligations,  losses,  damages, costs, expenses,
penalities or injury (including reasonably attorneys' fees and costs of any suit
related  thereto) suffered or incurred by any of the Sellers Group, arising from
(a)  any  misrepresentation by, or breach of any covenant or warranty of Watters
contained  in  this Agreement or any exhibit, certificate, or other agreement or
instrument  furnished  or  to  be  furnished  by  Watters hereunder, including a
breach  of  Section  4.6; (b) any nonfulfillment of any agreement on the part of
Watters  under  this  Agreement;  (c)  from any material misrepresentation in or
material  omission  from,  any  exhibit,  certificate  or  other  agreement  or
instrument  furnished  or  to  be  furnished to the Seller hereunder; or (d) any
suit, action, proceeding, claim or investigation against the Seller which arises
from  or  which is based upon or pertaining to Watters' conduct or the operation
or  liabilities  of the business of RCI Louisiana, either prior to or subsequent
to  Closing.

     Section 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, the
indemnifying  party  shall  be entitled, if it so elects, to take control of the
defense  and  investigation  of  such lawsuit or action and to employ and engage
attorneys  of  its own choice to handle and defend the same, at the indemnifying
party's  cost,  risk  and expense; and such indemnified party shall cooperate in
all  reasonable  respects,  at its cost, risk and expense, with the indemnifying
party and such attorneys in the investigation, trial and defense of such lawsuit
or  action  and  any  appeal  arising  therefrom;  provided,  however,  that the
indemnified party may, at its own cost, participate in such investigation, trial
and  defense  of  such  lawsuit or action and any appeal arising therefrom.  The
indemnifying  party  shall  not,  without  the  prior  written  consent  of  the
indemnified  party,  effect any settlement of any proceeding in respect of which
any  indemnified party is a party and indemnity has been sought hereunder unless
such  settlement  of  a  claim,  investigation,  suit,  or other proceeding only
involves  a  remedy  for  the  payment  of  money  by the indemnifying party and
includes  an  unconditional release of such indemnified party from all liability
on  claims  that  are  the  subject  matter  of  such  proceeding.

     Section  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

                        Stock Purchase Agreement - Page 9
<PAGE>
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
                                  MISCELLANEOUS

     Section  8.1     Amendment;  Waiver.  Neither  this  Agreement  nor  any
                      ------------------
provision  hereof  may  be  amended, modified or supplemented unless in writing,
executed  by  all  the  parties  hereto.  Except as otherwise expressly provided
herein,  no waiver with respect to this Agreement shall be enforceable unless in
writing  and  signed by the party against whom enforcement is sought.  Except as
otherwise  expressly  provided  herein,  no  failure  to  exercise,  delay  in
exercising,  or  single or partial exercise of any right, power or remedy by any
party,  and  no  course  of  dealing  between or among any of the parties, shall
constitute  a waiver of, or shall preclude any other or further exercise of, any
right,  power  or  remedy.

     Section  8.2     Notices.  Any  notices or other communications required or
                      -------
permitted  hereunder  shall be sufficiently given if in writing and delivered in
Person,  transmitted  by  facsimile  transmission (fax) or sent by registered or
certified  mail  (return  receipt  requested)  or  recognized overnight delivery
service,  postage  pre-paid,  addressed as follows, or to such other address has
such  party  may  notify  to  the  other  parties  in  writing:

     (a)  if  to  the  Seller:

          Rick's  Cabaret  International,  Inc.
          16770  Hedgecroft  Drive,  #714
          Houston,  Texas  77060
          Attn:  Eric  Langan
          Telephone  No.:   281-820-1181
          Facsimile  No.:    281-820-1445

          with  a  copy  to:

          Robert  D.  Axelrod
          Axelrod,  Smith  &  Kirshbaum
          5300  Memorial  Drive,  Suite  700
          Houston,  Texas  77007
          Telephone  No.:  713-861-1996
          Facsimile  No.:  713-552-0202

                       Stock Purchase Agreement - Page 10
<PAGE>
     (b)  if  to  Watters:

          Robert  L.  Watters
          1810  Elmen
          Houston,  Texas  77019
          Telephone  No.:  713-529-4110
          Facsimile  No.:  713-942-9656

          with  a  copy  to:

          Chaffe,  McCall,  Phillips,  Toler  &  Sarpy,  L.L.P.
          2300  Energy  Centre
          1100  Poydras  Street
          New  Orleans,  Louisiana  70163
          Attn:  E.  Howell  Crosby,  Esq.
          Telephone  No.:  504-585-7212
          Facsimile  No.:  504-585-7587

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

     Section  8.3     Severability.  Whenever  possible,  each provision of this
                      ------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable  law, but if any provision of this Agreement is held to be prohibited
by  or  invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of  this  Agreement.

     Section  8.4     Successors  and  Assigns.  Except  as  otherwise  provided
                      ------------------------
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon,  the  successors  and  permitted  assigns of the parties hereto.  No party
hereto  may  assign  its rights or delegate its obligations under this Agreement
without  the  prior  written  consent  of  the  other  parties  hereto.

     Section  8.5     Survival of Representations, Warranties and Covenants. All
                      -----------------------------------------------------
representations  and  warranties made in, pursuant to or in connection with this
Agreement  shall  survive  the  execution  and  delivery of this Agreement for a
period  of  two  (2)  years.

     Section  8.6     Publicity.  All  voluntary public announcements concerning
                      ---------
the  transactions contemplated by this Agreement shall be mutually acceptable to
both  Seller  and  Watters.  With  respect  to  any announcement that any of the
parties  is  required  by  law or stock exchange regulation to issue, such party
shall,  to the extent possible under the circumstances, review the necessity for
and  the  contents of the announcement with the other parties before issuing the
announcement.

                       Stock Purchase Agreement - Page 11
<PAGE>
     Section  8.7     Entire  Agreement.  This Agreement and the other documents
                      -----------------
delivered  pursuant  hereto  constitute  the  full  and entire understanding and
agreement  between  the  parties  with  regard  to the subject matter hereof and
thereof  and supersede and cancel all prior representations, alleged warranties,
statements,  negotiations,  undertakings,  letters, acceptances, understandings,
contracts and communications, whether verbal or written among the parties hereto
and thereto or their respective agents with respect to or in connection with the
subject  matter  hereof.

     Section  8.8     Choice  of  Law.  This Agreement shall be governed by, and
                      ---------------
construed  in accordance with, the laws of the State of Texas, without regard to
principles  of  conflict  of  laws.  In  any  action between or among any of the
parties, whether arising out of this Agreement or otherwise, each of the parties
irrevocably  consents to the exclusive jurisdiction and venue of the federal and
state  courts  located  in  Harris  County,  Texas.

     Section 8.9     Counterparts.  This Agreement may be executed in any number
                     ------------
of  counterparts  and by different parties hereto in separate counterparts, with
the  same  effect  as  if  all  parties  had signed the same document.  All such
counterparts  shall be deemed an original, shall be construed together and shall
constitute  one  and  the  same  instrument.

     Section 8.10     Costs and Expenses.   The Seller shall pay all of the fees
                      ------------------
and  expenses  incurred by it and Watters shall pay all of the fees and expenses
incurred  by  him  in  negotiating  and  preparing this Agreement (and all other
agreements executed in connection herewith or therewith) and in consummating the
transactions  contemplated  by  this  Agreement.

     Section  8.11     Section Headings.  The section and subsection headings in
                       ----------------
this Agreement are used solely for convenience of reference, do not constitute a
part  of  this  Agreement,  and  shall  not  affect  its  interpretation.

     Section  8.12     No  Third-Party Beneficiaries.  Nothing in this Agreement
                       -----------------------------
will  confer  any  third  party  beneficiary  or  other  rights  upon any person
(specifically  including  any  employees  of the Seller and its Subsidiaries) or
entity  that  is  not  a  party  to  this  Agreement.


     [Remainder  of  Page  Intentionally  Left  Blank]

                       Stock Purchase Agreement - Page 12
<PAGE>
                            RICK'S  CABARET  INTERNATIONAL,  INC.


                            By:     /s/  Eric  Langan
                            Eric  Langan
                            Its:     Vice-president




                            /s/  Robert  L.  Watters
                            Robert  L.  Watters

                       Stock Purchase Agreement - Page 13