RICKS CABARET INTERNATIONAL INC
EXHIBIT 10.2
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>doc3.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
THIS  SECURED  CONVERTIBLE  NOTE  (THE "NOTE") HAS NOT BEEN REGISTERED UNDER THE
SECURITIES  ACT  OF  1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY
STATE.  THIS  NOTE  MAY  NOT  BE  SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT
REGISTRATION  UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR DELIVERY
TO RCI ENTERTAINMENT (NEW YORK) INC. OF AN OPINION OF LEGAL COUNSEL SATISFACTORY
TO  RCI  ENTERTAINMENT  (NEW  YORK)  INC. THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER  THE  ACT  OR  ANY  APPLICABLE  STATE  SECURITIES  LAWS.


                            SECURED CONVERTIBLE NOTE
                                       OF
                       RCI ENTERTAINMENT (NEW YORK), INC.


                                                       January 18, 2005

     FOR  VALUE  RECEIVED,  RCI  ENTERTAINMENT  (NEW  YORK),  INC.,  a  New York
corporation  (the  "Company" or "Debtor"), which is a wholly owned subsidiary of
RICK'S  CABARET  INTERNATIONAL,  INC.,  a  Texas  corporation  ("Rick's"),
unconditionally  promises  to  pay  to  Philip  Eisenberg  whose  address  is 38
Evergreen  Place,  Demarest,  New Jersey, 07627, or the registered assignee (the
"Registered  Holder"  or  "Holder")  at the office of the Company, the principal
amount  of  $5,125,000  (the  "Principal Amount"), together with the accrued and
unpaid  interest  thereon and other sums as hereinafter provided, subject to the
terms  and  conditions  as  set  forth  below.

     1.   SCHEDULE  FOR PAYMENT OF PRINCIPAL AND INTEREST.  The Principal Amount
          -----------------------------------------------
outstanding  under  this  Secured  Convertible  Note  (the  "Note") shall accrue
interest  at  the  rate  of  4% per annum and shall be payable in sixty-one (61)
monthly  installments  of  principal and interest, commencing June 18, 2005 (151
days  after  the  Closing  of  the sale of all of the capital stock of Peregrine
Enterprises, Inc. to the Company (the "Closing")) and continuing on the 18th day
of  each  month  thereafter  as  follows:

     The initial twenty-four (24) monthly installments shall be in an amount of
     $58,333.33; for months twenty-five (25) through forty-eight (48) the
     monthly installments shall be in an amount of $63,333.33; for months
     forty-nine (49) through sixty (60) the monthly installments shall be in an
     amount of $68,333.33; and a lump sum payment of the remaining balance shall
     be paid on or before June 18, 2010 (the 61st month), such date hereafter
     sometimes referred to as the "Maturity Date".

All  payments  shall  be  credited  first  to accrued interest and thereafter to
principal on the Note.  Accrual of interest on the outstanding Principal Amount,
payable  in  cash,  shall  commence  on  the


<PAGE>
Closing  and  shall  continue until payment in full of the outstanding Principal
Amount  has  been  made  hereunder.

     2.   PAYMENT.  Payment  of  any  sums  due to the Holder under the terms of
          -------
this  Note  shall  be made in United States Dollars by check or wire transfer at
the  option of the Company.  Payment shall be made at the address last appearing
on  the records of the Company for this Note (the "Note Register") as designated
in  writing  by  the  Holder hereof from time to time.  If any payment hereunder
would otherwise become due and payable on a day on which commercial banks in New
York,  New  York,  are  permitted  or  required to be closed, such payment shall
become  due  and payable on the next succeeding day on which commercial banks in
New York, New York, are not permitted or required to be closed ("Business Day").
The  receipt  of  such  funds by wire into Holder's account, or the receipt of a
good  check  by  Holder  shall constitute a payment of outstanding principal and
interest  hereunder  and shall satisfy and discharge the liability for principal
and  interest on this Note to the extent of the sum represented by such payment.
This  Note  may  be  prepaid, in whole or in part at any time in accordance with
Section  3  hereof.

     3.   DEBTOR'S  OPTION  TO  REDEEM  NOTE.  This  Note  will  be  subject  to
          ----------------------------------
redemption  at  the option of the Company, in whole or in part, at a price equal
to  100% of the principal amount of that portion of the Note which is then being
redeemed  (the  "Redemption  Price").  Notice  of  redemption  shall be sent, as
provided for in Section 21 hereof (the "Notice of Redemption"), not less than 20
days  before  the  Redemption Date (as defined below).  The Notice of Redemption
shall  be sent to the Registered Holder at such Registered Holder's last address
as  such  address  shall  appear  on the Company's Note Register.  The Notice of
Redemption  when  given  in  the  manner herein provided in Section 21, shall be
conclusively  presumed  to  have  been duly given, whether or not the Registered
Holder  received  the Notice of Redemption. The Notice of Redemption shall state
the  portion  of the Principal Amount thereof to be redeemed, the date fixed for
redemption  ("Redemption Date") and the Redemption Price at which the Note is to
be  redeemed.  Upon the Redemption Date, the Company shall pay to the Registered
Holder  by  Company  check  or  wire transfer, at the option of the Company, the
Redemption  Price  for  the  Note  called  for  redemption.  A  new  note in the
principal  amount  equal to the unredeemed portion thereof, if any, also will be
issued  in  the  name of the Registered Holder upon cancellation of the original
Note.  After  the  Redemption  Date,  unless  the  Company  shall default in the
payment  of  the  Redemption Price, interest will cease to accrue on the Note or
portions  thereof called for redemption and the Note or the portion thereof will
be  deemed  to  have been redeemed.  The Registered Holder shall have the right,
but  not  the obligation, to convert that portion of the Note to purchase shares
of common stock of Rick's pursuant to the conversion rights set forth in Section
4  hereof  not later than the close of business on the business day prior to the
Redemption  Date,  unless  the  Company subsequently fails to pay the applicable
Redemption  Price.  Partial  redemption of this Note will not reduce the amount,
or  postpone  the  due  date  of,  any  monthly  payment  due  hereunder.

     4.   CONVERSION  RIGHTS.
          ------------------

     (a)  The  Holder will have the right, at the Holder's option, to convert up
to  $2,000,000 of the Principal Amount of this Note into shares of common stock,
par  value  $.01  per  share  of


                                        2
<PAGE>
Rick's  ("Rick's  Common  Stock")  at any time prior to Maturity (unless earlier
redeemed  or  otherwise  paid)  at  the  Conversion Prices as set forth below in
Section  4(b)  (subject  to  adjustment  as described herein).  The right of the
Holder  to  convert  the  Note,  if called for redemption, will terminate at the
close of business on the business day prior to the Redemption Date for the Note,
unless  the  Company  subsequently fails to pay the applicable Redemption Price.

     The  Holder  of  this Note shall be entitled to convert up to $2,000,000 of
the  Principal  Amount  of  this  Note into shares of Rick's Common Stock by (i)
giving  written  notice to Rick's that such Holder elects to convert into Rick's
Common  Stock,  (ii)  stating  in such written notice the denominations in which
such Holder wishes the certificate or certificates for Rick's Common Stock to be
issued  and (iii) surrendering this Note to the Company (compliance in full with
Sections  4(a)(i),(ii)  and  (iii) shall collectively be the "Conversion Date").
This  Note  or  the  portion  thereof,  shall  be  deemed to have been converted
immediately prior to the close of business on the Conversion Date.  Rick's will,
as  soon  as  practicable  thereafter,  cause  to be issued and delivered to the
Holder  certificates  for  the  number  of full shares of Rick's Common Stock to
which  the  Holder  shall be entitled and, if necessary, a new Note representing
any  unconverted portion of this Note.  Rick's shall not issue fractional shares
of  Rick's  Common  Stock  upon  conversion,  but the number of shares of Rick's
Common  Stock to be received by the Holder upon conversion shall be rounded down
to  the  next  whole  number  and the Holder shall be entitled to payment of the
remaining  principal  amount  by  company  check.

     (b)  The  Conversion Prices of the Rick's Common Stock into which this Note
is  convertible (subject to adjustment as described herein) shall be as follows:

          (1)  $200,000  of  the  Principal Amount shall be convertible at $4.00
               per  share;
          (2)  $225,000  of  the  Principal Amount shall be convertible at $4.50
               per  share;
          (3)  $250,000  of  the  Principal Amount shall be convertible at $5.00
               per  share;
          (4)  $275,000  of  the  Principal Amount shall be convertible at $5.50
               per  share;
          (5)  $300,000  of  the  Principal Amount shall be convertible at $6.00
               per  share;
          (6)  $325,000  of  the  Principal Amount shall be convertible at $6.50
               per  share;
          (7)  $350,000  of  the  Principal Amount shall be convertible at $7.00
               per  share;
          (8)  $75,000 of the Principal Amount shall be convertible at $7.50 per
               share.

     (c)  In  case  of  any  reclassification, consolidation or merger of Rick's
with or into another entity or any merger of another entity with or into Rick's,
or  in  the case of any sale, transfer or conveyance of all or substantially all
of  the  assets  of  Rick's  (computed  on  a consolidated basis), the Note then
outstanding  will,  without  the  consent of any Holder, become convertible only
into  the  kind and amount of securities, cash or other property receivable upon
such  reclassification, consolidation, merger, sale, transfer or conveyance by a
Holder  of  the  number  of  shares  of  common  stock  into  which the Note was
convertible  immediately  prior  thereto,  after giving effect to any adjustment
event.

     (d)  The  Conversion  Price  will  be  adjusted  as  follows:

          (i)  If the number of shares of Rick's Common Stock outstanding at any
     time after the date hereof is increased by a subdivision or split of Rick's
     Common  Stock,  or  by


                                        3
<PAGE>
     the declaration of a dividend on the Rick's Common Stock, which dividend is
     wholly or partially in the form of additional shares of Rick's Common Stock
     or  any  other  securities  of Rick's, then immediately after the effective
     date  of  such  subdivision or split-up, or the record date with respect to
     such  dividend,  as  the  case  may  be,  the  Conversion  Price  shall  be
     appropriately  reduced so that the holder of this Note thereafter exchanged
     shall  be  entitled  to  receive  the percentage of shares of Rick's Common
     Stock  which such holder would have owned immediately following such action
     had  this  Note  been  exchanged  immediately  prior  thereto;

          (ii)  If  the  number  of  Rick's Common Stock outstanding at any time
     after  the  date  hereof  is  decreased by a combination of the outstanding
     Rick's Common Stock or reverse split, then, immediately after the effective
     date  of  such  combination,  the  Conversion  Price shall be appropriately
     increased  so  that  the  holder of this Note thereafter exchanged shall be
     entitled  to  receive the percentage of shares of Rick's Common Stock which
     such  holder  would  have  owned immediately following such action had this
     Note  been  exchanged  immediately  prior  thereto;

     (e)  Rick's shall at all times reserve for issuance and maintain available,
out  of  its authorized but unissued Rick's Common Stock, solely for the purpose
of  effecting  the  conversion  of the Note, the full number of shares of Rick's
Common  Stock  deliverable  upon  the  conversion  of the Note from time to time
outstanding. The Company shall from time to time (subject to obtaining necessary
director  and  stockholder  action), in accordance with the laws of the State of
Texas, increase the authorized number of shares of its Rick's Common Stock if at
any  time  the  authorized  number  of  shares  of Rick's Common Stock remaining
unissued  shall  not  be  sufficient  to  permit  the  conversion  of  the Note.

     (f)  Any  shares of Rick's Common Stock to be issued to the Holder pursuant
to  the terms of this Note are restricted securities and may only be sold, under
current law, either by (a) the registration of the Rick's Common Stock under the
Act  and  applicable  state securities acts; (b) compliance with Rule 144 of the
Act;  or (c) the availability of an exemption from the registration requirements
of  the  Act  and  applicable  state  securities acts.  Rick's will use its best
efforts  to  maintain  current  information  by  complying  with  its  reporting
requirements  under  the  Securities  Act  of  1934,  as  amended.

     5.   COLLATERAL.
          ----------

     (a)  Grant  of  Security Interest.  As security for the prompt performance,
          ----------------------------
observance  and  payment  in  full  of the entire indebtedness evidenced by this
Note,  including the Principal Amount, interest thereon, fees and other charges,
undertakings,  covenants  and duties owing or to be performed or observed by the
Company  to the Holder, of every kind and description, whether joint or several,
direct  or  indirect, absolute or contingent, due or to become due, now existing
or  hereinafter  arising  (collectively,  the  "Obligations"),  the Company (and
Rick's,  with  respect  to the grant of a security interest in the shares of the
Company)  hereby  grant  to the Holder a security interest and lien for the Note
on:

     (i)  the  outstanding shares of capital stock of Peregrine Enterprise,
     Inc.  ("Peregrine");  (ii)  the outstanding shares of capital stock of
     the  Company;  and


                                        4
<PAGE>
     (iii)  all  of  the  assets  of  both  the  Company  and/or  Peregrine
     (including  the  assets of The Paradise Club or any successor business
     operating  at 50 West 33rd Street or such other location to which such
     business  shall  be  relocated,  whether  now  owned  or  hereinafter
     acquired, including: chattel paper, inventory, equipment, instruments,
     including  promissory  notes  owed  to  Debtor,  accounts  receivable,
     investment  property,  documents,  furniture,  fixtures  and  general
     intangibles  including,  but  not limited to, goodwill, tradenames and
     licenses  of either the Company or Peregrine, and payment intangibles,
     supporting  obligations  and  to  the  extent  not  listed  above, the
     proceeds  and products of the foregoing and (iv) the lease and tenancy
     rights  of  Peregrine for the premises located at 50 West 33rd Street,
     New  York,  New  York  (collectively  the  "Collateral").

     (b)  Obligations Secured.  The Company will simultaneously herewith execute
          -------------------
a  Security  Agreement  in  favor  of  Philip  Eisenberg  creating  a  valid and
continuing  security  interest  in  the  Collateral  in  favor of the Holder and
securing  the payment and performance of all of the Obligations under this Note,
however  evidenced,  whether  now  existing  or  hereafter  arising,  direct  or
indirect,  absolute or contingent, including all costs and reasonable attorneys'
fees  incurred  by  the  Holder  in  enforcing  this  Note  and/or collecting or
attempting  to  collect  on  this  Note.

     6.   EVENTS  OF  DEFAULTS  AND REMEDIES.  The following are deemed to be an
          ----------------------------------
event  of default ("Event of Default") hereunder: (i) the failure by the Company
to  pay any monthly installment payment on this Note as and when due and payable
and  the  continuance  of  any such failure for 10 days; (ii) the failure by the
Company  to  pay  all  or any part of the principal on this Note when and as the
same  become due and payable as set forth above, at Maturity, by acceleration or
otherwise;  (iii)  the failure of the Company to perform any conversion required
under  this  Note  and the continuance of any such failure for 30 days; (iv) the
failure  by  the  Company  to observe or perform any other covenant or agreement
contained  in  this  Note and the continuance of such failure for a period of 30
days  after the written notice is given to the Company; (v) any event of default
under  the Security Agreements or under the Stock Pledge Agreements delivered to
Holder  at  the  Closing  or  Stock Purchase Agreement between Peregrine, Philip
Eisenberg,  individually,  the Company and Rick's executed of even date herewith
(vi)  the  assignment  by  the  Company  for  the  benefit  of  creditors, or an
application  by  the Company to any tribunal for the appointment of a trustee or
receiver of a substantial part of the assets of the Company, or the commencement
of any proceedings relating to the Company under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debts, dissolution or other liquidation
law  of any jurisdiction; or the filing of such application, or the commencement
of  any such proceedings against the Company and an indication of consent by the
Company  to such proceedings, or the appointment of such trustee or receiver, or
an  adjudication  of  the  Company  bankrupt  or  insolvent,  or approval of the
petition  in any such proceedings, and such order remains in effect for 60 days;
(vii)  a  default in the payment of principal or interest when due which extends
beyond  any stated period of grace applicable thereto or an acceleration for any
other  reason  of maturity of any indebtedness for borrowed money of the Company
with  an  aggregate principal amount in excess of $50,000;  (viii) the existence
of  a  tax  lien  exceeding  $25,000  which  is  not cured, satisfied, bonded or
contested  in  good  faith;  and  (ix)  final  unsatisfied


                                        5
<PAGE>
judgments  not covered by insurance aggregating in excess of $50,000, at any one
time rendered against the Company and not stayed, bonded or discharged within 75
days.

     7.   HOLDER'S  RIGHTS  AND  REMEDIES  UPON  THE  OCCURRENCE  OF AN EVENT OF
          ----------------------------------------------------------------------
DEFAULT.  Following  the  occurrence  and  during the continuance of an Event of
-------
Default:

          a.   Remedies.  The  Holder may declare any and all of the Obligations
               --------
to  be  immediately  due  and  payable;  and,  in addition to that right, and in
addition  to  exercising all other rights or remedies, the Holder may proceed to
exercise  with  respect  to the Collateral all rights, options and remedies of a
secured  party  upon  default  as provided for under the Uniform Commercial Code
("UCC").

          b.   Exercise  of Remedies.  The Holder may, by notice to the Company,
               ---------------------
accelerate the payment of all Obligations (provided that no such notice shall be
required  if  the Event of Default is under Section 6(v); the Holder may proceed
to enforce payment of any of the Obligations and shall have and may exercise any
and  all  rights  under  the  UCC  or which are afforded to the Holder herein or
otherwise; and all Obligations shall bear interest payable on demand at the rate
per  annum  four  percent  (4%)  in  excess  of  the applicable rate of interest
provided  in  Section 1 (the "Default Rate").  Notwithstanding the foregoing, at
any  time  after  such  a declaration of acceleration has been made and before a
judgment  and/or  decree  for  payment  of  the money due has been obtained, the
Holder  may  rescind  and  annul  such  declaration  and its consequences if all
existing  Events  of  Default, have been cured or waived.  No such rescission or
annulment  shall  affect  any  subsequent default or impair any right consequent
thereon.

          c.   Disposition  of  Collateral.  The  Holder  may  sell,  lease  or
               ---------------------------
otherwise  dispose  of  and  deliver  any or all Collateral at public or private
sale,  for cash, upon credit or otherwise, at such prices and upon such terms as
the  Holder  deems  advisable  in  its  sole  discretion.  Any  requirements  of
reasonable  notice  shall be met if such notice is mailed postage prepaid to the
Company  at  its address set forth herein at least ten (10) business days before
the  time  of sale or other disposition.  The Holder may be the purchaser at any
such  sale,  if it is public, and in such event the Holder shall have all rights
of  a  good  faith,  bona  fide  purchaser  for value from a secured party after
default.  The  proceeds of any sale may be applied (in whatever order and manner
the  Holder  elects  in  its  sole discretion) to all costs and expenses of sale
(including  without limitation reasonable attorneys' fees and disbursements) and
to  the  payment  of Obligations, and any remaining proceeds shall be applied in
accordance  with  Article 9 of the UCC.  The Company shall remain liable for any
deficiency.

          d.   Cumulative Remedies.  The rights and remedies of the Holder shall
               -------------------
be deemed to be cumulative, and any exercise of any right or remedy shall not be
deemed  to  be an election of that right or remedy to the exclusion of any other
right  or  remedy.

          e.   Waivers.  The  Company  acknowledges that this Agreement involves
               -------
the  grant  of a security interest, and the Company hereby waives, to the extent
permitted  by  applicable  law,  (i)  any  requirement  of  marshaling assets or
proceeding  against  persons or assets in any particular order, and (ii) any and
all  notices  of  every  kind  and  description  that  may  be


                                        6
<PAGE>
required  to  be given by any statute or rule of law and any defense of any kind
based on any such notice, except any notices required under this Note, including
but not limited to all demands for payment, presentation for payment, notices of
intention  to accelerate maturity, notices of acceleration of maturity, protest,
and  notices  of  protest,  all  to  the  extent  permitted  by  law.

     8.   REGISTRATION RIGHTS.
          --------------------

     (a)  Rick's  agrees to file a Registration Statement within sixty (60) days
from  the  date  of execution hereof with the Securities and Exchange Commission
("SEC")  on  Form SB-2 or Form S-3 or other similar form (except for Form S-8 or
Form  S-4)  to  register  for  resale  by  the  Holder the shares underlying the
Conversion  Rights of this Note.  Rick's shall use its best efforts to cause the
Registration  Statement  to  become  effective  under  the Act as promptly as is
practicable  and to keep the Registration Statement continuously effective under
the Act for a period of the earlier of (i) five years from the effective date or
(ii)  until  all  of the shares which were registered for resale have been sold.

     (b)  From  time  to time, the Company shall prepare and file with the SEC a
post-effective  amendment  to  the Registration Statement or a supplement to the
related  Prospectus  or  a  supplement or amendment to any document incorporated
therein  by  reference or any other required document, so that such Registration
Statement  will  not  contain any untrue statement of a material fact or omit to
state  a  material  fact  required to be stated therein or necessary to make the
statements  therein  not  misleading,  and  so  that, as thereafter delivered to
purchasers  of  the  securities  being sold thereunder, such Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
required  to  be  stated therein or necessary to make the statements therein, in
light  of  the circumstances under which they were made, not misleading; provide
the  Holder  copies  of  any documents filed in such numbers as the Holder shall
reasonably request; and inform the Holder that the Company has complied with its
obligations  and  that  the Registration Statement and related Prospectus may be
used  for  the purpose of selling all or any of such securities (or that, if the
Company has filed a post-effective amendment to the Registration Statement which
has  not yet been declared effective, the Company will notify the Holder to that
effect,  will  use its best efforts to secure promptly the effectiveness of such
post-effective  amendment  and  will  immediately  so notify the Holder when the
amendment  has  become  effective).

     9.   LIMITATION  ON  MERGER,  SALE  OR CONSOLIDATION.  The Company may not,
          -----------------------------------------------
directly  or  indirectly, consolidate with or merge into another person or sell,
lease,  convey or transfer all or substantially all of its assets (computed on a
consolidated  basis),  whether  in  a  single transaction or a series of related
transactions,  to  another  person or group of affiliated persons, unless either
(a)  in  the  case  of  a  merger or consolidation, the Company is the surviving
entity or (b) the resulting, surviving or transferee entity expressly assumes by
supplemental  agreement all of the obligations of the Company in connection with
this  Note.

     Upon  any  consolidation  or merger or any transfer of all or substantially
all of the assets of the Company in accordance with the foregoing, the successor
entity  formed  by  such consolidation or into which the Company is merged or to
which  such  transfer is made, shall succeed to, and be substituted for, and may
exercise  every  right  and  power  of  the Company under the Note with the same
effect  as  if  such  successor  entity  had  been  named  therein  as  the


                                        7
<PAGE>
Company,  and the Company will be released from its obligations under the Notes,
except as to any obligations that arise from or as a result of such transaction.

     10.  CORPORATE  OBLIGATION.  No  recourse  shall  be had for the payment of
          ---------------------
the  principal  or the interest on this Note, or for any claim based thereon, or
otherwise in respect thereof, or based on or in respect of any Note supplemental
hereto,  against  any  incorporator,  stockholder,  officer,  or director (past,
present,  or  future)  of  the  Company,  whether by virtue of any constitution,
statute,  or  rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being by the acceptance hereof, and as part of the
consideration  for  the  issue  hereof,  expressly  waived  and  released.

     11.  LISTING  OF  REGISTERED HOLDER OF NOTES.  This Note will be registered
          ---------------------------------------
as  to  principal  amount  in  the Holder's name in the Company's Note Register,
after which no transfer hereof shall be valid unless made on the Company's books
at  the  office  of the Company, by the Holder hereof, in person, or by attorney
duly  authorized  in  writing,  and  similarly  noted  hereon.

     12.  HOLDER  NOT  DEEMED  A  STOCKHOLDER.  Except  as provided in any Stock
          -----------------------------------
Pledge  Agreement  executed in connection with the Closing, the Holder shall not
be  entitled  to  vote or receive dividends or be deemed the holder of shares of
the  Company  for  any  purpose,  nor  shall  anything contained in this Note be
construed  to  confer  upon  the  Holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to any
corporate  action  (whether any reorganization, issue of stock, reclassification
of  stock,  consolidation,  merger,  conveyance or otherwise), receive notice of
meetings,  receive  dividends  or  subscription  rights,  or  otherwise.

     13.  WAIVER  OF  DEMAND,  PRESENTMENT,  ETC.  The  Company hereby expressly
          --------------------------------------
waives demand and presentment for payment, notice of nonpayment, protest, notice
of  protest, notice of dishonor, notice of acceleration or intent to accelerate,
bringing  of  suit  and diligence in taking any action to collect amounts called
for  hereunder and shall be directly and primarily liable for the payment of all
sums  owing  and  to  be  owing hereunder, regardless of and without any notice,
diligence,  act  or  omission as or with respect to the collection of any amount
called  for  hereunder.

     14.  ATTORNEY'S  FEES.  The  Company  agrees to pay all costs and expenses,
          ----------------
including  without  limitation reasonable attorney's fees, which may be incurred
by  the  Holder in collecting any amount due under this Note or in enforcing any
of  Holder's  conversion  rights  as  described  herein.

     15.  ENFORCEABILITY.  In case any provision of this Note is held by a court
          --------------
of  competent  jurisdiction  to  be  excessive  in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so  that  it is enforceable to the maximum extent possible, and the validity and
enforceability  of  the remaining provisions of this Note will not in any way be
affected  or  impaired  thereby.

     16.  INTENT TO COMPLY WITH USURY LAWS.  In no event will the interest to be
          --------------------------------
paid  on this Note exceed the maximum rate provided by law.  It is the intent of
the  parties  to  comply  fully  with  the  usury laws of the State of New York;
accordingly,  it  is  agreed  that  notwithstanding


                                        8
<PAGE>
any provisions to the contrary in this Note, in no event shall such Note require
the  payment  or  permit  the  collection  of interest (which term, for purposes
hereof,  shall  include  any  amount  which, under New York law, is deemed to be
interest,  whether  or  not  such  amount  is  characterized  by  the parties as
interest)  in excess of the maximum amount permitted by the laws of the State of
New  York.  If any excess of interest is unintentionally contracted for, charged
or  received  under  this Note, or in the event the maturity of the indebtedness
evidenced  by  the Note is accelerated in whole or in part, or in the event that
all  of  part of the Principal Amount or interest of this Note shall be prepaid,
so  that  the  amount of interest contracted for, charged or received under this
Note,  on  the  amount of the Principal Amount actually outstanding from time to
time  under  this  Note shall exceed the maximum amount of interest permitted by
the  applicable  usury  laws,  then in any such event (i) the provisions of this
paragraph  shall  govern  and  control,  (ii)  neither the Company nor any other
person  or  entity  now  or  hereafter  liable for the payment thereof, shall be
obligated  to pay the amount of such interest to the extent that it is in excess
of the maximum amount of interest permitted by such applicable usury laws, (iii)
any  such  excess  which  may  have  been collected shall be either applied as a
credit  against  the  then  unpaid  principal  amount thereof or refunded to the
Company at the Holder's option, and (iv) the effective rate of interest shall be
automatically  reduced  to the maximum lawful rate of interest allowed under the
applicable  usury  laws  as  now  or  hereafter  construed  by the courts having
jurisdiction  thereof.  It  is  further  agreed  that  without limitation of the
foregoing,  all  calculations of the rate of interest contracted for, charged or
received  under  the  Note which are made for the purpose of determining whether
such  rate  exceeds  the  maximum lawful rate of interest, shall be made, to the
extent  permitted  by  applicable laws, by amortizing, prorating, allocating and
spreading  in  equal parts during the period of the full stated term of the Note
evidenced  thereby, all interest at any time contracted for, charged or received
from  the  Company  or  otherwise  by  the Holders in connection with this Note.

     17.  GOVERNING  LAW;  CONSENT TO JURISDICTION.  This Note shall be governed
          ----------------------------------------
by  and  construed  in accordance with the laws of the State of New York without
regard  to  the  conflict  of laws provisions thereof.  In any action between or
among  any of the parties, whether rising out of this Note or otherwise, each of
the  parties irrevocably consents to the exclusive jurisdiction and venue of the
federal  and/or  state  courts  located  in  New  York  County,  New  York.

     18.  AMENDMENT  AND  WAIVER.  Any  waiver  or  amendment hereto shall be in
          ----------------------
writing signed by the Holder.  No failure on the part of the Holder to exercise,
and  no  delay  in  exercising,  any  right  hereunder shall operate as a waiver
thereof,  nor  shall  any  single or partial exercise by the Holder of any right
hereunder  preclude any other or further exercise thereof or the exercise of any
other  rights.  The remedies herein provided are cumulative and not exclusive of
any  other  remedies  provided  by  law.

     19.  RESTRICTIONS  AGAINST  TRANSFER  OR  ASSIGNMENT.  This Note may not be
          -----------------------------------------------
sold,  transferred,  assigned, pledged, hypothecated or otherwise disposed of by
the  Registered  Holder hereof, in whole or in part, unless and until either (i)
the  Note  has  been  duly  and  effectively  registered  for  resale  under the
Securities  Act  of  1933,  as  amended,  and  under  any  then applicable state
securities laws; or (ii) the Registered Holder delivers to the Company a written
opinion  acceptable  to  the  Company's  counsel  that  an  exemption  from such
registration  requirements  is  then available with respect to any such proposed
sale  or  disposition.  Any  transfer  otherwise


                                        9
<PAGE>
permissible  hereunder shall be made only at the principle office of the Company
upon  surrender  of  this  Note  for  cancellation  and  upon the payment of any
transfer  tax  or other government charge connected therewith, and upon any such
transfer  a  new  Note  or  Notes  will  be issued to the transferee in exchange
therefor.

     20.  ENTIRE  AGREEMENT;  HEADINGS.  This  Note  constitutes  the  entire
          ----------------------------
agreement  between  the  Holder and the Company pertaining to the subject matter
hereof  and supersedes all prior and contemporaneous agreements, representations
and  understandings,  written  or  oral,  of such parties.  The headings are for
reference purposes only and shall not be used in construing or interpreting this
Note.

     21.  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 as such party
may  notify  to  the  other  parties  in  writing:

     (a)  If  to  the  Company,  to  it  at  the  following  address:

          RCI  Entertainment  (New  York),  Inc.
          10959  Cutten  Road
          Houston,  Texas  77066

          With  a  Copy  to:

          Robert  D.  Axelrod
          Axelrod,  Smith  &  Kirshbaum
          5300  Memorial  Drive,  Ste.  700
          Houston,  Texas  77007

     (b)  If  to  Holder:

          Philip  Eisenberg
          38  Evergreen  Pl.
          Demarest,  NJ  07627

          With  a  Copy  to:

          Jaffe  &  Asher
          600  Third  Avenue
          New  York,  New  York  10016

     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.


                                       10
<PAGE>
     22.  EXECUTION  BY RICK'S.  It is hereby understood and acknowledged by the
          --------------------
Holder  that  Rick's has caused this Note to be executed for the sole purpose of
enforceability  as  to  Sections  5  and  8  only  and  for  no  other  purpose.

     IN  WITNESS  WHEREOF, RCI ENTERPRISES (NEW YORK), INC. has caused this Note
to  be  duly  executed  in  its  corporate  name  by the manual signature of its
President  and  attested  by  the  manual  signature  of  its  Secretary.

                              RCI  ENTERTAINMENT  (NEW  YORK),  INC.


                              By:     /s/  Eric  Langan
                                      ------------------------------------------
                                      Eric  Langan
                              Title:  President

Attest:

/s/  Travis  Reese
------------------------------
Travis  Reese,  Secretary


FOR  PURPOSES  OF  ENFORCEABILTY  AS  TO
THE  PROVISIONS  OF  SECTIONS  5  and  8  ONLY:

RICK'S  CABARET  INTERNATIONAL,  INC.


By:  /s/  Eric  Langan
     -------------------------
          Eric  Langan
          Title:  President


                                       11
<PAGE>

</TEXT>
</DOCUMENT>
