Exhibit 10.2

COVENANT NOT TO COMPETE (PRIOR OWNER)

THIS COVENANT NO TO COMPETE (this “Agreement’) is made and  effective as of the
17th day of September 2007 (the “Closing Date”), between Bryan S. Foster, a
resident of the State of Texas (“Prior Owner”), and VCG Holding Company, a
Colorado corporation (“Employer”).

W I T N E S S E T H:

WHEREAS, all of the membership interests in Golden Productions JGC Fort Worth,
LLC d/b/a Jaguar’s Gold Club Fort Worth (“Fort Worth”) are to be acquired by
Employer pursuant to a certain Stock Purchase Agreement (the “Purchase
Agreement”); and

WHEREAS, Fort Worth thereafter will become wholly owned by Employer and will
continue to conduct its respective business in the same manner as such business
has been conducted by Fort Worth prior to the acquisition; and

WHEREAS, Prior Owner has been an owner of Fort Worth and has intimate knowledge
of its business practices, which, if exploited by Prior Owner in contravention
of this Agreement, would seriously, adversely and irreparably affect the
interests of Employer and Fort Worth and the ability of Fort Worth to continue
the business previously conducted by it; and

WHEREAS, to induce Employer to enter into the Purchase Agreement, make such cash
payment to Prior Owner and consummate the other transactions contemplated by the
Purchase Agreement, Prior Owner has agreed to execute and deliver this
Agreement.

NOW, THEREFORE, in consideration of the transactions contemplated by the
Purchase Agreement, the consideration paid and to be paid to Prior Owner under
the Purchase Agreement, the above premises, the mutual promises and covenants of
the parties hereto set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Prior Owner and Employer, intending to be legally bound, agree as follows:

1.             Definitions.    As used herein, the following terms shall have
the following meanings unless the context otherwise requires:

a.             “Area” shall mean a radius of fifty (50) miles of Fort Worth,
excluding Jaguar’s Gold Club Fort Worth No. 2 and the club operated in Dallas,
Texas by Manana Entertainment, Inc. d/b/a Jaguar’s Gold Club.

b.             “Business” shall mean the operations of Fort Worth as conducted
as of the Closing Date.

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c.             “Competing Business” shall mean any business organization of
whatever form engaged, either Directly or Indirectly, in any adult entertainment
or any business or enterprise which is the same as, or substantially the same
as, Fort Worth.

d.             “Directly or Indirectly” shall mean (i) acting as an agent,
representative, officer, director, or independent contractor of a Competing
Business; (ii) participating in any such Competing Business as an owner,
partner, limited partner, joint venturer, creditor or shareholder (except as a
shareholder holding less than five percent (5%) interest in a corporation whose
shares are actively traded on a regional or national securities exchange or in
the over-the-counter market); and (iii) communicating to any such Competing
Business the names or addresses or any other information concerning any past,
present, or identified prospective client or customer of Fort Worth or an entity
having title to the goodwill of Fort Worth.

e.             “Restricted Period” shall mean the period commencing with the
Closing Date and ending on the fifth (5th) anniversary thereof

f.              “Confidential Information” shall include any and all information
related to the purpose and business of Fort Worth which is proprietary and not
general public knowledge, specifically including (but without limiting the
generality of the foregoing) any financial statements, appraisals, analysis
data, cost analyses or strategies, clients, customer lists, suppliers, the sales
price of Fort Worth paid by Employer, or any other matters regarding Fort Worth.
Information that is orally disclosed will be considered “Confidential
Information” if Employer indicates to Prior Owner at the time of disclosure the
confidential or proprietary nature of the information and provides a written
summary of such information to Prior Owner within ten (10) days after the
initial oral disclosure thereof. Any technical or business information of a
third-person furnished or disclosed shall be deemed “Confidential Information”
of Fort Worth unless otherwise specifically indicated in writing to the
contrary.

2.             Agreement Not to Compete. Unless otherwise consented to in
writing by Employer, Prior Owner agrees that during the Restricted Period, he
will not, within the Area, either Directly or Indirectly, on his own behalf or
in the service or on behalf of others, engage in any Competing Business or
provide managerial, supervisory, administrative, financial or consulting
services or assistance to, or own a beneficial interest (except as a shareholder
holding less than five percent (5%) interest in a corporation whose shares are
actively traded on a regional or national securities exchange or in the
over-the-counter market) in any Competing Business.

3.             Agreement Not to Solicit Employees. Prior Owner agrees that
during the period commencing with the Closing Date and ending on the fifth (5th)
anniversary thereof, he will not, without the prior written consent of Employer,
either directly or Indirectly, on his own behalf or via sendee or on behalf of
others, solicit, divert, or hire away, or attempt to solicit, divert, or hire
away from the employment of Fort Worth or any of its subsidiaries, any Person
employed by Fort Worth or any of its subsidiaries, whether or not such employee
is a full-time employee or temporary employee, whether or

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not such employment is pursuant to a written agreement, whether or not such
employment is for a determined period or is at will, and whether or not such
employee has voluntarily terminated their employment. Further, Prior Owner
agrees that he will not, without the prior written consent of Employer, either
directly or indirectly, on his own behalf or in the service or on behalf of
others, solicit or attempt to solicit any entertainers who have performed at
Fort Worth during the preceding six (6) months prior to the Closing Date until
the end of the period commencing with the Closing Date and ending on the fifth
(5th) anniversary thereof.

4.             Confidentiality.   Prior Owner agrees to hold all Confidential
Information of Fort Worth in confidence for so long as Fort Worth treats such
information as confidential or proprietary, unless otherwise agreed to in
writing by the Employer. During such period Prior Owner will use such
information solely for the purposes set forth in this Agreement unless otherwise
agreed to in writing by Employer. Prior Owner agrees not to copy such
Confidential Information of Fort Worth unless otherwise agreed to in writing by
the Employer. Prior Owner agrees that he shall not make disclosure of any such
Confidential Information to anyone (including subcontractors) except accounting,
business, financial and legal advisors of the Employer to whom disclosure is
necessary for the purpose set forth above. Prior Owner shall appropriately
notify such advisors that the disclosure is made in confidence and shall be kept
in confidence in accordance with this Agreement. The obligations set forth in
this Agreement shall be satisfied by Prior Owner through the exercise of the
same degree of care used to restrict disclosure and use of its own Confidential
Information.

5.             Remedies.

a.             Prior Owner acknowledges and agrees that, by virtue of his
relationship with Fort Worth, great loss and irreparable damage would be
suffered by Employer, including, without limitation, damage to the goodwill and
proprietary interests of Employer, if Prior Owner should breach or violate any
of the terms or provisions of the covenants and agreements set forth in Sections
2, 3 and/or 4 hereof Prior Owner further acknowledges that Prior Owner has
examined in detail such restrictive covenants and agreements and agrees that the
restraints imposed thereby on Prior Owner are reasonable in the sense that they
are no greater than are necessary to protect the goodwill of Fort Worth invested
in by Employer pursuant to the Purchase Agreement and to protect Employer in its
legitimate business interests, and the restrictive covenants and agreements are
reasonable in the sense that they are not unduly harsh or oppressive.

b.             The parties acknowledge and agree that any breach of Sections 2,
3 and/or 4 of this Agreement by Prior Owner would result in irreparable injury
to Employer, and therefore Prior Owner agrees and consents that Employer shall
be entitled to a temporary restraining order and a permanent injunction to
prevent a breach or contemplated breach of any of the covenants or agreements of
Prior Owner contained herein.

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c.             In addition, Employer shall be entitled, upon any breach of
Sections 2,3 and/or 4 of this Agreement by Prior Owner, to demand an accounting
and repayment of all profits and other monetary compensation realized by Prior
Owner, directly or through any Competing Business controlled by Prior Owner, as
a result of any such breach.

d.             The rights of Employer under this Section 5 shall not be in
limitation or in lieu of any and all other remedies that may be available to
Employer under the Purchase Agreement or any other agreement , document or
instrument provided for therein, or other remedies otherwise available at law or
in equity. The existence of any claim, demand, action or cause of action against
Prior Owner whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of any then valid covenants
or agreements herein.

6.             Severability. Prior Owner agrees that the covenants and
agreements contained in Sections 2, 3, 4 and 5 of this Agreement are of the
essence of this Agreement; that each such covenant was agreed to by Employer and
Prior Owner as part of the transaction contemplated by the Purchase Agreement;
that Prior Owner has received good, adequate and valuable consideration for each
of such covenants; that each of such covenants is reasonable and necessary to
protect and preserve the interests and properties of Employer; that Fort Worth
and its subsidiaries are engaged in the Business through the Area: that
irreparable loss and damage will be suffered by Employer should Prior Owner
breach any of such covenants and agreements; that each of such      covenants
and agreements is separate, distinct and severable not only from the other of
such covenants and agreements but also from other and remaining provisions of
this Agreement; and, that the invalidity or unenforceability of any such
covenant or agreement shall not affect the validity or enforceability of any
other such covenants or agreements or any other provision or provisions of this
Agreement unless expressly stated herein. Further, if any provision of this
Agreement is ruled invalid or unenforceable by a court of competent jurisdiction
because of a conflict between such provision and any applicable law or public
policy, such provision shall be redrawn by such court to the extent required to
make such provision consistent with, and valid and enforceable under, such law
or public policy, and as redrawn may be enforced against Prior Owner.

7.             Tolling. In the event that Prior Owner should breach any or all
of the covenants set forth in Sections 2, 3 and/or 4 hereof, the running of the
period of the restrictions set forth in such section or sections breached shall
be tolled during the continuation(s) of any breach or breaches by Prior Owner,
and the running of the period of such restrictions shall commence or commence
again only upon compliance by Prior Owner with the terms of the applicable
section or sections breached.

8.             Consideration. In consideration for Prior Owner’s compliance with
his obligations under this Agreement, and as part of the transactions
contemplated by the Purchase Agreement, Prior Owner shall receive from Employer
the sum of Five Thousand ($5,000.00) Dollars in cash on the Closing Date, and
such other consideration provided for in the Purchase Agreement.. Further, Prior
Owner acknowledges and agrees

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that the terms of this Agreement contained herein are reasonable in light of the
good, adequate and valuable consideration which Prior Owner shall receive
pursuant to the Purchase Agreement.

9.             Waiver. The waiver by either party of any breach of this
Agreement by the other party shall not be effective unless in writing, and no
such waiver shall operate or be construed as the waiver of the same or another
breach on a subsequent occasion.

10.           Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by, and construed in accordance with, the laws of
the State of Texas, without regard to the conflicts of laws provisions thereof.

11.           Amendment. No amendment or modification of this Agreement shall be
valid or binding upon Employer or Prior Owner unless made in writing and signed
by the parties hereto.

12.           Captions and Section Headings. Captions and section headings used
 herein are for convenience only and are not a part of this Agreement and shall
not be used in construing it.

13.           Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have duly been given if
delivered or if mailed, by United States certified or registered mail, prepaid
to the party to which the same is directed at the following addresses (or at
such other addresses as shall be given in writing by the parties to one
another):

a.             If to Prior Owner:

Bryan S. Foster
2171 Manana Drive
Dallas, TX 75202

b.             If to Employer:

VCG Holding Company
Attn: Troy Lowrie
390 Union Blvd., Suite 540
Lakewood, CO 80228

with a copy to:
                                                                                                             
Martin A. Grusin
780 Ridge Lake Boulevard
Suite 202
Memphis, TN 38120

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Facsimile: (901) 682-3590

VCG Holding Company
Attn: Mike Ocello
390 Union Blvd., Suite 540
Lakewood, CO 80228

Notices delivered in person shall be effective on the date of delivery. Notices
delivered by mail as aforesaid shall be effective upon the third calendar day
subsequent to the postmark date thereof.

14.           Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed original, but all of which together
shall constitute one and the same instrument.

15.           Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties with respect to its subject matter
and any and all prior agreements, understandings or representations with respect
to the subject matter hereof are terminated and canceled in their entirety and
are of no further force or effect, but specifically excluding the Purchase
Agreement and the agreements, documents and instruments provided for therein.

IN WITNESS WHEREOF, Prior Owner and Employer have each executed and delivered
this Agreement as of the date first written above.

/s/ Bryan S. Foster

 

Bryan S. Foster, Prior Owner

 

 

 

 

 

 

 

VCG HOLDING COMPANY,

 

A Colorado corporation

 

 

 

 

By:

/s/ Micheal L. Ocello

 

Title:

President

 

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