**Exhibit 10.2**

 

**CONFIDENTIALITY AND**

**NON-COMPETITION AGREEMENT**

 

**THIS CONFIDENTIALITY AND NON-COMPETITION AGREEMENT****(the “Agreement”)** has been entered intothis 6th day of April 2001, by and between On Stage Entertainment, Inc.,(hereinafter referred to as “OSE” or the “Company”), and John W. STUART, anindividual (hereinafter referred to as “STUART”).

 

In consideration of themutual promises and convenants between the parties in connection with STUART’semployment agreement executed and dated October 12, 2000, (which isincorporated herein by reference and referred to as the “EmploymentAgreement”), as well as STUART’s future involvement with OSE as its Founder andChairman, and for other good and valuable consideration, the parties heretoagree as follows:

 

**1.             CONFLICTING ACTIVITIES.**

 

**1.1          Involvementin Business Opportunities.**  STUART shall not, during the term of his Employment Agreement, beengaged in any other business activity which is or may be competitive with thebusiness of the Company, without the prior written consent of the Company’sBoard of Directors; provided, however, that this restriction shall not beconstrued as preventing STUART from being a director of, or investing hispersonal assets in passive investments in, business entities which are not incompetition with the Company or any of its affiliates, or from pursuingbusiness opportunities as permitted by paragraph 1.2.

 

**1.2          Developmentof Business Opportunities. **STUART herebyagrees to promote and develop all business opportunities that come to hisattention relating to current or reasonably anticipated future business of theCompany, in a manner consistent with the best interests of the Company and withhis duties under his Employment Agreement. Should STUART discover a businessopportunity which is or may reasonably be anticipated to be related to thebusiness of the Company, he shall first offer such opportunity to theCompany.  Should the Board of Directorsof the Company not exercise its right to pursue this business opportunitywithin a reasonable period of time, not to exceed sixty (60) days, then STUARTmay develop the business opportunity for himself, provided, however, that suchdevelopment may in no way conflict or interfere with the duties owed by STUARTto the Company under his Employment Agreement. Further, STUART may develop such business opportunities only on his owntime, and may not use any service, personnel, equipment, supplies, facility, ortrade secrets of the Company in their development. As used herein, the term“business opportunity” shall not include business opportunities involvinginvestment in publicly traded stocks, bonds or other securities, or similarpassive investments.

 

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**2.**             **CONFIDENTIALITY OF TRADE SECRETS AND OTHER MATERIALS.**

 

**2.1          TradeSecrets. **STUART agreesnot to disclose to others, or take or use for his own purposes or the purposesof others, during or after his employment, any trade secrets, confidentialinformation, knowledge, data or the like that STUART acquires during hisEmployment Agreement and that is not otherwise in the public domain. STUARTagrees that these restrictions shall also apply to (a) information, knowledge,trade secret, data or know-how belonging to third parties in the Company’spossession; and (b) information, knowledge, trade secret, or data received,originated, discovered or developed by STUART during the term of thisAgreement. STUART recognizes that this obligation applies not only to technicalinformation, but also to any business, financial or marketing information that theCompany treats as confidential.  Anyinformation of the Company which is not readily available to the public shallbe considered to be a trade secret unless the Company advises STUART otherwise.

 

**2.2**          **Ownership of Trade Secrets; Assignment of Rights.**  STUART hereby agrees that all know-how,documents, reports, plans, proposals, marketing and sales plans, client lists,client files and materials made by him or by the Company during the term of hisemployment are the property of the Company and shall not be used by him in anyway adverse to the Company’s interests. STUART shall not deliver, reproduce or in any way allow such documentsor things to be delivered or used by any third party without specific directionor consent of the Board of Directors of the Company.  STUART hereby assigns to the Company any rights which he or shemay have in any such trade secret or proprietary information.

STUART agrees that for aperiod of two (2) years immediately following his termination (voluntary orwith cause) with the Company, he shall not interfere with the business of theCompany in any manner, including, without limitation, by inducing an employeeor associate to leave the Company, or by inducing a consultant or otherindependent contractor to sever that person’s relationship with the Company, ordisrupting the Company’s relationships with customers, agents, representativesor vendors or otherwise.

 

**3.             UNFAIR COMPETITION AFTERTERMINATION.**  Because ofhis employment by the Company, STUART will have access to trade secrets andconfidential information about the Company, its products, its customers and itsmethods of doing business.  In the eventof the termination of the Employment Agreement for any reason, STUART agreesthat for a period of two (2) years after termination of his employment he willnot, directly or indirectly, compete with Company in the field of liveentertainment, provided the Company continues to pay STUART his Base Salary,Minimum Guaranteed Bonus, Vacation, Car Allowance and Health/Dental/Vision insurancebenefits at such rates as were in effect as of last date of STUART’s employmentwith the Company. STUART understands and agrees that direct competition meansthe design, development, production, promotion, presentation, or sale of liveentertainment shows competitive with those of the Company.  Indirect competition means the employment byany competitor or third party in a role that involves STUART in the design,development, production, promotion, or sale of live entertainment showscompetitive with those of the Company, and for whom STUART will perform thesame or similar function as he performs for the Company.  STUART further agrees that for a period oftwo (2) years after termination of his employment, he

 

 

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will not directly or indirectly disclose toany third person any confidential information or trade secrets not otherwise inthe public domain, and to which he gained knowledge during the term of hisemployment, provided the Company continues to pay STUART his Base Salary,Minimum Guaranteed Bonus, Vacation, Car Allowance and Health/Dental/Visioninsurance benefits at such rates as were in effect as of last date of STUART’semployment with the Company.

 

**4**.             **INJUNCTIVE RELIEF.** The Company and STUART hereby acknowledge and agree that any defaultunder Sections 1 through 3, above, will cause damage to the Company in anamount which is difficult, if not impossible, to ascertain.  Accordingly, in addition to any other reliefto which the Company may be entitled, the Company shall be entitled to suchinjunctive relief as may be ordered by any court of competent jurisdictionincluding, but not limited to, an injunction restraining any violation of theabove named Sections, and without proof of actual damages.

 

**5**.             **ATTORNEY’S FEES.** If any party to this Agreement breaches any of the terms of thisAgreement, then that party shall pay to the non-defaulting party all of thenon-defaulting party’s costs and expenses, including attorney’s fees, incurredby that party in enforcing the terms of this Agreement.

 

**6**.             **MEDIATION/ARBITRATION.** If a dispute arises out of or relates to this Agreement, the partiesagree first to try in good faith to settle the dispute by mediation under thecommercial mediation rules of the American Arbitration Association, beforeresorting to arbitration.  Thereafter,any remaining unresolved controversy or claim arising out of or relating tothis Agreement shall be settled by arbitration in Clark County, Nevada, inaccordance with commercial arbitration rules of the American ArbitrationAssociation, and judgment upon the award rendered by the arbitrator may beentered in any court having jurisdiction thereof.  The prevailing party in any arbitration proceeding, as determinedby the arbitrator, shall be entitled to an award of reasonable attorney’s feesand the fees and costs arising out of the arbitration proceedings, including,but not limited to the arbitration’s fees and the American ArbitrationAssociation’s administrative fee.  Theparties further agree that the arbitrator, or such other person designated forthe purpose by the American Arbitration Association shall have jurisdictionover all matters involving provisional remedies just as any court of competentjurisdiction would, including but not limited to, the imposition of injunctiverelief to protect trade secrets and confidential information.

 

**7**.             **GOVERNING LAW.** This Agreement shall be subject to and governed by the laws of the Stateof Nevada.

 

Executed this 6 day of April, 2001.

 
| /s/ John W. Stuart             |   |
|--------------------------------|--------|
| JOHN W. STUART, an  individual |   |

 

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