Exhibit 10.6


 


BONUS AGREEMENT RELATED TO PURCHASE AGREEMENT


DATED SEPTEMBER 14, 2007


 


WHEREAS, on September 14, 2007, Kenja, Inc.
and Kenja II, Inc entered into a Purchase


 


	
   

  	
  Landlord’s Initials 

  	
  KW

  
	
   

  	
   

  
	
   

  	
  Tenant’s Initials

  	
  MO

  



 

















 


Agreement
whereby they agreed to sell to Purchaser, VCG Holding Corp (“VCG”) an adult
business located in the City of Hialeah, Florida (the “Business”); and


 


WHEREAS, the Purchase agreement provided that
the Purchaser would pay the sum of Six Million Eight Hundred and Seventy Five Thousand
($6,875,000.00) Dollars for the business, pursuant to the terms of the
agreement between Buyer and Seller; and


 


WHEREAS, Gregory Kenwood Gaines (“Seller
Shareholder”), has agreed to assist in the operation of the business following
the closing in order to attempt to increase sales at the business. Seller
Shareholder has agreed to assist in the operation of the Business without
remuneration in exchange for this Agreement (“Bonus Agreement”) which may
provide Selling Shareholder the ability to receive a bonus from the business (“Bonus
Program”) as described herein; and


 


WHEREAS, this Agreement sets forth the parties
full and complete understanding of the Bonus Program.


 


NOW THEREFORE
IT IS AGREED AS FOLLOWS:


 


1.                                       That
this Agreement shall be governed by all terms and conditions of the Purchase
Agreement dated September 14, 2007 and no provision of the Purchase Agreement
is being modified, altered or waived by this Agreement. This Agreement is in
addition to the terms of the Purchase Agreement.


 


2.                                       Seller
Shareholder agrees to assist VCG in the operation of the Business for up to 6
months following the closing of the sale of the Business to VCG (the “Bonus
Period”). During the bonus period, Selling Shareholder shall be given
reasonable                                                                                                                                     (INITIALED: KW, MO)


operational control over the Business, subject, however, to VCG’s
ultimate control over the Business. At all time, the business shall be operated
within the bounds of all applicable laws, rules, and regulations governing the
business. The failure of Selling Shareholder to comply with all rules, laws,
and regulations governing the business shall be cause for VCG


 

















 


to terminate this Agreement and VCG shall have no obligation to make
any payments to Selling Shareholder, whether under the bonus program or for any
other matter.


 


3.                                       That
during the Bonus Period, the following the following Bonus Program shall apply:


 


a.               If
the Business averages at least One Hundred Ten Thousand ($110,000.00) Dollars
per week in gross revenue for a consecutive 3-month period of time and during
this same 3-month period of time has a net profit of at least Three Hundred
Seventy Five Thousand ($375,000.00) Dollars, then VCG shall pay Seller
Shareholder an additional Five Hundred Thousand ($500,000.00) Dollars;


 


b.              If
the Business averages at least One Hundred Twenty Thousand ($120,000.00)
Dollars per week in gross revenue for a consecutive 3-month period of time and
during this same 3 month period of time has a net profit of at least Four
Hundred Eight Thousand ($408,500.00) Dollars, then VCG shall pay Seller
Shareholder an additional Two Hundred Fifty Thousand ($250,000.00) Dollars.
This payment shall be in addition to the bonus set forth in paragraph 3(a)
above.


 


c.               For purposes of
computing the bonus audit period set forth in paragraphs a & b above, VCG
shall accept any consecutive 3-month period contained in the bonus period and
will consider the bonus requirement satisfied if the business meets the


 


(INITIALED: KW, MO)


 


weekly revenue and net profit requirement as described herein. Seller
shall have six months from the date of the closing to demonstrate the revenue
requirements set forth in paragraphs a & b above.


 


d.              If
the Business does not meet the revenue requirements described in Bonus Program
during the Bonus Period, then no additional consideration shall be due the
Seller


 


	
   

  	
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  KW

  
	
   

  	
   

  
	
   

  	
  Tenant’s Initials

  	
  MO

  



 

















 


Shareholder and the obligation of VCG to pay a Bonus to Seller
Shareholder shall forever be discharged and VCG will have no further
obligations under the Bonus Program.


 


e.               Prior
to expiration of the Bonus Period, VCG shall have the right to terminate this
Agreement for any reason or for no reason at all, including terminating Selling
Shareholders authority to manage the business on behalf of VCG. (“Cancellation
Provision”) In the event that VCG elects to terminate this Agreement, then VCG
shall pay Selling Shareholder  as
follows:


 


1.                                       If
VCG terminates this Agreement during the first 2 months of this Agreement, then
VCG shall pay Selling Shareholder the sum of $100,000.00;


 


2.                                       If
VCG terminates this Agreement during the 3rd and 4th
month of this Agreement, then VCG shall pay Selling Shareholder the amount due
under subparagraphs 3(a & b) above if said funds are due and owing, or the
sum of $200,000.00, whichever is greater;


 


3.                                       If
VCG terminates this Agreement during the 5th and 6th
month of this Agreement, then VCG shall pay Selling Shareholder the amount due
under


 


(INITIALED: KW, MO)


 


subparagraphs 3(a & b) above if said funds are due and owing, or
the sum of $300,000.00, whichever is greater.


 


4.                                       During
the Bonus Period, VCG may cancel this contract without liability under
subparagraph 3(a & b) and 3(e)(1-3) in the event the average gross revenue
for any consecutive 4 week period during the months Selling Shareholder is
operating the Business following the closing of the sale between Sellers and


 

















 


VCG is not at least equal to 90% of the gross revenues in the one month
period proceeding the date of the execution of this Agreement.


 


5.                                       In
the event that Selling Shareholder elects to terminate this Agreement, then no
funds shall be due under the Bonus Program or the Cancellation Provisions.
However, if the Selling Shareholder’s termination is as a result of VCG’s
failure to allow him to operate the club as he reasonably and customarily
operates, then upon termination, VCG shall pay the termination fees due under
Section 3(e) above.


 


6.                                       In
the event that both Troy Lowrie and Micheal Ocello are no longer associated
with management of the VCG, then Selling Shareholder may terminate this
agreement and be paid the amounts which would be due under section 3(e) above.


 


f.                 In
calculating net revenue, the net revenue shall be determined in accordance with
VCG’s standard revenue calculations and prepared in accordance with U.S. GAAP.


 


(INITIALED: KW, MO)


 


4.                                       That
in the event that a dispute arises regarding the Bonus Program, including a
dispute regarding whether the gross revenue requirement have been met, then
such dispute shall be decided via binding arbitration pursuant to the Rules of
Commercial Arbitration of the American Arbitration Association. The Arbitration
shall take place in Dade County, Florida, or such other location as the parties
mutually agree. Any award rendered on an award may be enforced in a court of
competent jurisdiction. The laws and rules of procedure of the State of Florida
shall govern any such arbitration.


 


	
   

  	
  Landlord’s Initials 

  	
  KW

  
	
   

  	
   

  
	
   

  	
  Tenant’s Initials

  	
  MO

  



 

















 


	
  SELLER
  SHAREHOLDER

  	
   

  	
  PURCHASER
  - VCG HOLDING CORP

  
	
   

  	
   

  	
   

  
	
  /s/ G.
  Kenwood Gaines

  	
   

  	
  /s/ Micheal
  L. Ocello

  	
   

  
	
  Gregory
  Kenwood Gaines

  	
   

  	
  By: Micheal
  Ocello

  
	
  Dated:
  10/29/07

  	
   

  	
  Its:
  President

  
	
   

  	
   

  	
  Dated:
  10/29/07