Exhibit 10.1

 

SERVICE AGREEMENT

 

THIS AGREEMENT (the “Agreement”) is made and entered into this 6th day of
September, 2005, by and between ELITE FINANCIAL COMMUNICATIONS GROUP, LLC,
located at 605 Crescent Executive Court, Suite 124, Lake Mary, Florida 32746,
(hereinafter referred to as “ELITE”) and VITACUBE SYSTEMS HOLDINGS, INC.,
located at 480 South Holly Street Denver, Colorado 80246,  (hereinafter referred
to as the “Company”).

 

WITNESSETH:

 

For and consideration of the mutual promises and covenants contained herein, the
parties hereto agree as follows:

 

1)                       EMPLOYMENT

Company hereby hires and employs ELITE as an independent contractor, and ELITE
does hereby accept its position as an independent contractor to the Company upon
the terms and conditions hereinafter set forth.

 

2)                       TERM

The term of this Agreement shall be for twelve (12) months. However the Company
shall retain the right to terminate this Agreement following 90 consecutive days
of representation by ELITE.  Said desire to terminate must be submitted in
writing to ELITE by the Company no less than 30 days prior to the desired
termination date.

 

3)                       DUTIES AND OBLIGATIONS OF ELITE

a)              ELITE will review and analyze various aspects of the Company’s
goals and make recommendations on feasibility and achievement of desired goals.

b)             Through its Market Relations Group, ELITE will provide exposure
to its network of firms and brokers that may be interested in participating with
the Company, schedule and conduct the necessary due diligence, and obtain the
required approvals necessary for those firms to participate.  ELITE will also
interview and make determinations on any brokerage or institutional firms
referred by the Company with regard to their participation.

c)              At the Company’s request, ELITE will be available to field any
calls from firms, individual investors/shareholders and brokers inquiring about
the Company.  In addition, ELITE will assist the Company in preparing its
quarterly communications relative to its financial results and coordinate
corresponding news announcements, conference calls and simulcasts on the
Internet in accordance with Regulation FD.

d)             ELITE will feature the Company on the Internet via ELITE’s home
web site (www.efcg.net) within the Elite Financial Forum which will feature
comprehensive information relative to the Company’s fundamental and technical
strengths, as well as industry and corporate overviews; management biographies;
stock trading history; market making activity; conference call/webcast archives;
and other information meaningful to the investment community.  The Forum will be
updated routinely and provide for site visitors to request ongoing information
about the Company as it is released.

e)              ELITE shall write, produce and/or assist the Company in
preparing and releasing all news announcements.  The Company shall be solely
responsible for paying all fees associated with the actual release(s) through
BusinessWire, PR Newswire, or any other comparable news dissemination source.
ELITE will create, build and continually enhance a database of all brokers,
investors, analysts and media contacts who have expressed an interest in
receiving ongoing information on the Company and manage the ongoing distribution
of news announcements and/or other Company approved communications.

 

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f)                ELITE shall serve as the Company’s publicist and will strive
to obtain coverage in both national and industry publications, in financial
newsletters, on financial radio and television programming and via traditional
press mediums.  Specifically, ELITE will facilitate an ongoing outreach program
to an intelligently targeted universe of media professionals.  Further, ELITE
will track published articles and provide monthly clippings of those
articles/mentions featuring the Company.

g)             At the Company’s request, strive to obtain the Company analyst
coverage and/or investment banking sponsorship.

h)             ELITE shall arrange for a series of due diligence meetings with
select broker/dealers, institutional investors and analysts at predetermined
dates throughout the campaign term, while remaining compliant with the rules and
regulations associated with Regulation FD.

i)                 ELITE shall develop customized, high-quality, high-impact and
fully integrated financial communications programs and platforms, and leverage
our strategic resources to enhance general product/service marketing programs
initiated by the Company.

j)                 ALL OF THE FOREGOING ELITE-PREPARED DOCUMENTATION CONCERNING
THE COMPANY, INCLUDING, BUT NOT LIMITED TO, INFORMATIONAL WRITE-UPS, NEWS
ANNOUNCEMENTS, SHAREHOLDER LETTERS, ET AL, SHALL BE PREPARED BY ELITE USING
MATERIALS SUPPLIED TO IT BY THE COMPANY AND SHALL BE APPROVED BY THE COMPANY
PRIOR TO DISSEMINATION BY ELITE.

 

4)                       ELITE’S COMPENSATION

a)              $10,000 cash, payable per month with the first payment of
$10,000 due immediately following execution of this Agreement and subsequent
monthly payments due every 30 days thereafter for the term of the Agreement. 
The Company agrees to make all monthly payments on the applicable due date and
in no event beyond five (5) days past the due date.  For every five (5) days
past the applicable payment due date, the Company shall be assessed a late fee
equal to 5% of the outstanding amount until the payment is received by ELITE.

b)             ELITE would be entitled to receive a warrant to purchase up to
100,000 common shares of the Company’s common stock, exercisable as follows:

i)                 25,000 shares exercisable at $2.00 per share, which shall
vest immediately upon execution of this Agreement;

ii)              25,000 shares exercisable at $2.00 per share, which shall vest
on the 91st day following execution of this Agreement;

iii)           25,000 shares exercisable at $4.50 per share, which shall vest on
the 181st day following execution of this Agreement; and

iv)          25,000 shares exercisable at $6.00 per share, which shall vest on
the 271st day following execution of this Agreement.

c)              The Company shall agree to issue ELITE piggyback registration
rights for the common shares underlying the option/warrant listed above
(“underlying shares”), whereby these shares will be registered for resale by
ELITE on the first applicable Registration Statement filed by the Company with
the U.S. Securities & Exchange Commission.  The underlying shares common shares
shall be held by the Company until such time as ELITE elects to exercise its
option or warrant to purchase the common shares.  The term of the option/warrant
shall expire 24 months from the date the Registration Statement registering the
shares underlying the option/warrant is deemed effective.  In the event the
Company elects early termination of this Agreement, as defined in Section 2
herein, all restricted shares and underlying shares that have not reached their
issue or vesting dates will be deemed null and void.

 

 

Initial Company           

Initial ELITE           

 

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5)                       ELITE’S EXPENSES AND COSTS

Company shall pay all reasonable costs and expenses incurred by ELITE, its
directors, officers, employees and agents, in carrying out its duties and
obligations pursuant to the provisions of this Agreement, excluding ELITE’s
general and administrative expenses and costs, but including and not limited to
the following costs and expenses; provided all costs and expense items in excess
of $1.00 (One Dollar) must be approved by the Company in writing prior to
ELITE’s incurrence of the same:

a)              Travel expenses, including but not limited to transportation,
lodging and food expenses, when such travel is conducted on behalf of the
Company.

b)             Seminars, expositions, money and investment conferences.

c)              Radio and television time and print media advertising costs,
when/if applicable.

d)             Subcontract fees and costs incurred in preparation of independent
third party research reports, when/if applicable.

e)              Cost of on-site due diligence meetings, if applicable.

f)                Printing and publication costs of brochures and marketing
materials, which are not supplied by the Company.

g)             Corporate web site development costs.

h)             Printing and publication costs of Company annual reports,
quarterly reports, and/or other shareholder communication collateral material,
which is not supplied by the Company.

 

6)                       FUNDING ADVISORY SERVICES

Upon request by the Company’s management team, Elite will make strategic
introductions to funding groups, investment banking firms, and/or other sources
interested in furthering the business of the Company.  In the event that a
private/public financing transaction is arranged and successfully implemented
using a source first introduced to the Company by Elite, then Elite shall be
entitled to receive a cash finder’s fee at closing equal to 3% of the gross
proceeds received by the Company.

 

7)                        COMPANY’S DUTIES AND OBLIGATIONS

Company shall have the following duties and obligations under this Agreement:

a)              Cooperate fully and timely with ELITE so as to enable ELITE to
perform its obligations under this Agreement.

b)             Within ten (10) days of the date of execution of this Agreement
to deliver to ELITE a complete due diligence package on the Company, including
all the Company’s filings with the U.S. Securities and Exchange Commission
within the last twelve months; the last six (6) months of press announcements on
the Company; and all other relevant materials with respect to such filings,
including but not limited to, corporate reports, brochures, and the like, and a
list of analysts and or fund managers, who have been following the Company.

c)              The Company will act diligently and promptly in reviewing
materials submitted to it from time to time by ELITE and inform ELITE of any
inaccuracies contained therein prior to the dissemination of such materials.

d)             Promptly give written notice to ELITE of any change in the
Company’s financial condition or in the nature of its business or operations
which had or might have an adverse material effect on its operations, assets,
properties or prospects of its business.

e)              Promptly pay all Company pre-approved costs and expenses
incurred by ELITE under the provisions of this Agreement when presented with
invoices for the same by ELITE.

f)                Give full disclosure of all material facts concerning the
Company to ELITE and update such information on a timely basis.

g)             Promptly pay the compensation due ELITE under the provisions of
this Agreement, and as defined in Section 4 and Sections 5 and 6 (if and when
applicable) herein.

 

 

Initial Company           

Initial ELITE           

 

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8)                       NONDISCLOSURE

Except as may be required by law, the Company, its officers, directors,
employees, agents and affiliates shall not disclose the contents and provisions
of this Agreement to any individual or entity without ELITE’s expressed written
consent subject to disclosing same further to Company counsel, accountants and
other persons performing investment banking, financial, or related functions for
the Company.

 

9)                       COMPANY’S DEFAULT

In the event of any default in the payment of ELITE’s compensation to be paid to
it pursuant to this Agreement, or any other charges or expenses on the Company’s
part to be paid or met, or any part or installment thereof, at the time and in
the manner herein prescribed for the payment thereof and as when the same
becomes due and payable, and such default shall continue for five (5) days after
ELITE’s written notice thereof is received by Company; in the event of any
default in the performance of any of the other covenants, conditions,
restrictions, agreements, or other provisions herein contained on the part of
the Company to be performed, kept, complied with or abided by, and such default
shall continue for five (5) days after ELITE has given Company written notice
thereof, or if a petition in bankruptcy is filed by the Company, or if the
Company is adjudicated bankrupt, or if the Company shall compromise all its
debts or assign over all its assets for the payment thereof, of if a receiver
shall be appointed for the Company’s property, then upon the happening of any of
such events, ELITE shall have the right, at its option, forthwith or thereafter
to accelerate all compensation, costs and expenses due or coming due hereunder
and to recover the same from the Company by suit or otherwise and further, to
terminate this Agreement.  The Company covenants and agrees to pay all
reasonable attorney fees, paralegal fees, costs and expenses due of ELITE,
including court costs, (including such attorney fees, paralegal fees, costs and
expenses incurred on appeal) if ELITE employs an attorney to collect the
aforesaid amounts or to enforce other rights of ELITE provided for in this
Agreement in the event of any default as set forth above and ELITE prevails in
such litigation.

 

10)                COMPANY’S REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to ELITE for the purpose of inducing ELITE
to enter into and consummate this Agreement as follows:

a)              The Company has the power and authority to execute, deliver and
perform under this Agreement.

b)             The execution and delivery by the Company of this Agreement have
been duly and validly authorized by all requisite action by the Company.  No
license, consent or approval of any form is required for the Company’s execution
and delivery of this Agreement.

c)              No representation or warranty by the Company in this Agreement
and no information in any statement, certificate, exhibit, schedule or other
document furnished, or to be furnished by the Company to ELITE pursuant hereto,
or in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact necessary to make the statements contained herein or therein not
misleading.  There is no fact which the Company has not disclosed to ELITE, in
writing, or in SEC filings or news announcements, which materially adversely
affects, nor, so far as the Company can now reasonably foresee, may adversely
affect the business, operations, prospects, properties, assets, profits or
condition (financial or otherwise) of the Company. IN NO EVENT WILL THE COMPANY
BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES NOR FOR ANY CLAIM
AGAINST ELITE BY ANY PERSON OR ENTITY ARISING FROM OR IN ANY WAY RELATED TO THIS
AGREEMENT,

 

11)                ELITE’S DEFAULT

In the event of any default in the performance by ELITE pursuant to this
Agreement, at the sole discreation of the company, and such default shall
continue for five (5) days after the company’s written notice thereof is
received by ELITE; in the event of any default in the performance of any of the
other covenants, conditions,

 

 

Initial Company           

Initial ELITE           

 

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restrictions, agreements, or other provisions herein contained on the part of
ELITE to be performed, kept, complied with or abided by, and such default shall
continue for five (5) days after Company has given ELITE written notice thereof,
or if a petition in bankruptcy is filed by the ELITE, or if ELITE is adjudicated
bankrupt, or if ELITE shall compromise all its debts or assign over all its
assets for the payment thereof, of if a receiver shall be appointed for ELITE’s
property, then upon the happening of any of such events, the Company shall have
the right, at its option, forthwith or thereafter to get back all of its money
from ELITE by suit or otherwise and further, to terminate this Agreement.  ELITE
covenants and agrees to pay all reasonable attorney fees, paralegal fees, costs
and expenses due of the Company, including court costs, (including such attorney
fees, paralegal fees, costs and expenses incurred on appeal) if the Company
employs an attorney to collect the aforesaid amounts or to enforce other rights
of the Company provided for in this Agreement in the event of any default as set
forth above and the Company prevails in such litigation.

 

12)                LIMITATION OF ELITE LIABILITY

If ELITE fails to perform its services hereunder, its entire liability to the
Company shall not exceed the lessor of (a) the amount of cash compensation ELITE
has received from the Company under Section 4 of this Agreement or (b) the
actual damage to the Company as a result of such non-performance.  IN NO EVENT
WILL ELITE BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES NOR FOR
ANY CLAIM AGAINST THE COMPANY BY ANY PERSON OR ENTITY ARISING FROM OR IN ANY WAY
RELATED TO THIS AGREEMENT, UNLESS SUCH DAMAGES RESULT FROM THE USE, BY ELITE, OF
INFORMATION NOT AUTHORIZED BY THE COMPANY.

 

13)      MISCELLANEOUS

a)              Notices.  Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid to the parties hereto at their
addresses first above written.  Either party may change his or its address for
the purpose of this paragraph by written notice similarly given.

b)             Entire Agreement.  This Agreement represents the entire agreement
between the Parties in relation to its subject matter and supercedes and voids
all prior agreements between such Parties relating to such subject matter.

c)              Amendment of Agreement.  This Agreement may be altered or
amended, in whole or in part, only in writing signed by both Parties.

d)             Waiver.  No waiver of any breach or condition of this Agreement
shall be deemed to be a waiver of any other subsequent breach or condition,
whether of a like or different nature, unless such shall be signed by the person
making such waiver and/or which so provides by its terms.

e)              Captions.  The captions appearing in this Agreement are inserted
as a matter of convenience and for reference and in no way affect this
Agreement, define, limit or describe its scope or any of its provisions.

f)                Situs.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.  Venue shall be located in
Seminole County, Florida.

g)             Benefits.  This Agreement shall inure to the benefit of and be
binding upon the Parties hereto, their heirs, personal representatives,
successors and assigns.

h)             Severability.  If any provision of this Agreement shall be held
to be invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any way render invalid or unenforceable
any other provisions of this Agreement, and this Agreement shall be carried out
as if such invalid or unenforceable provision were not contained herein.

i)                 Arbitration.  Any controversy, dispute or claim arising out
of or relating to this Agreement or the breach thereof shall be settled by
arbitration.  Arbitration proceedings shall be conducted in accordance with the
rules then prevailing of the American Arbitration Association or any successor.

 

 

Initial Company           

Initial ELITE           

 

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The award of the Arbitration shall be binding on the Parties.  Judgment may be
entered upon an arbitration award or in a court of competent jurisdiction and
confirmed by such court.  Venue for arbitration proceedings shall be located in
Seminole County, Florida.  The costs of arbitration, reasonable attorney’s fees
of the Parties, together with all other expenses, shall be paid as provided in
the Arbitration award.

j)                 Currency.  In all instances, references to monies used in
this Agreement shall be deemed to be United States dollars.

k)              Multiple Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all of
such counterparts shall constitute one (1) instrument.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
as follows:

 

CONFIRMED AND AGREED ON THIS 6th DAY OF September, 2005.

 

ELITE FINANCIAL COMMUNICATIONS GROUP, LLC

 

 

By:

      /s/ Dodi Handy

 

 

      /s/ Juliet Trivino

 

 

ELITE Officer

 

 

Witness

 

 

 

 

 

 

 

      Dodi Handy

 

 

      Juliet Trivino

 

 

Print Name

 

 

Print Name

 

 

 

 

 

 

CONFIRMED AND AGREED ON THIS 6th DAY OF September, 2005

 

VITACUBE SYSTEMS HOLDINGS, INC.

 

 

 

 

 

 

By:

      /s/ Earnest Mathis

 

 

      /s/ Mary Pat O’Halloran

 

 

Duly Authorized

 

 

Witness

 

 

 

 

 

 

 

      Earnest Mathis

 

 

      Mary Pat O’Halloran

 

 

Print Name

 

 

Print Name

 

 

Initial Company           

Initial ELITE           

 

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