Exhibit 10.1


 


CONSULTING
AGREEMENT


 


This Independent Contractor Agreement (the “Agreement”)
is entered into effective as of the 7th day of July 2005, by and between
RG GLOBAL LIFESTYLES, INC. (“RGG”), a California corporation, AQUAIR, INC. (“AQUAIR”),
a wholly-owned subsidiary of RGG, and Brig. Gen. Steve Ritchie USAF, Ret. (“RITCHIE”),
an individual and resident of the State of Colorado.  RGG, AQUAIR and RITCHIE are collectively
referred to as the “Parties.”


 


RECITALS


 


WHEREAS, AQUAIR is a
wholly-owned subsidiary of RGG and a distributor and reseller of clean water
technology equipment in the military and government markets; and


 


WHEREAS, RGG and
AQUAIR desire to engage RITCHIE as a consultant, acting as an independent
contractor, and to compensate RITCHIE for initiating and/or procuring sales of
AQUAIR’s clean water technology equipment in the military and government
markets; and


 


WHEREAS, RITCHIE has
agreed to assist RGG and AQUAIR on a part time basis in initiating and/or
procuring sales of AQUAIR’s clean water technology equipment in return for the
consideration set forth herein;


 


AGREEMENT


 


NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, RGG, AQUAIR and RITCHIE agree
as follows:


 


1.                                      Independent Contractor Relationship. 
In accordance with the mutual intentions of RGG, AQUAIR
and RITCHIE, this Agreement establishes between them an independent contractor
relationship and all of the terms and conditions of this Agreement shall be
interpreted in light of that relationship. 
There is no intention to create by this Agreement an employer-employee
relationship.


 


2.                                      Term.  The term of
this Agreement shall be a three year period commencing on July 7, 2005,
and ending on July 7, 2008. 
Notwithstanding the foregoing, the Agreement may be terminated at any
time by RGG, AQUAIR or RITCHIE pursuant to paragraph 5, below.  The term may also be extended by an express,
written agreement signed by RGG, AQUAIR and RITCHIE.


 


3.                                      Duties and Extent of Services.


 


3.1                                 RITCHIE, in his
discretion, will refer military and government contacts and customers to RGG
and AQUAIR when, in his judgment, the clean water technology equipment marketed
by AQUAIR is or may be appropriate to the specific project.


 


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3.2                                 RITCHIE
shall perform the duties set forth in paragraph 3.1 on a part time,
discretionary basis.  RITCHIE will not be
required to maintain an office at RGG or AQUAIR or to attend regularly
scheduled meetings at RGG or AQUAIR.  RITCHIE
agrees to consult with RGG and AQUAIR on an as-needed basis, from time to time,
in connection with the establishment or maintenance of communications with
potential customers in the military and government sectors.


 


3.3                                 The
decision to refer projects to RGG and AQUAIR shall be made by RITCHIE in his
sole discretion and RITCHIE shall be under no obligation to refer any specific
project or projects to RGG and AQUAIR.


 


3.4                                 RGG
and AQUAIR do not have the exclusive right to RITCHIE’s services.  Nothing in this Agreement shall be
interpreted to prevent RITCHIE from referring projects to other clean water
technology equipment providers, including those in competition with RGG and/or
AQUAIR.


 


4.                                      Compensation.


 


4.1                                 As
partial consideration and compensation to RITCHIE hereunder, RGG hereby grants
to RITCHIE an option to purchase 100,000 shares of its $0.001 par value Common
Stock (“Option Shares” and “Option Share”) at a purchase price of $3.30 per Option
Share.  This option can be exercised by
written notice from RITCHIE to RGG in accordance with the vesting schedule below
from time to time during the period from the first vesting date hereof through July 7,
2008.  RGG shall give RITCHIE not less
that thirty (30) day’s prior written notice (an “FT Notice”) of the anticipated
or intended occurrence of a “Fundamental Transaction” with respect to RGG or AQUAIR.  A “Fundamental Transaction” shall include (i) the
merger of RGG or AQUAIR with one of more other corporations, or any
reorganization, recapitalization or other such transaction which would have
substantially the same effect; (ii) the dissolution or liquidation of RGG
or AQUAIR; (iii) the sale or exchange or other transfer by RGG or AQUAIR
of all or substantially all of its assets; (iv) the sale or exchange of
shares of RGG or AQUAIR’s Common Stock such that there is, after the exchange,
a change of the control of RGG or AQUAIR; or (v) a proposal which would
substantially and adversely affect the rights, preferences or privileges of the
Common Stock, including the Option Shares, whether by amendment of the Articles
of Incorporation or otherwise.  The FT
Notice shall include a description of the Fundamental Transaction, and shall
include copies of the relevant instruments or documents involved to the extent
they are then available.


 


4.2                                 As
further consideration and compensation to RITCHIE hereunder, RGG shall pay to
RITCHIE a commission in the amount of Five Percent (5%) of collected gross
sales resulting from the introduction of customers by RITCHIE to RGG or AQUAIR.
  Settlement of commissions payable shall
be made monthly in arrears, within ten (10) days following the close of
each calendar month, based upon completed collected sales received by RGG or
AQUAIR during the preceding calendar month. 
In the event of any returns of product by customers, said commission
shall be subject to a


 


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right of offset by the Company.  RITCHIE will be reimbursed for any approved
expenses on a monthly basis, ten (10) days following the close of each
calendar month.


 


4.3                                 In
the event there is a recapitalization, reorganization or other such
readjustment of the outstanding shares of Common Stock then the number of
shares and the price per share of the option shall be equitably adjusted to
maintain the effect of the option described in paragraph 4.1, above, as
presently in effect.


 


4.4                                 The
payments and other consideration described in paragraphs 4.1, 4.2 and 4.3,
above, shall constitute full payment for RITCHIE’s services under this
Agreement, and RITCHIE shall not receive any additional benefits or
compensation for his services during the term of this Agreement.


 


4.5                                 RITCHIE
shall be solely responsible for payment of any and all applicable taxes resulting
from his receipt of the compensation set forth above.  RITCHIE shall defend, indemnify and hold RGG
and AQUAIR harmless from any loss, liability or damages, including attorneys’
fees and costs, resulting from any failure on the part of RITCHIE to pay any
such taxes.


 


4.6     The options described in this Agreement
shall be vested over a three year period. One third of the options shall vest
at the end of 12 months from the date of execution of this Agreement; one third
shall vest at the end of 24 months from date of execution, and the remainder
shall vest at the end of 36 months from the date of execution.  In the event of an earlier termination of
this Agreement, all vested and unvested options shall be governed by the RG
Global Incentive Stock Plan of 2005.


 


5.                                     Termination.


 


5.1                                 Unless
extended by mutual written agreement, this Agreement shall automatically
terminate upon the expiration of the term.


 


5.2                                  This Agreement shall
terminate in the event of RITCHIE’s death, except as provided in Article II,
paragraph IC of the RG Global Stock Incentive Plan of 2005 (relating to the
limited transferability of vested options in the event of death.)


 


5.3                                 RITCHIE,
RGG or AQUAIR may terminate this Agreement at any time by providing written
notice to all Parties at least ninety (90) calendar days in advance of the
termination date.


 


5.4                                 Upon
termination of this Agreement pursuant to paragraph 5.1, 5.2 or 5.3, RGG and
AQUAIR shall pay all commissions owed to RITCHIE, and for a period of
twenty-four (24) calendar months following the termination of this Agreement,
shall continue to pay commissions to RITCHIE as set forth in paragraph 4.3 for any
and all sales of clean water technology units to customers introduced to RGG
and/or AQUAIR by RITCHIE prior to the termination of this Agreement.


 


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6.                                      Confidentiality.  RITCHIE
agrees to maintain the confidentiality of RGG’s and AQUAIR’s trade secret
information, including but not limited to (i) confidential information
about new products designed or developed by RGG and/or AQUAIR; and (ii) the
terms of AQUAIR’s existing contracts with customers, herein collectively
referred to as the “Confidential Information.” 
Except for such Confidential Information as can be proven by RITCHIE to
be in or to have entered the public domain through no fault of RITCHIE or to
have been in RITCHIE’s possession prior to disclosure by RGG and/or AQUAIR, RITCHIE
shall during the term of the Agreement and thereafter maintain as confidential
and not disclose to third parties or otherwise use such Confidential
Information, except as authorized in performing his duties under this Agreement
or otherwise authorized in writing by RGG’s President.


 


7.                                      Indemnity.  To the
fullest extent permitted by applicable law, RGG and AQUAIR will indemnify RITCHIE
and hold RITCHIE harmless from and with respect to any and all liability, loss
or damages of any kind, including but not limited to consequential damages, and
against all claims or actions based on or arising out of or in any way related
to RITCHIE’s referrals of customers to RGG and/or AQUAIR.  To the same extent, RGG and AQUAIR will advance
and pay all expenses, including reasonable attorneys’ fees and costs of court,
actually and necessarily incurred by RITCHIE in connection with the defense of
any action, suit or proceeding and in connection with any appeal thereon, which
is brought against RITCHIE and which arises out of or is in any way related to RITCHIE’s
referrals of customers to RGG and/or AQUAIR.


 


8.                                      No Warranty.  RITCHIE
does not warrant or otherwise promise that he will recommend RGG’s and/or
AQUAIR’s products or services to any specific customer or customers, or that
any customer or customers will follow RITCHIE’s recommendation and place orders
with RGG and/or AQUAIR.  RGG’s and AQUAIR’s
sole recourse if they are not satisfied with RITCHIE’s performance is to
terminate the Agreement in accordance with paragraph 5.3, above.


 


9.                                      Entire Agreement.  This
Agreement sets forth the entire understanding of the Parties with respect to
the subject matter hereof, and no statement, representation, warranty or
covenant has been made by any party, except as expressly set forth herein.  This Agreement supersedes and cancels all
prior agreements between the Parties, whether written or oral, relating to the subject
matter of this Agreement.


 


10.                               Successors and Assigns.  All
of the terms and provisions of the Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective heirs, assigns, and
personal representatives of RITCHIE and the successors and assigns of RGG and
AQUAIR.


 


11.                               Governing Law; Forum.  This
Agreement will be governed by and construed in accordance with the laws of the
State of California.  Any dispute between
the Parties relating to the interpretation and enforcement of their rights and
obligations under this Agreement shall be resolved solely by arbitration in
accordance with the provisions of this paragraph.  The provisions of the Commercial Arbitration Rules of
the American Arbitration Association shall apply and govern such
arbitration.  The award or decision of
the arbitrator, which may include


 


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equitable relief, shall be final and judgment may be entered on it in
accordance with applicable law in any court having jurisdiction over the
matter.


 


12.                               Authority.  It is
understood and agreed that, as an independent contractor, RITCHIE’s duties are
limited to those set forth in this Agreement. 
RITCHIE is not hereby granted any right or authority to assume or create
any obligation, express or implied, on behalf of or in the name of RGG and/or
AQUAIR.


 


13.                               Waiver of Breach.  No
waiver of any breach of any term or provision of this Agreement shall be
construed to be, or shall be, a waiver of any other breach of this
Agreement.  No waiver shall be binding
unless in writing and signed by the party waiving the breach.


 


14.                               Notice.  Any
notice required to be given pursuant to this Agreement shall be deemed to have
been sufficiently given either when served personally or when served by
first-class mail addressed to the other Parties.  Notice to RGG and AQUAIR shall be effective
only when addressed to:  R.G. Global
Lifestyles, Inc., 17751 Mitchell Ave., Irvine, CA 92614, Attn: Louis L.
Knickerbocker, CEO. Notice to RITCHIE shall be effective only when addressed
to:  Brig. Gen. Steve Ritchie USAF, Ret.,
Box 1942, Monument, CO 80132.


 


15.                               Mutual Drafters.  All
Parties have cooperated in the drafting and preparation of this Agreement.  Hence, this Agreement shall not be construed
against any party on the basis that the party was the drafter.


 


16.                               Severability.  If any provision of this Agreement
shall be held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be of no force and effect, but the
illegality or unenforceability of such provision shall have no effect upon and
shall not impair the enforceability of any other provision of this Agreement.


 


IN WITNESS WHEREOF, the
Parties hereto have duly executed this Agreement as of effective as of the date
first shown above.


 


 


	
  RG GLOBAL LIFESTYLES, INC.

  	
   

  	
  AQUAIR, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Louis L. Knickerbocker

  	
   

  	
   

  	
  By: 

  	
  /s/ Herrie Tantono

  	
   

  
	
   

  	
  Louis L.
  Knickerbocker

  	
   

  	
   

  	
   

  	
  Herrie
  Tantono

  
	
   

  	
  Chairman &
  CEO

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BRIG. GEN. STEVE RITCHIE USAF, RET.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Steve Ritchie

  	
   

  	
   

  	
   

  
	
  Steve Ritchie

  	
   

  	
   

  
								



 


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