Exhibit 10.2


 


CONSULTING SERVICES AGREEMENT


 


This
Agreement made as of the 1ST day of May 2005.


 


	
  BETWEEN:

  	
   

  	
  ASHTON REED & CO, INC.

  
	
   

  	
   

  	
  a
  company doing business under the laws of

  
	
   

  	
   

  	
  the
  state of California.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (hereinafter
  called the “Consultant” or ARCO)

  



 


OF THE FIRST PART


 


- and -


 


VITACUBE SYSTEMS HOLDINGS, INC.

(PRH:AMEX)


a corporation incorporated under the laws of the

Nevada, EIN #: 84-157-5085, and
doing

business at the following address:


 


480 S. Holly Street


Denver, CO 80246


(303) 316-8577


 


(hereinafter called the “Company” or referred to as
VCUB)


 


OF THE SECOND PART


 


WHEREAS, the Consultant operates and sells marketing services, consisting
primarily of researching, organizing and disseminating information, designed to
heighten public awareness of the business conducted and performance results
achieved by specified companies;


 


AND WHEREAS the Company desires to
retain the services of the Consultant in a financial public relations capacity
to inform the investment community and the public on the business and affairs
of the Company and to increase the awareness of the company’s publicly traded
securities;


 


The Company develops, sells, markets
and distributes nutritional supplement products primarily through direct sales
or network marketing in which independent distributors sell their products, as
well as purchase them for their own personal use. The Company also sells their
products directly to professional and Olympic athletes and to professional
sports teams.


 


The Company’s
independent distributors are encouraged to build a sales organization
consisting of customers and other independent distributors that they recruit
and enroll with them.


 





















 


The new independent distributors and customers
are classified as part of the recruiting independent distributor’s sales
network in that distributor’s “downline” organization.


 


The Company’s network
marketing program is designed to provide an incentive for independent
distributors to build, maintain and motivate a sales organization of customers
and other independent distributors to enhance their earning potential. The
Company’s independent distributors are compensated with commissions and bonuses
on sales generated through their downline organization.


 


The Company’s product
lines consist of two powdered beverages, 12 individual supplements packaged in
their VitaCube® line, and four supplements sold separately. Their VitaCube® is
an easy to use, compartmentalized box with instructions for which supplements
to take and the proper times to take them.


 


The Company’s products
were formulated for use by professional and Olympic athletes, with sales
beginning in the third quarter of 2001. 
In 2002, the Company marketed their products to consumers through retail
outlets and in-house telemarketing. In the third quarter of 2003, the Company
refocused their marketing plan to concentrate on direct marketing while
continuing to sell their products directly to professional and Olympic athletes
and to professional sports teams.


 


AND WHEREAS both parties wish to
formalize in a written agreement the terms and conditions under which the
Consultant will provide such services to the Company.


 


NOW
THEREFORE, for the mutual promises and
payments described herein, the parties agree as follows:


 


1.             APPOINTMENT


 


The Company hereby engages the Consultant and the
Consultant agrees to render services to the Company as a consultant effective May 1,
2005 upon the terms and conditions hereinafter set forth.


 


2.             TERM


 


The term of this Agreement commences May 1,
2005 and terminates on November 1, 2005 (the “Initial Term”) for an
initial term of SIX (6) months.  
This Agreement shall be extended on a mutually agreed upon new Agreement
thereafter.


 


3.             SERVICES


 


During the term of this Agreement, the Consultant
shall use commercially “Best Efforts” to provide advice to, undertake for and
consult with the Company concerning the implementation of a program and
implement such program all to enable the Company to


 


2





















 


promote the image of the Company, its products and of
the Company’s publicly traded securities. 
This program shall include but not be limited to the Consultant setting
up meetings with qualified brokers each month in major U.S. cities in an effort
to increase public awareness of the Company’s publicly traded securities.  The Consultant is not a registered
broker-dealer and will not register as a broker-dealer to perform its services.
The Consultant shall conduct its activities competently, in good faith and in
accordance with applicable laws and practices of the industry.  The Company understands and acknowledges that
the Consultant cannot guarantee that the services provided hereunder will
achieve any particular objective or fulfil any specified goals.  It is expressly understood that all materials
and/or correspondence regarding the Company for distribution to the public
require the prior approval of the Company.


 


4.             COMPENSATION


 


Cash:


 


Both the Company and the Consultant have agreed to the
terms such that the Company will pay the Consultant $4,000 upon the execution of this
Agreement and an additional $4,000
on the 1ST day of each month for the following FIVE (5) months
thereafter for a total of SIX (6) months. 
This will complete the SIX (6) month term of this Agreement.  After the initial term expires a new
Agreement shall be made effective to supersede this Agreement at the mutual
agreement of both parties.


 


SECURITIES:


 


(1). The Company will grant to ARCO
warrants to purchase 100,000 shares of its free trading common stock (the “Warrants”)
at the prices described below:


 


1. 33,334
Warrants at an exercise price of $ 3.7500 per share.


 


2. 33,334
Warrants at an exercise price of $ 4.750 per share.


 


3. 33,332
Warrants at an exercise price of $ 6.000 per share.


 


All Warrants are exercisable until 5:00 p.m.
January 19, 2007, after which they shall expire.


 


(A).
Protection Against Dilution.


If all or any portion of the Warrants are
exercised subsequent to the occurrence of any stock dividend, stock split,
combination or exchange of shares, reclassification or recapitalization of the
Company’s common stock,


 


3





















 


reorganization of the Company,
consolidation with or merger into or sale or conveyance of all or substantially
all of the Company’s assets to another corporation or any other similar event,
the holder of the Warrants exercising any shall receive, upon exercise of such
Warrant at the exercise price, the aggregate number and class of shares which
such holder would have received if the Warrant had been exercised immediately
prior to such or exchange of shares, reorganization, consolidation, merger or
sale or in the event of a stock dividend, stock split combination or
recapitalization, the exercise price and the number of shares issuable upon
exercise shall be proportionately adjusted.


 


(B). As
soon as practicable.


 


VCUB shall at its sole cost, except any
counsel fees of ARCO, file a registration statement on Form S-3, or other
available form, covering the public sale of the shares of common stock issuable
upon exercise of the Warrants (the “Registerable Securities”) and use its best
efforts to have it declared effective with the Securities and Exchange
Commission.


 


(C). VCUB
shall also:


 


(i). Supply to ARCO two (2) executed
copies of each registration statement and a reasonable number of copies of the
final prospectus in conformity with requirements of the Securities Act of 1933
(the “Act”) and the Rules and Regulations promulgated thereunder and such
other documents as ARCO shall reasonably request.


 


(ii). Use its best efforts to cause the
Registerable Securities to be available to be sold in the State of New York and
registered or qualified under such other securities acts or blue sky laws of
such jurisdictions as ARCO shall reasonably request as long as such
jurisdictions do not exercise a “merit review” of the offering and do any and
all other acts and things which may be necessary or advisable to enable ARCO to
consummate such proposed sale or other disposition of the Registerable
Securities in any such jurisdiction; provided, however, that in no event shall
VCUB be obligated, in connection


 


4





















 


therewith, to qualify to do business or to
file a general consent to service of process in any jurisdiction where it shall
not then be qualified.


 


(iii). Keep the registration statement
effective until the expiration date of the Warrants and cooperate in taking
such action necessary to permit the public sale or other disposition of such
Registerable Securities by ARCO.


 


(iv). Indemnify and hold harmless ARCO and
each underwriter, within the meaning of the Act, who may purchase from or sell
for ARCO, any Registerable Securities, from and against any and all losses,
claims, damages, and liabilities (including, but not limited to, any and all
expenses whatsoever reasonably incurred in investigation, preparing, defending
or settling any claim) arising from (1) any untrue or alleged untrue
statement of material fact contained in any such registration statement or any
prospectus contained therein or delivered thereunder, or from (2) any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, unless each untrue
statement or omission or such alleged untrue statement or omission was based
upon information furnished or required to be furnished in writing to VCUB by
ARCO or underwriter expressly for use therein, which indemnification shall
include each person, if any, who controls ARCO or underwriter within the
meaning of the Act.  Provided, however,
that VCUB shall not be so obligated to indemnify ARCO or underwriter or
controlling person unless ARCO and underwriter shall at the same time indemnify
the Company, its directors, each officer signing any registration statement or
any amendment to any registration statement and each person, if any, who
controls VCUB within the meaning of the Act, from and against any and all
losses, claims, damages and liabilities (including, but not limited to, any and
all expenses whatsoever reasonably incurred in investigation, preparing,
defending or settling any claim) arising from (3) any untrue or alleged
untrue statement of a material fact contained in the


 


5





















 


registration statement or any amendment
thereto, or prospectus contained therein or (4) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but the indemnity of
ARCO, underwriter or controlling person shall be limited to liability based
upon information furnished in writing to VCUB by ARCO or underwriter or
controlling person expressly for use therein. 
The indemnity agreement of VCUB herein shall not inure to the benefit of
ARCO or any such underwriter (or to the benefit of any person who controls ARCO
or such underwriter) on account of any losses, claims, damages, liabilities (or
actions or proceedings in respect thereof) arising from the sale of any such
Registerable Securities by ARCO or such underwriter to any person if such
underwriter failed to send or give a copy of the prospectus as the same may
then be supplemented or amended (if such supplement or amendment shall have
been furnished to ARCO or the underwriter) to such person with or prior to
written confirmation of the sale involved. 
By its signature, ARCO agrees to the indemnification provided above.


 


(v). VCUB shall comply with the
requirements of Section 2(C) at its own expense, including legal,
accounting, filing, state qualifications, and printing fees and costs, but
excluding counsel fees for the selling stockholders, i.e. ARCO.


 


(vi). VCUB’s obligation under Section 2(C) shall
be conditioned, as to each such public offering, upon a timely receipt by VCUB
in writing of:


 


(a). Information as to the terms of such
public offering furnished by or on behalf of ARCO or underwriter intending to
make a public distribution of its Registerable Securities; and


 


(b). Such other information as VCUB may
reasonably require from ARCO and any


 


6





















 


underwriter for inclusion in such
registration statement.


 


5.             CONFIDENTIALITY.


 


THE PARTIES AGREE TO HOLD ALL DOCUMENTS, INFORMATION,
DATA, AND OTHER MATERIALS PROVIDED TO EACH OTHER IN STRICTEST CONFIDENCE. THE
PARTIES AGREE NOT TO DISCLOSE ANY SUCH INFORMATION, INCLUDING THE CONTENT OF
THIS AGREEMENT, TO THIRD PARTIES UNLESS ONE PARTY PERMITS THE OTHER TO DO SO IN
WRITING.


 


Upon execution of this
Agreement by the parties hereto, a valid and binding agreement shall exist as
of the date first above written.


 


 


	
  VITACUBE SYSTEMS HOLDINGS, INC.

  	
  ASHTON REED & CO., INC.

  
	
   

  	
   

  	
   

  	
   

  
	
  Per:

  	
   /s/ Earnest Mathis

  	
   

  	
  Per:

  	
    /s/ Ajay Anand

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
         Earnest
  Mathis

  	
   

  	
  Name:

  	
    Ajay
  Anand

  	
   

  
	
   

  	
   

  
	
  Position:

  	
     CEO

  	
   

  	
  Position:

  	
        President

  	
   

  
	
   

  	
   

  
	
  Date:

  	
           5/4/05

  	
   

  	
  Date:

  	
              5/5/05