**Exhibit 10.1**

 

**CONSULTINGAGREEMENT**

 

This Independent Contractor Agreement (the “Agreement”)is entered into effective as of the 7th day of July 2005, by and betweenRG 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 collectivelyreferred to as the “Parties.”

 

**RECITALS**

 

**WHEREAS,**AQUAIR is awholly-owned subsidiary of RGG and a distributor and reseller of clean watertechnology equipment in the military and government markets; and

 

**WHEREAS,**RGG andAQUAIR desire to engage RITCHIE as a consultant, acting as an independentcontractor, and to compensate RITCHIE for initiating and/or procuring sales ofAQUAIR’s clean water technology equipment in the military and governmentmarkets; and

 

**WHEREAS,**RITCHIE hasagreed to assist RGG and AQUAIR on a part time basis in initiating and/orprocuring sales of AQUAIR’s clean water technology equipment in return for theconsideration set forth herein;

 

**AGREEMENT**

 

**NOW, THEREFORE**, forgood and valuable consideration, the receipt and sufficiency of which is herebyacknowledged, and intending to be legally bound, RGG, AQUAIR and RITCHIE agreeas follows:

 

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

 

**2.****                                      *Term. ***The term ofthis 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 anytime 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 hisdiscretion, will refer military and government contacts and customers to RGGand AQUAIR when, in his judgment, the clean water technology equipment marketedby AQUAIR is or may be appropriate to the specific project.

 

1

----

 

3.2                                 RITCHIEshall perform the duties set forth in paragraph 3.1 on a part time,discretionary basis.  RITCHIE will not berequired to maintain an office at RGG or AQUAIR or to attend regularlyscheduled meetings at RGG or AQUAIR.  RITCHIEagrees to consult with RGG and AQUAIR on an as-needed basis, from time to time,in connection with the establishment or maintenance of communications withpotential customers in the military and government sectors.

 

3.3                                 Thedecision to refer projects to RGG and AQUAIR shall be made by RITCHIE in hissole discretion and RITCHIE shall be under no obligation to refer any specificproject or projects to RGG and AQUAIR.

 

3.4                                 RGGand AQUAIR do not have the exclusive right to RITCHIE’s services.  Nothing in this Agreement shall beinterpreted to prevent RITCHIE from referring projects to other clean watertechnology equipment providers, including those in competition with RGG and/orAQUAIR.

 

**4.****                                      *Compensation.***

 

4.1                                 Aspartial consideration and compensation to RITCHIE hereunder, RGG hereby grantsto RITCHIE an option to purchase 100,000 shares of its $0.001 par value CommonStock (“Option Shares” and “Option Share”) at a purchase price of $3.30 per OptionShare.  This option can be exercised bywritten notice from RITCHIE to RGG in accordance with the vesting schedule belowfrom time to time during the period from the first vesting date hereof through July 7,2008.  RGG shall give RITCHIE not lessthat thirty (30) day’s prior written notice (an “FT Notice”) of the anticipatedor intended occurrence of a “Fundamental Transaction” with respect to RGG or AQUAIR.  A “Fundamental Transaction” shall include (i) themerger of RGG or AQUAIR with one of more other corporations, or anyreorganization, recapitalization or other such transaction which would havesubstantially the same effect; (ii) the dissolution or liquidation of RGGor AQUAIR; (iii) the sale or exchange or other transfer by RGG or AQUAIRof all or substantially all of its assets; (iv) the sale or exchange ofshares 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 wouldsubstantially and adversely affect the rights, preferences or privileges of theCommon Stock, including the Option Shares, whether by amendment of the Articlesof Incorporation or otherwise.  The FTNotice shall include a description of the Fundamental Transaction, and shallinclude copies of the relevant instruments or documents involved to the extentthey are then available.

 

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

 

2

----

 

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

 

4.3                                 Inthe event there is a recapitalization, reorganization or other suchreadjustment of the outstanding shares of Common Stock then the number ofshares and the price per share of the option shall be equitably adjusted tomaintain the effect of the option described in paragraph 4.1, above, aspresently in effect.

 

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

 

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

 

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

 

**5.****                                     *Termination.***

 

5.1                                 Unlessextended by mutual written agreement, this Agreement shall automaticallyterminate upon the expiration of the term.

 

5.2                                  This Agreement shallterminate 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 thelimited transferability of vested options in the event of death.)

 

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

 

5.4                                 Upontermination of this Agreement pursuant to paragraph 5.1, 5.2 or 5.3, RGG andAQUAIR shall pay all commissions owed to RITCHIE, and for a period oftwenty-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 anyand all sales of clean water technology units to customers introduced to RGGand/or AQUAIR by RITCHIE prior to the termination of this Agreement.

 

3

----

 

**6.****                                      *Confidentiality.*** RITCHIEagrees to maintain the confidentiality of RGG’s and AQUAIR’s trade secretinformation, including but not limited to (i) confidential informationabout new products designed or developed by RGG and/or AQUAIR; and (ii) theterms of AQUAIR’s existing contracts with customers, herein collectivelyreferred to as the “Confidential Information.” Except for such Confidential Information as can be proven by RITCHIE tobe in or to have entered the public domain through no fault of RITCHIE or tohave been in RITCHIE’s possession prior to disclosure by RGG and/or AQUAIR, RITCHIEshall during the term of the Agreement and thereafter maintain as confidentialand not disclose to third parties or otherwise use such ConfidentialInformation, except as authorized in performing his duties under this Agreementor otherwise authorized in writing by RGG’s President.

 

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

 

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

 

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

 

**10.****                               *Successors and Assigns. ***Allof the terms and provisions of the Agreement shall be binding upon and inure tothe benefit of and be enforceable by the respective heirs, assigns, andpersonal representatives of RITCHIE and the successors and assigns of RGG andAQUAIR.

 

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

 

4

----

 

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

 

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

 

**13.****                               *Waiver of Breach. ***Nowaiver of any breach of any term or provision of this Agreement shall beconstrued to be, or shall be, a waiver of any other breach of thisAgreement.  No waiver shall be bindingunless in writing and signed by the party waiving the breach.

 

**14.****                               *Notice. ***Anynotice required to be given pursuant to this Agreement shall be deemed to havebeen sufficiently given either when served personally or when served byfirst-class mail addressed to the other Parties.  Notice to RGG and AQUAIR shall be effectiveonly when addressed to:  R.G. GlobalLifestyles, Inc., 17751 Mitchell Ave., Irvine, CA 92614, Attn: Louis L.Knickerbocker, CEO. Notice to RITCHIE shall be effective only when addressedto:  Brig. Gen. Steve Ritchie USAF, Ret.,Box 1942, Monument, CO 80132.

 

**15.****                               *Mutual Drafters. ***AllParties have cooperated in the drafting and preparation of this Agreement.  Hence, this Agreement shall not be construedagainst any party on the basis that the party was the drafter.

 

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

 

**IN WITNESS WHEREOF,**theParties hereto have duly executed this Agreement as of effective as of the datefirst 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**                       | ** **                     | ** **       |
|                                         |                                |                  |  |  |  |  |  |

 

5

----