EMPLOYMENT
AGREEMENT

     

    EMPLOYMENT
AGREEMENT (“Agreement”) is entered into effective as of the 7th day of August,
2009, between IMAGENETIX, INC., a Nevada corporation (the “Company”), and Debra
L. Spencer (“Employee”).

     

    WHEREAS,
Employee is presently serving as the General Manager of the Company, Secretary
of the Corporation and a Board Director, without a written employment agreement,
and

     

    WHEREAS,
the Company wishes to ensure the continued service of Employee to the Company
pursuant to the terms of this Agreement;

     

    NOW,
THEREFORE, in consideration of the promises and the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as
follows:

     

    1. Position and
Duties.

     

    (a)
Effective as of the date of this Agreement (the “Effective Date”), and
until the second anniversary of the Effective Date (the “Initial Term”), the
Employee will be employed by the Company on a full-time basis as its General
Manager . The Employee shall be a member of the Board of Directors of the
Company. In addition, the Employee may be asked from time to time to serve as a
director or officer of one or more of the Company’s subsidiaries, or as a member
of a committee of the Board of Directors, without further compensation. The
Initial Term shall be automatically renewed for additional periods of two (2)
years (each, a “Renewal Term”) unless
written notice to the contrary shall be given by either party to the other not
less than thirty (30) days prior to the end of the Initial Term or the
Renewal Term.  The Initial Term and the Renewal Term are referred to
herein as the “Term”.

     

    (b) The
Employee agrees to perform the duties of her position and such other duties
consistent with those of a Director and an office manager as may reasonably be
assigned to the Employee from time to time by the Board of Directors. The
Employee also agrees that, while employed by the Company, the Employee will
devote a significant portion of her business time and efforts to the advancement
of the business and interests of the Company and its subsidiaries and to the
discharge of her duties and responsibilities for them. Notwithstanding the
above, the Employee shall be permitted to manage her personal, financial and
legal affairs; and, serve on civic, educational, philanthropic or charitable
boards or committees.

     

    (c) The
Company agrees to maintain a corporate office in San Diego County, California
sufficient to support senior management, including the incorporation of related
functions (for example, but not to be limited to, administrative, sales and
marketing positions).

     

    2. Compensation and Benefits.
During the Employee’s employment, as compensation for all services performed by
the Employee for the Company and its subsidiaries, the Company will provide the
Employee the following pay and benefits:

     

    (a) Base Salary. The Company will
pay the Employee a base salary at the rate of Seventy Three Thousand, Nine
Hundred Eighteen and 78/100 ($73,918.78) per year (“Base Salary”),
payable in accordance with the regular payroll practices of the Company and
subject to increase from time to time by the Board of Directors of the Company
(the “Board”)
in their discretion.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) Bonus Compensation. During the
Term, the Employee shall receive a bonus equal to six percent (6%) of the
Company’s net income before taxes and research and development expenses during
the prior fiscal year, up to a maximum of fifty percent (50%) of the Base
Salary.

     

    (c) Stock Options. Employee shall
be eligible to receive options to purchase shares of common stock of the Company
in such amounts and at such exercise prices as the Board of Directors may
determine from time to time.

     

    (d) Participation in Employee Benefit
Plans and Vacation Policies. The Employee will be entitled to participate
in all employee benefit plans and vacation policies in effect for employees and
senior executives of the Company. The Employee’s participation will be subject
to the terms of the applicable plan documents and generally applicable Company
policies.

     

    (e) Business Expenses. The Company
will pay or reimburse the Employee for all reasonable business expenses incurred
or paid by the Employee in the performance of his duties and responsibilities
for the Company. Reimbursements shall be subject to such reasonable
substantiation and documentation as the Company may specify from time to
time.

     

    3. Termination of Employment. The
Employee’s employment under this Agreement shall continue until terminated
pursuant to this Section 3.

     

    (a) The
Company may terminate the Employee’s employment for Cause with at least thirty
(30) days advance written notice to the Employee setting forth in
reasonable detail the nature of the Cause. For purposes of this Agreement,
“Cause” means
any of the following: (i) the Employee’s continued and substantial
violations of her employment duties or willful and material disregard of
reasonable directives from the Board, after Employee has received a written
demand for performance from the Board that sets forth the factual basis for the
Company’s belief that Employee has not substantially performed his duties or
willfully disregarded directives from the Board; (ii) the Employee’s moral
turpitude, material dishonesty or gross misconduct in the performance of her
duties which has materially and demonstrably injured the finances or future
business of the Company or any of its subsidiaries as a whole; (iii) the
Employee’s material breach of this Agreement; or, (iv) the Employee’s
conviction of, or confession or plea of no contest to, any felony or any other
act of fraud, misappropriation, embezzlement, or the like involving the
Company’s property; provided, however, that no such act or event described in
clauses (i) and (iii) of this paragraph (a) shall constitute
Cause hereunder if the Executive has materially cured such act or event during
the applicable thirty (30) day notice period.

    


    (b) The
Employee may terminate her employment for Good Reason with at least thirty
(30) days advance written notice to the Company setting forth in reasonable
detail the nature of the Good Reason.

     

    4. Severance Payments and Other Matters
Related to Termination.

     

    (a) In
the event of termination of the Employee’s employment by the Company other than
for Cause or the Employee’s termination of employment for Good Reason,
(i) the Employee shall be entitled to receive a lump sum cash severance
amount equal to two hundred (200%) percent of Employee’s then current
annual salary, (ii) any earned but unpaid bonus payment,
(iii) reimbursement of the health and dental care continuation premiums for
Employee  incurred by Employee to effect continuation of health and
dental insurance coverage for Employee on the same basis as active employees,
for a period of twenty-four (24) months from the date of such termination,
to the extent that Employee is eligible for and elects continuation coverage
under COBRA; and (iv) any accrued and unused vacation pay payable within
twenty one (21) calendar days of the termination date (subject to required
withholding).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b) In
the event of termination of the Employee’s employment by the Company for Cause
or the Employee’s unilateral termination other than for Good Reason, the Company
will pay the Employee any Base Salary earned but not paid through the date of
termination, any earned but unpaid bonus, and pay for any vacation time accrued
but not used to that date.

     

    (c)
Except for any right the Employee may have under the federal law known as
“COBRA” to continue participation in the Company’s group health and dental
plans, and subject to Section 4(a)(iii) above, benefits shall terminate in
accordance with the terms of the applicable benefit plans based on the date of
termination of the Employee’s employment, without regard to any continuation of
base salary or other payment to the Employee following termination.

     

    (d)
Provisions of this Agreement shall survive any termination if so provided in
this Agreement or if necessary to accomplish the purposes of other surviving
provisions.

     

    (e)
Section 409A. Notwithstanding anything to the contrary in this Agreement,
any cash severance payments otherwise due to the Employee pursuant to
Sections 4(a) or 5 or otherwise on or within the six-month period following
the Employee’s termination will accrue during such six-month period and will
become payable in a lump sum payment, with interest at the prime rate, on the
date six (6) months and one (1) day following the date of termination,
provided, that such cash severance payments will be paid earlier, at the times
and on the terms set forth in the applicable provisions of Sections 4(a) or
5, if the Company and the Employee mutually determine that the imposition of
additional tax under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), will not apply to an earlier payment of such cash
severance payments. In addition, this Agreement will be deemed amended to the
extent necessary to avoid imposition of any additional tax or income recognition
prior to actual payment to the Executive under Code Section 409A and any
temporary or final Treasury Regulations and guidance promulgated there-under and
the parties agree to cooperate with each other and to take reasonably necessary
steps in this regard.

    


    5. Change of Control Benefits.
Change of Control shall be defined as a transaction or series of transactions
where the shareholders of the Company immediately preceding such transaction
own, following such transaction, less than 50% of the voting securities of the
Company. If Employee is terminated without Cause or resigns for Good Reason upon
or during the twelve (12) month period after the effective date of a Change
of Control, the Employee shall automatically become fully vested in all of her
then-outstanding equity awards, any accrued but unpaid salary, vacation or bonus
payment, and the Employee shall be entitled to receive the consideration set
forth in section 4(a) hereof and shall be entitled to receive an additional cash
severance amount equal to $73,918.78.


     

    6. Indemnification and
Insurance.

     

    (a) The
Company agrees that (i) if the Employee is made a party, or is threatened
to be made a party to any proceeding by reason of the fact that she is or was a
director, officer, employee, agent, manager, consultant or representative of the
Company or any of its Affiliates, or (ii) if any claim is made, or is
threatened to be made, that arises out of or relates the Employee’s service in
any of the foregoing capacities, then the Employee shall be indemnified and held
harmless by the Company to the fullest extent legally permitted, or authorized,
by the certificate of incorporation, bylaws, other organizational documents, or
Board resolutions of the Company, against any and all costs, expenses,
liabilities and losses (including, without limitation, judgments, interest,
expenses of investigation, penalties, fines, ERISA excise taxes or penalties,
reasonable attorneys’ fees, and amounts paid or to be paid in settlement)
incurred or suffered by the Employee in connection herewith and such
indemnification shall continue as to the Employee even if he has ceased to be a
director, officer, member, employee, agent, manager, consultant or
representative of the Company and shall inure to the benefit of the Employee’s
heirs, executors, administrators and legal representatives. No amendment of the
Company’s certificates of incorporation or bylaws shall be effective to reduce
any of the Employee’s rights to indemnification, or advancement of costs and
expenses, under this Section 6.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)
During the term of employment and for a period of six years thereafter, the
Company shall procure and keep in place a directors’ and officers’ liability
insurance policy (or policies) providing comprehensive coverage to the
Employee.

     

    7.  Non-compete.  The
Employee shall not engage in a business in any manner similar to or in
competition with the Company or the Company’s Affiliates during the term of his
employment.  Furthermore, the Employee shall not engage in a business
in any manner similar to, or in competition with, the Company’s business for a
period of one year from the date of termination of his employment for any reason
with the Company.

     

    8. Definitions. For purposes of
this Agreement, the following definitions apply:

     

    “Affiliates”
means all persons and entities directly or indirectly controlling, controlled by
or under common control with the Company, where control may be by management
authority, equity interest or otherwise.

    “Person”
means an individual, a corporation, a limited liability company, an association,
a partnership, an estate, a trust or any other entity or organization, other
than the Company or any of its Affiliates.

     

    9. Withholding. All payments made
by the Company under this Agreement shall be reduced by any tax or other amounts
required to be withheld by the Company under applicable law.

     

    10. Assignment. Neither the
Employee nor the Company may make any assignment of this Agreement or any
interest in it, by operation of law or otherwise, without the prior written
consent of the other. This Agreement shall inure to the benefit of and be
binding upon the Employee and the Company, and each of our respective
successors, executors, administrators, heirs and permitted assigns.

     

    11. Severability. If any portion
or provision of this Agreement shall to any extent be declared illegal or
unenforceable by a court of competent jurisdiction, then the remainder of this
Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.

     

    12. Miscellaneous. This Agreement
sets forth the entire agreement between the Employee and the Company and
replaces all prior and contemporaneous communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Employee’s employment. This Agreement may not be modified or amended, and no
breach shall be deemed to be waived, unless agreed to in writing by the Employee
and an expressly authorized representative of the Board. The headings and
captions in this Agreement are for convenience only and in no way define or
describe the scope or content of any provision of this Agreement. This Agreement
may be executed in two or more counterparts, each of which shall be an original
and all of which together shall constitute one and the same
instrument.

     

    13. Governing Law. This Agreement
shall be governed and construed in accordance with the laws of the state of
California, without regard to the conflict of laws principles
thereof.

     

    14. Notices. Any notices provided
for in this Agreement shall be in writing and shall be effective when delivered
in person or deposited in the United States mail, postage prepaid, and addressed
to the Company at its principal place of business, attention of the Chief
Executive Officer, with copy to the Board, or in the case of the Employee, at
the Employee’s last known address on the books of the Company (or to such other
address as either party may specify by notice to the other actually
received).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  IMAGENETIX,
      INC.

                                
	 
      	 
      
	
                                  By:

                                	 
      
	 
      	
                                  Name:

                                
	 
      	
                                  Title:

                                
	 	 
	 
      
	
                                  DEBRA
      SPENCER