EX-10.1






EMPLOYMENT AGREEMENT




This Employment Agreement (the “Agreement”) is made as of April 3, 2007, by and between
Digital Lifestyle Group, Inc., Inc., a Delaware corporation (the “Company”), and L.E. Smith,
a resident of the Crossville, Tennessee (“Employee”).



WHEREAS, the Company desires to obtain the services of Employee, and Employee desires to
provide services to the Company, in accordance with the terms and conditions of this Agreement;



NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Employee agree as follows:



1. Employment. Effective on the Effective Date (as defined in Section 2) and
subject to the terms and conditions of this Agreement, the Company agrees to employ Employee as the
Company’s Chief Executive Officer, and Employee agrees to perform the duties associated with that
position diligently and to the reasonable satisfaction of the Company. Employee shall devote a
substantial portion of his time and attention to the business of the Company. Employee shall
perform his duties from his principal place of residence in Tennessee.



2. Term and Termination. Employee will be employed under this Agreement for an
initial term of one year (the “Initial Term”), beginning on the date of the Agreement (the
“Effective Date”). This Agreement will renew for successive one year periods after the completion
of the Initial Term, unless either party gives prior written notice to the contrary to the
other party no less than 30 days prior to the end of the Initial Term or renewal period, as the
case may be.



3. Compensation.




	 	(a)	 	Salary. Beginning on the Effective Date and thereafter during the term
of this Agreement, the Company shall pay Employee a base salary of $6,000 per
month (“Base Salary”), payable in accordance with the payroll practices of the Company.
In addition to the Base Salary, Employee shall be entitled to receive $1,000 per month
as an expense allowance. Any additional expenses incurred by Employee must be documented
and will be subject to review by the Company. All of Employee’s compensation under this
Agreement will be subject to deduction and withholding authorized or required by law.






	 	(b)	 	Stock Compensation. The Company will grant Employee an option to purchase
3,000,000 shares of the Company’s common stock, par value $0.03 per share (“Common
Stock”), on a fully diluted basis, as of the Effective Date. The exercise price per share
of such option shall be $0.20 and shall have a term of three (3) years, and will vest in
twelve (12) equal monthly installments (“Vesting Schedule”), beginning with the first
vesting exactly one (1) month after the Effective Date and thereafter in eleven (11)
monthly installments in accordance with the Vesting Schedule.






In addition, after six months from the date of this Agreement, the Company will
grant Employee, so long as Employee remains an Employee pursuant to the terms of this
Agreement, a stock option to purchase 100,000 shares of the Company’s common stock each
month beginning in the seventh (7th) month following the Effective Date and continuing
for six (6) months thereafter, for a total of 600,000 shares of the Company’s common
stock (“Performance Options”). The exercise price per share of any of the Performance
Options shall be $0.50 and shall have term(s) of three (3) years.



If this Agreement is terminated for any reason in accordance with Section 2 hereinabove,
Employee shall have six (6) months from the date of termination to exercise all vested stock
options, or such vested stock options shall be forfeited.



4. Board Seat. The Company will appoint Employee as the Chairman of the Board of Directors
of the Company as of the Effective Date, and Employee shall have the right to immediately appoint
two (2) additional directors at his discretion.



5. Employee Benefits. Beginning on the Effective Date and thereafter during the term of this
Agreement, the Company will provide to Employee such fringe benefits, perquisites, vacation and
other benefits that the Company generally provides to its executive employees.



6. Indemnification. The Company agrees that if Employee is made a party or is threatened
to be made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that Employee is or was a
trustee, director or officer of the Company or any affiliate of the Company or is or was serving
at the request of the Company or any affiliate as a trustee, director, officer, member,
employee or agent of another corporation or a partnership, joint venture, trust or other
enterprise, including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official capacity as a
trustee, director, officer, member, employee or agent while serving as a trustee,
director, officer, member, employee or agent, Employee shall be indemnified to the fullest
extent authorized by law, as the same exists or may hereafter be amended, against all
expenses incurred or suffered by Employee in connection therewith. If the Company
maintains a directors’ and officers’ insurance policy, Employee shall be covered to the
same extent as other employees.



7. No Obligation to Third Party. Employee represents and warrants that Employee is not
under any obligation to any person or other third party and does not have any other
interest that is inconsistent or in conflict with this Agreement, or which would
substantially prevent, limit, or impair Employee’s performance of any of the covenants
hereunder or Employee’s duties as an employee of the Company.



8. Severability. If, at any time, any provision of this Agreement shall be determined to
be invalid or unenforceable under any applicable law, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Agreement shall be considered
divisible and shall become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court or other body having
jurisdiction over the matter and Employee and the Company agree that this Agreement as so
amended shall be valid and binding            as though any invalid or unenforceable provision had
not been included herein.



9. Entire Agreement. This Agreement constitutes the complete agreement of the parties
with respect to the subject matter hereof and supersedes any prior written, or prior or
contemporaneous oral, understandings or agreements between the parties that relates in any way to
the subject matter hereof. This Agreement may be amended only in writing executed by the
Company and Employee.



10. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
respective heirs, executors, administrators, legal representatives and successors of the Company
and Employee.



11. Notice. Any notice required or permitted under this Agreement must be in writing and
will be deemed to have been given when delivered personally, by telecopy or by overnight courier
service or three days after being sent by mail, postage prepaid: (a) if to the Company, to the
Company’s principal place of business, or (b) if to Employee, to Employee’s residence or to
Employee’s latest address then contained in the Company’s records (or to such changed address as
such person may subsequently give notice of in accordance herewith).



12. Governing Law. This agreement will be governed by and construed and interpreted in
accordance with the substantive laws of the State of Tennessee without giving effect to any
conflicts of law, rule or principle that might require the application of the laws of another
jurisdiction.



EMPLOYEE AND COMPANY BOTH ACKNOWLEDGE THAT EACH HAS CAREFULLY REVIEWED THE PROVISIONS
CONTAINED IN THIS AGREEMENT, EACH HAS HAD THE OPPORTUNITY TO REVIEW WITH RESPECTIVE
ADVISORS AND COUNSEL, AND EACH UNDERSTANDS THE CONTENTS OF THIS AGREEMENT AND SIGNIFIES SUCH
UNDERSTANDING BY SIGNING HEREINBELOW.



IN WITNESS WHEREOF, the Company and Employee have executed and delivered this Agreement as of
the date first above written.



DIGITAL LIFESTYLES GROUP, INC.




     




Name: Jay Furrow



Title: Director



EMPLOYEE:



     



L.E. Smith