Document:

Exhibit
        10.1

      

      
        

        

      

       

      EMPLOYMENT
        AGREEMENT

      

      Between

      

      TRULITE,
        INC.

      

      and

      

      John
        Sifonis

      

      

      Dated
        as
        of October 20, 2004

      

      

      
        

        

      

      

      
        
           

        

        
           

          
            

          

        

        
           

EMPLOYMENT
          AGREEMENT

      

      

      

      This
        EMPLOYMENT
        AGREEMENT (this
        “Agreement”) is made effective as of the 15th day of September, 2004 by and
        between Trulite, Inc., a Delaware corporation (the “Company”), and John Sifonis
        (“Executive”). 

       

      W
        I T
        N E S S E T H:

      
 

      WHEREAS,
        Executive is a Key Employee of the Company

       

      NOW,
        THEREFORE, in consideration of the employment of Executive by the Company
        and
        the payment of salary and other compensation to Executive by the Company,
        the
        parties hereto agree as follows:

      

      Employment.
        The
        Company hereby agrees to employ Executive, and Executive hereby agrees to
        serve
        the Company, on the terms and conditions set forth herein.

       

      Term.
        The
        employment of Executive by the Company as provided in Section 1 shall commence
        on the date hereof and shall continue until January 1, 2005, unless sooner
        terminated as hereinafter provided. Should
        Executive serve until January 1, 2005, and remain employed by the Company
        thereafter, such employment shall convert to a month-to-month, at-will
        relationship otherwise subject to the terms of this Agreement and terminable
        for
        any reason whatsoever by either the Company or Executive upon 30 days prior
        written notice to the other party.

       

      Position
        and Duties.
        

       

      The
        Company agrees to employ Executive,
        and
Executive
        agrees
        to be so employed, in such capacity and having such duties as are assigned
        to
        the Chief Executive
        Officer
        of Trulite Inc.

       

      Executive
        agrees
        to devote his full business time and attention to the business and affairs
        of
        the Company and will use his best efforts in performing faithfully his duties
        under this Agreement. 

       

      Executive
        shall
        use his reasonable best efforts to perform faithfully and efficiently his
        duties
        under this Agreement, and shall not engage in or be employed by any other
        business; provided, however, that nothing contained herein shall prohibit
        Executive
        from (i)
        serving as a member of the board of directors, board of trustees or the like
        of
        any for-profit entity that does not compete with the Company, or performing
        services of any type for any civic or community entity, whether or not
Executive
        receives
        compensation therefore, (ii) investing his assets in such form or manner
        as
        shall not require any significant services on his part in the operation of
        the
        business of or property in which such investment is made as long as such
        business does not compete with the Company, or (iii) serving in various
        capacities with, and attending meetings of, industry or trade groups and
        associations, as long as Executive’s
        engaging in any activities permitted by virtue of clauses (i), (ii) and (iii)
        above does not materially interfere with the ability of Executive
        to
        perform the services and discharge the responsibilities required of him under
        this Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Compensation
        and Related Matters.

       

      Salary.
        During
        the term of this Agreement, the Company shall pay to Executive a monthly
        salary
        of $1,000. 

       

      Equity.
        During
        the term of this Agreement, the Company shall grant the Executive options
        worth
        three (3) percent of the outstanding equity of the Company in the form of
        Common
        Stock. Such options shall vest on a monthly basis over a four year period.
        An
        additional two (2) percent of the outstanding equity of the Company shall
        be
        granted to the Executive if the Company achieves a pre-money financing valuation
        of equal to or greater than $5 million within twelve months from the date
        of
        this Agreement. Such options shall vest over four years. 

       

      Expenses.
        During
        the term of Executive’s
        employment hereunder, Executive
        shall be
        entitled to receive prompt reimbursement for all reasonable and necessary
        expenses incurred by Executive
        in
        performing services hereunder, including all travel and living expenses while
        away from home on business or at the request of and in the service of the
        Company, entertainment expenses incurred by Executive at the request of and
        in
        the service of the Company, provided that such expenses are incurred and
        accounted for in accordance with the policies and procedures established
        by the
        Company.

       

      (a)
         Termination.
        Executive’s
        employment hereunder may be terminated by either party with thirty (30) days
        of
        written notice. No additional benefits or compensation will be given in
        connection with termination.

       

      Company’s
        Right to Repurchase Shares.
        In the
        event that Executive’s employment is terminated, whether by the Company, for
        Cause, or by Executive’s voluntary departure, the Company shall have the right
        to repurchase all vested Common Stock owned by Executive at fair market value,
        as defined below. Notwithstanding the above, in the event that Executive
        is
        terminated without Cause, the Executive shall be entitled to retain his vested
        stock. The Company shall have the right to repurchase his unvested stock
        at fair
        market value, as defined below. Fair market value, for the purposes of this
        Section 6, shall be determined by a qualified business valuation or appraisal
        expert chosen jointly by the Executive and the Company’s Board of
        Directors.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Confidentiality,
        Non-Solicitation, and Non-Competition.
        

       

      Confidential
        Information. Executive acknowledges that (i) upon execution of this
        Agreement and during the term of this Agreement and as a part of his employment
        with the Company and any subsidiaries, whether pursuant to this Agreement
        or
        otherwise, Executive has been and will be afforded access to “Confidential
        Information” as hereinafter defined; (ii) public disclosure of such Confidential
        Information could have a material adverse impact on the Company and its
        business; and (iii) as a result of his access to such Confidential Information,
        Executive will attain substantial technical expertise, skill and knowledge
        with
        respect to the Company’s business. Executive acknowledges that the provisions of
        this Section 7(a) are reasonable and necessary with respect to the improper
        use
        or disclosure of Confidential Information. As used in this Agreement,
“Confidential Information” means any information, knowledge or data of any
        nature and in any form (including information that is electronically transmitted
        or stored on any form of magnetic or electronic storage media) relating to
        the
        past, current or prospective business or operations of the Company and its
        Affiliates, that at the time or times concerned is not generally known to
        persons engaged in businesses similar to those conducted or contemplated
        by the
        Company and its Affiliates (other than information known by such persons
        through
        a violation of an obligation of confidentiality to the Company), whether
        produced by the Company and its Affiliates or any of their consultants, agents
        or independent contractors or by Executive, and whether or not marked
        confidential, including without limitation information relating to the Company’s
        or its Affiliates’ products and services, business plans, business acquisitions,
        processes, product or service research and development methods or techniques,
        inventions and improvements, training methods and other operational methods
        or
        techniques, quality assurance procedures or standards, operating procedures,
        files, plans, specifications, proposals, drawings, charts, graphs, support
        data,
        trade secrets, supplier lists, supplier information, purchasing methods or
        practices, distribution and selling activities, consultants’ reports, marketing
        and engineering or other technical studies, maintenance records, employment
        or
        personnel data, marketing data, strategies or techniques, financial reports,
        budgets, projections, cost analyses, price lists and analyses, employee lists,
        customer lists, customer source lists, proprietary computer software, and
        internal notes and memoranda relating to any of the foregoing. 

       

      Non-Disclosure
        of Confidential Information. In consideration of the foregoing and of
        continued employment by the Company and the compensation and benefits paid
        or
        provided and to be paid or provided to Executive by the Company pursuant
        to this
        Agreement, Executive hereby covenants and agrees that during the term of
        this
        Agreement and for a period of two years thereafter, Executive shall not,
        without
        the Company’s prior written consent or as may be required by law or legal
        process, disclose, communicate, divulge or make available to any person or
        entity (other than the Company), or use for any purpose other than for the
        exclusive benefit of the Company, any Confidential Information, whether
        Executive has such information in his memory or embodied in writing or other
        physical form. Upon termination of Executive’s employment hereunder, Executive
        shall deliver promptly to the Company any Confidential Information in his
        possession, including any duplicates thereof and any notes or other records
        Executive has prepared with respect thereto. In the event that the provisions
        of
        any applicable law or the order of any court would require Executive to disclose
        or otherwise make available any Confidential Information then Executive shall
        give the Company prompt prior written notice of such required disclosure
        and an
        opportunity to contest the requirement of such disclosure or apply for a
        protective order with respect to such Confidential Information by appropriate
        proceedings. Executive agrees that disclosures made by the Company or its
        affiliates to governmental authorities, to its customers or potential customers,
        to its suppliers or potential suppliers, to its employees or potential
        employees, to its consultants or potential consultants or disclosures made
        by
        the Company or its affiliates in any litigation or administrative or
        governmental proceedings shall not mean that the matters so disclosed are
        available to the general public. The foregoing, however, shall not limit
        the
        Company’s authority to determine whether or not any such information has been so
        disclosed.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Protection
        of Information.
        

       

      The
        Company shall disclose to Executive,
        or
        place Executive
        in a
        position to have access to or develop, trade secrets or confidential information
        of the Company; and/or shall entrust Executive
        with
        business opportunities of the Company; and/or shall place Executive
        in a
        position to develop business good will on behalf of the Company.

       

      Executive
        agrees
        not to disclose or utilize, for Executive’s
        personal benefit or for the direct or indirect benefit of any other person
        or
        entity, or for any other reason, whether for consideration or otherwise,
        during
        the term of his employment hereunder or at any time thereafter, any information,
        ideas, concepts, improvements, discoveries or inventions, whether patentable
        or
        not, which are conceived, made, developed, or acquired by Executive,
        individually or in conjunction with others, during Executive’s
        employment by the Company (whether during business hours or otherwise and
        whether on the Company’s premises or otherwise) which relate to the business,
        products, or services of the Company (including, without limitation, all
        such
        business ideas, prospects, proposals or other opportunities which are developed
        by Executive
        during
        his employment hereunder, or originated by any third party and brought to
        the
        attention of Executive
        during
        his employment hereunder, together with information relating thereto (including,
        without limitation, data, memoranda, opinions or other written, electronic
        or
        charted means, or any other trade secrets or other confidential or proprietary
        information of or concerning the Company)) (collectively, “Business
        Information”). Moreover, all documents, drawings, notes, files, data, records,
        correspondence, manuals, models, specifications, computer programs, E-mail,
        voice mail, electronic databases, maps, and all other writings or materials
        of
        any type embodying any such Business Information are and shall be the sole
        and
        exclusive property of the Company. Upon termination of Executive’s
        employment hereunder, for any reason, Executive
        promptly
        shall deliver all Business Information, and all copies thereof, to the Company.
        As a result of knowledge of confidential Business Information of third parties,
        such as customers, suppliers, partners, joint ventures, and the like, of
        the
        Company, Executive
        also
        agrees to preserve and protect the confidentiality of such third party Business
        Information to the same extent, and on the same basis, as the Company’s Business
        Information.

       

      Executive
        agrees
        that, during his employment, any inventions (whether or not patentable),
        concepts, ideas, expressions, discoveries, or improvements, including, without
        limitation, products, processes, methods, publications, works of authorship,
        software programs, designs, trade secrets, technical specifications, algorithms,
        technical data, know-how, internal reports and memoranda, marketing plans
        and
        any other patent or proprietary rights conceived, devised, developed, or
        reduced
        to practice, in whole or in part, by Executive
        during
        the term of his employment by the Company that pertain to hydrogen fuel
        technology (the “Developments”) are the sole and exclusive property of the
        Company on a worldwide basis as works made for hire or otherwise, and further
        that any revenue or other consideration obtained from the sale, license or
        other
        transfer or conveyance of any such Development, or a product or service
        incorporating such Development, is solely for the benefit of and becomes
        the
        property of the Company. To the extent a Development may not be considered
        work
        made by Executive
        for hire
        for the Company, Executive
        agrees
        to assign, and automatically assigns at the time of creation of the Development,
        without any requirement of further consideration, any and all right, title
        and
        interest he may have in such Development. Executive
        shall
        preserve each such Development as confidential and proprietary information
        of
        the Company. Executive
        shall
        promptly disclose each such Development and shall, upon demand, at the Company’s
        expense, execute and deliver to the Company such documents, instruments,
        deeds,
        acts and things as the Company may request to evidence or maintain the Company’s
        ownership of the Development, in any and all countries of the world, or to
        effect enforcement thereof, and to assign all rights, if any, of Executive
        in and
        to each of such Developments. In addition, Executive
        agrees
        not to publish or seek to publish any information whatsoever concerning any
        Development without the prior written consent of the Company, which may be
        withheld in its sole and absolute discretion.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Any
        inventions relating to the business of the Company that pertain to hydrogen
        fuel
        technology conceived or reduced to practice after Executive
        leaves
        the employ of the Company shall be conclusively deemed to have been conceived
        and/or reduced to practice during the period of the employment if conceived
        and/or reduced to practice within six months from termination of employment,
        and
        shall be subject to the terms of this Section 7(c).

       

      Non-Recruitment
        of Other Company Employees.
        During
        the term of Executive’s
        employment under this Agreement and for a period of two years thereafter,
        Executive
        will not
        directly or indirectly (i) recruit, solicit, encourage or induce any employee
        of
        the Company or any of its Affiliates to terminate such employment, (ii)
        otherwise disrupt any such employee’s relationship with the Company or its
        Affiliates, or (iii) whether individually or as owner, agent, employee,
        consultant or otherwise, hire, employ or offer employment to any person who
        is
        or was employed by the Company or an Affiliate thereof, whether or not such
        engagement is solicited by Executive.

       

      Non-Solicitation
        of Customers or Other Persons.
        

       

      During
        the term of Executive’s
        employment under this Agreement and for a period of two years thereafter,
        Executive
        shall
        not solicit, induce, or attempt to induce any past, current or potential
        customer of the Company or its Affiliates to (A) cease doing business in
        whole
        or in part with or through the Company or its Affiliates or otherwise disrupt
        any previously established relationship existing between such customer and
        the
        Company or its Affiliates, or (B) do business with any other person or entity
        which performs services materially similar to or competitive with those provided
        by the Company or its Affiliates. 

       

      During
        the term of Executive’s
        employment under this Agreement and for a period of two years thereafter,
        Executive
        shall
        not solicit, induce, or attempt to induce any supplier, lessor, licensor,
        or
        other person who has a business relationship with the Company or its Affiliates,
        or who on the date Executive’s
        employment hereunder is terminated is engaged in discussions or negotiations
        to
        enter into a business relationship with the Company or its Affiliates, to
        discontinue or reduce the extent of such relationship with the Company or
        its
        Affiliates.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Non-Competition
        with the Company.
        Executive
        acknowledges and agrees that the services which have been and will be performed
        by Executive
        for the
        Company or its Affiliates, whether during his employment with the Company
        or any
        Affiliates otherwise than pursuant to this Agreement, include services of
        a
        special, unique, unusual, extraordinary and intellectual character. Executive
        further
        acknowledges that the business of the Company and its subsidiaries is worldwide
        in scope, that Executive
        has been
        and will be an integral part of conceiving, developing, marketing and selling
        such products and services on a worldwide basis, and that the Company and
        its
        subsidiaries compete with other organizations that are or could be located
        in
        any part of the world. Executive
        further
        acknowledges that, by virtue of the character of his services, Executive
        will be
        deemed to have worked for the Company or its subsidiaries at any and every
        location and geographic area in which Executive’s
        services have been or will be applied on behalf of the Company or any subsidiary
        during his employment by the Company or any subsidiary whether pursuant to
        this
        Agreement or otherwise, irrespective of whether or not Executive
        was
        physically present at such location or geographic area. Therefore, Executive
        hereby
        covenants and agrees that during the term of Executive’s
        employment hereunder and for a period of two years thereafter, Executive
        will not
        directly or indirectly engage or invest in, own, manage, operate, control
        or
        participate in the ownership, management, operation or control of, be employed
        by, associated or connected with, or render services or advice to, any other
        business whose services, products or activities compete in whole or in part
        with
        the services, products or activities of the Company relating to Company’s
        hydrogen fuel technology or its subsidiaries, within all geographic areas
        worldwide in which Executive’s
        services were applied by the Company or its subsidiaries at any time during
        Executive’s
        employment by the Company or its subsidiaries otherwise than pursuant to
        this
        Agreement.

       

      Reasonableness
        of Covenants.
        It is
        understood and agreed by the parties hereto that the covenants by Executive
        set
        forth in this Section 7 are essential elements of this Agreement and that
        but
        for Executive’s
        agreement to comply with such covenants, the Company would not have entered
        into
        this Agreement. The parties also acknowledge that the time, scope, geographic
        area and other provisions of Section 7(b) through 7(f) have been specifically
        negotiated at arm’s length by sophisticated commercial parties with peculiar
        knowledge of the Company’s business. It is further agreed that all such
        provisions are reasonable under the circumstances pertaining to the Company’s
        business and Executive’s
        key
        role therein, and necessary for the protection of the Company’s legitimate
        business interests. The Company and Executive
        have
        independently consulted their respective legal counsel and have been advised
        in
        all respects concerning the reasonableness and propriety of such covenants,
        with
        specific regard to the nature of the businesses conducted by the Company
        and its
        subsidiaries.

       

      Injunctive
        Relief and Other Remedies with Respect to Covenants.
        Executive
        acknowledges and agrees that the covenants and obligations of Executive
        as set
        forth in this Section 7 relate to special, unique and extraordinary matters
        and
        that a violation of any of the terms of such covenants and obligations will
        cause the Company irreparable injury for which adequate remedies are not
        available at law. Executive
        further
        agrees that if, at any time, despite express agreement of the parties hereto,
        a
        court of competent jurisdiction holds that any portion of Section 7(b) through
        7(f) of this Agreement is unenforceable for any reason, the maximum permissible
        restrictions of time, scope or geographic area as determined by such court,
        will
        be substituted for any such restrictions held unenforceable. In the event
        Executive’s
        breach
        (or threatened breach in the case of clause (i) below) of any of the covenants
        and obligations set forth in this Section 7, Executive
        agrees
        that the Company will (i) be entitled to an injunction, restraining order
        or
        such other equitable relief restraining Executive
        from
        violating such covenants and obligations contained in this Section 7, without
        requiring the Company to post any bond or surety therefore, and (ii) have
        no
        further obligation to make any payments to Executive
        hereunder. These remedies are cumulative and are in addition to any other
        rights
        and remedies the Company may have at law or in equity, including, but not
        limited to, recovery of costs and expenses such as reasonable attorneys’ fees by
        reason of any such breach, actual damages sustained by the Company as a result
        of any such breach, and cancellation of any unpaid salary, bonus, commissions
        or
        reimbursements otherwise outstanding at such time.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Applicability
        of Certain Sections.
        Notwithstanding the foregoing, the parties agree that Sections 7(d), 7(e)
        and
        7(f) shall be binding upon Executive
        only in
        the event that Executive
        voluntarily terminates his employment hereunder during the term of this
        Agreement without the consent of the Company and in the event that Executive
        is
        discharged by the Company for Disability or Cause.

       

      Successors;
        Binding Agreement.
        The
        terms and conditions of this Agreement shall inure to the benefit of and
        be
        binding upon the parties hereto and their respective successors and permitted
        assigns. Neither this Agreement nor any rights, interests or obligations
        hereunder may be assigned by any party hereto without the prior written consent
        of the other parties hereto; provided that the Company may assign any rights,
        interests or obligations hereunder to any successor (whether direct or indirect,
        by merger, purchase, consolidation or otherwise) to all or substantially
        all of
        the business and/or assets of the Company.

       

      Notice.
        All
        notices hereunder must be in writing and shall be deemed to have given upon
        receipt of delivery by: (a) personal delivery to the designated individual,
        (b)
        certified or registered mail, postage prepaid, return receipt requested,
        (c) a
        nationally recognized overnight courier service with confirmation of receipt
        or
        (d) facsimile transmission with confirmation of receipt. All such notices
        must
        be addressed as follows or such other address as to which any party hereto
        may
        have notified the other in writing. For the purpose of this Agreement, notices,
        demands and all other communications provided for in this Agreement shall
        be in
        writing and shall be deemed to have been duly given when delivered or (unless
        otherwise specified) mailed by United States certified or registered mail,
        return receipt requested, postage prepared, addressed as follows:

       

      

        
          	 	To the
                  Company:	 
	 	 	 
	 	
                  520
                    Post Oak Blvd. 

                  Houston,
                    TX 77027

                  Attention:
                    John Berger

                	 

        

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

        
          	 	To Executive:	 
	 	 	 
	 	
                  John
                    Sifonis

                	 
	 	 	 
	 	 	 

        

         

      

      or
        to
        such other address as any party may have furnished to the others in writing
        in
        accordance herewith, except that notices of change of address shall be effective
        only upon receipt.

      

      Miscellaneous.
        No
        provisions of this Agreement may be modified, waived or discharged unless
        such
        waiver, modification or discharge is agreed to in writing signed by Executive
        and such
        officer of the Company as may be specifically designated by the Chief Executive
        Officer of the Company. No waiver by either party hereto at any time of any
        breach by the other party hereto of, or compliance with, any condition or
        provision of this Agreement to be performed by such other party shall be
        deemed
        a waiver of similar or dissimilar provisions or conditions at the same or
        at any
        prior or subsequent time. No agreements or representations, oral or otherwise
        express or implied, with respect to the subject matter hereof have been made
        by
        either party which are not set forth expressly in this Agreement.

       

      Validity.
        The
        invalidity or unenforceability of any provision or provisions of this Agreement
        shall not affect the validity or enforceability of any other provision of
        this
        Agreement, which shall remain in full force and effect.

       

      Counterparts.
        This
        Agreement may be executed in one or more counterparts, each of which shall
        be
        deemed to be an original but all of which together shall constitute one and
        the
        same instrument.

       

      Entire
        Agreement.
        This
        Agreement sets forth the entire agreement of the parties hereto in respect
        of
        the subject matter contained herein and supersedes all prior agreements,
        promises, covenants, arrangements, communications, representations or
        warranties, whether oral or written, by any officer, employee or representative
        of any party hereto; and any prior agreement of the parties hereto in respect
        of
        the subject matter contained herein is hereby terminated and
        canceled.

       

      Governing
        Law.
        This
        Agreement shall be construed and enforced in accordance with and governed
        by the
        internal laws of the State of Texas without regard to principles of conflict
        of
        laws.

       

      [signatures
        appear on the following page]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      

      IN
        WITNESS WHEREOF, the parties have executed this Agreement on the date and
        year
        first above written.

      
        	 	 	 
	 	COMPANY:
	 	 
	 	TRULITE, INC.
	 	
	 	 
	 	By:  	
	 	
                
Name:
                William J. Berger
	 	Title:
                Chief Executive Officer
	 	 
	 	
                EXECUTIVE:

              
	 	
	 	
                

                John
                  SifonisExhibit
        10.2

      

      STOCK OPTION AGREEMENT

      FOR
        THE GRANT OF

      NON-QUALIFIED
        STOCK OPTIONS UNDER THE

      TRULITE,
        INC.

      STOCK
        OPTION PLAN

      

      THIS
        AGREEMENT
        is
        entered into as of April ___, 2005 by and between Trulite, Inc., a Delaware
        corporation (“Trulite” or the “Company”), and John Sifonis
        (“Optionee”).

      

      WHEREAS,
        Optionee
        is an employee of the Company and the Company considers it desirable and
        in its
        best interest that Optionee be given an inducement to acquire a proprietary
        interest in the Company and an added incentive to advance the interests of
        the
        Company by possessing an option to purchase shares of the common stock, $.0001
        par value per share (the “Common Stock”) of the Company in accordance with the
        Trulite, Inc. Stock Option Plan (the “Plan”) which was adopted by the Board of
        Directors on April ____, 2005.

      

      NOW,
        THEREFORE,
        in
        consideration of the premises, it is agreed as follows:

      

      1.  DEFINITIONS

      

      For
        purposes of this Agreement, any capitalized terms used herein and not defined
        herein shall have the meaning provided in the Plan and the following terms
        shall
        have the definitions indicated:

       

      
        	(a)  	
                Date
                  of Grant - the date of this Agreement, April ___,
                  2005.

              

      

       

      
        	(b)  	
                Exercise
                  Date - date that the Option or any portion thereof, as the context
                  requires, is exercised.

              

      

       

      2.  GRANT
        OF OPTION

      

      Subject
        to the provisions of the Plan, the Company hereby grants to Optionee the
        right,
        privilege and option to purchase (the “Option”) 249,260 shares of Common Stock
        (the “Option Shares”) at a price of $0.88 per share (the “Grant Price”), which
        has been determined by the Board of Directors to be equal to the Fair Market
        Value of a share of Common Stock on the Date of Grant. The Option shall be
        exercisable in the amounts and at the times specified in Section 3 below.
        The
        number of Option Shares and the Grant Price have been adjusted to reflect
        a
        five-for-one stock split of the Trulite common stock to be effective in April
        2005. The Option is a non-qualified stock option and shall not be treated
        as an
        incentive stock option.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3.
        VESTING
        AND EXERCISE OF OPTIONS

       

      3.1
         The
        Option shall vest as provided below if Optionee continues to be employed
        by the
        Company on such dates:

       

      
        	 	
                With
                  respect to 18.5% of the Option Shares

              	
                One
                  year after the Date of Grant

              
	 	
                With
                  respect to an additional 22.5% of the Option Shares

              	
                Two
                  years after the Date of Grant

              
	
              	
                With
                  respect to an additional 26.5% of the Option Shares

              	
                Three
                  years after the Date of Grant

              
	 	
                With
                  respect to an additional 32.5% of the Option Shares

              	
                Four
                  years after the Date of Grant

              

      

       

      3.2  The
        Option may not be exercised later than seven years after the Date of
        Grant.

       

      3.3
         (a)
         If
        some
        or all of the shareholders of Trulite on the Date of Grant (the “Current
        Shareholders”) enter into a definitive agreement to sell to a third party (an
“Acquiring Party”) some or all of the shares of Common Stock held by the Current
        Shareholders and the proposed sale will result in the Current Shareholders
        having voting power with respect to less then 50% of the voting securities
        entitled to vote in the election of directors of Trulite, the Board may require
        the Optionee to exercise the vested portion of the Option and sell the Option
        Shares to the Acquiring Party or to the Current Shareholders, on the same
        terms
        and conditions, including prices, as the Acquiring Party is acquiring the
        shares
        from the Current Shareholders. Following the sale to the Acquiring Party,
        the
        unvested portion of the Option shall continue to be subject to the vesting
        terms
        provided herein.

       

      (b) In
        the
        event of (1)
        a sale
        of all or substantially all of the assets of the Company or (2)
        a
        merger, consolidation or reorganization involving Trulite, following which
        the
        Current Shareholders will have voting power with respect to less than 50%
        of the
        voting securities entitled to vote generally in the election of directors
        of the
        surviving entity, the Board can require that all vested Options be exercised
        at
        the time of effectiveness of the asset sale, merger, consolidation or
        reorganization and that, if not exercised, shall be forfeited. All Options
        not
        exercised at the time of the asset sale, merger, consolidation or reorganization
        and not required to be forfeited, shall be assumed by any acquiring or surviving
        entity on the same terms and shall become equivalent options to acquire
        securities of such acquiring or surviving entity.

       

      3.4 Notwithstanding
        the foregoing, the Board may at any time in its sole discretion declare any
        outstanding Options to be fully vested and immediately exercisable in full
        or in
        part.

       

      4.
        TERMINATION OF EMPLOYMENT

      

      The
        Option must be exercised while Optionee is employed by the Company, except
        that,
        subject to Section 3.2, the Option may be exercised, to the extent vested,
        within 180 days of the date on which Optionee ceases to be an employee as
        a
        result of retirement on or after attaining the age of 65 or early retirement
        with approval of the Board (“Retirement”), as a result of disability within the
        meaning of Section 22(e)(3) of the Code or as a result of death.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      5.
        METHOD OF EXERCISE OF OPTION

      

      5.1 Optionee
        may exercise all or a portion of the Option by delivering to the Board a
        signed
        written notice of his intention to exercise the Option, specifying therein
        the
        number of shares to be purchased. Upon receiving such notice, and after the
        Board has received full payment of the Grant Price for the Option Shares
        being
        acquired and applicable withholding taxes, the Board shall direct the
        appropriate officer of the Company to transfer title to the Option Shares
        purchased to Optionee on the Company’s stock records and to issue to Optionee a
        stock certificate for the number of Option Shares being acquired. Optionee
        shall
        not have any rights as a shareholder until the stock certificate is issued
        to
        him.

      

      5.2 The
        Option may be exercised by the payment of the Grant Price in cash or by
        check.

      

      6.  FORFEITURE
        OF OPTION GAIN

      

      6.1 Forfeiture
        of option gain and unexercised options if Optionee engages in certain
        activities.
        If, at
        any time within two years after termination of employment, Optionee engages
        in
        any activity in competition with any activity of the Company, or inimical,
        contrary or harmful to the interests of the Company, including, but not limited
        to (a) conduct related to Optionee’s employment for which either criminal or
        civil penalties against Optionee may be sought, (b) accepting employment
        with or
        serving as a consultant, advisor or in any other capacity to an employer
        that is
        in competition with or acting against the interests of the Company, including
        employing or recruiting any present, former or future employee of the Company,
        or (c) disclosing or misusing any confidential information or material
        concerning the Company, then (i) this Option shall terminate effective the
        date
        on which Optionee enters into such activity, unless terminated sooner by
        operation of another term or condition of this Option or the Plan, and (ii)
        any
        gain realized by Optionee from exercising all or a portion of this Option
        shall
        be paid by Optionee to the Company. The forfeiture described herein shall
        not be
        required if Optionee’s employment with the Company terminates following a
        transaction described in Section 3.3.

      

      6.2 Right
        of Set-off.
        By
        accepting this agreement, Optionee consents to a deduction from any amounts
        the
        Company owes Optionee from time to time (including amounts owed to Optionee
        as
        wages or other compensation, fringe benefits, or vacation pay, as well as
        any
        other amounts owed to Optionee by the Company), to the extent of the amounts
        Optionee owes the Company under paragraph 6.1 above. Whether or not the Company
        elects to make any set-off in whole or in part, if the Company does not recover
        by means of set-off the full amount Optionee owes it, calculated as set forth
        above, Optionee agrees to pay immediately the unpaid balance to the
        Company.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      6.3 Board
        Discretion.
        Optionee may be released from his obligations under this Section only if
        the
        Board determines in its sole discretion that such action is in the best
        interests of the Company.

      

      7.
        COMPLIANCE WITH APPLICABLE LAW

      

      No
        shares
        may be issued upon exercise of the Option unless such issuance is in compliance
        with the Delaware General Corporation Law, as in effect on the date of such
        issuance. It is the intention of the Company to effect full compliance with
        all
        securities and other applicable laws with respect to the sale of Option Shares
        pursuant to the exercise of Options hereunder and subsequent resales by the
        Optionee. The Company shall not be required to sell and deliver Option Shares
        hereunder upon exercise of these Options in whole or part until the Optionee
        shall have made such representations and agreed to the legending of stock
        certificates in a fashion as may reasonably be required by the Company's
        counsel
        to effect compliance with all applicable securities or other laws.

      

      8.
        RESTRICTION ON TRANSFER OF OPTION SHARES

      

      Unless
        the Common Stock is publicly traded, there will be no market for the Option
        Shares and the Option Shares will be subject to restrictions on transfer
        imposed
        by law, the Plan and this Agreement, as well as an Investors Rights Agreement
        and a Right of First Refusal and Co-Sale Agreement to which Optionee will
        be
        obligated to become a party upon exercise of the Option. By signing this
        Agreement, Optionee represents that any purchase of Option Shares upon exercise
        of an Option, prior to the Common Stock becoming publicly traded, will be
        for
        investment purposes without an intention to resell the Option Shares for
        a
        substantial period of time. No transfer of Option Shares will be recognized
        by
        the Company, unless in the opinion of counsel to the Company such transfer
        will
        not result in a violation of applicable securities laws.

      

      9.  TAXES

      

      The
        Company may make such provisions as it may deem appropriate for the withholding
        of any federal, state and local taxes that it determines are required to
        be
        withheld on the exercise of the Option.

      

      10.  BINDING
        EFFECT

      

      This
        Agreement shall inure to the benefit of and be binding upon the parties hereto
        and their respective heirs, executors, administrators and
        successors.

      

      11.
        INCONSISTENT PROVISIONS

      

      The
        Option granted hereby is subject to the provisions of the Plan as in effect
        on
        the date hereof. If any provision of this Agreement conflicts with such a
        provision of the Plan, the Plan provision shall control.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      12.
        SEVERABILITY

      

      If
        a
        court of competent jurisdiction determines that any provision of this Agreement
        is invalid or unenforceable, then the invalidity or unenforceability of that
        provision shall not affect the validity or enforceability of any other provision
        of this Agreement, and all other provisions shall remain in full force and
        effect.

      

      

      IN
        WITNESS WHEREOF
        the
        parties hereto have caused this Agreement to be executed on the day and year
        first above written.

      
        
          	 	 	 
	 	TRULITE,
                  INC.
	 	 
	 	By:  	 
	 	 	
	 	
                  
President
                  and CEO
	 	 
	 	 
	 	
	 	
                  
                    

                  

                  John
                    Sifonis

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