Document:

Exhibit 10.11

 

THE SECURITIES
REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES ACTS (THE “STATE
ACTS”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR OTHERWISE
TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER, EXCEPT UPON THE
ISSUANCE TO VITACUBE SYSTEMS HOLDINGS, INC. (THE “CORPORATION”) OF A FAVORABLE
OPINION OF THE HOLDER’S COUNSEL, OR SUBMISSION TO THE CORPORATION OF SUCH OTHER
EVIDENCE AS MAY BE REASONABLY SATISFACTORY TO COUNSEL FOR THE CORPORATION, TO
THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT AND THE
STATE ACTS.

 

STOCK OPTION AGREEMENT

 

This Stock Option Agreement is made effective as of the 2nd day of
March 2005, between VITACUBE SYSTEMS
HOLDINGS, INC., a Nevada corporation (the “Corporation”) and Earnest
Mathis, Jr. (“Optionee”).

 

BACKGROUND:

 

A.                                   Optionee
is employed by the Corporation as its chief executive officer and president.

 

B.                                     Pursuant
to the terms of Optionee’s employment agreement with the Corporation, the
Corporation agreed to issue an option to purchase common stock of the
Corporation to Optionee.

 

IN CONSIDERATION of Optionee’s employment with the Corporation and the
mutual promises and undertakings described below, the parties agree as follows:

 

1.                                       Grant of Option.  The Corporation hereby grants to Optionee an
option (“Option”) to acquire from the Corporation, at an initial purchase price
of $3.00 per share, 275,000 fully paid and nonassessable shares of common
stock, par value $.001 per share (the “Common Stock”) of the Corporation.  The Option shall vest and be exercisable as
provided below.  The purchase price per
share of the Common Stock, as adjusted from time to time as provided herein, is
referred to as the “Purchase Price.”

 

2.                                       Exercise of Option.

 

2.1.                              This Option is vested and
exercisable with respect to 137,500 shares of Common Stock as of the date of
this Agreement and will vest and be exercisable with respect to the balance of
the Common Stock on the one-year anniversary of this Agreement.  Each increment of Common Stock that has
vested hereinafter referred to as the “Vested Options.”  Except as provided in Section 2.2, upon
termination of Optionee’s

 

 

employment with the Corporation, this Option will be exercisable only
with respect to Vested Options as of the date of termination of
employment.  Except as provided in
Section 2.3, Vested Options will be exercisable for a period of five years following
their vesting date.  The Option will
terminate and cease to be outstanding for any Vested Options for which the
Option has not been exercised on the 5-year anniversary of the respective
vesting dates unless earlier terminated as provided in Section 2.3.

 

2.2.                              If the Corporation
terminates Optionee’s employment with the Corporation without “just cause” or
Optionee terminates for “good reason” as defined in the Employment Agreement
dated March 2, 2005, between the Optionee and the Corporation (the “Employment
Agreement”), all unvested options will immediately vest and become
exercisable.  Options that vest under
this section will be exercisable for a period of five years following the date
of Optionee’s termination of employment. 
The Option will terminate and cease to be outstanding for any Options
which vest under this Section 2.2 on the 5-year anniversary of Optionee’s
termination of employment

 

2.3.                              If the Corporation
terminates Optionee’s employment with the Corporation for “just cause” as
defined in the Employment Agreement, this Option will immediately terminate and
cease to be outstanding for any Common Shares that have not been exercised as
of the date of Optionee’s termination of employment.

 

3.                                       Manner of Exercise.

 

3.1.                              The Optionee may exercise
this Option, in whole or in part, upon surrender of this Option, with the
exercise form annexed hereto duly executed, at the office of the Corporation,
480 S. Holly Street, Denver, Colorado 80246, or such other office of which the
Corporation shall notify the Optionee in writing, together with a certified or
bank cashier’s check payable to the order of the Corporation in the amount of
the Purchase Price times the number of shares of Common Stock being purchased.

 

3.2.                              As soon as practical
after the exercise date and in compliance by the Optionee with any request
pursuant to Section 6.2 of this Agreement, the Corporation will issue to or on
behalf of the Optionee a certificate representing the shares of Common Stock
purchased pursuant to this Option.

 

3.3.                              In no event shall any
fractional share of Common Stock of the Corporation be issued upon any exercise
of this Option.  If, upon exercise of
this Option as an entirety, the Optionee would, except as provided in this
section, be entitled to receive a fractional share of Common Stock, then the
Corporation shall issue the next higher number of full shares of Common Stock,
issuing a full share with respect to such fractional share.

 

4.                                       Reservation of Shares.  The Corporation covenants that it will at all
times reserve and keep available a number of its authorized shares of Common
Stock, free from all preemptive rights, which will be sufficient to permit the
exercise of this Option.  The Corporation
further covenants that such shares as may be issued pursuant to the exercise of
this

 

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Option will, upon issuance, be
duly and validly issued, fully paid and nonassessable and free from all taxes,
liens, and charges.

 

5.                                       Adjustments to Purchase Price.

 

5.1.                              If the Corporation shall
at any time prior to the expiration of this Option subdivide its outstanding
shares of Common Stock, by split-up or otherwise, or combine its outstanding
shares of Common Stock, or issue additional shares of Common Stock in payment
of a stock dividend in respect of its shares of Common Stock, the Purchase
Price then applicable to shares covered by this Option shall forthwith be
proportionately decreased in the case of a subdivision or stock dividend, or
proportionately increased in the case of a combination.

 

5.2.                              In the case of any
reclassification, capital reorganization, or change of the outstanding shares
of Common Stock of the Corporation (other than as a result of a subdivision,
combination or stock dividend), or in the case of any consolidation of the
Corporation with, or merger of the Corporation into, another corporation or
other business organization (other than a consolidation or merger in which the
Corporation is the continuing corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock of the
Corporation), or in the case of any sale or conveyance to another corporation
or other business organization of the property of the Corporation as an
entirety or substantially as an entirety, at any time prior to the expiration of
this Option, then, as a condition of such reclassification, reorganization,
change, consolidation, merger, sale or conveyance, lawful provision shall be
made, and duly executed documents evidencing the same from the Corporation or
its successor shall be delivered to the Optionee of this Option, so that the
Optionee shall have the right prior to the expiration of this Option to
purchase, at a total price not to exceed that payable upon the exercise of the
unexercised portion of this Option, the kind and amount of shares of stock and
other securities and property receivable upon such reclassification,
reorganization, change, consolidation, merger, sale or conveyance, by an
Optionee of the number of shares of Common Stock of the Corporation which might
have been purchased by the Optionee immediately prior to such reclassification,
reorganization, change, consolidation, merger, sale, or conveyance, and in any
such case appropriate provisions shall be made with respect to the rights and
interest of the Optionee to the end that the provisions hereof (including,
without limitation, provisions for the adjustment of the Purchase Price and of
the number of shares purchasable upon exercise of this Option) shall thereafter
be applicable in relation to any shares of stock and other securities and
property thereafter deliverable upon exercise hereof.

 

5.3.                              Whenever the Purchase
Price is adjusted, as herein provided, the Corporation shall promptly deliver
to the Optionee a certificate setting forth the Purchase Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

 

5.4.                              If at any time prior to
the expiration or exercise of this Option, the Corporation shall pay any
dividend or make any distribution upon its shares of Common Stock or shall make
any subdivision or combination of, or other change in its shares of

 

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Common Stock, the Corporation shall cause notice thereof to be mailed,
first class, postage prepaid, to the Optionee at least ten full business days
prior to the record date set for determining the holders of Common Stock who
shall participate in such dividend, distribution, subdivision, combination or
other change.  Such notice shall also
specify the record date as of which holders of Common Stock who shall
participate in such dividend or distribution are to be determined.  Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any dividend or
distribution.

 

6.                                       Restricted Shares.

 

6.1.                              Neither this Option nor
the shares of Common Stock issuable upon exercise of this Option have been
registered under the Securities Act of 1933, as amended (the “Act”), or any
state acts.  Optionee understands and
agrees that any shares of Common Stock purchased by Optionee pursuant to this
Option will be “restricted shares”, as such term is defined under the Act, and
that such shares must be held indefinitely unless and until subsequently
registered under the Act and the state acts, unless an exemption from such
registration is available.

 

6.2.                              Unless a current
registration statement under the Securities Act, shall be in effect with
respect to the securities to be issued upon exercise of this Option, the
Optionee, by accepting this Option, covenants and agrees that, at the time of
exercise hereof, the Corporation may require the Optionee to make such
representations, and may place such legends on certificates representing the
shares of Common Stock issuable upon exercise of this Option, as may be reasonably
required in the opinion of counsel to the Corporation to permit such shares of
Common Stock to be issued without such registration.

 

7.                                       Transferability of Option.   During the lifetime of the Optionee, the
Option is exercisable only by the Optionee and is not assignable or
transferable.  If the Optionee dies prior
to the expiration of this Option, the Option to the extent exercisable on the
date of Optionee’s death may be exercised by the personal representative of the
Optionee’s estate, or by the persons to whom the Option is transferred pursuant
to the Optionee’s will or in accordance with the laws of descent and
distribution.

 

8.                                       No Employment Rights.  Nothing in this Agreement will confer
upon Optionee any right to continue in the employment of the Corporation for
any period or specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation or of the Optionee, to terminate his
employment as provided in the Employment Agreement.

 

9.                                       Compliance with Laws and Regulations.

 

9.1.                              The exercise of this
Option and the issuance of the shares of Common Stock issuable upon exercise of
this Option shall be subject to compliance by the Corporation and Optionee with
all applicable requirements of law.

 

9.2.                              The inability of the Corporation
to obtain approval from any regulatory body having authority deemed by the
Corporation to be necessary to the lawful issuance and sale of any shares of
Common Stock issuable upon exercise of this Option shall

 

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relieve the Corporation of any liability with respect to the
non-issuance or sale of the shares of Common Stock issuable upon exercise of
this Option as to which such approval shall not have been obtained.  The Corporation, however, shall use its best
efforts to obtain all such approvals.

 

9.3.                              The Corporation’s
obligation to deliver shares of common stock pursuant to the exercise of this
Option is subject to the Optionee’s payment to the Corporation in cash of the
amount necessary to satisfy all applicable federal, state, and local income and
employment tax withholding requirements.

 

10.                                 Representations and Warranties by Optionee.  Optionee represents and warrants to
Corporation as follows:

 

10.1.                        This Option is being acquired
by Optionee for investment only, for Optionee’s own account, and not with a
view to, for offer for sale, or for sale in connection with the distribution or
transfer thereof.

 

10.2.                        This Option is not being
purchased for subdivision or fractionalization thereof; Optionee has no
contract, undertaking, agreement or arrangement with any person or entity to
sell, hypothecate, pledge, donate, or otherwise transfer (with or without
consideration) to any such person or entity the Option; and Optionee has no
present plans or intentions to enter into any such contract, undertaking,
agreement or arrangement.

 

11.                                 Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF COLORADO WITHOUT
REFERENCE TO ANY CONFLICTS OF LAW PROVISION THAT WOULD REQUIRE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION.  VENUE
FOR ANY PROCEEDING BROUGHT TO ENFORCE THE TERMS OF THIS AGREEMENT SHALL BE
PROPER ONLY IN THE STATE OR FEDERAL COURTS LOCATED IN THE CITY AND COUNTY OF
DENVER, STATE OF COLORADO.

 

12.                                 Severability.  If any provision of this Option is determined
to be invalid or unenforceable for any reason, the remainder of the Option
shall remain in full force and effect.

 

13.                                 Succession.  This Option shall be binding upon the
parties, their respective heirs, successors, assigns, and legal
representatives.

 

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IN WITNESS
WHEREOF, the parties have executed this Option effective as of the day and year
first above written.

 

 

	
  VITACUBE SYSTEMS HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mary Pat O’Halloran

  	
   

  	
   

  
	
   

  	
  Mary Pat O’Halloran,

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  March 2, 2005

  	
   

  	
   

  
	
   

  	
   

  
	
  OPTIONEE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Earnest Mathis, Jr.

  	
   

  	
   

  
	
  Earnest Mathis, Jr.

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  March 2, 2005

  	
   

  	
   

  
					

 

6

 

Form of Exercise

 

	
   

  	
   

  	
   

  	
  Date:            

  
	
   

  	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  VitaCube Systems Holdings, Inc.

  
	
   

  	
   

  	
  480 S. Holly Street

  
	
   

  	
   

  	
  Denver, CO 80246

  

 

The undersigned hereby subscribes for         
shares of Common Stock of VitaCube Systems Holdings, Inc. covered by this Option
and hereby makes payment of $              
in payment of the purchase price therefor.

 

I understand that the Corporation’s obligation to deliver the Common
Stock is subject to all applicable federal and state securities laws.  I agree to execute such additional documents
as the Corporation may reasonably request with respect to my acquisition of the
Common Stock.

 

The certificate(s) for such shares should be issued in the name of the
undersigned or as otherwise indicated below:

 

 

	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name for Registration, if different

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mailing Address

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security Number or

  
	
   

  	
  Employee Identification NumberBP (x1-54073) Exhibit 10.28

Exhibit 10.28

March 1, 2005

Mr. Christopher Maus

Re: Employment with LifeNexus, Inc.

Dear Christopher:

1.

LifeNexus, Inc. (the “Company”), agrees to employ you to assist the Company in developing a smart card containing health and related information and related health and financial services for health consumers. Your employment under this Agreement shall be for a fixed period beginning March 1, 2005, and ending March 1, 2007 (“Term”).

2.

You agree that during your employment you will perform such duties on behalf of the Company as the Chairman of the Board of the Company, consult with management on a as needed basis, on any and all required business issues and to support the CEO as may be needed from time to time. You will report directly to the Board of Directors. Your duties shall be those of Chairman of the Board, with the responsibility to develop the Company’s Strategic Plan with the CEO and assist in raising the capital required to execute the business plan. You shall serve as Chairman of the Board for the term of this agreement. You agree that, during the term of your employment, you will perform such duties to the best of your ability, competence, skill and efficiency, but that you may provide services to other enterprises during the term, consistent with your duties and obligations under this Agreement. You shall determine the number of hours per week you will devote to fulfilling the duties assigned to you.

3.

Your initial Base Salary (“Base Salary” shall mean regular cash compensation paid on a periodic basis) during your employment under this Agreement, shall be at the annual rate of $100,000, payable in equal installments according to the Company’s regular payroll payment dates, less state and federal taxes and any other applicable withholding. 

4.

In addition to your Base Salary, the Company shall provide the following:

a.

A grant 10-year stock option priced at par value of $.001 per share in which 50,000 shares are granted upon signing and 450,000 shares of common stock of the Company that shall become vested as follows:

	 	Vesting Date

	 	Vested/Aggregate Shares

	 	Upon the commitment of an aggregate of at least $500,000 of equity, debt, or any other capital contributions that facilitate Company’s the business plan.

	 	

200,000/250,000

	 	Upon the commitment of an aggregate of at least $1,000,000 of equity, debt, or any other capital contributions that facilitate Company’s the business.

	 	

100,000/350,000

	 	Upon the commitment of an aggregate of at least $5,000,000 of equity, debt, or any other capital contributions that facilitate Company’s the business. 

	 	

150,000/500,000

For purposes of the above schedule, all equity capital committed after January 15, 2005 shall be aggregated in determining the aggregate option vested. Immediately upon vesting, the appropriate number of options will be delivered to you or your assigning and may immediately be exercised in which those shares will be issued as fully paid and non-assessable, except that no options may be exercised and converted into common shares of LifeNexus stock to cause a consolidated balance sheet with Lifestream Technologies, Inc.  The number of shares shall be adjusted in the event of a stock split or other reorganization of the Company, but shall not be adjusted for any additional equity capital received from any investor. You may dispose of such shares at any time after you become vested in such shares, subject to applicable securities laws, such shares will be carry piggy-back registration if the company shall go public, and will be registered with in 60 days if for any reason LifeNexus merges with any public company.

5.

The Company will pay or reimburse you for all reasonable and necessary out-of-pocket expenses incurred by you in the performance of your duties under this Agreement, subject to the presentment of appropriate vouchers in accordance with the Company's normal policies for expense verification.

6.

The Company agrees to retain your services and to pay the amount due during the Term. In the event that the Company terminates your employment during the Term for any reason other than your material breach of this Agreement (other than as a result of your death or disability that renders you incapable of performing your essential duties during the Term), the Company will continue to pay the Base Salary and other benefits due you under this Agreement for the remainder of the Term and shall immediately vest you in any unvested options described in Section 4(a) above, as liquidated damages for its breach of this Agreement, or in the event of your death or disability, as a death benefit or disability benefit (which, in the case of disability, may be offset by any Company provided disability insurance). LifeNexus will, upon termination, and within 90 days of written request by the consultant, purchase up to all shares of the consultants stock holdings, as may be requested by the consultant, at the higher of the last financing, the average 90 day share price as post on a public exchange or by averaging the appraisal value of two of three independent appraisers. Mr. Maus has the sole right to retain ownership if it is determined not to be a suitable value by Mr. Maus.

7.

You also agree that, except as permitted or directed by the Company, you will not, either during your employment or thereafter, divulge, furnish, or make accessible to anyone or use in any way (other than in the ordinary course of the business of the Company) any Confidential Information (as defined below). You acknowledge that the Confidential Information constitutes a unique and valuable asset of the Company and represents a substantial investment of time and expense by the Company and its predecessors, and that any disclosure or other use of such Confidential Information other than for the sole benefit of the Company would be wrongful and would cause irreparable harm to the Company. For purposes of this Agreement, “Confidential Information” means information, not generally known, and proprietary to the Company or to a third party for whom the Company is performing work, including, without limitation, information concerning any patents or trade secrets, confidential or secret designs, processes, formulae, source codes, plans, devises or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Company, any customer or supplier lists of the Company, any confidential secret development or research work of the Company or any confidential information or secret aspects of the business of the Company. Information shall cease to be Confidential 

Information from and after the date it becomes public information (other than as a result of your acts or the acts of your representative in violation of this Agreement).

8.

This Agreement is made under and shall be governed by and construed in accordance with the laws of the state of Idaho, other than its law dealing with conflicts of law.

9.

This Agreement supercedes all prior agreements and understandings with respect to your employment with the Company.

10.

No amendment of modification of this Agreement shall be deemed effective unless made in writing and signed by both you and the Company. Notices pursuant to this Agreement should be in writing and shall be deemed given when received and, if mailed, shall be mailed by United States registered or certified mail, return receipt requested, postage prepaid. If to the Company, notice should be addressed to the Board of Directors of the Company at the Company’s regular corporate address. If to you, notices will be addressed to your last known address appearing in the Company’s records. Either you or the Company may specify another address for notice purposes.

11.

This Agreement shall not be assignable, in whole or in part, by you. This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assignees and upon any person acquiring, by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company’s assets and business, and the successor shall be substituted for the Company under this Agreement.

12.

Any controversy or claim arising out of or relating to this Agreement (or the breach thereof) shall be settled by final, binding and non-appealable arbitration in Idaho by three arbitrators, and conducted in accordance with the rules of the American Arbitration Association (the "Association") then in effect. The Company shall appoint one of the arbitrators, one shall be appointed by you, and the first two arbitrators shall appoint the third. If the first two arbitrators cannot agree on the third arbitrator within 30 days of the appointment of the second arbitrator, then the Association shall appoint the third arbitrator. The arbitrators shall have no power to award any punitive or exemplary damages; may construe or interpret but shall not ignore or vary the terms of this Agreement, and shall be bound by controlling law. Each party shall bear its own costs, including attorneys’ fees, except that all costs associated with the arbitration, including the attorneys’ fees and costs of the prevailing party shall be paid by the non-prevailing party if the arbitrator determines that such party’s claims or defenses were brought not in good faith and without a reasonable basis therefore. Such arbitration award shall be enforceable in any court of competent jurisdiction.

If this letter Agreement accurately reflects our understanding and agreement, please sign the original and return it to me. The copy is for your file.

Sincerely,

	LifeNexus, Inc.

	 	 	 
	 	 	 	 	 
	By:

	/s/ DAVID HURLEY, CEO

	 	Date:

	March 1, 2005

	 	David Hurley, CEO

	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:

	/s/ CHRISTOPHER MAUS

	 	Date:

	March 1, 2005

	 	Christopher Maus

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