Document:

Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment
Agreement is made on this 19th day of January 2007 between ELITE FX, INC.
("Employer") and Richard W. McGee ("Employee").

WHEREAS, Employer
is actively engaged in the business of a manufacturing and distributing of
non-alcoholic beverages; and, 

WHEREAS, Employer
wishes to continue employing Employee and Employee wishes to continue to be
employed pursuant to the terms of this Employment Agreement.

WHEREAS, if and
when Employer's securities become registered or exchanged for securities
registered with the Securities and Exchange Commission ("SEC"), it may be
required to form a compensation committee (the "Compensation Committee"), which
may in many cases determine any changes to Employee's compensation. In such
instance, the relevant references to Employer herein shall be deemed to be
references to Compensation Committee.

NOW THEREFORE, in
consideration of the mutual covenants and agreements contained in this
Employment Agreement, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, agree as follows:

Article 1

Employment of Employee

Employer agrees
to employ Employee, and Employee accepts employment with Employer, on and
subject to the terms and conditions set forth in this Employment Agreement.

Article 2

Duties of Employee

Section 2.1.
Position and Duties. Employer agrees
to employ Employee to act as 
Chief Operating Officer  for Employer. Employee shall be
responsible for performing the following duties: executive management , sales
and other duties typically performed by persons employed in a similar capacity.
Employer reserves the right from time to time to change the nature of Employee's
duties and job title; provided, however, Employee's duties and job title shall
always be of an executive nature.

Section 2.2.
Time Devoted to Work. Employee agrees
to devote Employee's entire business time, attention, and energies to the
business of Employer in accordance with Employer's instructions and directions
and shall not be engaged in any other business activity, whether or not the
activity is pursued for gain, profit, or other pecuniary advantage, during the
term of this Employment Agreement without Employer's prior written consent.

1

Article 3

Place of Employment

Employee shall be
based at Employer's principal office at 140 NE 4th Avenue, Suite C,
Delray Beach, FL 33483, excluding reasonable travel commensurate with Employee's
position and duties. 

Article 4

Compensation of
Employee

Section 4.1.
Base Salary. For all services rendered
by Employee under this Employment Agreement, Employer agrees to pay Employee an
annual base salary of $ 108,000 , which shall be payable to Employee in
such installments, but not less frequently than monthly, as are consistent with
Employee's practice for its other Employees. Employee's base salary will be
increased to $ 144,000 , upon Employer receiving $2.5 million in hard money
financing. Subsequent to the aforementioned increase, Employee's base salary
shall be reviewed at least once a year by Employer.

Section 4.2.
Incentive Compensation. In addition to
the base salary, Employee shall be entitled to receive incentive compensation
according to a pre-established bonus plan specific for the Employee, as
determined by Employer.

Section 4.3.
Reimbursement for Business Expenses.
Employer shall promptly pay or reimburse Employee for all reasonable business
expenses incurred by Employee in performing Employee's
duties and obligations under this Employment Agreement, but only if Employee
properly accounts for expenses in accordance with Employer's policies.

Section 4.4.
Stock Options and Other Stock Awards.
 The Employee shall be eligible for stock option grants and other stock awards
pursuant to the Company's 2006 Incentive Stock Plan, and any successor plan
thereto (the "Incentive Stock Plan") and all rules of regulation of the
Securities and Exchange Commission applicable to stock option plans then in
effect. The number of Stock Options and terms and conditions of the Stock
Options shall be determined by the Employer's Board of Directors or the
Compensation Committee, if formed.

Article 5

Vacations and Other
Paid Absences

Section 5.1.
Vacation Days. Employee shall be
entitled to 20 days paid vacation each calendar year during the term of this
Employment Agreement. All vacation is accrued during the calendar year of work,
should Employee not take all vacation days in any calendar year, no days will be
carried over to the next year. If the agreement is terminated during a calendar
year, any accrued and not taken vacation will be paid at the base salary rate,
any vacation taken but previously not earned will not be deducted from any
amount due to the Employee.

Section 5.2.
Holidays. Employee shall be entitled
to the same paid holidays as authorized by Employer for its other Employees.

 

2

Section 5.3.
Sick Days and Personal Absence Days.
Employee shall be entitled to the same number of paid sick days and personal
absence days authorized by Employer for its other Employees.

Article 6

Life Insurance

Employer may, in
its sole discretion, maintain in effect during the term of Employee's employment
a life insurance policy on the life of Employee in such amount as Employer shall
in its sole discretion decide to maintain during the term of this Employment
Agreement. Any proceeds payable under the policy shall be paid to the
beneficiary or beneficiaries designated in writing from time to time by
Employee.

Article 7

Fringe Benefits

Section 7.1.
Employer Employee Benefit Plans.
Employee shall be entitled to participate in and receive benefits from all of
Employer's Employee benefit plans that currently are maintained by Employer for
its Employees. Employee shall be entitled to participate in and receive benefits
under any retirement plan, profit-sharing plan, or other Employee benefit plan
that Employer establishes for the benefit of its Employees after the date of
this Employment Agreement. No amounts paid to Employee from an Employee benefit
plan shall count as compensation due Employee as base salary or incentive
compensation. Nothing in this Employment Agreement shall prohibit Employer from
modifying or terminating any of its Employee benefit plans in a manner that does
not discriminate between Employee and other Employees of Employer.

Article 8

Disability

Section 8.1.
Termination Because of a Disability.
Except as may otherwise be required or prohibited by state or federal law, if
because of illness or injury Employee becomes unable to work full time for
Employer for more than sixty (60) days in any twelve month period (excluding
vacation days and holidays), Employer may, in its sole discretion at any time
after the accumulation of such time terminate Employee's employment upon written
notice to Employee.

Section 8.2.
Compensation During Periods of Disability.

(a)       
Employee shall continue to receive Employee's base salary and incentive
compensation while Employee is unable to work full time, until the earlier of: (i)
the accumulation of sixty (60) days of disability in any 12 month period; (ii)
the date Employee begins receiving disability insurance benefits equal to
Employee base salary and incentive compensation; or (iii) the date Employee
terminates Employee's employment with Employer because Employee's health becomes
so impaired that continued performance of Employee's duties under this
Employment Agreement would be hazardous to Employee's physical or mental health.

 

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(b)       
While Employee is unable to work full time because of illness or injury and
through the full term of this Employment Agreement, including extensions,
Employer shall maintain for Employee's benefit all Employee benefit plans in
which Employee was participating at the time Employee was replaced. If Employee
is barred from participating in any Employee benefit plan because of Employee's
disability, Employer shall pay Employee an amount equal to what Employer would
have contributed on Employee's behalf to the Employee benefit plan if Employee's
participation had not been barred.

Section 8.3.
Disability Insurance. Employer may, in
its sole discretion, purchase and maintain disability insurance in force for the
benefit of Employee throughout the term of this Employment Agreement, including
extensions. The policy shall provide that if Employer fails to make a premium
payment, Employee shall have the right in Employee's sole discretion to advance
such funds as may be required to maintain the policy in force and shall
thereafter be entitled to recover amounts paid from Employer.

Article 9

Termination of
Employment

Section 9.1.
Term of Employment. Employee's
employment shall commence on the date of execution by Employer and shall
continue for three (3) years ("end-of-employment date"), unless extended or
terminated sooner, as provided by this article of the Employment Agreement. 
However, no compensation or benefits described hereunder shall be due or payable
unless and until the closing of Employer's merger with Vector Ventures Corp. 
Should Employer's merger with Vector Ventures Corp. fail to close on or before
May 3, 2007, all provisions other than those contained in Article 10 shall
automatically terminate and become null and void retroactive to its commencement
and Employer shall not be obligated to pay Employee any compensation or benefits
stated herein or continue the same thereafter.

Section 9.2.
Extension of Employment. On the
end-of-employment date and every two (2) years thereafter, Employee's employment
with Employer automatically shall be extended for an additional two (2) years
unless, at least ninety (90) days prior to the end-of-employment date, or
successive two (2) year anniversary thereof, Employer or Employee delivers to
the other a written notice that Employee's employment with Employer is not to be
extended, in which event Employer shall pay Employee pursuant to Section 9.8.

Section 9.3.
Termination at Employee's Death.
Employee's employment with Employer shall terminate at Employee's death.

Section 9.4.
Termination by Employee. Employee may,
but is not obligated to, terminate this Employment Agreement at any time under
the following circumstances:

(a)               
There is a change in control of Employer, excluding
the planned merger with Vector Ventures Corp. For purposes of this Agreement,
the term "Change in Control" shall mean:

 

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(i) Approval
by Employer's shareholders of (x) a reorganization, merger, consolidation or
other form of corporate transaction or series of transactions, in each case,
with respect to which persons who were Employer's shareholders immediately prior
to such reorganization, merger or consolidation or other transaction do not,
immediately thereafter, own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, in substantially the
same proportions as their ownership immediately prior to such reorganization,
merger, consolidation or other transaction, or (y) Employer's liquidation or
dissolution or (z) the sale of all or substantially all of Employer's assets
(unless such reorganization, merger, consolidation or other corporate
transaction, liquidation, dissolution or sale is subsequently abandoned); 

(ii)
Individuals who, as of the date of this Agreement, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board, provided that any person becoming a director subsequent to the date of
this Agreement whose election, or nomination for election by Employer's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of an
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of Employer's directors, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Securities Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or

(b)       
Employee is assigned duties that are significantly different than those
described in this Employment Agreement, or duties assigned Employee by this
Employment Agreement are eliminated or transferred to someone else.

(c)       
Employee is removed from any of the positions described in Section 2.1 of this
Employment Agreement (other than by Employer for cause).

(d)      
Employee's fringe benefits or other compensation are materially reduced.

(e)       
Employer fails to have a successor assume this Employment Agreement.

(f)       
Employer becomes insolvent or files a bankruptcy petition.

Section 9.5.
Termination by Employer. 

(a)       
Termination for Cause. Employer may terminate Employee's employment for
cause.

(b)       
For purposes of this Agreement, the term "Cause" shall mean (i) an action or
omission of the Employee which constitutes a willful and material breach of, or
failure or refusal (other than by reason of his disability) to perform his
duties under, this Agreement which is not cured within fifteen (15) days after
receipt by the Employee of written notice of same, (ii) fraud, embezzlement,
misappropriation of funds or breach of trust in connection with his services

 

5

hereunder, (iii)
conviction of any crime which involves dishonesty or a breach of trust, or (iv)
gross negligence in connection with the performance of the Employee's duties
hereunder, which is not cured within fifteen (15) days after written receipt by
the Employee of written notice of same, or (v) Employee violates Article 10 or
Article 11 of this Employment Agreement.

Section 9.6.
Notice of Termination. Any termination
of Employee's employment by Employer or Employee must be communicated to the
other party by a written notice of termination. The notice must specify the
provision of this Employment Agreement authorizing the termination and must set
forth in reasonable detail the facts and circumstances providing the basis for
termination of Employee's employment. The Employee shall
have the right to address the Board regarding the acts set forth in the notice
of termination.

Section 9.7.
Date Termination Is Effective. If
Employee's employment terminates because this Employment Agreement expires, then
Employee's employment will be considered to have terminated on that expiration
date. If Employee's employment terminates because of Employee's death, then
Employee's employment will be considered to have terminated on the date of
Employee's death. If Employee's employment is terminated by Employee, then
Employee's employment will be considered to have terminated on the date that
notice of termination is given. If Employee's employment is terminated by
Employer for cause, then Employee's employment will be considered to have
terminated on the date specified by the notice of termination. If, within thirty
(30) days after a notice of termination is given, the party receiving the notice
notifies the other party that there is a dispute concerning the termination,
then Employee's employment will not be considered to have terminated, and
Employer shall continue to compensate Employee pursuant to this Employment
Agreement, until the dispute is ended by a written agreement between the parties
or a final judgment, order, or decree of a court of competent jurisdiction. A
judgment, order, or decree of a court of competent jurisdiction will be
considered final only if the time for appealing the decision has expired and no
notice of appeal has been filed.

Section 9.8.
Compensation Following Termination.

(a)       
If Employee's employment is terminated by Employer for cause, or by Employee
other than pursuant to Section 9.4, Employer shall pay Employee/Employee's then
current base salary through the date employment is terminated, and Employer
shall have no further obligations to Employee under this Employment Agreement.

(b)       
If Employee's employment is terminated by Employer other than for cause, or by
Employee pursuant Section 9.4, Employer shall pay Employee Employee's then
current base salary through the date employment is terminated and any legal fees
and expenses incurred by Employee to enforce Employee's rights under this
Employment Agreement. In addition, Employer shall pay Employee as liquidated
damages an amount equal to the sum of Employee's then current annual base salary
plus the annualized amount of incentive compensation paid to Employee within the
last year before the date Employee's employment was terminated, multiplied by
the number of full and partial years remaining in the term of this Employment
Agreement.

Article 10

Confidential
Information

Section 10.1. 
Confidential Information Defined.
"Confidential Information" as used in this Employment Agreement shall mean any
and all technical and non-technical information belonging to, or in the
possession of, Employer or its officers, directors, Employees, affiliates,
subsidiaries, clients, vendors, or Employees, including without limitation,
patent, trade secret, and proprietary information; techniques, sketches,
drawings, models, inventions, know-how, processes, apparatus, equipment,
algorithms, source codes, object codes, software programs, software source
documents, and formulae related to Employer's business or any other current,
future and/or proposed business, product or service contemplated by Employer;
and includes, without limitation, all information concerning research,
experimental work, development, design details and specifications, engineering,
financial information, procurement requirements, purchasing, manufacturing,
customer lists, vendor lists, business forecasts, sales and merchandising, and
marketing plans or similar information.

Section 10.2
Disclosures. Employee agrees that it
shall, at no time during or after termination of this Employment Agreement,
directly or indirectly make use of, disseminate, or in any way disclose
Confidential Information to any person, firm or business, except to the extent
necessary for performance of this Employment Agreement. Employee agrees that it
shall disclose Confidential Information only to Employer's other Employees who
need to know such information and who have previously agreed to be bound by the
terms and conditions of a substantially similar confidentiality provision and
shall be liable for damages for the intentional or negligent disclosure of
Confidential Information.  Employee's obligations with respect to any
portion of Confidential Information shall terminate only when Employee has
documented to Employer that (a) such information was lawfully in the public
domain at the time it was communicated to Employee by Employer; or (b) the
communication was in response to a valid order by a court of competent
jurisdiction or was necessary to establish the rights of Employer under this
Employment Agreement.

Section 10.3.
Survival. This Article 10 shall
survive any termination of this Agreement and all extended periods.

Article 11

Noncompetition
Agreement

Section 11.1.
Agreement Not To Compete. For two (2)
years after Employee's employment with Employer terminates, including employment
following the termination of this Employment Agreement, Employee agrees not to
directly or indirectly own, manage, control, or operate; serve as an officer,
director, partner, employee or consultant of; have any direct or indirect
financial interest in; or assist in any way; any person or entity that competes
with any business conducted by Employer or any of Employer's affiliates or
subsidiaries in any geographic region in which Employer conducts business.

Section 11.2.
Competitive Businesses. For purposes
of this Article 11, a competitive business shall be any person or entity
directly or indirectly engaged in the manufacturing, import, 

 

6

export, sale or
distribution of non-alcoholic beverages.

Section 11.3.
Ownership of Public Corporation No
Violation. Employee will not be considered to have violated this provision
merely because Employee owns no more than five percent (5%) of the stock of any
publicly held corporation.

Section 11.4.
Survival. This Article 11 shall
survive any termination of this Agreement and all extended periods.

Section 11.5.
Extension of Agreement Not To Compete.
At Employer's discretion, the Employer can cause Employee to extend the period
of the agreement not to compete by paying in advance the Employee 30% of the
Employee's last annual base salary and bonuses per year of extension. The
Employer can cause the extension for a total of 3 annual periods.

Article 12

Notices

Any notice given under this
Employment Agreement to either party shall be made in writing. Notices shall be
deemed given when delivered by hand or when mailed by registered or certified
mail, return receipt requested, postage prepaid, and addressed to the party at
the address set forth below.

Employee's address:  
Richard W. McGee

                                               
636 N University Dr   

                                               
Plantation, FL 33324  

Employer's address:   
Elite FX, Inc.

140 NE 4th
Avenue, Suite C

                                   
Delray Beach, FL 33483

Each party may designate a different
address for receiving notices by giving written notice of the different address
to the other party. The written notice of the different address will be deemed
given when it is received by the other party.

Article 13

Binding Agreement

Section 13.1.
Employer's Successors.

(a)       
The rights and obligations of Employer under this Employment Agreement shall
inure to the benefit of and shall be binding in all respects upon the successors
and assigns of Employer.

(b)       
Employer shall require any direct or indirect successor (by purchase, merger,
consolidation, or otherwise) of all or substantially all of Employer's stock,
business and/or assets to expressly agree to assume Employer's obligations under
this Employment Agreement and 

 

7

perform them in
the same manner and to the same extent as Employer would have been required to
do if no succession had occurred. The agreement must be in a form and substance
satisfactory to Employee.

(c)       
If Employer fails to obtain such an agreement before the effective date of the
succession, Employer's failure will be considered a breach of this Employment
Agreement, and Employee shall be entitled to the immediate payment of the amount
of money that Employee would have been entitled to if Employer had terminated
Employee's employment other than for cause in accordance with the terms of
Section 9.8(c) of this Employment Agreement, calculated as though Employee's
employment had terminated on the effective date of the succession. 
However, Employer's failure to obtain such agreement shall not affect said
successor's obligations pursuant to paragraph 13.1(a) above.

Section 13.2.
Employee's Successors. This Employment
Agreement shall inure to the benefit and be enforceable by and upon Employee's
personal representatives, legatees, and heirs. If Employee dies while amounts
are still owed, such amounts shall be paid to Employee's legatees or, if no such
person or persons have been designated, to Employee's estate.

Article 14

Waivers

The waiver by
either party of a breach of any provision of this Employment Agreement shall not
operate or be construed as a waiver of any subsequent breach.

Article 15

Entire Agreement

Section 15.1.
No Other Agreements. This instrument
contains the entire agreement of the parties. The parties have not made any
agreements or representations, oral or otherwise, express or implied, pertaining
to the subject matter of this Employment Agreement other than those specifically
included in this Employment Agreement.

Section 15.2.
Prior Agreements. This Employment
Agreement supersedes any prior agreements pertaining to or connected with or
arising in any manner out of the employment of Employee by Employer. All such
prior agreements are terminated and are of no force or effect whatsoever.

Article 16

Amendment of Agreement

No change or
modification of this Employment Agreement shall be valid unless it is in writing
and signed by the party against whom the change or modification is sought to be
enforced. No change or modification by Employer shall be effective unless it is
approved by Employer's Board of Directors and signed by an officer specifically
authorized to sign such documents.

 

8

Article 17

Severability of
Provisions

If any provision
of this Employment Agreement is invalidated or held unenforceable, the
invalidity or unenforceability of that provision or provisions shall be deemed
modified or severed only to the minimum extent necessary to make said
provision(s) valid and enforceable while maintaining the intent of said
provision(s).  No such modification shall affect the validity or
enforceability of any other provision of this Employment Agreement.

Article 18

Assignment of
Agreement

Employer shall
not assign this Employment Agreement without Employee's prior written consent,
but failure to obtain such consent shall not affect said assignee's obligations
pursuant to paragraph 13.1(a) above, which consent will not be unreasonably
withheld.

Article 19

Governing Law, Venue &
Attorneys Fees

All questions
regarding the validity and interpretation of this Employment Agreement shall be
governed by and construed and enforced in all respects in accordance with the
laws of the State of Florida.  Venue for any action arising in any manner
out of the Employee's employment, this Employment Agreement, or any of the terms
contained herein shall be the Federal and or State courts located in Palm Beach
County, Florida, regardless of where this Employment Agreement is to be
performed.  In the event either party engages legal counsel to enforce any
provision contained in this Employment Agreement, the prevailing party shall be
entitled to all reasonable attorneys fees, investigative expenses, costs, and
court costs, whether or not a suit is actually filed, but including all levels
of appeal.

[signature page
follows]

 

9

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

EMPLOYEE:

/s/ Richard W. McGee

                                                                       
______________________________________

                                                                       
Richard W. McGee

EMPLOYER:

ELITE FX, INC.

/s/ Stephen C. Haley

By:
___________________________________

       Stephen C. Haley, Chief Executive Officer

 

10ex10_1.htm

    

    Exhibit
      10.1

     

    SALON
      CITY, INC.

    909
      N.
      Palm Avenue, Ste 311

    West
      Hollywood, CA  90069

    

    

    June
      26,
      2006

    

    PERSONAL
      AND CONFIDENTIAL

    

    Mr.
      Brian
      Battaglia

    President

    Capital
      Solutions, Inc.

    2817
      Carlaris Road

    San
      Marino, California  91108

    

    Dear
      Mr.
      Battaglia:

    

    This
      letter agreement ("Agreement") confirms the terms and conditions of the
      engagement of Capital Solutions, Inc. (“Capital”) and Brian Battaglia by Salon
      City, Inc. (the “Company”) to render certain professional services to the
      Company in connection with the Company's strategic and financial plans, as
      follows:

    

    1.           Services.  Capital
      agrees to perform the following services:

    

    
      	
              (a)  

            	
              Make
                Brian Battaglia available to actively participate in helping the
                Company
                with its financial planning, financings and other related financial
                activities;

            

    

    

    
      	
              (b)  

            	
              Make
                Brian Battaglia available to assist the CEO reach his financial and
                revenue milestones through active on-going
                communication;

            

    

    

    
      	
              (c)  

            	
              Make
                Brian Battaglia available to interface with the investment team of
                the
                Company;

            

    

    

    
      	
              (d)  

            	
              Make
                Brian Battaglia available to assist the Company to meet and accelerate
                its
                revenue goals from 2007, 2008, and 2009, which will be the basis
                for
                incentive bonuses; and

            

    

    

    
      	
              (e)  

            	
              Brian
                Battaglia will provide the above services independently of the Company,
                from a separate office, without taking on any direct Company
                responsibility.

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    2.           Fees.  The
      Company agrees to pay Capital for its services with a professional fee
      ("Professional Fee") of a total of:

    

    (a)  One
      million shares of restricted common stock of the Company (as such term
“restricted” is defined in Rule 144 under the Exchange Act) to be issued as
      promptly as practicable after the execution of this Agreement for services
      performed from January 1, 2005 to date.

    

    (b)  One
      million shares of restricted common stock of the Company (as such term
“restricted” is defined in Rule 144 under the Exchange Act) to be issued within
      30 days after end of the 2008 fiscal year, if and when the Company reaches
      $5.0
      million in sales, or a pro-rated portion of said one million shares based on
      annual volume for fiscal 2008.  Two examples of such pro rating are
      the following: (1) If the Company’s sales reach $4.0 million for fiscal 2008,
      the Company will be obligated to issue 800,000 restricted shares under this
      subsection; (2) if the Company’s sales reach $6.0 million for fiscal 2008, the
      Company will be obligated to issue 1,200,000 restricted shares under this
      subsection.

    

    (c)  One
      million shares of restricted common stock of the Company (as such term
“restricted” is defined in Rule 144 under the Exchange Act) to be issued within
      30 days after the end of the 2009 fiscal year, if and when the Company reaches
      $10.0 million in sales, or a pro-rated portion of said one million shares based
      on annual volume for fiscal 2009.   Two examples of such pro
      rating are the following:  (1) If the Company’s sales reach $8.0
      million for fiscal 2009, the Company will be obligated to issue 800,000
      restricted shares under this subsection; (2) if the Company’s sales reach $12.0
      million for fiscal 2009, the Company will be obligated to issue 1,200,000
      restricted shares under this subsection.

    

    (d)  Antidilution
      Protection - The Company will not, by amendment of its Certificate of
      Incorporation or through any reorganization, transfer of assets, consolidation,
      merger, dissolution, issue or sale of securities, or any other voluntary action,
      avoid or seek to avoid the percentage ownership position or potential percentage
      ownership position of Capital in the Company, but will at all times in good
      faith assist in the maintaining such ownership position or potential ownership
      position of Capital and in the taking of all such action as may reasonably
      be
      requested by the Capital in order to protect such ownership percentage or
      potential ownership percentage against dilution or other impairment, consistent
      with the tenor and purpose of this Agreement.

    

    (e)  All
      certificates for common stock of the Company to be issued pursuant to the terms
      of this Agreement shall be issued in the name of “Brian Battaglia,” the person
      who will be providing the services under this Agreement, and Brian Battaglia
      does hereby agree to perform such services.

    

    3.           Term.  The
      term of this Agreement shall commence on January 1, 2005, and end on the
      completion of fiscal 2009 (the "Term").  This Agreement may be renewed
      upon mutual written agreement of the parties hereto with the additional services
      and fees to be mutually agreed upon. This agreement may be terminated by the
      Company with 45 days prior written notice to Capital.

    

    4.           Indemnification.  In
      addition to the payment of fees and reimbursement of fees and expenses provided
      for above, the Company agrees to indemnify Capital and its affiliates with
      regard to the matters contemplated herein, as set forth in Exhibit A, attached
      hereto, which is incorporated by reference as if fully set forth
      herein.

     

    5.           Matters
      Relating to Engagement.   The Company acknowledges that
      Capital has been retained solely to provide the services set forth in this
      Agreement.  In rendering such services, Capital shall act as an
      independent contractor, and any duties of Capital arising out of its engagement
      hereunder shall be owed solely to the Company.  The Company further
      acknowledges that Capital may perform certain of the services described herein
      through one or more of its affiliates.

    

    The
      Company acknowledges that Capital is a consulting firm that is engaged in
      providing professional services. The Company acknowledges and agrees that in
      connection with the performance of Capital's services hereunder (or any other
      services) that neither Capital nor any of its employees will be providing the
      Company with legal, tax or accounting advice or guidance (and no advice or
      guidance provided by Capital or its employees to the Company should be construed
      as such) and that neither Capital nor its employees hold itself or themselves
      out to be advisors as to legal, tax, accounting or regulatory matters in any
      jurisdiction. The Company shall consult with its own legal, tax, accounting
      and
      other advisors concerning all matters and advice rendered by Capital to the
      Company and the Company shall be responsible for making its own independent
      investigation and appraisal of the risks, benefits and suitability of the advice
      and guidance given by Capital to the Company and the transactions contemplated
      by this Agreement.  Neither Capital nor its employees shall have any
      responsibility or liability whatsoever to the Company or its affiliates with
      respect thereto.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    The
      Company recognizes and confirms that in performing its duties pursuant to this
      Agreement, Capital will be using and relying on data, material, and other
      information (the "Information") furnished by the Company or their respective
      employees and representatives. The Company will cooperate with Capital and
      will
      furnish Capital with all Information concerning the Company which Capital deems
      appropriate and will provide Capital with access to the Company's officers,
      directors, employees, independent accountants and legal counsel for the purpose
      of performing Capital's obligations pursuant to this Agreement.  The
      Company hereby agrees and represents that all Information furnished to Capital
      pursuant to this Agreement shall be accurate and complete in all material
      respects at the time provided, and that, if the Information becomes materially
      inaccurate, incomplete or misleading during the term of Capital's engagement
      hereunder, the Company shall promptly advise Capital in
      writing.  Accordingly, Capital assumes no responsibility for the
      accuracy and completeness of the Information.  In rendering its
      services, Capital will be using and relying upon the Information without
      independent verification evaluation thereof.  Capital hereby promises
      and agrees to hold all of such Information confidential and not to use such
      information for its benefit without the express written permission of the
      Company.

    

    6.           Governing
      Law.  This Agreement shall be governed by and construed in
      accordance with the laws of the State of California without regard to the
      conflict of laws provisions thereof.

    

    7.           No
      Brokers.  The Company represents and warrants to Capital that
      there are no brokers, representatives or other persons which have an interest
      in
      compensation due to Capital from any services contemplated herein.

    

    8.     Authorization.  The
      Company and Capital represent and warrant that each has all requisite power
      and
      authority, and all necessary authorizations, to enter into and carry out the
      terms and provisions of this Agreement and the execution, delivery and
      performance of this Agreement does not breach or conflict with any agreement,
      document or instrument to which it is a party or bound.

    

    9.           Miscellaneous.  This
      Agreement constitutes the entire understanding and agreement between the Company
      and Capital with respect to the subject matter hereof and supersedes all prior
      understanding or agreements between the parties with respect thereto, whether
      oral or written, express or implied.  Any amendments or modifications
      must be executed in writing by both parties.  This Agreement and all
      rights, liabilities and obligations hereunder shall be binding upon and insure
      to the benefit of each party’s successors but may not be assigned without the
      prior written approval of the other party.  If any provision of this
      Agreement shall be held or made invalid by a statute, rule, regulation, decision
      of a tribunal or otherwise, the remainder of this Agreement shall not be
      affected thereby and, to this extent, the provisions of this Agreement shall
      be
      deemed to be severable.  This Agreement may be executed in any number
      of counterparts, each of which, shall be deemed to be an original, but such
      counterparts shall, together, constitute only one instrument.  The
      descriptive headings of the Paragraphs of this Agreement are inserted for
      convenience only, do not constitute a part of this Agreement and shall not
      affect in anyway the meaning or interpretation of this Agreement.

    

    Please
      confirm that the foregoing correctly sets forth our agreement by signing below
      in the space provided and returning this Agreement to Capital for execution,
      which shall constitute a binding agreement as of the date first above
      written.

    

    Thank
      you.  We look forward to a mutually rewarding
      relationship.

    

    SALON
      CITY, INC.

    

    

    
      By:______________________________

    

    Name: Steve
      Casciola

    Title: President

    

    AGREED
      TO
      AND ACCEPTED

    AS
      OF
      JUNE __, 2006

    

    CAPITAL
      SOLUTIONS,
      INC.                                  BRIAN
      BATTAGLIA

    

    

    By:______________________________                     ______________________________

    Name: Brian
      Battaglia                                                      
      (In His Individual Capacity)

    Title: President

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A: INDEMNIFICATION

    

    The
      Company agrees to indemnify Capital, its employees, directors, officers, agents,
      affiliates, and each person, if any, who controls it within the meaning of
      either Section 20 of the Securities Exchange Act of 1934 or Section 15 of the
      Securities Act of 1933 (each such person, including Capital is referred to
      as
      "Indemnified Party") from and against any losses, claims, damages and
      liabilities, joint or several (including all legal or other expenses reasonably
      incurred by an Indemnified Party in connection with the preparation for or
      defense of any threatened or pending claim, action or proceeding, whether or
      not
      resulting in any liability) ("Damages"), to which such Indemnified Party, in
      connection with providing its services or arising out of its engagement
      hereunder, may become subject under any applicable Federal or state law or
      otherwise, including but not limited to liability or loss (i) caused by or
      arising out of an untrue statement or an alleged untrue statement of a material
      fact or omission or alleged omission to state a material fact necessary in
      order
      to make a statement not misleading in light of the circumstances under which
      it
      was made, (ii) caused by or arising out of any act or failure to act, or (iii)
      arising out of Capital's engagement or the rendering by any Indemnified Party
      of
      its services under this Agreement; provided, however, that the Company will
      not
      be liable to the Indemnified Party hereunder to the extent that any Damages
      are
      found in a final non-appealable judgment by a court of competent jurisdiction
      to
      have resulted from the gross negligence or willful misconduct of the Indemnified
      Party seeking indemnification hereunder.

    

    These
      indemnification provisions shall be in addition to any liability which the
      Company may otherwise have to any Indemnified Party.

    

    If
      for
      any reason, other than a final non-appealable judgment finding an Indemnified
      Party liable for Damages for its gross negligence or willful misconduct the
      foregoing indemnity is unavailable to an Indemnified Party or insufficient
      to
      hold an Indemnified Party harmless, then the Company shall contribute to the
      amount paid or payable by an Indemnified Party as a result of such Damages
      in
      such proportion as is appropriate to reflect not only the relative benefits
      received by the Company and its shareholders on the one hand and the Indemnified
      Party on the other, but also the relative fault of the Company and the
      Indemnified Party as well as any relevant equitable considerations.

    

    Promptly
      after receipt by the Indemnified Party of notice of any claim or of the
      commencement of any action in respect of which indemnity may be sought, the
      Indemnified Party will notify the Company in writing of the receipt or
      commencement thereof and the Company shall have the right to assume the defense
      of such claim or action (including the employment of counsel reasonably
      satisfactory to the Indemnified Party and the payment of fees and expenses
      of
      such counsel), provided that the Indemnified Party shall have the right to
      control its defense if, in the opinion of its counsel, the Indemnified Party's
      defense is unique or separate to it as the case may be, as opposed to a defense
      pertaining to the Company.  In any event, the Indemnified Party shall
      have the right to retain counsel reasonably satisfactory to the Company, at
      the
      Company's sole expense, to represent it in any claim or action in respect of
      which indemnity may be sought and agrees to cooperate with the Company and
      the
      Company's counsel in the defense of such claim or action.  In the
      event that the Company does not promptly assume the defense of a claim or
      action, the Indemnified Party shall have the right to employ counsel to defend
      such claim or action. Any obligation pursuant to this Annex shall survive the
      termination or expiration of the Agreement.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ADDENDUM
      TO LETTER AGREEMENT

     

    

     

    This
      clause below shall be incorporated into the contract dated June 26, 2006 between
      Salon City, Inc. ("Company"), Capital Solutions, Inc. and Brian Battaglia
      (collectively referred to as "Consultant") concerning the engagement of
      Consultant by Company to render certain professional services to Company
      ("Agreement").

     

    PERFORMANCE
      BONUS

     

    Company
      and Consultant agree that Consultant shall receive a performance bonus of THREE
      MILLION (3,000,000) restricted shares of Company common stock for Consultant's
      services to Company in 2006.  The additional shares shall be
      distributed to Consultant within a reasonable time after the signing of this
      Addendum.

     

    IN
      WITNESS WHEREOF, The parties
      hereto, intending to be bound, hereby sign this Addendum to Letter Agreement
      below as of February 20, 2007.

     

    SALON
      CITY, INC.

     

    
      /s/
        Steve Casciola

    

    Title: President

     

    CAPITAL
      SOLUTIONS, INC.

     

    By:_______________________
      Name:  Brian Battaglia Title:  President

     

    BRIAN
      BATTAGLIA

     

    (In
      his
      Individual Capacity)

     

     

    
      
         

      

      
        5

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