Document:

EXECUTION
        COPY

       

      EMPLOYMENT
        AGREEMENT

    

    

    EMPLOYMENT
      AGREEMENT
      (the
“Agreement”) effective as of the 1st
      day of
      January, 2008 between YTB
      INTERNATIONAL, INC., a
      Delaware corporation with principal executive offices located at 1901 East
      Edwardsville Road, Wood River, IL 62095 (the “Corporation”), and Andrew Cauthen,
      with an office at 1901 East Edwardsville Road, Wood River, IL 62095 (the
“Executive”).

    

    W
      I T N E S E T H:

    

    WHEREAS,
      the
      Corporation desires to employ the Executive as Chief Operating Officer (“COO”)
      and Corporate Secretary (“Secretary”) of the Corporation, to engage in such
      activities and to render such services under the terms and conditions hereof
      and
      has authorized and approved the execution of this Agreement; 

    

    WHEREAS,
      the
      Executive desires to be employed by the Corporation under the terms and
      conditions hereinafter provided; and

    

    WHEREAS,
      the
      Agreement constitutes the entire understanding and agreement between the Company
      and the Executive regarding its subject matter and supersedes all prior or
      contemporaneous negotiations and agreements, whether oral or written, between
      them with respect to such subject matter. 

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and undertakings herein contained, the
      parties agree as follows:

    

    1. Employment,
      Duties and Acceptance.

    

    1.1 Services.
      The
      Corporation hereby employs Executive, for the Term (as hereinafter defined
      in
      Section 2 hereof), to render services to the business and affairs of the
      Corporation in the office referenced in the recitals hereof and, in connection
      therewith, shall perform such duties as directed by the Board of Directors
      of
      the Corporation and the Chief Executive Officer of the Corporation from time
      to
      time, in their reasonable discretion, and shall perform such other duties as
      shall be consistent with the responsibilities of such office (collectively
      the
“Services”). Executive shall perform activities related to such office as he
      shall reasonably be directed or requested to so perform by the Chief Executive
      Officer of the Corporation, to whom he shall report. Executive shall use his
      best efforts, skill and abilities to promote the interests of the Corporation
      and its subsidiaries. 

    

    1.2 Acceptance.
      Executive hereby accepts such employment and agrees to render the Services.
      Executive shall not engage in any other business activity or serve in any
      industry, trade, professional, governmental or academic position during the
      term
      of this Agreement. The Executive may request permission from the Board to engage
      in business activity unrelated to the business activity of the Corporation
      and
      may only do so if the Board expressly approves the request in advance in
      writing.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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    1.3 Representations
      of the Executive.
      The
      Executive represents and warrants to the Corporation that his execution and
      delivery of this Agreement, his performance of the Services hereunder and the
      observance of his other obligations contemplated hereby will not (i) violate
      any
      provisions of or require the consent or approval of any party to any agreement,
      letter of intent or other document to which he is a party or (ii) violate or
      conflict with any arbitration award, judgment or decree or other restriction
      of
      any kind to or by which he is subject or bound.

    

    2. Term
      of Employment. 

     

    The
      term
      of Executive’s employment under this Agreement (the “Term”) shall commence on
      January 1, 2008 (the “Commencement Date”) and shall terminate on December 31,
      2012 unless sooner terminated pursuant to Sections 9 or 5 of this Agreement;
      provided,
      however,
      if
      either party shall fail to give written notice of non-renewal not less than
      90
      days prior to the scheduled expiration or any extension of the Term hereof,
      the
      Term shall automatically be extended for an additional one (1) year period,
      at
      the then current Base Salary (as hereinafter defined). Notwithstanding anything
      to the contrary contained herein, the provisions of this Agreement governing
      Protection of Confidential Information shall continue in effect as specified
      in
      Section 10 hereof.

    

    3. Base
      Salary and Expense Reimbursement.

    

    3.1 Base
      Salary.
      During
      the Term, as full compensation for the Services, the Corporation agrees to
      pay
      Executive a base salary (“Base Salary”) at the annual rate of $300,000 for the
      period from January 1, 2008 to December 31, 2008, increasing annually thereafter
      on the anniversary date of the Commencement Date in the amount of $25,000 per
      year of the then current Base Salary (“Salary Increments”). Base Salary is
      subject to withholding and other applicable taxes, payable during the term
      of
      this Agreement in accordance with the Corporation’s customary payment practices,
      but not less frequently than monthly.

    

    3.2 Stock
      Option Agreement.
      In
      addition to the Base Salary the Executive shall on the Commencement Date be
      granted options to purchase up to 300,000 shares of the Corporation’s Class A
      Common Stock. Such option grant will be made under the Corporation’s 2004 Stock
      Option and Restricted Stock Plan (the “Plan”) and be evidenced by separate
      agreements. The per share option exercise price shall equal the fair market
      value of a share of Class A Common Stock as defined under the Plan on the
      Commencement Date. The stock options granted in this Section 3.2 will be
      composed of non-qualified stock options and Incentive Stock Options in the
      discretion of the Corporation’s Compensation Committee (“the Compensation
      Committee”).

    

    3.3 Business
      Expense Reimbursement.
      Upon
      submission to, and approval by an officer of the Corporation designated by
      the
      Board of Directors of the Corporation, of a statement of expenses, reports,
      vouchers or other supporting information, which approval shall be granted or
      withheld based on the Corporation’s policies in effect at such time, the
      Corporation shall promptly reimburse Executive for all reasonable business
      expenses actually incurred or paid by him during the Term or renewals thereof
      in
      the performance of the Services, including, but not limited to, expenses for
      entertainment, travel and similar items.

     

    
      
         

      

      
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    4. Bonuses.

     

    4.1 Bonus
      Amount.
      In order
      to provide performance-based incentive compensation to the Executive, the
      Corporation hereby agrees to pay the Executive, in addition to the Base Salary
      and Stock Options set forth in Section 3 hereof, a bonus in respect of each
      fiscal year during the Executive’s employment hereunder (the “Bonus”)
in
      the
      amount of two percent (2%) of the Net Pre-Tax Income (as defined below) of
      the
      Corporation. No Bonus shall be payable unless the
      Net
      Pre-Tax Income of the Corporation is at least $4,000,000 in each such fiscal
      year. The Bonus shall be paid in the form of a restricted stock award made
      under
      the Plan, and be evidenced by a separate written agreement. 

    

    4.2 Net
      Pre-Tax Income of the Corporation. For
      purposes hereof, the Net Pre-Tax Income of the Corporation shall be the amount
      determined by the Compensation Committee, after consultation with the
      independent accountants and Audit Committee of the Corporation, to be the Net
      Pre-Tax Income of the Corporation with respect to a given fiscal year, which
      amount shall be determined based on the financial statements of the Corporation
      (a) in a manner consistent with generally accepted accounting principles, (b)
      with regard solely to the Corporation and its subsidiaries, (c) so as to exclude
      the effect of any elimination of inter-company transfers applied with respect
      to
      any entity which is not a subsidiary of the Corporation, (d) having regard
      to
      such other matters, if any, as the Compensation Committee may determine to
      be
      equitable to consider and (e) without giving effect to any Bonus paid pursuant
      to this Section 4.2. The determination of the Compensation Committee of the
      Corporation shall be final, conclusive and binding for all purposes, absent
      manifest error. 

    

    4.3 Determination
      and Payment.
      The
      determination of the amount of Net Pre-Tax Income and the extent to which any
      Bonus under this Section 4 may be payable (the “Final Determination”)
shall
      be
      determined by the Compensation Committee in accordance with the terms hereof
      based on the audited financial statements of the Corporation and the criteria
      set forth herein with respect to each fiscal year. Such Final Determination
      with
      respect to any fiscal year shall be made promptly, and in any event within
      15
      days, after the Corporation has filed its Annual Report on Form 10-K for each
      year with the Securities and Exchange Commission.
      The
      Bonus
      shall be
      payable to the Executive in a
      restricted
      stock award of Class A Common Stock pursuant to the Plan no later than the
      date
      of the Final Determination in each year of this Agreement.
      In any
      event, all matters pertaining to the Bonus and to the payment of any Bonus
      to
      the Executive hereunder, shall be administered and determined by the
      Compensation Committee in its reasonable discretion consistent with the terms
      hereof, the determination of which shall be final, conclusive and binding for
      all purposes, absent manifest error.

    

    4.4 Partial
      Years.
      Notwithstanding anything contained herein to the contrary, no Bonus under this
      Section 4 shall be deemed earned or payable with respect to any fiscal year
      during which this Agreement or the Executive’s employment is terminated by the
      Corporation for Cause (as such term is hereinafter defined). 

     

    
      
         

      

      
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    4.5 No
      Additional Rights. Nothing
      in this Section 4 shall be construed as conferring upon the Executive any right
      (i) normally associated with the ownership of capital stock; (ii) to
      continue in the employ of the Corporation or any affiliate of the Corporation;
      or (iii) to interfere in any way with the right of the Corporation to
      terminate this Agreement in accordance with the provisions hereof. Nothing
      in
      this Agreement shall be construed to imply that any specific assets of the
      Corporation have been set aside to provide for payments under this Agreement.
      Any payments under this Agreement shall be made solely from general assets
      of
      the Corporation existing at the time such payments are due.

    

    5. Severance.

    

    5.1 Termination
      Without Cause. In
      the
      event that Executive’s employment hereunder shall be terminated by the
      Corporation without Cause (as defined in Section 9.4 hereof) at any time prior
      to the end of the Term, the Executive shall be entitled to receive from the
      Corporation, in addition to any Base Salary earned to the date of termination,
      severance pay in an amount equal to the Executive’s
      Base
      Salary payable for the remainder of the Term as if the Agreement had not been
      terminated. In
      the
      event of such termination, the amounts due hereunder shall be payable without
      offset or defense or any obligation of the Executive to mitigate damages.

    

    6. Additional
      Benefits.

    

    6.1 In
      General.
      In
      addition to the compensation, bonuses, expenses and other benefits to be paid
      under Sections 3, 4 and 5 hereof, Executive will be entitled to all rights
      and
      benefits for which he shall be eligible under any insurance, health and medical
      (including health and medical plans offered exclusively to the management of
      the
      Corporation), incentive, bonus, profit-sharing, pension
      or other extra compensation or “fringe” benefit plan of the Corporation or any
      of its subsidiaries now existing or hereafter adopted for the benefit of the
      executives or employees generally of the Corporation. The provisions of this
      Agreement which incorporate employee benefit packages shall change as and when
      such employee benefit packages change. 

    

    7. Vacation.

    

    7.1
       In
      General. The
      Executive shall be entitled each year during the Term of this Agreement to
      a
      vacation period of three (3) weeks, during which all salary, compensation,
      benefits and other rights to which the Executive is entitled to hereunder shall
      be provided in full. Such vacation may be taken in the Executive’s discretion,
      and such time or times as are not inconsistent with the reasonable business
      needs of the Corporation.

    

    8. Right
      to Insure.
      In the
      event that Executive is insurable, Executive agrees that the Corporation shall
      have the right during the Term to insure the life of Executive by a policy
      or
      policies of insurance in such amount or amounts as it may deem necessary or
      desirable, and the Corporation shall be the beneficiary of any such policy
      or
      policies and shall pay the premiums or other costs thereof. The Corporation
      shall have the right, from time to time, to modify any such policy or policies
      of insurance or to take out new insurance on the life of Executive. Executive
      agrees, upon request, at any time or times prior to the commencement of or
      during the Term to sign and deliver any and all documents and to submit to
      any
      physical or other reasonable examinations which may be required in connection
      with any such policy or policies of insurance or modifications
      thereof.

     

    
      
         

      

      
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    9. Termination.

    

    9.1 Death.
      If
      Executive dies during the Term of this Agreement, Executive’s employment
      hereunder shall terminate upon his death and all obligations of the Corporation
      hereunder shall terminate on such date, except that Executive’s estate or his
      designated beneficiary shall be entitled to payment of any unpaid accrued Base
      Salary through the date of his death. In addition, any accrued and unpaid Bonus
      shall be paid in accordance with Section 4 hereof.

    

    9.2 Disability.
      Subject
      to the provisions of Section 6.1, if Executive shall be unable to perform a
      significant part of his duties and responsibilities in connection with the
      conduct of the business and affairs of the Corporation and such inability lasts
      for (i) a period of at least one hundred twenty (120) consecutive days, or
      (ii)
      periods aggregating at least one hundred eighty (180) days during any three
      hundred sixty five (365) consecutive days, by reason of Executive’s physical or
      mental disability, whether by reason of injury, illness or similar cause,
      Executive shall be deemed disabled, and the Corporation any time thereafter
      may
      terminate Executive’s employment hereunder by reason of the disability. Upon
      delivery to Executive of such notice, all obligations of the Corporation
      hereunder shall terminate, except that Executive shall be entitled to the
      payment of any unpaid accrued Base Salary through the date of termination.
      In
      addition, any accrued and unpaid Bonus shall be paid in accordance with Section
      4 hereof. The obligations of Executive under Section 9 hereof shall continue
      notwithstanding termination of Executive’s employment pursuant to this Section
      9.2.

    

     

    9.3 Termination
      for Cause.
      The
      Corporation may at any time during the Term, without any prior notice, terminate
      this Agreement and discharge Executive for Cause, whereupon the Corporation’s
      obligation to pay compensation or other amounts payable hereunder to or for
      the
      benefit of Executive shall terminate on the date of such discharge. As used
      herein the term “Cause” shall mean: (i) a willful and material breach by
      Executive of the terms of this Agreement, (ii) willful violation of specific
      and
      lawful written direction from the Board of Directors of the Corporation or
      the
      Chief Executive Officer; provided such direction is not inconsistent with the
      Executive’s duties and responsibilities the Executive is holding at the time of
      the directive; (iii) fraud, embezzlement or other material dishonesty by the
      Executive with respect to the Corporation or any of its Affiliates; (iv)
      conviction of the Executive of a felony by a federal or state court of competent
      jurisdiction; (v) Executive’s willful failure to perform (other than by reason
      of disability), or gross negligence in the performance of the Services; or
      (vi)
      Executive’s excessive absenteeism, alcoholism or drug abuse. The obligations of
      the Executive under Section 10 shall continue notwithstanding termination of
      the
      Executive’s employment pursuant to this Section 9.3. 

     

    
      
         

      

      
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    9.4 Termination
      Without Cause.
      The
      Corporation shall have the option to terminate this Agreement without Cause
      upon
      ninety (90) days written notice to the Executive. In the event the Corporation
      terminates this Agreement without Cause as defined above, the Corporation shall
      pay the Executive upon termination, the amount required pursuant to Section
      5.1.
      The obligations of the Executive under Section 10 hereof shall continue
      notwithstanding termination of the Executive’s employment pursuant to this
      Section 9.4.

    

    9.5 Post
      Agreement Employment.
      In the
      event Executive remains in the employ of the Corporation following termination
      of this Agreement, by the expiration of the Term or otherwise, then such
      employment shall be at will.

     

    10. Protection
      of Confidential Information; Intellectual Property.

    

    In
      view
      of the fact that Executive’s work for the Corporation will bring him into close
      contact with confidential information and plans for future developments,
      Executive agrees to the following:

    

    10.1 Secrecy.
      To keep
      secret and retain in the strictest confidence all confidential matters of the
      Corporation, including, without limitation, trade “know how” and trade secrets,
      customer lists, pricing policies, marketing plans, technical processes,
      formulae, inventions and research projects, and other business affairs of the
      Corporation, learned by him heretofore or hereafter, and not to disclose them
      to
      anyone inside or outside of the Corporation, except in the course of performing
      the Services hereunder or with the express written consent of the Chief
      Executive Officer or Board of Directors of the Corporation and except to the
      extent such information is already known to the general public.

    

    10.2 Return
      Memoranda, etc.
      To
      deliver promptly to the Corporation on termination of his employment, or at
      any
      other time as the Chief Executive Officer or the Board of Directors of the
      Corporation may so request, all memoranda, notes, records, reports, manuals,
      drawings, blueprints and other documents (and all copies thereof) relating
      to
      the Corporation’s business and all property associated therewith, which he may
      then possess or have under his control.

    

    10.3 Covenants.

    

    10.3.1 Non-competition.
      Executive agrees that at all times while he is employed by the Corporation
      and,
      regardless of the reason for termination of his employment or this Agreement,
      for a period of two (2) years thereafter, he will not, as a principal, agent,
      employee, employer, consultant, stockholder, investor, director or co-partner
      of
      any person, firm, corporation or business entity other than the Corporation,
      or
      in any individual or representative capacity whatsoever, directly or indirectly,
      without the express prior written consent of the Corporation:

    

    (i) engage
      or
      participate in any business whose products or services are competitive with
      that
      of the Corporation, which business is the sale of travel and sale support
      services to the travel industry, and which conducts or solicits business, or
      transacts with supplier or customers located within the United States or Puerto
      Rico;

     

    
      
         

      

      
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    (ii) aid
      or
      counsel any other person, firm, corporation or business entity to do any of
      the
      above;

    

    (iii) become
      employed by a firm, corporation, partnership or joint venture which competes
      with the business of the Corporation within the United States or Puerto Rico;
      or

    

    (iv) approach,
      solicit business from, or otherwise do business or deal with any customer of
      the
      Corporation in connection with any product or service competitive to any
      provided by the Corporation. 

    

    10.3.2 Anti-Raiding.
      Executive agrees that during the term of his employment hereunder, and,
      thereafter for a period of two (2) years, he will not, as a principal, agent,
      employee, employer, consultant, director or partner of any person, firm,
      corporation or business entity other than the Corporation, or in any individual
      or representative capacity whatsoever, directly or indirectly, without the
      prior
      express written consent of the Corporation approach, counsel or attempt to
      induce any person who is then in the employ of the Corporation to leave the
      employ of the Corporation or employ or attempt to employ any such person or
      persons who at any time during the preceding six months was in the employ of
      the
      Corporation.

    

    10.3.3 Executive’s
      Acknowledgements.
      Executive acknowledges (i) that his position with the Corporation requires
      the
      performance of services which are special, unique, and extraordinary in
      character and places him in a position of confidence and trust with the
      customers and employees of the Corporation, through which, among other things,
      he shall obtain knowledge of the Corporation’s “technical information” and
“know-how” and become acquainted with its customers, in which matters the
      Corporation has substantial proprietary interests; (ii) that the restrictive
      covenants set forth above are necessary in order to protect and maintain such
      proprietary interests and the other legitimate business interests of the
      Corporation; and (iii) that the Corporation would not have entered into this
      Agreement unless such covenants were included herein. Executive also
      acknowledges that the business of the Corporation presently will extend
      throughout the United States and Puerto Rico, and that he will personally
      supervise and engage in such business on behalf of Corporation and, accordingly,
      it is reasonable that the restrictive covenants set forth above are not more
      limited as to geographic area then is set forth therein. Executive also
      represents to the Corporation that the enforcement of such covenants will not
      prevent Executive from earning a livelihood or impose an undue hardship on
      the
      Executive.

    

    10.3.4 Assignment
      of Rights to Intellectual Property.
      Executive shall promptly and fully disclose all Intellectual Property to the
      Corporation. Executive hereby assigns and agrees to assign to the Corporation
      (or as otherwise directed by the Corporation) Executive’s full right, title and
      interest in and to all Intellectual Property. Executive agrees to execute any
      and all applications for domestic and foreign patents, copyrights or other
      proprietary rights and to do such other acts (including without limitation
      the
      execution and delivery of instruments of further assurance or confirmation)
      requested by the Corporation to assign the Intellectual Property to the
      Corporation and to permit the Corporation to enforce any patents, copyrights
      or
      other proprietary rights to the Intellectual Property. Executive will not charge
      the Corporation for time spent, although the Corporation will reimburse
      Executive for any expenses Executive reasonably incurs, in complying with these
      obligations. All copyrightable works that Executive creates shall be considered
      “work made for hire”. “Intellectual Property” means inventions, discoveries,
      developments, methods, processes, compositions, works, concepts and ideas
      (whether or not patentable or copyrightable or constituting trade secrets)
      conceived, made, created, developed or reduced to practice by Executive (whether
      alone or with others, whether or not during normal business hours or on or
      off
      Corporation premises) during Executive’s employment that relate to either the
      Products or any prospective activity of the Corporation under active
      consideration. “Products” means all products planned, researched, developed,
      tested, manufactured, sold, licensed, leased or otherwise distributed or put
      into use by the Corporation or any of its Affiliates, together with all services
      provided or planned by the Corporation, during Executive’s
      employment.

     

    
      
         

      

      
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    10.4 Severability.
      If any
      of the provisions of this Section 10, or any part thereof, is hereinafter
      construed to be invalid or unenforceable, the same shall not affect the
      remainder of such provision or provisions, which shall be given full effect,
      without regard to the invalid portions. If any of the provisions of this Section
      10, or any part thereof, is held to be unenforceable because of the duration
      of
      such provision, the area covered thereby or the type of conduct restricted
      therein, the parties agree that the court making such determination shall have
      the power to modify the duration, geographic area and/or other terms of such
      provision and, as so modified, said provision(s) shall then be enforceable.
      In
      the event that the courts of any one or more jurisdictions shall hold such
      provisions wholly or partially unenforceable by reason of the scope thereof
      or
      otherwise, it is the intention of the parties hereto that such determination
      not
      bar or in any way affect the Corporation’s right to the relief provided for
      herein in the courts of any other jurisdictions as to breaches or threatened
      breaches of such provisions in such other jurisdictions, the above provisions
      as
      they relate to each jurisdiction being, for this purpose, severable into diverse
      and independent covenants.

    

    10.5 Injunctive
      Relief.
      Executive acknowledges and agrees that, because of the unique and extraordinary
      nature of his services, any breach or threatened breach of the provisions of
      Sections 10.1, 10.2, or 10.3 hereof will cause irreparable injury and
      incalculable harm to the Corporation, and the Corporation shall, accordingly,
      be
      entitled to injunctive and other equitable relief for such breach or threatened
      breach and that resort by the Corporation to such injunctive or other equitable
      relief shall not be deemed to waive or to limit in any respect any right or
      remedy which the Corporation may have with respect to such breach or threatened
      breach. The Corporation and Executive agree that any such action for injunctive
      or equitable relief shall be heard in a state or federal court situate in New
      Jersey and each of the parties hereto, hereby agrees to accept service of
      process by registered mail and to otherwise consent to the jurisdiction of
      such
      courts.

    

    10.6 Expenses
      of Enforcement of Covenants.
      In the
      event that any action, suit or proceeding at law or in equity is brought to
      enforce the covenants contained in Sections 10.1, 10.2, or 10.3 hereof or to
      obtain money damages for the breach thereof, the party prevailing in any such
      action, suit or other proceeding shall be entitled upon demand, to reimbursement
      from the other party for all expenses (including, without limitation, reasonable
      attorneys’ fees and disbursements) incurred in connection
      therewith.

     

    
      
         

      

      
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    10.7 Section
      16(a). Executive
      acknowledges that he is an insider under Section 16(a) of the “Exchange Act” due
      to his status as an officer of the Corporation. Executive acknowledges he is
      aware of and agrees to comply with the Exchange Act requirements pertaining
      to
      insiders by reporting to the Securities and Exchange Commission (the “SEC”) on
      Form 4 any transactions involving equity securities of the Corporation within
      two business days following the day on which the transaction is
      executed.

    

    10.8 Separate
      Agreement.
      The
      provisions of this Section 10 shall be construed as an agreement on the part
      of
      the Executive independent of any other part of this Agreement or any other
      agreement, and the existence of any claim or cause of action of the Executive
      against the Corporation, whether predicated on this Agreement or otherwise,
      shall not constitute a defense to the enforcement by the Corporation of the
      provisions of this Section 9.

    

    11. Indemnification.

    

    The
      Corporation shall provide the Executive (including his heirs, executors and
      administrators) with coverage under a standard directors and officer’s liability
      insurance policy at the Corporation’s expense to the same extent as provided for
      any other director, officer or trustee of the Corporation. In addition, the
      Corporation shall indemnify the Executive (and his heirs, executors and
      administrators) to the fullest extent permitted under the law of its state
      of
      incorporation against all expenses and liabilities reasonably incurred by him
      in
      connection with or arising out of any action, suit or proceeding in which the
      Executive may be involved by reason of his having been a director or officer
      of
      the Corporation or any subsidiary thereof. Such expenses and liabilities shall
      include, but not be limited to, judgments, court costs and attorneys’ fees and
      the cost of reasonable settlements, such settlements to be approved by the
      Board
      if such action is brought against the Executive in his capacity as a director
      or
      officer of the Corporation or any subsidiary thereof. The Corporation shall,
      upon the request of the Executive, advance to the Executive such amounts as
      necessary to cover expenses, including without limitation legal fees and
      expenses, incurred by the Executive in connection with any suit or proceeding
      in
      which the Executive may be involved by reason of his being or having been a
      director or officer of the Corporation or of any subsidiary thereof. Such
      indemnity and advance of expenses, however, shall not extend to matters as
      to
      which the Executive is finally adjudged to be liable for willful misconduct
      in
      the performance of his duties.

    

    12. Arbitration.
      

    

    Except
      with respect to any proceeding brought under Section 10 hereof, any controversy,
      claim, or dispute between the parties, directly or indirectly, concerning this
      Employment Agreement or the breach hereof, or the subject matter hereof,
      including questions concerning the scope and applicability of this arbitration
      clause, shall be finally settled by arbitration in Madison County, Illinois,
      pursuant to the rules then applying of the American Arbitration Association.
      The
      arbitrators shall consist of one representative selected by the Corporation,
      one
      representative selected by the Executive and one representative selected by
      the
      first two arbitrators. The parties agree to expedite the arbitration proceeding
      in every way, so that the arbitration proceeding shall be commenced within
      thirty (30) days after request therefore is made, and shall continue thereafter,
      without interruption, and that the decision of the arbitrators shall be handed
      down within thirty (30) days after the hearings in the arbitration proceedings
      are closed. The arbitrators shall have the right and authority to assess the
      cost of the arbitration proceedings and to determine how their decision or
      determination as to each issue or matter in dispute may be implemented or
      enforced. The decision in writing of any two of the arbitrators shall be binding
      and conclusive on all of the parties to this Agreement. Should either the
      Corporation or the Executive fail to appoint an arbitrator as required by this
      Section 12 within thirty (30) days after receiving written notice from the
      other
      party to do so, the arbitrator appointed by the other party shall act for all
      of
      the parties and his decision in writing shall be binding and conclusive on
      all
      of the parties to this Employment Agreement. Any decision or award of the
      arbitrators shall be final and conclusive on the parties to this Agreement;
      judgment upon such decision or award may be entered in any competent Federal
      or
      state court located in the United States of America; and the application may
      be
      made to such court for confirmation of such decision or award for any order
      of
      enforcement and for any other legal remedies that may be necessary to effectuate
      such decision or award.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    EXECUTION
      COPY

    
 

    13. Notices.

    

    All
      notices, requests, consents and other communications required or permitted
      to be
      given hereunder, shall be in writing and shall be deemed to have been duly
      given
      if delivered personally or sent by prepaid telegram, telecopy or mailed first
      class, postage prepaid, by registered or certified mail (notices sent by
      telegram or mailed shall be deemed to have been given on the date sent), to
      the
      parties at their respective addresses hereinabove set forth or to such other
      address as either party shall designate by notice in writing to the other in
      accordance herewith.

    

    14. General.

    

    14.1 Governing
      Law.
      This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      local laws of the State of Delaware.

    

    14.2 Captions.
      The
      section headings contained herein are for reference purposes only and shall
      not
      in any way affect the meaning or interpretation of this Agreement.

    

    14.3 Entire
      Agreement.
      This
      Agreement sets forth the entire agreement and understanding of the parties
      relating to the subject matter hereof, and supersedes all prior agreements,
      arrangements and understandings, written or oral, relating to the subject matter
      hereof. No representation, promise or inducement has been made by either party
      that is not embodied in this Agreement, and neither party shall be bound by
      or
      liable for any alleged representation, promise or inducement not so set
      forth.

    

    14.4 Severability.
      If any
      of the provisions of this Agreement shall be unlawful, void, or for any reason,
      unenforceable, such provision shall be deemed severable from, and shall in
      no
      way affect the validity or enforceability of, the remaining portions of this
      Agreement.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

     

    EXECUTION
      COPY

    14.5 Waiver.
      The
      waiver by any party hereto of a breach of any provision of this Agreement by
      any
      other party shall not operate or be construed as a waiver of any subsequent
      breach of the same provision or any other provision hereof.

    

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

    

    14.7 Assignability.
      This
      Agreement, and Executive’s rights and obligations hereunder, may not be assigned
      by Executive. The Corporation may assign its rights, together with its
      obligations, hereunder in connection with any sale, transfer or other
      disposition of all or substantially all of its business or assets; in any event
      the rights and obligations of the Corporation hereunder shall be binding on
      its
      successors or assigns, whether by merger, consolidation or acquisition of all
      or
      substantially all of its business or assets. This Agreement shall inure to
      the
      benefit of, and be binding upon, the Executive and his executors,
      administrators, heirs and legal representatives.

    

    14.8 Amendment.
      This
      Agreement may be amended, modified, superseded, cancelled, renewed or extended
      and the terms or covenants hereof may be waived, only by a written instrument
      executed by both of the parties hereto, or in the case of a waiver, by the
      party
      waiving compliance. No superseding instrument, amendment, modification,
      cancellation, renewal or extension hereof shall require the consent or approval
      of any person other than the parties hereto. The failure of either party at
      any
      time or times to require performance of any provision hereof shall in no matter
      affect the right at a later time to enforce the same. No waiver by either party
      of the breach of any term or covenant contained in this Agreement, whether
      by
      conduct or otherwise, in any one or more instances, shall be deemed to be,
      or
      construed as, a further or continuing waiver of any such breach, or a waiver
      of
      the breach of any other term or covenant contained in this
      Agreement.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    EXECUTION
      COPY

    
 

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

    

     

    
      	ATTEST: 	 	YTB
              INTERNATIONAL, INC.  
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	
              By:

            	 
	 	
              

            	 	 	
              
J.
              Lloyd Tomer, Chairman
              of the Board of Directors
	 	 	 	 	 

       

      
        	ATTEST: 	 	EXECUTIVE
	 	 	 	 	 
	 	 	 	
                 

              	 
	 	 	 	 	 
	 	
                

              	 	 	
                

                Andrew
                  Cauthen, Individually

              
	 	 	 	 	 

       

    

     

    
      
         

      

      
        -12-ASSIGNMENT
        & NON-COMPETITION AGREEMENT

       

      dated
        as of

       

      January
        4th, 2008

       

      by
        and between

       

      RxELITE
        INC.

       

      and

       

      DR.
        ARIE GUTMAN

       

      
        

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      TABLE
        OF CONTENTS

       

      
        
          	
                  1.

                	
                  Non-Competition
                    Undertaking.

                	
                  1

                
	
                  2.

                	
                  Assignment
                    of Rights

                	
                  2

                
	
                  3.

                	
                  Consideration

                	
                  3

                
	
                  4.

                	
                  Board
                    representation

                	
                  4

                
	
                  5.

                	
                  Representations
                    and Warranties of RxElite

                	
                  4

                
	
                  6.

                	
                  Representations
                    and Warranties of Gutman

                	
                  8

                
	
                  7.

                	
                  Closing

                	
                  8

                
	
                  8.

                	
                  Certain
                    Covenants

                	
                  9

                
	
                  9.

                	
                  Indemnification

                	
                  9

                
	
                  10.

                	
                  Miscellaneous

                	
                  11

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ASSIGNMENT
        & NON-COMPETITION AGREEMENT

       

      THIS
        ASSIGNMENT & NON-COMPETITION AGREEMENT (the “Agreement”)
        is
        made
        and entered into as of January 4th, 2008, by and between RxElite Inc., a
        Delaware corporation (“RxElite”),
        and
        Dr. Arie Gutman, an Israeli citizen (“Gutman”).
        

       

      WITNESSETH
        :

      

        WHEREAS,
          Gutman is an internationally known scientist, with many inventions, experience
          and connections in the field of active pharmaceutical materials, and is
          the sole
          shareholder of FineTech Laboratories, Ltd., a company organized under the
          laws
          of the State of Israel (“Finetech”);
          

         

        WHEREAS,
          RxElite is a Delaware corporation currently doing business in the field
          of
          pharmaceutical products, and the shares of RxElite are traded on the Electronic
          Bulletin Board;

      

       

      WHEREAS,
        RxElite
        desires to secure Gutman’s personal commitment to allow RxElite and Finetech to
        benefit from his non-competition in the Prohibited Business over the Period
        (as
        hereinafter defined); 

       

      WHEREAS,
        Finetech has assigned to Gutman certain rights to receive Royalties from
        certain
        Applicable Contracts (as
        hereinafter defined),
        and
        the Parties hereto wish to terminate such assignment in such manner that
        the
        right to the Royalties shall revert to Finetech, all according to the terms
        set
        out herein; 

       

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the parties hereto hereby agree as follows,
        intending to be legally bound:

       

      
        	1.	
                Non-Competition
                  Undertaking.

              

      

       

      
        	1.1	
                For
                  the Consideration as set out below, Gutman hereby undertakes as
                  provided
                  in this Aticle 1 below.

              

      

       

      
        	1.2	
                For
                  a period of one
                  (1) year
                  from and after the end of Employment (the “Period”),
                  Gutman will not, directly or indirectly (whether as an owner, proprietor,
                  partner, shareholder, officer, employee, independent contractor,
                  director,
                  joint venturer, consultant, lender or investor), solicit or engage
                  in the
                  Prohibited Business (“Non-Compete
                  Undertaking”).
                  For purposes of this Agreement, the “Prohibited
                  Business”
                  means: offering to provide or providing any product or service
                  competitive
                  with the business of RxElite or its Israeli subsidiary RxElite
                  Israel Ltd
                  (collectively: the “Companies”),
                  worldwide. The Non-Compete Undertaking notwithstanding, Gutman
                  may be a
                  securities holder in certain entities operating in the pharmaceutical
                  field, as follows: (i) securities of RxElite itself; and (ii) up
                  to 5% of
                  the securities of entities publicly traded on a national securities
                  exchange. To avoid doubts, the provisions of Section 2.3 below
                  will not be
                  deemed a breach of the Non-Compete Undertaking.

              

      

       

      
        	1.3	
                From
                  and after the Closing Date, Gutman shall not, directly or indirectly,
                  (i)
                  discourage any person from accepting employment with the Companies,
                  or
                  (ii) solicit the employment or services of any person who is employed
                  by
                  the Companies, or is otherwise engaged to perform services for
                  the
                  Companies (whether in the capacity of employee, consultant, independent
                  contractor or otherwise), or is offered a position by the Companies,
                  or
                  (iii) cause or attempt to cause such person as described above
                  to leave
                  the employment or service of the
                  Companies.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

      

      
        	1.4	
                Gutman
                  acknowledges and agrees that the limitations imposed by Sections
                  1.2 and
                  1.3 as to time, geographical area, and scope of activity being
                  restrained
                  are reasonable and do not impose a greater restraint than is necessary
                  to
                  protect the goodwill or other business interests of the
                  Companies.

              

      

       

      
        	1.5	
                The
                  parties hereby agree that if Gutman violates the provisions of
                  this
                  Article 1, it will be difficult to determine the entire cost, damage
                  or
                  injury which the Companies would sustain. Gutman acknowledges that
                  if he
                  violates or threatens to violate the provisions of this Article
                  1, the
                  Companies may not have adequate remedy at law. In that event, the
                  Companies shall have the right, in addition to any other rights
                  that may
                  be available to them, to apply for injunctive relief in any court
                  of
                  competent jurisdiction, in order to restrain any or threatened
                  violation
                  by Gutman of the provisions of this Article 1 or to compel specific
                  performance by Gutman of one or more of his undertakings hereunder.
                  The
                  seeking or obtaining by the Companies of such injunctive relief
                  shall not
                  foreclose or in any way limit the right of the Companies to obtain
                  a
                  monetary judgment against Gutman for any damage to the Companies
                  that may
                  result from any breach by Gutman of the provisions of this Article
                  1.
                   

              

      

       

      
        	1.6	
                Should
                  a final judgment of a court of competent jurisdiction declare any
                  term or
                  provision of this Article 1 to be invalid or unenforceable, the
                  parties
                  agree that the court making such determination of invalidity or
                  unenforceability shall have the power to reduce the scope, duration
                  or
                  area of the term or provision, to delete specific words or phrases,
                  or to
                  replace any invalid or unenforceable term or provision with a term
                  or
                  provision that is valid and enforceable and that comes closest
                  to
                  expressing the intention of the invalid or unenforceable term or
                  provision, and this Article 1 shall be enforceable as so modified
                  after
                  the expiration of the time within which the judgment may be appealed.
                  Such
                  judgment shall not effect any other provision of this
                  Agreement.

              

      

       

      
        
          	2.	
                  Assignment
                    of Rights

                

        

      

       

      
        
          
            
              
                	2.1	
                        Finetech
                          and Gutman have previously executed an assignment deed
                          effective as of
                          February 1, 2006 (the “Assignment
                          Deed”)
                          whereby Gutman was assigned all rights to receive a certain
                          share in the
                          sales of two Israeli companies (such share is herein referred
                          to as
                          “Royalties”),
                          as provided in the following agreements: (i) an agreement
                          dated October
                          26, 2003 between Finetech and the Israeli company Unipharm
                          Ltd. regarding
                          sales of Latanoprost (the “Unipharm
                          Agreement”),
                          (ii) an agreement dated January 9, 2004 between Finetech
                          and the Israeli
                          company Trima Israel Pharmaceutical Products Maabarot Ltd.
                          regarding sales
                          of Cabergoline (the “Trima
                          Agreement”
                          and together with the Unipharm Agreement, the “Applicable
                          Contracts”);

                      

              

            

          

        

      

       

      
        	2.2	
                As
                  of the Closing and subject to receipt of the Consideration as set
                  out
                  below, Gutman hereby reassigns to Finetech all his rights under
                  the
                  Assignment Deed (such reassignment is herein referred to as the
                  “Assignment”).
                  Consequently, all rights to receive the Royalties under the Applicable
                  Contracts shall revert to Finetech, and the Assignment Deed shall
                  terminate as of the Closing. To avoid doubts, no
                  promise or guarantee is given or made by Gutman as to economic
                  value of
                  the Assignment or the actual Royalties amounts to be paid to Finetech
                  consequent to the Applicable Contracts. 

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	2.3	
                During
                  past years, Gutman was granted/assigned the right to receive royalties
                  due
                  as a result of sales of products based on intellectual properties
                  developed/provided by Gutman and/or Finetech, as follows: (i) royalties
                  due on sales of Donepezil products by Unipharm Ltd. and its affiliates
                  (agreement dated 1998), and (ii) royalties due on sales of Rotinirole,
                  Latanoprost and Donepezil products by PAR Pharmaceutical, Inc.
                  and its
                  affiliates (agreement dated January 2006). The right to receive
                  the
                  aforesaid royalties is not included in the Assignment hereunder,
                  and this
                  right shall survive and continue to be valid to the benefit of
                  Gutman,
                  without any claim by either Finetech or RxElite.
                  

              

      

       

      
        	3.	
                Consideration

              

      

       

      
        	3.1	
                In
                  consideration for the Non-Compete Undertaking and the Assignment,
                  RxElite
                  shall pay to Gutman at the Closing an amount of US $21,054,592
                  in
                  18,632,383 unregistered shares of Common Stock of RxElite (the
                  “Shares”
                  and the “Common
                  Stock”
                  respectively), valued
                  at US$1.13 per Share.  

              

      

       

      
        	 	
                The
                  Shares shall be unregistered under the US Securities Act of 1933
                  (the
                  “Act”)
                  and accordingly any disposition by Gutman shall require their registration
                  or an exemption from registration under said Act. 

              

      

       

      
        	 	
                Once
                  issued, the Shares shall be validly issued, fully paid and non-assessable,
                  and free of any encumbrance or third party rights.
                  

              

      

       

      
        	3.2	
                RxElite
                  represents that as of the date hereof and as of the Closing, the
                  outstanding share capital of RxElite, on a fully diluted as converted
                  and
                  as exercised basis, including all current, contingent or otherwise
                  promised securities of any kind, is 147,120,967 shares of Common
                  Stock
                  (exclusive of 11,771,033 ISOP options that were authorized but
                  not yet
                  allocated), and no other equity securities (or securities exercisable
                  or
                  convertible into equity securities), of any class, are outstanding.
                  RxElite undertakes to maintain the aforesaid throughout the period
                  until
                  the Closing, and during this period RxElite shall not promise or
                  undertake
                  to issue any such securities.

              

      

       

      
        	3.3	
                By
                  not later than the Closing, RxElite and Gutman shall execute and
                  deliver a
                  Registration Rights Agreement in customary form (the "Registration
                  Rights Agreement"),
                  whereby RxElite will provide certain registration rights with respect
                  to
                  the Shares, under the Act and the rules and regulations promulgated
                  thereunder, and under applicable state securities
                  laws.

              

      

       

      
        	3.4	
                RxElite
                  warrants and undertakes that, except as required in order to comply
                  with
                  applicable securities laws and the Registration Rights Agreement,
                  there
                  shall be no limitations on the right of Gutman to effect the transfer
                  of
                  any of the Shares, and neither RxElite nor anybody acting on its
                  behalf or
                  by its instructions shall stop or delay such transfers. During
                  the first
                  two years after the Closing, the Shares will be restricted shares,
                  meaning
                  that no transfers will be allowed, except to Permitted Transferees.
                  For
                  that purpose, “Permitted
                  Transferees”
                  are family members or Affiliates of the transferor; and “Affiliate”
                  shall mean an entity that, directly or indirectly, through one
                  or more
                  intermediaries, controls or is controlled by, or is under common
                  control
                  with, the transferor (for this definition, “control”
                  and its derivatives means the possession, directly or indirectly,
                  or as
                  trustee or executor, of the power to direct or cause the direction
                  of the
                  management and policies of an entity, whether through ownership
                  of voting
                  equity interests, as trustee or executor, by contract or credit
                  arrangements or otherwise). Gutman shall always be entitled to
                  transfer
                  some or all of the Shares to Permitted
                  Transferees.

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	4.	
                Board
                  representation

              

      

       

      
        	4.1	
                RxElite
                  shall make best effort to appoint Gutman or his nominee as a member
                  of the
                  Board of Directors of RxElite (the “Board”)
                  and to renew such appointment from time to time, unless Gutman
                  waives this
                  right. As a Board member, Gutmans or his nominee (as the case may
                  be)
                  shall have the right to serve on any (or all) committee he deems
                  fit.
                  

              

      

       

      
        	4.2	
                Until
                  the date such nomination to the Board takes effect, Gutman will
                  be invited
                  to all Board and Board committees meetings, shall have the right
                  to attend
                  each such meeting as a non-voting observer, and shall receive all
                  materials, information and privileges provided to the Board members.
                  

              

      

       

      
        	4.3	
                Gutman
                  shall be included in any D&O insurance and undertaking provided by
                  RxElite to its directors and officers.

              

      

       

      
        	5.	
                Representations
                  and Warranties
                  of RxElite

              

      

       

      RxElite
        hereby represents and warrants to Gutman as of the date hereof and as of
        the
        Closing Date (unless another date is expressly set forth below) that
the
        representations and warranties set forth in this Article 5 below are and
        will be
        accurate, true and complete. 

       

      
        	5.1	
                Existence
                  and Power.
                  RxElite is a corporation duly organized, validly existing and in
                  good
                  standing under the laws of Delaware, and has all corporate powers
                  and all
                  governmental licenses, permits, authorizations, consents and approvals
                  required to own its property and to carry on its business and operations
                  as now conducted or proposed to be conducted. RxElite has heretofore
                  delivered to Gutman true and complete copies of RxElite’s Certificate of
                  Incorporation and By-laws as currently in
                  effect.

              

      

       

      
        	5.2	
                Authorization.
                  The execution, delivery and performance by RxElite of this Agreement
                  and
                  all other documents and agreements to be executed by RxElite in
                  connection
                  herewith (the “Related
                  Documents”)
                  and the consummation by RxElite of the transaction contemplated
                  hereby
                  require no action by or in respect of, or filing with, any governmental
                  body, agency, official or authority in the United States on federal
                  or
                  state level. 

              

      

       

      
        	5.3	
                Enforcement.
                  This Agreement and the Registration Rights Agreement and all ancillary
                  documents (collectively, the “Transaction
                  Documents”)
                  have been duly executed and delivered by RxElite and constitute
                  the valid
                  and legally binding obligation of RxElite, enforceable against
                  RxElite in
                  accordance with their respective terms including without limitation
                  the
                  issuance of the Shares to Gutman in accordance with the terms hereof,
                  except as such enforceability may be limited by laws governing
                  bankruptcy,
                  insolvency, reorganization, moratorium, fraudulent conveyance or
                  other
                  similar laws, without limitation, relating to or affecting creditors’
                  rights generally. 

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	5.4	
                Non-Contravention.
                  The execution, delivery and performance by RxElite of this Agreement
                  and
                  the other Transaction Documents, and the consummation of the transactions
                  contemplated hereby and thereby (including the issuance of the
                  Shares to
                  Gutman), do not and will not:

              

      

       

      
        	
              	5.4.1	
                Contravene,
                  violate or conflict with, or constitute a violation of, any provision
                  of
                  any law (including federal and state securities laws and regulations
                  and
                  the rules and regulations of the NASD Over-the-Counter market (the
                  "OTC")),
                  regulation, judgment, injunction, order or decree, the Certificate
                  of
                  Incorporation or Bylaws, binding upon or applicable to
                  RxElite;

              

      

       

      
        	
              	5.4.2	
                Conflict
                  with, result in a breach or violation of, or constitute a default
                  under,
                  or result in a contractual right to cause the termination or cancellation
                  of or loss of a benefit under, or right to accelerate, any agreement,
                  contract or other instrument binding upon RxElite or license, franchise,
                  permit or other similar authorization held by RxElite;
                  or

              

      

       

      
        	
              	5.4.3	
                Result
                  in the creation or imposition of any Encumbrance on any of
                  the Shares.

              

      

       

      
        	5.5	
                SEC
                  Documents; Other Information.
                  RxElite has timely filed all reports, schedules, forms, statements
                  and
                  other documents required to be filed by it with the US Securities
                  and
                  Exchange Commission (“SEC”)
                  and with similar State agencies pursuant to the reporting requirements
                  of
                  the 1934 Act and applicable State laws (all of the foregoing filed
                  prior
                  to the date hereof, and all exhibits included therein and financial
                  statements and schedules thereto and documents incorporated by
                  reference
                  therein being hereinafter referred to as the "SEC
                  Documents").
                  Except as modified by subsequent filings, as of their respective
                  dates,
                  the SEC Documents complied in all material respects with the requirements
                  of the 1934 Act and the rules and regulations of the SEC promulgated
                  thereunder applicable to the SEC Documents, and none of the SEC
                  Documents,
                  at the time they were filed with the SEC, contained any untrue
                  statement
                  of a material fact or omitted to state a material fact required
                  to be
                  stated therein or necessary in order to make the statements therein,
                  in
                  the light of the circumstances under which they were made, not
                  misleading.

              

      

       

      
        	5.6	
                Subsidiaries.
                  Other than RxElite Holdings, Inc., RxElite does not own directly
                  or
                  indirectly, any capital stock, equity interest or other ownership
                  interest
                  in any corporation, partnership, association, joint venture, limited
                  liability company or other entity. 

              

      

       

      
        	5.7	
                Financial
                  Statements.
                  The Financial Statements and complementary information contained
                  and
                  referenced in the RxElite 10-QSB report for the quarter ending
                  on
                  September 30, 2007 (Collectively, the “Financial
                  Statements”)
                  have been previously delivered to Gutman. The Financial Statements
                  were
                  prepared in accordance with Generally Accepted Accounting Principles
                  in
                  the US (“GAAP”)
                  applied on a consistent basis. The Financial Statements fairly
                  present the
                  financial position of RxElite as of the date thereof and its results
                  of
                  operations for the period then ended.

              

      

       

      
        	5.8	
                Absence
                  of Certain Changes.
                  Since September 30, 2007, to the knowledge of RxElite, except
                  as set forth in Schedule
                  5.8
                  and except
                  as disclosed on the Financial Statements, there has not been any
                  Material
                  Adverse Effect applicable to RxElite or the Common Stock, or any
                  event,
                  occurrence, development or state of circumstances or facts which
                  as of the
                  date hereof could reasonably be expected to have a Material Adverse
                  Effect
                  on RxElite or the Common Stock.

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	5.9	
                Stock.
                  Prior to the Closing, the authorized capital stock of RxElite consists
                  of
                  1,000,000 shares of Preferred Stock par value $0.001 each, of which
                  as of
                  the date hereof, none are issued and outstanding, and 200,000,000
                  shares
                  of Common Stock par value $0.001 each, of
                  which:

              

      

       

      
        	
              	5.9.1	
                96,682,920
                  shares have been duly issued and are outstanding;
                  

              

      

      
        	
              	5.9.2	
                38,014,328
                  shares are reserved for issuance upon full exercise of warrants;
                  

              

      

      
        	
              	5.9.3	
                9,323,388
                  shares are reserved for issuance upon conversion of a convertible
                  note;
                  

              

      

      
        	
              	5.9.4	
                3,102,850
                  shares are reserved for issuance upon exercise of options previously
                  allocated under the RxElite Incentive Stock Option Plan (“ISOP”);
                  

              

      

      
        	
              	5.9.5	
                11,771,033
                  additional shares are reserved for issuance upon allocation and
                  exercise
                  of as yet un-allocated options under the ISOP;

              

      

      
        	
              	5.9.6	
                All
                  of such outstanding shares have been validly issued, and ISOP was
                  duly
                  adopted. All resolutions regarding the issuance of securities (including
                  warrants and options) were duly adopted and carried
                  out.

              

      

       

      
        
          Except
            as
            set forth above, at the date hereof (i) there are no outstanding rights
            to
            subscribe to any shares of capital stock of RxElite, (ii) there are no
            securities or rights convertible into, or exercisable or exchangeable
            for,
            shares of capital stock of RxElite, (iii) there are no contracts, commitments,
            understandings or arrangements by which RxElite is or may become bound
            to issue
            additional shares of its capital stock; (iv) there are no securities
            or
            instruments which grant to their holders rights or privileges superior
            to those
            attached to the Shares. 

        

      

       

      
        
          
            
              	5.10	
                      Intellectual
                        Property. RxElite
                        owns all right, title and interest in and to or is duly licensed
                        to use or
                        may freely use, all of the Intellectual Property presently
                        used in the
                        operation of its business as it is conducted or as expected
                        to be
                        conducted on the Closing Date, but excluding “off the shelf” licenses
                        pursuant to which such Intellectual Property is made available
                        through
                        regular commercial distribution channels on standard terms
                        and conditions.
                        To the knowledge of RxElite, there is no other item of Intellectual
                        Property that is necessary for the conduct of RxElite business
                        as
                        presently operated or as expected to be operated as of the
                        Closing Date.
                        To the knowledge of RxElite, the operation of its business
                        does not
                        interfere with, infringe, misappropriate or otherwise violate
                        or misuse
                        any Intellectual Property of any third party (“Third
                        Party Intellectual Property Assets”).
                        

                    

            

          

        

      

       

      
        	5.11	
                Licenses
                  and Permits.
                  RxElite holds all governmental licenses, permits, authorizations,
                  consents
                  and approvals that are necessary or useful for the conduct of its
                  business. All such Permits are valid and in full force and effect,
                  will
                  not be terminated or impaired or become terminable as a result
                  of the
                  transaction contemplated hereby and are sufficient for the operation
                  of
                  the business of RxElite as presently conducted or as expected to
                  be
                  conducted after the Closing Date. 

              

      

       

      
        
          
            
              
                	5.12	
                        Environmental
                          Matters.
                          Without in any manner limiting any other representation
                          or warranty set
                          forth in this Agreement with
                          respect to premises and facilities used or operated by
                          RxElite (each a
                          “Business
                          Facility”),
                          to the knowledge of RxElite, RxElite is in compliance with,
                          and has no
                          liability under any applicable environmental law.
                          

                      

              

            

          

        

      

       

      
        
          	5.13	
                  Tax
                    Matters. RxElite
                    has timely filed (taking into account any applicable extensions)
                    all
                    applicable Tax Returns and reports for all years and periods
                    for which
                    such returns and reports were due to be filed by it prior to
                    the Closing
                    Date. To the knowledge of RxElite, each of such Tax Returns
                    as
                    filed was correct and complete.

                

        

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	 	
                With
                  the exception of a 2004 Audit, RxElite
                  is
                  not currently the subject of an audit, other examination, matter
                  in
                  controversy, proposed adjustment, refund litigation or other proceeding
                  with respect to Taxes by the federal and state Tax authorities
                  of the US,
                  nor has RxElite
                  received any notices from any Tax authority relating to any such
                  issue or
                  potential issue. 

              

      

       

      
        	 	
                There
                  are no liens for Taxes upon any
                  assets or properties of RxElite,
                  except for statutory liens for current Taxes not yet due. RxElite
                  has not, as of the date hereof, entered into an agreement or waiver
                  extending any statute of limitations relating to the payment or
                  collection
                  of Taxes. 

              

      

       

      
        	 	
                RxElite
                  has timely paid all Taxes and Tax liabilities in respect of periods
                  prior
                  to the date hereof and, to the knowledge of RxElite, has accrued
                  on its
                  Financial Statements an amount necessary to pay in full all unpaid
                  Taxes.
                  To its knowledge, RxElite
                  has complied with all applicable Tax Laws.

              

      

       

      
        	 	
                To
                  its knowledge, all
                  Taxes that RxElite is or was required to withhold have been duly
                  withheld
                  and, to the extent required, have been paid to the proper Governmental
                  Authority. 

              

      

       

      
        	5.14	
                Compliance
                  with Laws; No Defaults.
                  To
                  its knowledge, RxElite is not (i) in violation of any statute,
                  law, rule
                  or regulation or any judgment, order, writ, injunction or decree
                  of any
                  court or Governmental Authority to which RxElite is subject, or
                  (ii)
                  subject to any claim asserted by any Governmental Authority that
                  RxElite
                  is in violation of any Legal
                  Requirement.

              

      

       

      
        
          	 	
                  To
                    its
                    knowledge, as of the date hereof, RxElite is not in default under,
                    and no
                    condition exists that with notice or lapse of time or both would
                    constitute a default under, any contract or other instrument
                    binding upon
                    RxElite or affecting or relating to its business or any license,
                    authorization, permit, consent or approval held by RxElite or
                    affecting or
                    relating to its business, except as otherwise disclosed in this
                    Agreement
                    or in Schedules attached
                    hereto.

                

        

      

       

      
        	5.15	
                Legal
                  Proceedings.
                  There is no order in which relief is sought involving, affecting,
                  or
                  relating to RxElite or its business or the ownership, operation
                  or use by
                  RxElite of any of its assets or that would prevent, delay or make
                  illegal
                  the transaction contemplated by this Agreement, and there is no
                  litigation, action, suit, proceeding or governmental investigation
                  pending
                  or, to RxElite’s knowledge, threatened against (orally or in writing),
                  involving, affecting or relating to RxElite, the Common Stock or
                  the
                  transaction contemplated by this Agreement. 

              

      

       

      
        	5.16	
                No
                  Undisclosed Liabilities.
                  RxElite is not aware of any liabilities, except for: (i) liabilities
                  reflected or reserved against in the Financial Statements, (ii)
                  current
                  liabilities incurred in the Ordinary Course of Business of RxElite
                  since
                  the date of the Financial Statements, (iii) liabilities arising
                  from
                  RxElite’s contracts, and (iv) liabilities imposed by applicable law.
                  

              

      

       

      
        	5.17	
                Compliance
                  With The Foreign Corrupt Practices Act And Export Control And Antiboycott
                  Laws.
                  RxElite shall comply fully with all laws, rules, and regulations
                  applicable to it and the performance of its obligations under this
                  Agreement, including laws and regulations dealing with payments,
                  gifts,
                  and gratuities. 

              

      

      
      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	 	
                RxElite
                  has at all times been in compliance with all Legal Requirements
                  applicable
                  to it, relating to export control and trade embargoes. No product
                  sold or
                  service provided by RxElite during the last five (5) years has
                  been,
                  directly or indirectly, sold to or performed on behalf of Cuba,
                  Iraq,
                  Iran, Libya or North Korea.

              

      

       

      
        	 	
                RxElite
                  has not violated the antiboycott prohibitions applicable to it.
                  During the
                  last five (5) years, RxElite has not been a party to, is not a
                  beneficiary
                  under and has not performed any service or sold any product under
                  any
                  contract under which a product has been sold to customers in Cuba,
                  Iraq,
                  Iran, Libya or North Korea. 

              

      

       

      
        	5.18	
                Books
                  and Records.
                  The books of account, stock record books, and other records of
                  RxElite,
                  are complete and correct and have been maintained in accordance
                  with sound
                  business practices. At the Closing, all of those books and records
                  will be
                  in the possession of RxElite.
                  Upon request, RxElite will make available to Gutman such books
                  and
                  records.

              

      

       

      
        
          	5.19	
                  Accuracy
                    of Information Furnished. To
                    the knowledge of RxElite, no
                    representation, statement or information contained in this Agreement
                    (including the various Schedules and Exhibits attached hereto)
                    or any
                    agreement executed in connection herewith or in any certificate
                    or other
                    document delivered pursuant hereto or thereto or made or furnished
                    to
                    Gutman or his representatives by RxElite, contains or shall contain
                    any
                    untrue statement of a material fact or omits or shall omit any
                    material
                    fact necessary to make the information contained herein and therein
                    not
                    misleading. At the request of Gutman, RxElite will provide to
                    Gutman true,
                    accurate and complete copies of the documents listed or described
                    in the
                    various Schedules attached
                    hereto.

                

        

      

       

      
        	6.	
                Representations
                  and Warranties of
                  Gutman

              

      

       

      
        
          	 	
                  Gutman
                    hereby
                    represents and warrants to RxElite as of the date hereof and
                    as of the
                    Closing Date (unless another date is expressly set forth below)
                    that
                    the
                    representations and warranties set forth in this Article 6 below
                    are and
                    will be accurate, true and complete. 

                

        

      

       

      
        	6.1	
                Non-Contravention.
                  The execution, delivery and performance by Gutman of this Agreement,
                  and
                  the consummation of the transactions contemplated hereby do not
                  and will
                  not contravene, violate or conflict with, or constitute a violation
                  of,
                  any provision of any contract or undertaking binding upon
                  Gutman.

              

      

       

      
        	6.2	
                Enforcement.
                  This Agreement constitutes the valid and legally binding obligation
                  of
                  Gutman, enforceable against him in accordance with its terms, except
                  as
                  such enforceability may be limited by laws governing bankruptcy,
                  insolvency, reorganization, moratorium, fraudulent conveyance or
                  other
                  similar laws, without limitation, relating to or affecting creditors’
                  rights generally. 

              

      

       

      
        	6.3	
                No
                  Promise.
                  Gutman confirms that there is no promise or guarantee by RxElite
                  or
                  anybody on its behalf as to the technical or commercial success
                  of RxElite
                  or as to the future value and/or marketability of its Common Stock,
                  and
                  there is no assurance or guarantee that forward-looking plans or
                  projections, or planned products, will materialize or achieve the
                  projected or expected results.

              

      

       

      
        	7.	
                Closing

              

      

       

      
        	7.1	
                The
                  closing of the transactions contemplated by this Agreement (the
                  “Closing”)
                  shall occur at such time and place as the parties mutually agree
                  in good
                  faith. The date on which the Closing occurs is referred to in this
                  Agreement as the “Closing
                  Date.”
                  The Closing may take place by delivery and exchange of documents
                  by
                  facsimile or electronic mail with originals to follow by overnight
                  courier. 

              

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	7.2	
                At
                  the Closing, RxElite shall deliver to Gutman: (i) a certificate
                  representing the Shares; (ii) a certificate of the Secretary or
                  Assistant
                  Secretary of RxElite, certifying as to (a) the certificate of
                  incorporation and the bylaws (or similar organizational documents)
                  of
                  RxElite, (b) the incumbency of all officers of RxElite executing
                  this
                  Agreement and any agreement executed in connection herewith, and
                  (c) the
                  resolutions of the RxElite Board authorizing the execution, delivery
                  and
                  performance by RxElite of this Agreement and the transactions contemplated
                  hereby; and (iii) an opinion of counsel to
                  RxElite.

              

      

       

      
        	8.	
                Certain
                  Covenants

              

      

       

      
        	8.1	
                Conduct
                  Of Business.
                  The business of RxElite shall not be conducted in violation of
                  any law,
                  ordinance or regulation of any governmental entity, except where
                  such
                  violations would not result, either individually or in the aggregate,
                  in a
                  Material Adverse Effect.

              

      

       

      
        	8.2	
                SEC
                  Compliance.
                  RxElite shall use best efforts to ensure that the quotation of
                  the Common
                  Stock on the OTC shall not be suspended or revoked by the SEC or
                  the
                  OTC.

              

      

       

      
        	8.3	
                Reports.
                  RxElite shall always be current in its public reporting obligations
                  pursuant to applicable United States federal and State securities
                  laws,
                  regulations and rules.

              

      

       

      
        	8.4	
                On-going
                  Updates.
                  RxElite will give Gutman prompt written notice of any material
                  adverse
                  development causing a breach of any of its representations and
                  warranties
                  under this Agreement. 

              

      

       

      
        	9.	
                Indemnification

              

      

       

      
        	9.1	
                Indemnification
                  by the RxElite.
                  RxElite hereby agrees to indemnify, defend and hold Gutman harmless
                  from
                  and against any losses, liabilities, claims, obligations, damages
                  (including diminution in value), strict liability, Environmental
                  Responsibility, fines, penalties, assessments, deficiencies, actions,
                  causes of action, arbitrations, proceedings, remediations, judgments,
                  settlements, violations or alleged violations of law, costs and
                  expenses
                  (including reasonable attorneys’ fees and all other expenses incurred in
                  investigating, preparing, or defending any litigation or proceeding,
                  commenced or threatened) (collectively, “Gutman
                  Damages”)
                  arising out of or resulting from:

              

      

       

      
        	
              	(a)	
                a
                  breach of any representation or warranty RxElite has made in this
                  Agreement;

              

      

      
        	
              	(b)	
                a
                  breach by RxElite of any of its covenants or obligations in this
                  Agreement; and 

              

      

      
        	
              	(c)	
                any
                  allegation by a third party of any of the
                  foregoing.

              

      

       

      
        	 	
                RxElite
                  will not be liable for indemnification arising under this Section
                  for any
                  Gutman Damages unless the aggregate amount of such Damages for
                  which
                  RxElite would be liable exceeds $50,000, in which case RxElite
                  will be
                  liable for all Gutman Damages incurred by Gutman including such
                  $50,000,
                  up to the maximum liability amount as set forth
                  below.

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	 	
                The
                  maximum indemnification liability of RxElite (whether arising in
                  law or
                  equity, in contract, tort or any other theory of law) towards Gutman
                  for
                  any Gutman Damages giving rise to such indemnification, shall not
                  exceed
                  an aggregate amount (for all Gutman Damages) of US$620,000 (six
                  hundred
                  and twenty thousand US Dollars); and Gutman hereby waives any excess
                  amounts of Gutman Damages. Furthermore, no claim for indemnification
                  may
                  be made after expiration of the survival period as per Section
                  10.1 below
                  (18 months following the Closing Date). The aforesaid limited liability
                  constitutes the sole and exclusive remedy for Gutman for any breach
                  by
                  RxElite of any and all representations, warranties and covenants
                  under and
                  arising from this Agreement. The aforesaid limitations shall not
                  apply in
                  the case of fraud or intentional misrepresentation by RxElite,
                  and shall
                  not apply to breach of the obligation to issue to Gutman the Shares
                  as set
                  forth in this Agreement. 

              

      

       

      
        
          	9.2	
                  Indemnification
                    by Gutman.
                    Gutman hereby agrees to indemnify, defend and hold RxElite harmless
                    from
                    and against any losses, liabilities, claims, obligations, damages
                    (including diminution in value), strict liability, fines, penalties,
                    assessments, deficiencies, actions, causes of action, arbitrations,
                    proceedings, remediations, judgments, settlements, violations
                    or alleged
                    violations of law, costs and expenses (including reasonable attorneys’
                    fees and all other expenses incurred in investigating, preparing,
                    or
                    defending any litigation or proceeding, commenced or threatened)
                    (collectively, “RxElite
                    Damages”)
                    arising out of or resulting
                    from:

                

        

      

       

      
        	
              	(a)	
                any
                  breach of any representation or warranty Gutman has made in this
                  Agreement;

              

      

      
        	
              	(b)	
                any
                  breach by Gutman of its covenants or obligations in this Agreement;
                  and
                  

              

      

      
        	
              	(c)	
                any
                  allegation by a third party of any of the foregoing.
                  

              

      

       

      
        	 	
                The
                  maximum indemnification liability of Gutman (whether arising in
                  law or
                  equity, in contract, tort or any other theory of law) towards RxElite
                  for
                  any RxElite Damages giving rise to such indemnification, shall
                  not exceed
                  an aggregate amount (for all RxElite Damages) of US$620,000 (six
                  hundred
                  and twenty thousand US Dollars); and RxElite hereby waives any
                  excess
                  amounts of RxElite Damages. Furthermore, no claim for indemnification
                  may
                  be made after expiration of the survival period as per Section
                  10.1 below
                  (18 months following the Closing Date). The aforesaid limited liability
                  constitutes the sole and exclusive remedy for RxElite for any breach
                  by
                  Gutman of any and all representations, warranties and covenants
                  under and
                  arising from this Agreement. The aforesaid limitations shall not
                  apply in
                  the case of fraud or intentional misrepresentation by Gutman.
                  

              

      

       

      
        
          	9.3	
                  Indemnification
                    Procedure for Third-Party Claims.
                    Promptly after receipt by a party entitled to indemnification
                    hereunder
                    (the “Indemnified
                    Party”)
                    of written notice of the institution of any legal proceeding,
                    or of any
                    claim or demand, asserted by a third party (a “Third
                    Party Claim”)
                    against the Indemnified Party with respect to which a claim for
                    indemnification is to be made pursuant to Section 9.1 or 9.2
                    herein, the
                    Indemnified Party shall give written notice to the other party
                    (the
                    “Indemnifying
                    Party”)
                    of such Third Party Claim. The Indemnifying Party shall be entitled
                    to
                    participate in and to assume the defense of such Third Party
                    Claim with
                    counsel reasonably satisfactory to the Indemnified Party, and
                    after notice
                    from the Indemnifying Party to such Indemnified Party of such
                    assumption
                    of defense, and provided that the Indemnifying Party continues
                    to
                    diligently pursue such defense, the Indemnifying Party shall
                    not be liable
                    to such Indemnified Party for any legal or other expenses subsequently
                    incurred by the latter in connection with the defense thereof.
                    Notwithstanding the foregoing, an Indemnified Party shall in
                    all cases be
                    entitled to control its defense, including the selection of separate
                    counsel (at the cost and expense of the Indemnifying Party),
                    of any Third
                    Party Claim if such claim: (i) may result in injunctions or other
                    equitable remedies in respect of the Indemnified Party which
                    would affect
                    its business or operations in any materially adverse manner;
                    (ii) may
                    result in material liabilities which may not be fully indemnified
                    hereunder; (iii) may have a significant adverse impact on the
                    business or
                    the financial condition of the Indemnified Party (including a
                    Material
                    Adverse Effect on the tax liabilities, earnings or ongoing business
                    relationships of the Indemnified Party) even if the Indemnifying
                    Party
                    pays all indemnification amounts in full or (iv) the anticipated
                    defendants in any such situation, proceeding or action include
                    both the
                    Indemnified Party and the Indemnifying Party, and the Indemnified
                    Party
                    shall have reasonably concluded that there may be legal defenses
                    available
                    to it which are different from, additional to or inconsistent
                    with those
                    available to the Indemnifying Party. No Indemnifying Party will
                    enter into
                    any settlement with respect to such Third Party Claim without
                    the prior
                    written consent of the Indemnified Party unless such settlement
                    (a)
                    requires solely the payment of money damages by the Indemnifying
                    Party and
                    (b) includes as an unconditional term thereof the release by
                    the claimant
                    or the plaintiff of the Indemnified Party and the persons for
                    whom the
                    Indemnified Party is acting or who are acting on behalf of the
                    Indemnified
                    Party from all liability in respect of the proceeding giving
                    rise to the
                    Third Party Claim.

                

        

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        
          	9.4	
                  Limitations
                    on Indemnification.
                    Without prejudice to the limitation provisions of Sections 9.1
                    and 9.2
                    above, and except in the case of actual fraud by a party hereto,
                    no party
                    shall be liable under this Agreement for special, punitive, exemplary,
                    consequential, or indirect damages, or lost profits, whether
                    based on
                    contract, tort, strict liability, other Laws or otherwise, and
                    whether or
                    not arising from the other party’s sole, joint or concurrent negligence,
                    strict liability or other
                    fault.

                

        

      

       

      
        	10.	
                Miscellaneous

              

      

       

      
        	10.1	
                Survival.
                  The representations and warranties of the parties contained in
                  this
                  Agreement shall survive the Closing for a period of eighteen (18)
                  months
                  after the Closing Date.

              

      

       

      
        	10.2	
                Notices.
                  All notices, requests and other communications to either party
                  hereunder
                  shall be in writing (including facsimile, telecopy or similar writing)
                  and
                  shall be deemed given when
                  delivered:

              

      

       

      
        
          	
                  If
                    to RxEliste, to:

                	 
	
                  Jonathan
                    Houssian, CEO and President

                	 
	
                  RxElite
                    Inc.

                	 
	
                  1404
                    North Main Street, Suite 200

                	 
	
                  Meridian,
                    Idaho 83642

                	 
	
                  Telecopier:
                    (208) 288-1191

                	 
	
                  Telephone:
                    (208) 288-5550

                	 
	 	 
	
                  with
                    a copy (which shall not constitute notice) to:

                
	
                  Haynes
                    and Boone, L.L.P.

                	 
	
                  152
                    East 53rd Street, 49th Floor

                	 
	
                  New
                    York, New York

                	 
	
                  Attention:
                    Harvey Kesner, Esq.

                	 
	
                  Telecopier:
                    (212) 884-8233

                	 
	
                  Telephone:
                    (212) 659-4973

                	 

        

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

        
          	
                  If
                    to Gutman, to:

                	 
	
                  Dr.
                    Arie Gutman

                	 
	
                  33
                    Narkissim Street 

                	 
	
                  Nesher
                    36601, Israel

                	 
	
                  Telecopier:
                    +972-4-8343341 

                	 
	
                  Telephone:
                    +972-52-47338333 

                	 
	 	 
	
                  with
                    a copy (which shall not constitute notice) to:

                	 
	
                  Primes,
                    Shiloh, Givon Meir - Law Firm

                	 
	
                  16,
                    Derech Hayam (Sea Road)

                	 
	
                  Haifa
                    34741, Israel

                	 
	
                  Attention:
                    Yesha Primes, Adv.

                	 
	
                  Telecopier:
                    +972-4-8381401 

                	 
	
                  Telephone:
                    +972-4-8388332 

                	 

        

      

      
        	 	 

        	
                
                

              	
                Each
                  of the above persons may change their address or facsimile number
                  or
                  telephone number by notice to the other persons in the manner set
                  forth
                  above.

              

      

       

      
        	10.3	
                Amendments;
                  No Waivers.
                  Any provision of this Agreement may be amended or waived if, and
                  only if,
                  such amendment or waiver is in writing and signed, in the case
                  of an
                  amendment, by RxElite and Gutman, or in the case of a waiver, by
                  the party
                  against whom the waiver is to be effective. No failure or delay
                  by any
                  party in exercising any right, power or privilege hereunder shall
                  operate
                  as a waiver thereof nor shall any single or partial exercise thereof
                  preclude any other or further exercise thereof or the existence
                  of any
                  other right, power or privilege. The rights and remedies herein
                  provided
                  shall be cumulative and not exclusive of any rights or remedies
                  provided
                  by law.

              

      

       

      
        	10.4	
                Expenses.
                  Except as otherwise provided herein, all costs and expenses incurred
                  in
                  connection with this Agreement shall be paid by RxElite or Gutman,
                  depending on which such party incurred or directed the incurrence
                  of such
                  cost or expense. 

              

      

       

      
        	10.5	
                Successors
                  and Assigns.
                  The provisions of this Agreement shall be binding upon and shall
                  inure to
                  the benefit of the parties hereto and their respective successors
                  and
                  permitted assigns. No party to this Agreement may assign, delegate
                  or
                  otherwise transfer any of its rights or obligations under this
                  Agreement
                  without the prior written consent of the other party hereto. Neither
                  this
                  Agreement nor any provision hereof is intended to confer upon any
                  person
                  other than the parties hereto any rights or remedies hereunder.
                  

              

      

       

      
        	10.6	
                Governing
                  Law.
                  This Agreement shall be governed by, and construed and enforced
                  in
                  accordance with, the laws of the State of New York without regard
                  to any
                  provision thereof that would require the application of the law
                  of any
                  other jurisdiction.
                  Each party hereby submits to the exclusive jurisdiction of the
                  courts of
                  the State of New York, sitting in New York City.
                  

              

      

       

      
        	10.7	
                Specific
                  Performance.
                  Each of the parties acknowledges and agrees that the other party
                  would be
                  damaged irreparably in the event any of the provisions of this
                  Agreement
                  are not performed in accordance with their specific terms or otherwise
                  are
                  breached. Accordingly, each of the parties agrees that the other
                  party
                  shall be entitled to an injunction or injunctions to prevent breaches
                  of
                  the provisions of this Agreement and to enforce specifically this
                  Agreement and the terms and provisions hereof, in addition to any
                  other
                  remedy to which it may be entitled, at law or in equity.
                  

              

      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      
        	10.8	
                Counterparts.
                  Effectiveness.
                  This Agreement may be signed in any number of counterparts, each
                  of which
                  shall be an original, with the same effect as if the signatures
                  thereto
                  and hereto were upon the same instrument. Facsimile copies of signature
                  pages shall have the same legal effect as signed originals. This
                  Agreement
                  shall become effective when each party hereto shall have received
                  a
                  counterpart hereof signed by the other party hereto. 

              

      

       

      
        	10.9	
                Entire
                  Agreement.
                  This Agreement, the Schedules and Exhibits hereto, and any other
                  documents
                  referred to herein constitute the entire agreement between the
                  parties
                  with respect to the subject matter hereof and supersede all prior
                  agreements, understandings and negotiations, both written and oral,
                  between the parties with respect thereto. No representation, inducement,
                  promise, understanding, condition or warranty not set forth herein
                  has
                  been made or relied upon by either party hereto. 

              

      

       

      
        
          	10.10	
                  Construction.
                    The parties have participated jointly in the negotiation and
                    drafting of
                    this Agreement. In the event an ambiguity or question of intent
                    or
                    interpretation arises, this Agreement shall be construed as if
                    drafted
                    jointly by the parties and no presumption or burden of proof
                    shall arise
                    favoring or disfavoring any party by virtue of the authorship
                    of any of
                    the provisions of this Agreement. The following rules of construction
                    shall apply to this
                    Agreement:

                

        

      

       

      
        	
              	(a)	
                Any
                  reference to any federal, state, provincial or local statute or
                  law shall
                  be deemed also to refer to all rules and regulations promulgated
                  thereunder, unless the context requires otherwise.
                  

              

      

      
        	
              	(b)	
                All
                  uses of “include,” “including” or words or phrases of similar import shall
                  be deemed to be followed by “without limitation.”
                  

              

      

      
        	
              	(c)	
                The
                  headings and titles herein are for convenience only and shall have
                  no
                  significance in the interpretation hereof.

              

      

      
        	
              	(d)	
                Unless
                  otherwise provided, all references in this Agreement to “Articles” and
                  “Sections” are to articles and sections of this Agreement; and all
                  references to “Exhibits”, “Schedules” or “Annexes” are to exhibits,
                  schedules or annexes attached to this Agreement, each of which
                  is made a
                  part of this Agreement for all purposes.

              

      

      
        	
              	(e)	
                Unless
                  the context otherwise requires, the words “this Agreement,” “hereof,”
                  “hereunder,” “herein,” “hereby” or words or phrases of similar import
                  shall refer to this Agreement as a whole and not to a particular
                  Article,
                  Section, subsection, clause or other subdivision hereof.
                  

              

      

      
        	
              	(f)	
                Capitalized
                  terms that are defined herein shall have the specified meaning
                  ascribed to
                  them in this Agreement regardless of whether any usage appears
                  before or
                  after the place where a term is
                  defined.

              

      

      
        	
              	(g)	
                Terms
                  defined in the singular shall have the corresponding meaning when
                  used in
                  the plural and vice versa. Any definition of one part of speech
                  of a word,
                  such as definition of the noun form of that word, shall have a
                  comparable
                  or corresponding meaning when used as a different part of speech,
                  such as
                  the verb form of that word. 

              

      

      
        	
              	(h)	
                Unless
                  the context otherwise requires, references to agreements shall
                  be deemed
                  to mean and include such agreements as the same may be amended,
                  supplemented and otherwise modified from time to time, and references
                  to
                  parties to agreements shall be deemed to include the permitted
                  successors
                  and assigns of such parties.

              

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
              	(i)	
                Where
                  the character or amount of any asset or liability or item of income
                  or
                  expense is required to be determined or any consolidation or other
                  accounting computation is required to be made for the purposes
                  of this
                  Agreement, the same shall be done in accordance with generally
                  accepted
                  accounting principles in the United States, except where such principles
                  are inconsistent with the specific provisions of this Agreement
                  or any
                  applicable law.

              

      

       

      
        	
                10.11

              	
                Severability.
                  Any part of this Agreement which is found to be void, invalid,
                  illegal or
                  unenforceable, shall be severed from this Agreement and ineffective
                  to the
                  extent of that voidness, invalidity, illegality or unenforceability.
                  Such
                  voidness, invalidity, illegality or unenforceability will not invalidate,
                  affect or impair the remaining provisions of this Agreement. If
                  a court of
                  competent jurisdiction determines that the terms in respect of
                  which
                  covenants in this Agreement are to be entered are unreasonable
                  or
                  unenforceable for any reason, then this Agreement shall be reread
                  and
                  construed with such terms, as may be applicable, as determined
                  to be
                  reasonable by a court of competent jurisdiction and the Agreement
                  shall be
                  amended and construed accordingly
                  hereby.

              

      

       

      
        	
                10.12

              	
                Certain
                  Definitions 

              

      

       

      
        
          “Encumbrances”
means
            any mortgages, pledges, liens, encumbrances, charges or other security
            interests. 

        

      

       

      
        
          
            “Governmental
              Authority”
means
              any nation, province, state, county, municipality or any other political
              subdivision of any of the foregoing, including (A) any court, governmental
              department, tribunal, arbitrator or panel of arbitrators, authority,
              agency,
              body, board, bureau, commission, official or other instrumentality
              of the United
              States of America or any nation, state, province, county, city or other
              political subdivision or similar governing entity, (B) any person or
              entity
              exercising executive, legislative, regulatory, judicial or administrative
              functions and (C) any governmental, quasi-governmental or non-governmental
              body
              (whether executive, legislative, judicial or administrative) administering,
              regulating or having general oversight over the business of
              RxElite.

          

        

      

       

      
        
          “Intellectual
            Property”
or
            “Intellectual
            Property Assets”
means
            all software, inventions, art works, patents, patent applications, processes,
            shop rights, formulas, brand names, trade secrets, know-how, service
            marks,
            trade names, trademarks, trademark applications, copyrights, source and
            object
            codes, customer lists, drawings, ideas, algorithms, processes, computer
            software
            programs or applications (in code and object code form), tangible or
            intangible
            proprietary information and any other intellectual property and similar
            items
            and related rights owned by or licensed to RxElite or used in its business,
            together with any goodwill associated therewith and all rights of action
            on
            account of past, present and future unauthorized use or infringement
            thereof.

        

      

       

      
        
          “Lease”
shall
            mean any lease or rental agreement pertaining to the occupancy by RxElite
            or the
            use by RxElite of any space on any Real Property.

        

      

       

      
        
          
            
              “Legal
                Requirement”
shall
                mean any national, federal, state, local, municipal, foreign, international,
                multinational or other constitution, law, ordinance, principle of
                common law,
                code, regulation, statute or treaty or decision or order of any applicable
                Governmental Authority.

            

          

        

      

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              “Liabilities”
shall
                mean with respect to any Person, any liability or obligation of such
                Person that
                is required to be accrued on the financial statements of such
                Person.

            

          

        

      

       

      
        
          “Losses”
means
            all damage, loss, liability and expense, including, without limitation,
            penalties, interest, reasonable expenses of investigation and reasonable
            attorneys’ fees and expenses in connection with any action, suit or proceeding
            incurred or suffered by any of the Indemnified Parties arising out of
            any breach
            of any representation or warranty, covenant or agreement made or to be
            performed
            by Indemnifying Parties pursuant to this Agreement. 

        

      

       

      
        
          “Material
            Adverse Effect”
with
            respect to any Person shall mean any change or effect (or any development
            that,
            insofar as can reasonably be foreseen, could reasonably be expected to
            result in
            any change or effect) that could reasonably be expected to be materially
            adverse
            to the business, properties, assets, condition (financial or otherwise),
            results
            of operations or prospects of that person and its subsidiaries, taken
            as a whole
            and without limiting the foregoing, such term shall in any case mean
            an effect
            or change that adversely affects or impairs the value, ownership or operation
            of
            any asset by, or creates a liability for, an amount greater than
            $100,000.

        

      

       

      
        
          “Ordinary
            Course of Business”
means
            an action taken by a Person will be deemed to have been taken in the
            Ordinary
            Course of Business only if that action:

        

      

       

      
        	 	
                (a)

              	
                is
                  consistent in nature, scope and magnitude with the past practices
                  of such
                  Person and is taken in the ordinary course of the normal, day-to-day
                  operations of such Person;

              

      

      
        	 	
                (b)

              	
                does
                  not require authorization by the board of directors or shareholders
                  of
                  such Person (or by any Person or group of Persons exercising similar
                  authority) and does not require any other separate or special
                  authorization of any nature; and

              

      

      
        	 	
                (c)

              	
                is
                  similar in nature, scope and magnitude to actions customarily taken,
                  without any separate or special authorization, in the ordinary
                  course of
                  the normal, day-to-day operations of other Persons that are in
                  the same
                  line of business as such Person.

              

      

       

      
        
          “Permits”
shall
            mean all governmental
            licenses, permits, authorizations, consents or approvals affecting, or
            relating
            in any way to, the RxElite or its business.

        

      

       

      
        
          “Permitted
            Encumbrances”
shall
            mean:

        

      

       

      
        	 	
                a)

              	
                liens
                  for taxes, assessments and governmental charges due and being contested
                  in
                  good faith and diligently by appropriate
                  proceedings.

              

      

      
        	 	
                b)

              	
                servitudes,
                  easements, restrictions, rights-of-way and other similar rights
                  in real
                  property or any interest therein which are covered by title
                  insurance;

              

      

      
        	 	
                c)

              	
                liens
                  for taxes either not due and payable or due but for which notice
                  of
                  assessment has not been given; and

              

      

      
        	 	
                d)

              	
                undetermined
                  or inchoate liens, charges and privileges incidental to current
                  construction or current operations and statutory liens, charges,
                  adverse
                  claims, security interests or encumbrances of any nature whatsoever
                  claimed or held by any Governmental Authority that have not at
                  the time
                  been filed or registered against the title to the asset or served
                  upon
                  RxElite pursuant to law or that relate to obligations not due or
                  delinquent.

              

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        
          “Person”
means
            an individual or a corporation, company, limited liability company, sole
            proprietorship, joint venture, partnership, trust, estate, unincorporated
            organization, association, or other entity.

        

      

       

      
        
          “Real
            Property”
shall
            mean all real property controlled by RxElite.

        

      

       

      
        
          
            
              
                “Records”
                  shall
                  mean information that is inscribed on a tangible medium or that
                  is stored in an
                  electronic or other medium and is retrievable in perceivable
                  form.

              

            

          

        

      

       

      
        
          
            
              “Subsidiary”
shall
                mean any Person which is owned or controlled by
                RxElite.

            

          

        

      

       

      
        
          “Tax”
or
            “Taxes”
            means
            any
            national, federal, state, provincial, local or foreign income, gross
            receipts,
            license, payroll, employment, excise, severance, stamp, occupation, premium,
            windfall profits, customs duties, capital stock, franchise, profits,
            withholding, social security (or similar), unemployment, disability,
            real
            property, personal property, sales, use, transfer, registration, value
            added,
            alternative minimum or other tax of any kind whatsoever, including without
            limitation, any interest, penalty or addition thereto, whether disputed
            or
            not.

        

      

       

      
        
          “Tax
            Return”
            means
            any
            return, declaration, report, claim for refund or information return or
            statement
            relating to Taxes, including without limitation, any schedule or attachment
            thereto, and including, without limitation, any amendment
            thereof.

        

      

       

      [signature
        page follows]

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed by their respective authorized officers effective as of the day
        and
        year first above written but executed on the dates set forth below.

       

      

        
          	 	
                  RxELITE
                    Inc.

                
	 	 
	 	 
	 	
                  By:
                    Jonathan Houssian and Earl Sullivan

                
	 	
                  Its
                    Authorized Officers

                
	 	 
	 	 
	 	
                  Dr.
                    Arie Gutman

                

        

         

      

      Schedule
        5.8

       

      1.
        Sandell Convertibel Debt Agreement entered into December 31, 2007.

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