Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 15th
day of September, 2006 by and between Universal Energy Corp., a Delaware
corporation (hereinafter called the “Company”), and Billy Raley (hereinafter
called the “Executive”).

Recitals

A. The Board of Directors of the Company (the “Board”) desires to assure the
Company of the Executive’s continued employment in an executive capacity and to
compensate him therefore.

B. The Board has determined that this Agreement will reinforce and encourage the
Executive’s continued attention and dedication to the Company.

C. The Executive is willing to make his services available to the Company on the
terms and conditions hereinafter set forth.

Agreement

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:

1. Employment.

1.1 Employment and Term. The Corporation hereby agrees to employ the Executive
as its Chief Executive Officer, in such capacity, agrees to provide services to
the Corporation for the period beginning on September 15, 2006 and ending
September 15, 2009 (the “Termination Date”) (or such later date as may be agreed
to by the parties within 120 days prior to the Termination Date) (the
“Employment Period”).

1.2 Duties of Executive. The Executive shall serve as the Chief Executive
Officer of the Company and shall diligently perform all services as may be
reasonably assigned to him by the Board, and shall exercise such power and
authority as may from time to time be delegated to him by the Board. The
Executive shall be required to report solely to, and shall be subject solely to
the supervision and direction of the Board at duly called meetings thereof, and
no other person or group shall be given authority to supervise or direct
Executive in the performance of his duties. In addition, the Executive shall
regularly consult with the Chairman of the Board with respect to the Company’s
business and affairs. The Executive shall devote his working time and attention
as he deems appropriate to the business and affairs of the Company (excluding
any vacation and sick leave to which the Executive is entitled), render such
services to the best of his ability, and use his reasonable best efforts to
promote the interests of the Company. It shall not be a violation of this
Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement.

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1.3 Place of Performance. In connection with his employment by the Company, the
Executive shall be based at the Company’s principal executive offices except for
travel reasonably necessary in connection with the Company’s business. The
Company shall not, without the written consent of the Executive, relocate or
transfer its principal executive offices outside the area generally known as the
greater Orlando, Florida area.

2. Compensation.

2.1 Base Salary. Commencing on the effective date of this Agreement, the
Executive shall receive a base salary at the annual rate of not less than
$96,000 (the “Base Salary”) during the term of this Agreement, with such Base
Salary payable in installments consistent with the Company’s normal payroll
schedule, subject to applicable withholding and other taxes. The Base Salary
will be automatically increased to not less than $120,000 during year 2 of this
Agreement and increased to not less than $144,000 during year 3 of this
Agreement. The Base Salary shall also be reviewed, at least annually, for merit
increases and may, by action and in the discretion of the Board, be increased at
any time or from time to time. The Base Salary shall also be increased at any
time and from time to time as shall be substantially consistent with increases
in base salary awarded in the ordinary course of business to other key
executives of the Company and its subsidiaries. The Base Salary, if increased,
shall not thereafter be decreased for any reason.

2.2 Incentive Compensation. The Executive shall be entitled to receive such
bonus payments or incentive compensation as may be determined at any time or
from time to time by the Board (or any authorized committee hereof) in its
discretion. Such potential bonus payments and/or incentive compensation shall be
considered at least annually by the Board.

2.3 Incentive Stock Option Grant.

(a) The Company hereby grants to the Executive 2,500,000 options to purchase of
the common stock of the Company at a price of $1.95 per share. The stock is
restricted as defined by applicable securities laws:

 

  (b) The Option is granted effective as of September 15, 2006.

 

  (c) TERM: Your right to exercise each vesting installment of the Option will
expire five years after the vesting date for that installment, unless sooner
terminated as a result of termination of your employment or services with the
Company or upon a Terminating Event.

 

  (d) VESTING: The Option shall vest monthly over the term of this Employment
Agreement. Any Option Shares that have not yet vested shall be considered
“Unvested Shares.” Upon cessation of your employment or services on behalf of
the Company for any reason, no further vesting of the Option will occur and any
unvested portion of the Option will terminate.

 

  (e) ACCELERATION OF VESTING SCHEDULE: In the event (i) the Company enters into
a purchase and sale agreement whereby substantially all of the Company’s assets
will be sold to an unrelated thirty party or (ii) more than ninety-five percent
(95%) of the total issued and outstanding shares of the Company are to be sold
pursuant to a stock

 

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       transfer agreement to an unrelated third party (herein an “Accelerating
Event”), any installments of the option not yet vested shall conditionally vest
and the Employee will have the right to exercise such installment(s) of the
option subject to the following:

 

  a. Exercise. The terms and conditions of the Employee’s right to exercise any
installment as set forth herein shall remain the same except that the exercise
must occur concurrent with the successful consummation of the Accelerating
Event.

 

  b. Failure to Exercise or Consummate. In the event the Employee fails to
exercise any installment of the option concurrent with the consummation of the
Accelerating Event, or, for whatever reason, the Accelerating Event is not
consummated, the Employee’s right to exercise the conditionally vested shares
expire and the vesting schedule as set forth in this Agreement shall control the
date of the Employee’s right to exercise the next installment of the option.

 

  c. Accelerating Event. Accelerating Event shall not include (i) corporate
reorganizations where shareholders of the successor company(s) are substantially
the same as the Company’s shareholders and/or (ii) the assignment of shares of
stock in the Company among family members, whether for estate planning or
otherwise.

3. Expense Reimbursement and Other Benefits.

3.1 Expense Reimbursement. During the term of Executive’s employment hereunder,
the Company, upon the submission of reasonable supporting documentation by the
Executive, shall reimburse the Executive for all reasonable expenses actually
paid or incurred by the Executive in the course of and pursuant to the business
of the Company, including all travel and entertainment related expenses.

3.2 Incentive, Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs applicable to other key
executives of the Company and its subsidiaries, in each case comparable to those
currently in effect or as subsequently amended. Such plans, practices, policies
and programs, in the aggregate, shall provide the Executive with compensation,
benefits and reward opportunities at least as favorable as the most favorable of
such compensation, benefits and reward opportunities provided at any time
hereafter with respect to other key executives.

3.3 Welfare Benefit Plans. During the Employment Period, the Executive and/or
the Executive’s family, as the case may be, shall be eligible for participation
in and shall receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company and its subsidiaries (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs), at least as favorable as the most favorable of
such plans, practices, policies and programs in effect at any time hereafter
with respect to other key executives.

 

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3.4 Working Facilities. During the term of Executive’s employment hereunder, the
Company shall furnish the Executive with such facilities and services suitable
to his position and adequate for the performance of his duties hereunder.

3.5 Automobile Allowance. During the Employment Period, the Company shall
provide Executive with a non-accountable automobile allowance of two hundred
fifty Dollars ($250.00) per month, which amount is intended to compensate
Executive for wear and tear and, in addition, reimburse the Executive for all
costs of gasoline, oil, repairs, maintenance, insurance and other expenses
incurred by Executive by reason of the use of Executive’s automobile for Company
business from time to time.

3.6 Vacation. During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the most favorable plans, policies, programs
and practices of the Company and its subsidiaries as in effect at any time
hereafter with respect to other key executives of the Company and its
subsidiaries; provided, however, that in no event shall Executive be entitled to
fewer than four weeks paid vacation per year.

4. Termination.

4.1 Termination for Cause. Notwithstanding anything contained to the contrary in
this Agreement, this Agreement may be terminated by the Company for Cause. As
used in this Agreement, “Cause” shall only mean (i) an act or acts of personal
dishonesty taken by the Executive and intended to result in substantial personal
enrichment of the Executive at the expense of the Company, (ii) subject to the
following sentences, repeated violation by the Executive of the Executive’s
material obligations under this Agreement which are demonstrably willful and
deliberate on the Executive’s part and which are not remedied in a reasonable
period of time after receipt of written notice from the Company, or (iii) the
conviction of the Executive for any criminal act which is a felony. Upon any
determination by the Company’s Board of Directors that Cause exists under clause
(ii) of the preceding sentence, the Company shall cause a special meeting of the
Board to be called and held at a time mutually convenient to the Board and
Executive, but in no event later than ten (10) business days after Executive’s
receipt of the notice contemplated by clause (ii). Executive shall have the
right to appear before such special meeting of the Board with legal counsel of
his choosing to refute any determination of Cause specified in such notice, and
any termination of Executive’s employment by reason of such Cause determination
shall not be effective until Executive is afforded such opportunity to appear.
Any termination for Cause pursuant to clause (i) or (iii) of the first sentence
of this Section 4.1 shall be made in writing to Executive, which notice shall
set forth in detail all acts or omissions upon which the Company is relying for
such termination. Upon any termination pursuant to this Section 4.1, the
Executive shall be entitled to be paid his Base Salary to the date of
termination and the Company shall have no further liability hereunder (other
than for reimbursement for reasonable business expenses incurred prior to the
date of termination).

4.2 Disability. Notwithstanding anything contained in this Agreement to the
contrary, the Company, by written notice to the Executive, shall at all times
have the right to terminate this Agreement, and the Executive’s employment
hereunder, if the Executive shall, as the result of mental or physical
incapacity, illness or disability, fail to perform his duties and
responsibilities provided for herein for a period of more than one hundred
twenty (120) consecutive days in any 12-month period. Upon any termination
pursuant to this Section 4.2, the Executive shall be entitled to be paid his
Base Salary to the date of termination and the Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of termination).

 

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4.3 Death. In the event of the death of the Executive during the term of his
employment hereunder, the Company shall pay to the estate of the deceased
Executive an amount equal to the sum of (x) any unpaid amounts of his Base
Salary to the date of his death, plus (y) six months of Base Salary, and the
Company shall have no further liability hereunder (other than for reimbursement
for reasonable business expenses incurred prior to the date of the Executive’s
death).

4.4 Termination Without Cause. At any time the Company shall have the right to
terminate Executive’s employment hereunder by written notice to Executive;
provided, however, that the Company shall (i) pay to Executive any unpaid Base
Salary accrued through the effective date of termination specified in such
notice, and (ii) pay to the Executive in a lump sum, in cash within 30 days
after the date of employment termination, an amount equal to the product of
(x) the sum of the Executive’s then Base Salary plus the amount of the highest
annual bonus or other incentive compensation payment theretofore made by the
Company to the Executive, multiplied times (y) one. The Company shall be deemed
to have terminated the Executive’s employment pursuant to this Section 4.4 if
such employment is terminated (i) by the Company without Cause, or (ii) by the
Executive voluntarily for “Good Reason.” For purposes of this Agreement, “Good
Reason” means

(a) the assignment to the Executive of any duties inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by
Section 1.2 of this Agreement, or any other action by the Company which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;

(b) any failure by the Company to comply with any of the provisions of
Section 2, Section 3, Section 7 or Section 17 of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive;

(c) the Company’s requiring the Executive to be based at any office or location
other than the greater Orlando, Florida area except for travel reasonably
required in the performance of the Executive’s responsibilities;

(d) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement;

(e) any failure by the Company to comply with and satisfy Section 10(c) of this
Agreement; or

(f) any termination by the Executive for any reason during the three-month
period following the effective date of any “Change in Control”.

For purposes of this Section 4.4, any good faith determination of “Good Reason”
made by the Executive shall be conclusive.

5. Change in Control. For purposes of this Agreement, a “Change in Control”
shall mean:

(a) The acquisition (other than by or from the Company), at any time after the
date hereof, by any person, entity or “group”, within the meaning of
Section 13(d)(3) or 14(d)(2) of the

 

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Securities Exchange Act of 1934 (the “Exchange Act”), of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 15%or
more of either the then outstanding shares of common stock or the combined
voting power of the Company’s then outstanding voting securities entitled to
vote generally in the election of directors; or

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

(c) Approval by the shareholders of the Company of (A) a reorganization, merger
or consolidation with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 75% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company’s then outstanding voting securities, (B) a
liquidation or dissolution of the Company, or (C) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.

(d) The approval by the Board of the sale, distribution and/or other transfer or
action (and/or series of sales, distributions and/or other transfers or actions
from time to time or over a period of time), that results in the Company’s
ownership of less than 50% of the Company’s current assets.

6. Restrictive Covenants.

6.1 Nondisclosure. During his employment and for twelve (12) months thereafter,
Executive shall not divulge, communicate, use to the detriment of the Company or
for the benefit of any other person or persons, or misuse in any way, any
Confidential Information (as hereinafter defined) pertaining to the business of
the Company. Any Confidential Information or data now or hereafter acquired by
the Executive with respect to the business of the Company shall be deemed a
valuable, special and unique asset of the Company that is received by the
Executive in confidence and as a fiduciary, and Executive shall remain a
fiduciary to the Company with respect to all of such information. For purposes
of this Agreement, “Confidential Information” means all material information
about the Company’s business disclosed to the Executive or known by the
Executive as a consequence of or through his employment by the Company
(including information conceived, originated, discovered or developed by the
Executive) after the date hereof, and not generally known.

6.2 Nonsolicitation of Employees. While employed by the Company and for a period
of six (6) months thereafter, Executive shall not directly or indirectly, for
himself or for any other person, firm, corporation, partnership, association or
other entity, attempt to employ or enter into any contractual arrangement with
any employee or former employee of the Company, unless such employee or former
employee has not been employed by the Company for a period in excess of six
months.

6.3 Injunction. It is recognized and hereby acknowledged by the parties hereto
that a breach by the Executive of any of the covenants contained in Section 6.1,
6.2 or 6.3 of this Agreement

 

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will cause irreparable harm and damage to the Company, the monetary amount of
which may be virtually impossible to ascertain. As a result, the Executive
recognizes and hereby acknowledges that the Company shall be entitled to an
injunction from any court of competent jurisdiction enjoining and restraining
any violation of any or all of the covenants contained in this Section 6 by the
Executive or any of his affiliates, associates, partners or agents, either
directly or indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.

7. Election of Executive as Director. Upon completion of a ninety (90) day
probationary period, the Board will appoint Executive to fill a vacancy on the
Board of Directors. For so long as the Executive continues to serve as the
Company’s Chief Executive Officer, the Company shall cause the nomination of the
Executive as a member of the Board of the Company at each stockholder meeting at
which election of directors is considered and otherwise use its best efforts to
cause the election of the Executive as a member of the Board of the Company.

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

9. Notices: Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given when delivered by
hand or when deposited in the United States mail, by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Company:   Universal Energy Corp.   4044 W Lake Mary Blvd.   #104-347
  Lake Mary, FL 32746 If to the Executive:   Billy Raley   1078 Henley Downs
Place   Heathrow, Florida 32746 with a copy to:   Greenberg Traurig LLP   450 S.
Orange Avenue   Suite 650   Orlando, Florida 32801

or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.

10. Successors.

(a) This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

 

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(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law or otherwise.

11. Severability. The invalidity of any one or more of the words, phrases,
sentences, clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clauses or sections
contained in this Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted. If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.

12. Waivers. The waiver by either party hereto of a breach or violation of any
term or provision of this Agreement shall not operate nor be construed as a
waiver of any subsequent breach or violation.

13. Damages. Nothing contained herein shall be construed to prevent the Company
or the Executive from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach of any term or provision
of this Agreement.

14. No Third Party Beneficiary. Nothing expressed or implied in this Agreement
is intended, or shall be construed, to confer upon or give any person (other
than the parties hereto and, in the case of Executive, his heirs, personal
representative(s) and/or legal representative) any rights or remedies under or
by reason of this Agreement.

15. Full Settlement. The Company’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement. The Company agrees to pay, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company or others of the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any
payment pursuant to Section 16 of this Agreement), plus in each case interest at
the applicable Federal rate provided for in Section 7872(f)(2) of the Code.

16. Certain Reduction of Payments by the Company.

(d) Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
“Payment”), would be nondeductible by the Company for Federal income tax
purposes because of Section 280G of the Code, then the aggregate present value
of amounts payable or distributable to or for the benefit of the Executive
pursuant to this Agreement (such payments or

 

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distributions pursuant to this Agreement are hereinafter referred to as
“Agreement Payments”) shall be reduced to the Reduced Amount. The “Reduced
Amount” shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any Payment to be
nondeductible by the Company because of Section 280G of the Code. Anything to
the contrary notwithstanding, if the Reduced Amount is zero and it is determined
further that any Payment which is not an Agreement Payment would nevertheless be
nondeductible by the Company for Federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of Payments which are
not Agreement Payments shall also be reduced (but not below zero) to an amount
expressed in present value which maximizes the aggregate present value of
Payments without causing any Payment to be nondeductible by the Company because
of Section 280G of the Code. For purposes of this Section 16, present value
shall be determined in accordance with Section 280G(d)(4) of the Code. Any
amount which is not paid in the taxable year in which it was originally
scheduled to be paid as a result of the postponement thereof pursuant hereto
shall be payable in the next succeeding taxable year in which such payment will
not result in the disallowance of a deduction pursuant to either Section 162(m)
or 280G of the Code; provided, however, that all postponed payments shall be
placed in a Rabbi trust or similar vehicle for the benefit of the Executive in
such a way that the amounts so transferred are not taxable to such person or
deductible by the Company until payment from such vehicle to the Executive is
made. In the event a payment has been made to the Executive, but then disallowed
as a deduction by the Internal Revenue Service and return of the payment is
required into the trust, said payment to the Executive shall be treated as a
loan and said payment to the trust shall be treated as repayment of said loan.
The Company shall not pledge, hypothecate or otherwise encumber any amounts held
in the trust or other similar vehicle for the benefit of the Executive
hereunder.

(e) All determinations required to be made under this Section 16 shall be made
by the Orlando, Florida office of Tedder, James, Worden & Associates, P.A. or,
at the Executive’s option, any other nationally or regionally recognized firm of
independent public accountants selected by the Executive and approved by the
Company, which approval shall not be unreasonably withheld or delayed (the
“Accounting Firm”), which shall provide (i) detailed supporting calculations
both to the Company and the Executive within twenty (20) business days of the
termination of Executive’s employment or such earlier time as is requested by
the Company, and (ii) an opinion to the Executive that he has substantial
authority not to report any excise tax on his Federal income tax return with
respect to any Payments. Any such determination by the Accounting Firm shall be
binding upon the Company and the Executive. The Executive shall determine which
and how much of the Payments shall be eliminated or reduced consistent with the
requirements of this Section 16, provided that, if the Executive does not make
such determination within ten business days of the receipt of the calculations
made by the Accounting Firm, the Company shall elect which and how much of the
Payments shall be eliminated or reduced consistent with the requirements of this
Section 16 and shall notify the Executive promptly of such election. Within five
business days thereafter, the Company shall pay to or distribute to or for the
benefit of the Executive such amounts as are then due to the Executive under
this Agreement. All fees and expenses of the Accounting Firm incurred in
connection with the determinations contemplated by this Section 16 shall be
borne by the Company.

(f) As a result of the uncertainty in the application of Section 280G of the
Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Payments will have been made by the Company which should not
have been made (“Overpayment”) or that additional Payments which will not have
been made by the Company could have been made (“Underpayment”), in each case,
consistent with the calculations required to be made hereunder. In the event
that the Accounting Firm, based upon the assertion of a deficiency by the
Internal Revenue Service against the Executive which the Accounting Firm
believes has a high probability of success, determines

 

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that an Overpayment has been made, any such Overpayment paid or distributed by
the Company to or for the benefit of the Executive shall be treated for all
purposes as a loan ab initio to the Executive which the Executive shall repay to
the Company together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be
deemed to have been made and no amount shall be payable by the Employee to the
Company if and to the extent such deemed loan and payment would not either
reduce the amount on which the Executive is subject to tax under Section 1 and
Section 4999 of the Code or generate a refund of such taxes. In the event that
the Accounting Firm, based upon controlling precedent or other substantial
authority, determines that an Underpayment has occurred, any such Underpayment
shall be promptly paid by the Company to or for the benefit of the Executive
together with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code.

17. Conflicts With Certain Existing Arrangements. The Company agrees that (x) it
shall not hereafter acquire a “Conflicting Organization” or otherwise expand its
present business activities such that Executive could reasonably be expected to
be deemed in breach or violation of such non-competition covenants, and (y) it
shall indemnify and hold harmless the Executive from any and all damages that
Executive may hereafter suffer or incur by reason of any such Company
acquisition or expansion of business after the date hereof.

18. Reimbursement of Legal Expenses. The Company shall promptly reimburse
Executive for all reasonable legal fees incurred by Executive in connection with
the preparation, negotiation and execution of this Agreement and ancillary
documents.

19. Indemnification. The Company agrees to promptly execute and deliver to
Executive an Indemnification Agreement within 15 days of the date of execution
of this Agreement.

 

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

 

COMPANY:

/s/ Dyron M. Watford

By:

 

Dyron M. Watford, CFO

EXECUTIVE:

/s/ Billy Raley

 

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