EXECUTIVE EMPLOYMENT AGREEMENT


      This EXECUTIVE  EMPLOYMENT  AGREEMENT (this "Agreement") is made effective
May 1, 2006  ("Effective  Date"),  by and between  CAPITAL GOLD  CORPORATION,  a
Delaware  corporation  ("Employer"),  and JOHN BROWNLIE,  a resident of Colorado
("Executive").

      WHEREAS,  Executive  agrees to be employed by Employer  for the period and
upon and subject to the terms herein provided; and

      WHEREAS,  Employer agrees to employ  Executive for the period and upon and
subject to the terms herein provided;

      NOW,  THEREFORE,  in  consideration  of the  foregoing  and of the  mutual
promises,  covenants and agreements  contained herein,  the legal sufficiency of
which is hereby  acknowledged,  and intending to be legally bound,  Employer and
Executive agree:

      1.    Employment.  Upon and subject to the terms provided herein, Employer
agrees to employ  Executive,  and  Executive  hereby  agrees to be  employed  by
Employer,  as  Employer's  Vice  President  Operations,  or other  substantially
similar  position.  Executive  shall report to the President and Chief Executive
Officer  or such other  supervisor  as  designated  by the  President  and Chief
Executive Officer of Employer.  Executive shall perform such tasks  commensurate
with this  position as may from time to time be assigned  by  Employer.  In this
regard,   unless  and  until  Executive  is  notified   otherwise  by  Employer,
Executive's duties shall include,  among other things,  serving as the President
of Minera Santa Rita,  S.A. de C.V., a subsidiary  of Employer  incorporated  in
Mexico.  Executive  shall  devote all business  time,  labor,  skill,  undivided
attention and best ability to the performance of Executive's duties hereunder in
a manner which will faithfully and diligently further the business and interests
of  Employer.  During the term of  employment,  Executive  shall not directly or
indirectly  pursue any other business activity without the prior written consent
of Executive's  supervisor,  with the exception of passive personal  investments
not in breach of any other term or provision hereof.  Executive agrees to travel
to  whatever  extent  is  reasonably  necessary  in the  conduct  of  Employer's
business, at Employer's expense and pursuant to Employer's standard policies and
procedures.

      2.    Term  of  Employment.  Subject  to  the  terms  set  forth  in  this
Agreement, Employer agrees to employ Executive and Executive hereby agrees to be
employed by Employer for a period (the "Employment  Period") commencing from the
date hereof  until the second  anniversary  of the date hereof.  The  Employment
Period shall  automatically  renew for successive one-year periods unless either
party provides the other party with written notice of its intent not to renew at
least thirty (30) days prior to the  expiration  of the then current  Employment
Period.

      3.    Compensation.

            (a)   Base  Salary.   As  compensation  for  the  services  rendered
pursuant to this Agreement, Employer agrees to pay Executive a base salary at an
annual rate of $150,000,  payable in  installments in accordance with Employer's
standard payroll practices,  subject to such payroll and withholding  deductions
as are required by law or authorized by Executive. The amount of the base salary
shall be reviewed  periodically  and may be increased at the sole  discretion of
Employer.



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            (b)   Bonus.  Executive  shall be eligible for any annual  incentive
bonus opportunity  offered by Employer to employees at Executive's level. In the
event of any  conflict  between  this  Agreement  and any  incentive  bonus plan
adopted by  Employer  for its  officers  and  employees,  this  Agreement  shall
control.  The amount of this bonus, as well as the criteria  necessary to earn a
bonus,  may be  changed  at any time by  Employer  and shall be within  the sole
discretion  of Employer.  All bonuses paid  pursuant to this  Agreement  will be
subject to applicable  withholdings  and  deductions and will be paid no earlier
than  fifteen  (15) days and no later than  ninety  (90) days  after  Employer's
fiscal  year end for  which  the  bonus is  earned.  If  Executive's  employment
terminates,  voluntarily or  involuntarily,  prior to the last day of the fiscal
year for which the bonus applies, Executive acknowledges that he is not entitled
to any bonus not yet paid at the time of the termination because any such unpaid
bonus will not be earned,  vested,  due, or owing.  Executive  hereby  expressly
forfeits and waives any such unpaid bonus.

            (c)   Vacation.  For each full  twelve  (12)  months of  employment,
Executive shall be entitled to receive four (4) weeks paid vacation.  During the
first full twelve (12) months of Executive's  employment,  however,  Executive's
paid  vacation  time shall accrue on a prorata basis at the rate of one (1) week
every three (3) months.  One (1) week of paid  vacation  may be carried  forward
from one calendar  year to the next  calendar  year only (the  "Carried  Forward
Vacation"). If applicable, Executive's first week of vacation each calendar year
shall be deemed the Carried Forward Vacation.

            (d)   Participation  in Equity Plan.  Executive  will be eligible to
participate in any equity incentive plan, as amended from time to time, that may
be adopted by Employer or any successor plan adopted by Employer during the term
of this  Agreement and applicable to other  employees at Executive's  level (the
"Equity Plan"). The number of options, vesting schedule, exercise price, and all
other terms and  conditions of the stock options shall be set forth in an option
agreement  pursuant  to the  applicable  plan  and  shall be  commensurate  with
Executive's position, as determined by the Compensation  Committee of Employer's
Board of Directors,  in its sole discretion.  Employer may,  consistent with its
obligations  under such a plan or plans,  amend or discontinue  any or all stock
option plans at any time.

            (e)   Employer  Vehicle.  Executive  shall be entitled to use one of
Employer's  vehicles  located on site at Employer's  property in Sonora,  Mexico
only  as  necessary  to  meet  Executive's  duties  and  obligations  hereunder.
Executive  may not utilize  any  vehicle  owned by  Employer  for  personal  use
unrelated to Executive's duties and obligations hereunder.

            (f)   Expense Reimbursement.  Employer shall reimburse Executive for
all reasonable and documented travel,  entertainment and other business expenses
actually and properly  incurred by him in relation to  Employer's  business,  as
they are incurred.

            (g)   Stock Options. Executive is hereby granted options to purchase
200,000 shares of issued and outstanding common stock of Employer,  which may be
exercised by Executive (i) for up to 50,000 shares,  any time from and after the
Effective Date, and (ii) for up to an additional  150,000 shares,  any time from
and after the date of Economic Completion as defined in the Loan Agreement to be
entered into  between  Standard  Bank PLC and Minera  Santa Rita,  S.A. de C.V.,
Employer's  wholly-owned  subsidiary,  at an exercise  price of $0.32 per share,
exercisable  at any time within a two-year  period  following the Effective Date
and a two-year period following the date of Economic  Completion,  respectively.
Employer shall use good faith efforts to adopt the options  granted to Executive
herein as an equity incentive plan, and to file a registration statement on Form
S-8 in connection therewith.



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      4.    Termination of Employment.  Notwithstanding  any other  provision of
this Agreement, Executive's employment may be terminated as follows:

            (a)   Expiration.  This Agreement may be terminated  upon expiration
of the term hereof,  in accordance  with the  procedures set forth in Section 2.
Following  termination pursuant to this Section 4(a), Employer's only obligation
to Executive shall be to pay to Executive within thirty (30) days of termination
all accrued  base  salary,  all accrued  vacation  time and any  reasonable  and
necessary business expenses incurred by Executive in connection with his duties,
all to the date of  termination  and  payable  in a lump  sum,  less  applicable
deductions and withholdings.

            (b)   Termination  for Cause.  This  Agreement  may be terminated by
Employer  for Cause.  For purposes of this  Agreement,  "Cause"  justifying  the
termination  of this Agreement by Employer is defined as: (i) failure or refusal
to perform the services required hereunder;  (ii) a material breach by Executive
of any of the terms of this  Agreement;  or (iii)  Executive's  conviction  of a
crime that either results in imprisonment or involves embezzlement,  dishonesty,
or  activities  injurious to Employer or its  reputation.  Whether  Cause exists
under this  Agreement  shall be  determined  by the  Employer in its  reasonable
discretion. Following termination pursuant to this Section 4(b), Employer's only
obligation to Executive shall be to pay to Executive  within thirty (30) days of
termination  all  accrued  base  salary,  all  accrued  vacation  time  and  any
reasonable and necessary  business  expenses incurred by Executive in connection
with his duties,  all to the date of termination and payable in a lump sum, less
applicable deductions and withholdings.

            (c)   Disability.  This Agreement may be terminated by Employer upon
at least thirty (30) days' written  notice if Executive is prevented by illness,
accident or other disability  (mental or physical) from performing the essential
functions of the position for one or more periods  cumulatively  totaling  three
(3) months during any  consecutive  twelve (12) month period.  In the event this
Agreement is  terminated  pursuant to this Section 4(c),  Employer  shall pay to
Executive  within thirty (30) days of termination  all accrued base salary,  all
accrued  vacation  time  and any  reasonable  and  necessary  business  expenses
incurred  by  Executive  in  connection  with  his  duties,  all to the  date of
termination  and  payable  in  a  lump  sum,  less  applicable   deductions  and
withholdings.  In addition,  Employer shall pay to Executive  within thirty (30)
days of  termination a severance  payment in an amount equal to one (1) month of
Executive's base salary,  payable in a lump sum, less applicable  deductions and
withholdings,  as soon as  administratively  practicable  following  Executive's
termination  ("Disability  Severance  Payments").  The severance payment made by
Employer to  Executive  pursuant to this  Section  4(c) are  conditioned  on the
Executive signing a Confidential  Severance Agreement and Release  substantially
in the form attached hereto as EXHIBIT A.



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            (d)   Death. This Agreement shall be automatically terminated in the
event of  Executive's  death  during the term of  employment.  In the event this
Agreement  terminates  upon  Executive's  death,  Employer shall pay Executive's
estate  or  beneficiary,  as  applicable,  all  accrued  vacation  time  and any
reasonable and necessary  business  expenses incurred by Executive in connection
with his duties,  all to the date of termination  and all payable in a lump sum,
less  applicable  deductions  and  withholdings,  as  soon  as  administratively
practicable following Executive's termination.

            (e)   Without  Cause.  This  Agreement may be terminated by Employer
without Cause at any time,  such  termination  to be effective  thirty (30) days
after  Executive's  receipt of  written  notice  from  Employer;  provided  that
Employer pays Executive each of the following:

                  (i)   If  Executive  has been  employed for less than one year
from and after the Effective  Date,  Executive shall not be entitled to any Cash
Severance  Payments (as defined  below).  If Executive  has been  employed for a
period of one year or more,  Employer shall pay Executive  severance payments in
an amount equal to Executive's  base salary for three (3) months after the first
anniversary of Executive's  employment  with Employer plus an additional one (1)
month of base  salary for each  additional  full year of  employment  (the "Cash
Severance  Payments").  Such  Cash  Severance  Payments  shall  be paid in equal
monthly  installments to Executive beginning in the month following  Executive's
termination.  In any event,  Employer  shall pay to  Executive  all accrued base
salary,  all accrued  vacation time and any  reasonable  and necessary  business
expenses incurred by Executive in connection with his duties, all to the date of
termination  and  payable  in  a  lump  sum,  less  applicable   deductions  and
withholdings,  as soon as  administratively  practicable  following  Executive's
termination.

                  (ii)  Provided  that  Executive  timely  elects   continuation
coverage under the Consolidated  Omnibus Budget  Reconciliation  Act of 1985, as
amended  ("COBRA"),  Employer shall pay, on Executive's  behalf,  the portion of
premiums  of  Executive's  group  health  insurance,   including   coverage  for
Executive's  eligible  dependents,  that  Employer  paid  immediately  prior  to
Executive's  separation of employment  with Employer  ("COBRA  Payments")  for a
period of twelve  (12) months  ("COBRA  Period").  Employer  will pay such COBRA
Payments for Executive's  eligible  dependents only for coverage for which those
dependents were enrolled immediately prior to the date of Executive's separation
of employment. Executive will continue to be required to pay that portion of the
premium of  Executive's  health  coverage,  including  coverage for  Executive's
eligible  dependents,  that Executive was required to pay as an active  employee
immediately prior to the date of Executive's  separation of employment.  For the
balance of the period that  Executive is entitled to coverage  under COBRA after
the COBRA Period,  if any,  Executive shall be entitled to maintain coverage for
Executive and Executive's eligible dependents at Executive's sole expense.

                  (iii) The Cash Severance Payments and the COBRA Payments shall
be paid so long as  Executive  is not in breach  of any term of this  Agreement,
including,  without limitation,  Sections 5, 6, and 7 hereof. The Cash Severance
Payments  and COBRA  Payments  made by Employer  to, or on behalf of,  Executive
pursuant  to this  Section  4(e) are  conditioned  on the  Executive  signing  a
Severance  Agreement and Release  substantially  in the form attached  hereto as
EXHIBIT A.



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            (f)   Material Breach. This Agreement may be terminated by Executive
for a material  breach by Employer of any of the terms of this  Agreement,  upon
thirty (30) days' written notice specifying the breach,  and failure of Employer
to either (i) cure or  diligently  commence to cure the breach within the 30-day
notice  period,  or (ii)  dispute in good faith the  existence  of the  material
breach.  Following  termination  pursuant to this Section 4(f), if Executive has
been employed for a period of one year or more,  Employer shall pay to Executive
severance  payments in an amount equal to Executive's  base salary for three (3)
months after the first anniversary of Executive's  employment with Employer plus
an  additional  one (1) month of base  salary for each  additional  full year of
employment,  less applicable  withholdings  and deductions,  after the date such
notice  is  given.  Such  severance  payments  shall  be paid in  equal  monthly
installments  to  Executive   beginning  in  the  month  following   Executive's
termination.  Such severance  payments shall be paid so long as Executive is not
in breach of any term of this Agreement, including, without limitation, Sections
5, 6, and 7 hereof.  In addition,  Employer  shall pay to Executive  all accrued
base salary, all accrued vacation time and any reasonable and necessary business
expenses incurred by Executive in connection with his duties, all to the date of
termination  and  payable  in  a  lump  sum,  less  applicable   deductions  and
withholdings,  as soon as  administratively  practicable  following  Executive's
termination.  Severance  payments made by Employer to Executive pursuant to this
Section 4(f) are conditioned on the Executive  signing a Confidential  Severance
Agreement and Release substantially in the form attached hereto as EXHIBIT A.

            (g)   Resignation. This Agreement may be terminated by Executive for
any  reason  or no reason at all by giving  notice to  Employer  of  Executive's
resignation  at least sixty (60) days prior to the effective  resignation  date.
Following  termination pursuant to this Section 4(g), Employer's only obligation
to  Executive  shall  be to pay to  Executive  within  thirty  (30)  days of the
effective date of resignation all accrued base salary, all accrued vacation time
and any  reasonable  and necessary  business  expenses  incurred by Executive in
connection with his duties, all to the date of termination and payable in a lump
sum, less applicable deductions and withholdings.

            (h)   Section 409A.

                  (i)   Anything   in   this    Agreement    to   the   contrary
notwithstanding,  if on the date of termination of Executive's  employment  with
Employer,  as a result of such termination,  Executive would receive any payment
that,  absent  the  application  of this  Section  4(h)(i),  would be subject to
interest and additional tax imposed pursuant to Section 409A(a) of the Code as a
result of the  application  of  Section  409A(2)(B)(i)  of the  Code,  then such
payment  shall be payable on the date that is the earliest of (A) six (6) months
after Executive's  termination date, (B) the Executive's death or (C) such other
date as will not  result in such  payment  being  subject to such  interest  and
additional tax.

                  (ii)  It is the  intention  of the  parties  that  payments or
benefits  payable  under this  Agreement  not be subject to the  additional  tax
imposed  pursuant  to Section  409A of the Code.  To the extent  such  potential
payments or benefits  could become  subject to such  Section,  the parties shall
cooperate to amend this Agreement with the goal of giving Executive the economic
benefits  described  herein in a manner  that does not  result in such tax being
imposed.



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      5.    Proprietary Information.

            (a)   Executive   represents  and  warrants  to  Employer  that  (i)
Executive is not subject to any limitation or agreement  restricting  employment
by Employer or  performance of Executive's  duties  hereunder,  and (ii) neither
Executive  nor any  third  party  has any  right or claim  to  Executive's  work
produced on behalf of Employer or using the property,  personnel,  or facilities
of Employer.  Executive shall not misappropriate  proprietary rights of Employer
or any third party.

            (b)   Executive  further  agrees not to make,  use,  disclose to any
third party,  or permit to be made,  used,  or  disclosed,  any records,  plans,
papers, articles, notes, memoranda, reports, lists, records, drawings, sketches,
specifications,  software  programs,  data,  or other  materials  of any  nature
relating  to any  matter  within  the  scope  of the  business  of  Employer  or
concerning  any  of  its  dealings  or  affairs  ("Materials"),  whether  or not
developed,  in whole or in part,  by  Executive  and  whether  or not  embodying
Confidential  Information  (defined  below),  otherwise  than for the benefit of
Employer.  Executive  shall  not,  after the  termination  of  employment,  use,
disclose, or permit to be used or disclosed, any such Materials, it being agreed
that all such Materials  shall be and remain the sole and exclusive  property of
Employer.  Immediately  upon the  termination  of  employment,  Executive  shall
deliver  all  such  Materials,  and all  copies  thereof,  to  Employer,  at its
designated office.

      6.    Non-Competition;  Non-Solicitation; Anti-Raiding; Non-Disparagement.
Without  the prior  written  approval  of the  Chief  Executive  Officer  or the
President of Employer,  Executive shall not, directly or indirectly,  during his
employment and until the end of one hundred eighty (180) days after  termination
of employment (however such termination occurs,  including,  without limitation,
termination pursuant to Section 4(a), 4(b), 4(c), 4(e), 4(f), or 4(g)):

            (a)   Engage in a "Competing Business" in the "Territory",  as those
terms are  defined  below,  whether  as a sole  proprietor,  partner,  corporate
officer,  employee,  director,   shareholder,   consultant,  agent,  independent
contractor,  trustee,  or in any  other  manner  by which  Executive  holds  any
beneficial  interest  in a  Competing  Business,  derives  any  income  from any
interest in a Competing  Business,  or provides any service or  assistance  to a
Competing Business.  "Competing  Business" shall mean any business that mines or
produces  minerals which is competitive  with the business of Employer or any of
its Affiliates  (defined below),  as conducted or under  development at any time
during the term of employment.  "Affiliates" shall mean any entity controlled by
or under common control with Employer or any joint venture, partnership or other
similar entity to which Employer is a party.  "Territory" shall mean anywhere in
the state of Sonora,  Mexico. The provisions of this Section 6 will not restrict
Executive  from  owning  less than five  percent of the  outstanding  stock of a
publicly-traded corporation engaged in a Competing Business;

            (b)   Acquire,  lease or otherwise obtain or control any beneficial,
direct  or  indirect  interest  in  mineral  rights,  or other  rights  or lands
necessary  to  develop,  any mineral  property  in which  Employer or any of its
Affiliates at the time of  termination  as a beneficial  interest or is actively
seeking to acquire, or that is within a distance of five (5) kilometers from any
point on the outer  perimeter of any such  property in which  Employer or any of
its affiliates has a beneficial interest or that it is seeking to acquire;



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            (c)   Conduct any exploration or production  activities or otherwise
work on or in  respect of any  mineral  property  within a distance  of five (5)
kilometers  from any point on the outer  perimeter  of any  mineral  property in
which  Employer or any of its  affiliates  then has a beneficial  interest or is
actively seeking to acquire;

            (d)   (i) Contact or solicit,  or direct or assist others to contact
or solicit,  for the purpose of promoting  any  person's or entity's  attempt to
compete with Employer or any of its  Affiliates,  in any business  carried on by
Employer or any of its  Affiliates  during the period in which  Executive was an
employee of Employer, any suppliers, independent contractors,  vendors, or other
business  associates of Employer or any of its Affiliates  that were existing or
identified prospective suppliers, independent contractors,  vendors, or business
associates  during such period,  or (ii)  otherwise  interfere in any way in the
relationships  between  Employer or any of its Affiliates  and their  suppliers,
independent contractors, vendors, and business associates;

            (e)   (i) Solicit,  offer employment to, otherwise  attempt to hire,
or assist in the hiring of any  employee  or officer of  Employer  or any of its
Affiliates; (ii) encourage, induce, assist or assist others in inducing any such
person  to  terminate  his  or  her  employment  with  Employer  or  any  of its
Affiliates; or (iii) in any way interfere with the relationship between Employer
or any of its Affiliates and their employees; or

            (f)   Make any  public  statement  or  perform  or do any  other act
prejudicial or injurious to the reputation or goodwill of Employer or any of its
Affiliates  or otherwise  interfere  with the business of Employer or any of its
Affiliates.

      7.    Confidentiality.

            (a)   The term "Confidential  Information" shall include, but not be
limited  to,  the  whole or any  portion  or phase of (i) any  confidential,  or
proprietary  or  trade  secret,  technical,  business,  marketing  or  financial
information,  whether  pertaining to (1) Employer or its Affiliates,  (2) its or
their  suppliers,  or (3) any third party which  Employer or its  Affiliates  is
under an obligation to keep confidential including, but not limited to, methods,
know-how,   techniques,   systems,   processes,   software  programs,  works  of
authorship,  supplier  lists,  projects,  plans,  and  proposals,  and  (ii) any
software programs and programming prepared for Employer's benefit whether or not
developed,  in whole or in part by  Executive.  For purposes of this  Agreement,
"Confidential   Information"  shall  include,  but  shall  not  be  limited  to,
strategies,   analysis,   concepts,   ideas,  or  plans;  operating  techniques;
demographic and trade area  information;  prospective  site locations  know-how;
improvements;   discoveries,   developments;  designs,  techniques,  procedures;
methods; machinery, devices; drawings; specifications;  forecasts; new products;
research data,  reports,  or records;  marketing or business  development plans,
strategies,   analysis,   concepts  or  ideas;   contracts;   general  financial
information  about or  proprietary to Employer,  including,  but not limited to,
unpublished financial statements,  budgets,  projections,  licenses,  and costs;
pricing;  personnel  information;  and any and all other  trade  secrets,  trade
dress,  or proprietary  information,  and all concepts or ideas in or reasonably
related to Employer's business.  All such Confidential  Information is extremely
valuable  and is  intended  to be kept  secret  to  Employer;  is the  sole  and
exclusive  property  of  Employer  or its  Affiliates;  and,  is  subject to the
restrictive covenants set forth herein. The term Confidential  Information shall
not  include  any  information  generally  available  to the public or  publicly
disclosed  by  Employer  (other  than  by the  act or  omission  of  Executive),
information   disclosed  to  Executive  by  a  third  party  under  no  duty  of
confidentiality to Employer or its Affiliates, or information required by law or
court order to be disclosed by Executive.



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<PAGE>

            (b)   Executive  shall  not,   without   Employer's   prior  written
approval,  use,  disclose,  or reveal to any person or entity any of  Employer's
Confidential  Information,   except  as  required  in  the  ordinary  course  of
performing  duties  hereunder.  Executive  shall not use or  attempt  to use any
Confidential  Information in any manner which has the possibility of injuring or
causing  loss,  whether  directly  or  indirectly,  to  Employer  or  any of its
Affiliates.

            (c)   In the event that  Executive's  employment  with  Employer  is
terminated for any reason whatsoever, he shall return to Employer, promptly upon
Employer's written request therefore, any documents,  photographs, tapes, discs,
memory devices,  and other property  containing  Confidential  Information which
were received by him during his employment, without retaining copies thereof.

      8.    Acknowledgments. Executive acknowledges that the covenants contained
in Sections 5, 6, and 7, including those related to duration,  geographic scope,
and the scope of prohibited conduct, are reasonable and necessary to protect the
legitimate  interests of Employer.  Executive  acknowledges  that the  covenants
contained  in Sections 5, 6, and 7 are  designed,  intended,  and  necessary  to
protect,  and are  reasonably  related to the protection  of,  Employer's  trade
secrets,  to  which he will be  exposed  and  with  which he will be  entrusted.
Specifically,  without  limitation,  Executive is entrusted  with trade  secrets
regarding:  the strategic  planning  initiatives;  business  development  plans;
budgets; financial information;  management training; future business plans; and
operational strategies and procedures.  Executive understands that any breach of
Sections  5  or  7  will  also  constitute  a  misappropriation   of  Employer's
proprietary rights, and may constitute a theft of Employer's trade secrets under
applicable local,  state, and federal  statutes,  and will result in a claim for
injunctive  relief,  damages,  and/or criminal  sanctions and penalties  against
Executive by Employer, and possibly others.

      9.    Forfeiture of Severance Payments.  If Executive breaches Sections 5,
6, or 7 of this  Agreement  during  the term that  severance  payments  are made
pursuant to Sections 4(c), 4(e), or 4(f) of this Agreement,  Executive shall pay
back to  Employer  all  severance  payments  received  through  the date of such
breach.  Nothing  contained in this Section 9 shall be construed as  prohibiting
Employer  from pursuing any other  remedies  available to it in the event of the
breach of Sections 5, 6, or 7,  including  the  equitable  remedies set forth in
Section 12.

      10.   Forfeiture  of Profits  Related to Option  Exercises.  If  Executive
breaches Section 5, 6, or 7 of this Agreement,  Employer shall have the right to
repurchase  any or all  shares  of common  stock of  Employer  purchased  by the
Executive  upon the  exercise  of options  within the twelve  (12)-month  period
immediately  preceding the breach at the exercise price of the option, or if the
Executive no longer  holds such shares of common stock  purchased on exercise of
options,  the  Executive  shall pay to  Employer  an  amount  equal to the gross
profits that  Executive  received on the sale of such shares  calculated  as the
aggregate  sale price of such shares of common  stock less the  exercise  price.
Nothing contained in this Section 10 shall be construed as prohibiting  Employer
from pursuing any other  remedies  available to it in the event of the breach of
Sections 5, 6, or 7, including the equitable remedies set forth in Section 12.



                                      A-8
<PAGE>

      11.   Non-Exclusivity of Rights.  Amounts that are vested benefits or that
Executive is otherwise entitled to receive under any plan, policy or program of,
or contract or  agreement  with  Employer at or  subsequent  to  termination  of
employment  (however such termination  occurs,  including,  without  limitation,
termination  pursuant to Section 4(a), 4(b), 4(c), 4(e), 4(f), or 4(g)) shall be
payable in accordance  with such plan,  policy or program of, or any contract or
agreement except as explicitly modified by this Agreement.

      12.   Equitable Remedies. The services to be rendered by Executive and the
Confidential Information entrusted to Executive as a result of his employment by
Employer are of a unique and special character, and any breach of Sections 5, 6,
or 7 will cause Employer  immediate and irreparable injury and damage, for which
monetary  relief would be inadequate or difficult to quantify.  Employer will be
entitled  to, in  addition to all other  remedies  available  to it,  injunctive
relief  and  specific  performance  to  prevent  a  breach  and  to  secure  the
enforcement  of  Sections 5, 6, or 7.  Executive  acknowledges  that  injunctive
relief may be  granted  immediately  upon the  commencement  of any such  action
without notice to Executive and in addition may recover monetary damages. In the
event a court requires  posting of a bond, the parties agree to a maximum $5,000
bond.  Executive further acknowledges that his duties under this Agreement shall
survive  termination of his employment,  whether the termination is voluntary or
involuntary, rightful or wrongful, and shall continue until Employer consents in
writing to the release of  Executive's  obligations  under this  Agreement.  The
parties  further agree that the  provisions of Sections 5, 6, and 7 are separate
from  and  independent  of the  remainder  of  this  Agreement  and  that  these
provisions are specifically  enforceable by Employer  notwithstanding  any claim
made by Executive against Employer.

      13.   Attorney's  Fees. In the event Executive  breaches,  or threatens to
breach, any provision of this Agreement, Executive acknowledges that he shall be
solely  and  fully  responsible  for  all  fees  and  costs,  including  without
limitation,  all  attorney's  fees and costs,  incurred by Employer in enforcing
this Agreement if Employer is the prevailing party in any litigation.

      14.   Entire  Agreement;   Amendments.   This  Agreement   (including  all
exhibits) constitute the entire  understanding  between the parties with respect
to the  subject  matter  herein and  therein,  and they  supersede  any prior or
contemporaneous  understandings  or  agreements.  This Agreement may be amended,
supplemented,  or terminated only by a written  instrument duly executed by each
of the parties.

      15.   Headings.  The headings in this  Agreement  are for  convenience  of
reference only and shall not affect its  interpretation.  References to Sections
are to Sections of this Agreement.



                                      A-9
<PAGE>

      16.   Gender; Number. Words of gender may be read as masculine,  feminine,
or neuter,  as required  by context.  Words of number may be read as singular or
plural, as required by context.

      17.   Severability.  The covenants in this Agreement shall be construed as
independent of one another, and as obligations distinct from one another and any
other  contract  between  Executive  and  Employer.  If any  provision  of  this
Agreement  is  held  illegal,   invalid,  or  unenforceable,   such  illegality,
invalidity, or unenforceability shall not affect any other provisions hereof. It
is the intention of the parties that in the event any provision is held illegal,
invalid, or unenforceable, that such provision be limited and construed so as to
effect the intent of the parties to the fullest  extent  permitted by applicable
law. Any claim by Executive  against  Employer shall not constitute a defense to
enforcement by Employer of this Agreement.

      18.   Survival.  The  provisions of Sections 4, 5, 6, 7, 8, 9, 10, 11, 12,
13, 14, 17, 18, 19, 20, 21, 22, and 23 shall  survive  the  termination  of this
Agreement.

      19.   Notices. All notices,  demands,  waivers,  consents,  approvals,  or
other communications  required hereunder shall be in writing and shall be deemed
to  have  been  given  if  delivered  personally,  if  sent  by  facsimile  with
confirmation  of receipt,  if sent by  certified  or  registered  mail,  postage
prepaid,  return receipt requested,  or if sent by same day or overnight courier
service to the following addresses:

         If to Employer, to:

                  Capital Gold Corporation
                  76 Beaver Street, 26th Floor
                  New York, New York 10005
                  Attention: President and Chief Executive Officer
                  Telephone: (212) 344-2785
                  Facsimile:  (212) 344-4537

         If to Executive, to:

                  John Brownlie
                  6040 Puma Ridge
                  Littleton, Colorado 80124
                  Telephone: (303) 379-8063
                  Facsimile:  (303) 379-8063

Notice of any change in any such  address  shall also be given in the manner set
forth  above.  Whenever  the  giving of notice is  required,  the giving of such
notice may be waived by the party entitled to receive such notice.

      20.   Waiver.  The failure of any party to insist upon strict  performance
of any of the terms or  conditions  of this  Agreement  shall not  constitute  a
waiver of any of such party's rights hereunder.



                                      A-10
<PAGE>

      21.   Assignment.  Other than as provided below,  neither party may assign
any rights or delegate any of  obligations  hereunder  without the prior written
consent of the other party, and such purported assignment or delegation shall be
void;  provided  that  Employer  may assign  the  Agreement  to any entity  that
purchases  the stock or assets of, or merges  with,  Employer or any  Affiliate.
This  Agreement  binds,  inures to the  benefit  of, and is  enforceable  by the
successors  and permitted  assigns of the parties and does not confer any rights
on any other persons or entities.

      22.   Governing  Law.  This  Agreement  shall be construed and enforced in
accordance with New York law except for any New York  conflict-of-law  principle
that might require the application of the laws of another jurisdiction.

      23.   Submission to Jurisdiction:  Service:  Waivers.  With respect to any
claim arising out of this Agreement,  each party hereto (a) irrevocably submits,
for itself and its property,  to the  jurisdiction of the state court located in
the City and County of New York,  New York,  the  federal  court  located in New
York, New York, and appellate  courts  therefrom,  (b) agrees that the venue for
any suit,  action or  proceeding  arising out of or  relating to this  Agreement
shall be exclusive to and limited to such courts, and (c) irrevocably waives any
objection it may have at any time to the laying of venue of any suit,  action or
proceeding  arising  out of or relating  to this  Agreement  brought in any such
court,  irrevocably  waives any claim that any such suit,  action or  proceeding
brought in any such court has been brought in an inconvenient  forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or  proceeding  brought  in any  such  court  that  such  court  does  not  have
jurisdiction over it. Each party irrevocably  consents to the service of process
in any suit,  action or proceeding in any of the aforesaid courts by the mailing
of copies of  process to the other  party or parties  hereto,  by  certified  or
registered mail at the address specified in Section 19.


                            [SIGNATURE PAGE FOLLOWS]


                                      A-11


<PAGE>


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

                                    EMPLOYER :

                                    CAPITAL GOLD CORPORATION


                                    By: /s/ Gifford A. Dieterle
                                        ----------------------------------------
                                        Name: Gifford A. Dieterle
                                        Title: President


                                    EXECUTIVE:


                                    By: /s/ John Brownlie
                                        ----------------------------------------
                                        Name:  John Brownlie


                                      A-12