EXHIBIT
10.10





EMPLOYMENT
AGREEMENT
 
 This
Employment Agreement (the “Agreement”) is effective as of February 27, 2008 (the
“Effective Date”) by and between John MacDonald (the “Executive”) and Blast
Energy Services, Inc., a Texas corporation (the “Company”).
 
 1.
              Duties
      and Scope of Employment.
 
 (a)           Position.  For the
term of this Agreement, the Company agrees to employ the Executive in the
position of Chief Financial Officer (the “Employment”).  The duties
and responsibilities of Executive shall include the duties and responsibilities
for the Executive’s corporate office and position as set forth in the Company’s
bylaws and such other duties and responsibilities as the Company’s Chief
Executive Officer and/or Board of Directors may from time to time reasonably
assign to the Executive.
 
 (b)           Obligations to the
Company.  During his Employment, the Executive shall devote his
full business efforts and time to the Company.  During his Employment,
without prior written approval from the Company’s Chief Executive Officer, the
Executive shall not render services in any capacity to any other person or
entity and shall not act as a sole proprietor or partner of any other person or
entity or as a shareholder or other owner owning more than ten percent of the
stock or other interests of any other corporation or entity.  This
obligation, however, shall not preclude Executive from engaging in appropriate
civic, charitable or religious activities or from devoting a reasonable amount
of time to private investments or from serving on the boards of directors of
companies, including closely held companies which are controlled by Executive as
long as these activities or services do not materially interfere or conflict
with Executive’s responsibilities to, or ability to perform his duties of
employment by, the Company under this Agreement.  The Executive shall
comply with the Company’s policies and rules as they may be in effect from time
to time during his Employment.
 
 (c)           No Conflicting
Obligations.  The Executive represents and warrants to the
Company that he is under no obligations or commitments, whether contractual or
otherwise, that are inconsistent with his obligations under this
Agreement.  The Executive represents and warrants that he will not use
or disclose, in connection with his employment by the Company, any trade secrets
or other proprietary information or intellectual property in which the Executive
or any other person has any right, title or interest and that his employment by
the Company as contemplated by this Agreement will not infringe or violate the
rights of any other person.  The Executive represents and warrants to
the Company that he has returned all property and confidential information
belonging to any prior employer.
 
 2.           Cash
and Incentive Compensation.
 
 (a)           Salary.  The Company
shall pay the Executive as compensation for his services a base salary at a
gross annual of $150,000.  Such salary shall be payable in accordance
with the Company’s standard payroll procedures.  (The annual
compensation specified in this Subsection (a), together with any increases in
such compensation as a result of an extension of the term of this Agreement
pursuant to Section 4(a), is referred to in this Agreement as “Base
Compensation.”)
 
 
 (b)           Bonus.  Executive
shall be included in the Company Executive Compensation program, whereby senior
management are eligible to receive annual bonuses of up to 50% of their base
compensation.  Such bonus, if any, shall be awarded after the end of
the calendar year solely at the discretion of the Board of
Directors.
 
 (c)           Options.  Executive
shall be eligible to be considered for stock option grants under the Company’s
annual stock option award program as administered by, and at the discretion of,
the Compensation Committee of the Board of Directors.  An initial
option shall be granted to the Executive for the right to purchase an aggregate
of 200,000 warrants shares of the Company’s common stock at an exercise price
based upon the date of approval by the Compensation Committee of the Board of
Directors.  Such option shall vest quarterly over the initial term of
this Agreement.
 
 (d)           Insurance Coverage
Reimbursement.  Company agrees to pay Executive at current rate
of $224 per month to cover and to be in lieu of medical benefits, as selected by
Executive in his sole discretion.  Executive understands and agrees
that Company is not required to permit Executive to participate in any
Company-sponsored benefit plans, including but not limited to the Company’s
medical plan, in the same or any manner as Company and an third-party benefit
provider make such opportunities available to Company’s regular full-time
employees; provided, however, if Company does provide such Company-sponsored
benefit plans and Executive is eligible to participate in such Company-sponsored
benefit plans, Executive shall not be entitled to receive such $224 monthly
payment.
 
 (e)           Vacation.  During
the term of this Agreement, Executive shall be entitled to vacation each year in
accordance with the Company’s policies in effect from time to time, but in no
event less than four (4) weeks paid vacation per calendar year.
 
 3.           Business
Expenses.  During his Employment, the Executive shall be
authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with his duties hereunder.  The
Company shall reimburse the Executive for such expenses upon presentation of an
itemized account and appropriate supporting documentation, all in accordance
with the Company’s generally applicable policies.  The Executive shall
have a car allowance of $1,000.00 per month during the term of this
Agreement.
 
 4.  Term
of Employment.
 
 (a)           Term.  This
Agreement shall expire on the first anniversary of the Effective Date, unless
otherwise extended by the mutual agreement of Executive and the Company; provided, that this
Agreement shall automatically be renewed for additional one (1) year terms and
shall automatically be continued effective as of the subsequent anniversary date
of the Agreement ( a “Renewal Date”) unless the Company or Executive has
delivered written notice of non-renewal to the other party at least sixty (60)
days prior to the relevant Renewal Date.
 
 
 (b)           Basic Rule.  The
Executive’s Employment with the Company shall be “at will,” meaning that either
the Executive or the Company shall be entitled to terminate the Executive’s
Employment at any time and for any reason, with or without Cause (in the case of
the Company) or Constructive Termination (in the case of
Executive).  Any contrary representations that may have been made to
the Executive shall be superseded by this Agreement.  This Agreement
shall constitute the full and complete agreement between the Executive and the
Company on the “at will” nature of the Executive’s Employment, which may be
changed only in an express written agreement signed by the Executive and duly
authorized officer of the Company.
 
 (c)           Termination.  The
Company or the Executive may terminate the Executive’s Employment at any time
and for any reason (or no reason), and with or without Cause (in the case of the
Company) or Constructive Termination (in the case of Executive), by giving the
other party notice in writing.  The Executive’s Employment shall
terminate automatically in the event of his death.
 
 (d)           Rights Upon
Termination.  Except as expressly provided in Section 5, upon
the termination of the Executive’s Employment pursuant to this Section 4, the
Executive shall be entitled only to the compensation, benefits and
reimbursements described in Sections 2 and 3 for the period preceding the
effective date of the termination.
 
 5.           Termination
Benefits.
 
 (a)           General
Release.  Any other provision of this Agreement
notwithstanding, Subsections (b), (c), and (d) below shall not apply unless the
Employee (i) has executed a general release (in a form reasonably prescribed by
the Company) of all known and unknown claims that he may then have against the
Company or persons affiliated with the Company, and (ii) has agreed not to
prosecute any legal action or other proceeding based upon any of such
claims.
 
 (b)           Severance Pay.  If,
during the term of this Agreement, the Company terminates the Executive’s
Employment for any reason other than Cause or Disability, or if the Executive
voluntarily resigns following a Constructive Termination, (collectively, a
“Termination Event”), then the Company shall pay the Executive his Base
Compensation for the remaining period of the then-current term of this
Agreement, but not in excess of 6 months.  Such Base Compensation
shall be paid as a lump sum within thirty (30) days after the Termination
Event.  In addition, the Company shall also reimburse the Executive
for the payment of the Executive’s COBRA or equivalent other replacement medical
and dental insurance premiums for a period of 6 months.
 
 
 (c)           Stock Options.  With
respect to all stock options in the Company granted to Executive prior to the
effective date of the Termination Event, an amount of option shares equal to the
number of months for which Executive is entitled to receive severance pay will
become immediately vested, not subject to repurchase and not subject to
assumption, assignment or replacement by the Company or its
successors.
 
 (d)           Disability.  If the
Executive’s employment is terminated by the Company by reason of the Executive’s
Disability, the Executive shall be entitled to a prompt cash payment of a
prorated portion of the payments set forth in Section 2(a) above for the year in
which such termination occurs.  Executive and his eligible dependents
shall be entitled to continued participation so long as he is disabled and is
not eligible for coverage under a successor employer’s plans through the month
in which the Executive attains age sixty-five (65) in all medical, dental,
vision and hospitalization insurance coverage, and in all other employee welfare
benefit plans, programs and arrangements in which he was participating on the
date of termination of his employment for Disability on terms and conditions
that are no less favorable that those applicable, from time to time, to senior
executives of the Company.  For purposes of this Agreement,
“Disability” means the Executive’s inability, due to physical or mental
incapacity, to substantially perform his duties and responsibilities
contemplated by this Agreement.  In the event of a dispute as to
whether the Executive is disabled, the determination shall be made by a licensed
medical doctor selected by the Company and agreed to by the
Executive.  If the parties cannot agree on a medical doctor, each
party shall select a medical doctor and the two doctors shall select a third who
shall be the approved medical doctor for this purpose.  The Executive
agrees to submit to such tests and examinations as such medical doctor shall
deem appropriate.
 
 (e)           Definition of
“Cause.”  For all purposes under this Agreement, “Cause” shall
mean:
 
 (i)           Any
breach of the Invention, Confidential Information and Non-Competition Agreement
referenced in Section 6 hereof between the Executive and the Company, as
determined by the Board of Directors of the Company;
 
 (ii)           Conviction
of, or a plea of “guilty” or “no contest” to, a felony, or a plea of “guilty” or
“no contest” to a lesser included offense in exchange for withdrawal of a felony
indictment or felony charge by indictment, in each case whether arising under
the laws of the United States or any state thereof;
 
 (iii)           Any
act or acts of fraud;
 
 (iv)           violations
of applicable laws, rules or regulations that expose the Company to material
damages or material liability
 
 (v)           material
breach by the employee of any material provision of the Employment Agreement
that remains uncorrected for 30 days following written notice of such breach to
the employee by the company.
 
 
 (f)           Definition of “Constructive
Termination.”  For all purposes under this Agreement,
Constructive Termination shall mean the voluntary resignation of the Executive
within 60 days following:
 
 (i)           The
failure of the Executive to be elected or reelected to any of the positions
described in Section 1(a) or his removal from any such position without his
written consent.
 
 (ii)           A
material diminution in the Executive’s duties or the assignment of him of any
duties inconsistent with the Executive’s position and status as CFO of the
Company.
 
 (iii)           A
change in the Executive’s reporting relationship such that the Executive no
longer reports directly to the Chief Executive Officer.
 
 (iv)           A
reduction in the Executive’s Base Compensation without his consent;
 
 (v)           Receipt
of notice from Company that the Executive’s principal workplace will be
relocated by more than fifty (50) miles without his written
consent;
 
 (vi)           A
breach by the Company of any of its material obligations to the Executive under
this Agreement; or
 
 (vii)           The
failure of the Company to obtain a satisfactory agreement from any successor to
all or substantially all of the assets or business of the Company to assume and
agree to perform this Agreement within 15 days after a merger, consolidation,
sale or similar transaction.
 
 6.
              Successors.
 
 (a)           Company’s
Successors.  This Agreement shall be binding upon any successor
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company’s business and/or assets.  For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s
business and/or assets which becomes bound by this Agreement.
 
 (b)           Executive’s
Successors.  This Agreement and all rights of the Executive
hereunder shall inure to the benefit of, and be enforceable by, the Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
  
 
 7.
              Miscellaneous
      Provisions.
 
 (a)           Notice.  Notice and
all other communications contemplated by this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or when mailed
by U.S. registered or certified mail, return receipt requested and postage
prepaid.  In the case of the Executive, mailed notices shall be
addressed to him at the home address which he most recently communicated to the
Company in writing.  In the case of the Company, mailed notices shall
be addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.
 
 (b)           Modifications and
Waivers.  No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive).  No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time.
 
 (c)           Indemnification.  To
the fullest extent permitted by the indemnification provisions of the Articles
of Incorporation and Bylaws of the Company in effect as of the date of this
Agreement, and the indemnification provision of the laws of the jurisdiction of
the Company’s incorporation in effect from time to time, the Company shall
indemnify the Executive as a director, senior officer or employee of the Company
against all liabilities and reasonable expenses that may be incurred in any
threatened, pending or completed action, suit or proceeding, and shall pay for
the reasonable expenses incurred by the Executive in the defense of or
participation in any proceeding to which the Executive is a party because of his
service to the Company.  The rights of the Executive under this
indemnification provision shall survive the termination of
employment.
 
 (d)           Whole
Agreement.  This Agreement and the Invention, Confidential
Information and Non-Competition Agreement between the Company and Executive
contain the entire understanding of the parties with respect to the subject
matter hereof.  No other agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in such agreements have been made or entered into by either party with
respect to the subject matter hereof.
 
 (e)           Withholding
Taxes.  All payments made under this Agreement shall be subject
to reduction to reflect taxes or other charges required to be withheld by
law.
 
 (f)           Choice of Law and
Severability.  This Agreement is executed by the parties in the
State of Texas and shall be interpreted in accordance with the laws of such
State (except their provisions governing the choice of law).  If any
provision of this Agreement becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction by reason of the scope, extent or duration of
its coverage, then such provision shall be deemed amended to the extent
necessary to conform to applicable law so as to be valid and enforceable or, if
such provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect.  Should there ever
occur any conflict between any provision contained in this Agreement and any
present or future statute, law, ordinance or regulation contrary to which the
parties have no legal right to contract, then the latter shall prevail but the
provision of this Agreement affected thereby shall be curtailed and limited only
to the extent necessary to bring it into compliance with applicable
law.  All the other terms and provisions of this Agreement shall
continue in full force and effect without impairment or limitation.
 
 
 (g)           Arbitration.  Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, or the Executive’s Employment or the termination thereof, shall be
settled in Houston, Texas, by arbitration in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association.  The decision of the arbitrator shall be final and
binding on the parties, and judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.  The parties
hereby agree that the arbitrator shall be empowered to enter an equitable decree
mandating specific enforcement of the terms of this Agreement.  The
Company and the Executive shall share equally all fees and expenses of the
arbitrator.  The Executive hereby consents to personal jurisdiction of
the state and federal courts located in the State of Texas for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
 
 (h)           No Assignment.  This
Agreement and all rights and obligations of the Executive hereunder are personal
to the Executive and may not be transferred or assigned by the Executive at any
time.  The Company may assign its rights under this Agreement to any
entity that assumes the Company’s obligations hereunder in connection with any
sale or transfer of all or a substantial portion of the Company’s assets to such
entity.
 
 (i)           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
 
 IN WITNESS WEREOF, each of the
parties has executed this Agreement, in the case of the Company by its duly
authorized officer, as of the day and year first above written.
 
 
 
 /s/
      John MacDonaldJohn
      MacDonaldBLAST
      ENERGY SERVICES, INC.By:
              /s/
      John O’KeefeName:
              John
      O’KeefeTitle:
              CEO