<PAGE>


Synergy Letterhead




January2, 2002

Barry J. Coffey
333 East 53rd Street, Apt. 7E
New York, NY  10022

Dear Mr. Coffey:

         This letter (the "Agreement") will confirm the agreement between
Synergy Technologies Corporation, a Colorado corporation (the "Company"), and
you relating to your employment by the Company.

         1. EMPLOYMENT. The Company hereby employs you, and you hereby agree to
serve, as Chairman, President and Chief Executive Officer of the Company during
the Term of Employment (as defined in Section 2 hereof). In such capacity, you
shall be responsible for managing the overall efforts of the Company and
performing those duties and given such authority as is consistent and
commensurate with your position, as may from time to time be reasonably directed
by the Board of Directors, to whom you shall directly report. You agree
diligently to promote the interests of the Company and to devote all of your
working time, efforts and energies to the business and affairs of the Company
during the Term of Employment. Subject to Section 4 hereof, you may be
associated with or invest in other companies; provided, however, you will not
allow such activities to interfere with your services to the Company.

         2. TERM OF EMPLOYMENT. The Term of Employment hereunder shall be for
the period commencing on January 1, 2002 and shall end on December 31, 2004 (the
"Term of Employment"); provided however, that this Agreement shall be
automatically renewed thereafter for successive twelve (12) month terms (each a
"Renewal Term") if neither party gives the other party at least sixty (60) days
prior written notice before the end of the original Term of Employment or any
Renewal Term, unless earlier terminated pursuant to the provisions of Section 5
hereof.

         3.   COMPENSATION; EXPENSES; BENEFITS.

              (a) Compensation. As full compensation for the services rendered
hereunder during the Term of Employment, the Company shall pay you a base salary
of $240,000 per annum ("Base Salary"). The Base Salary shall be payable in
appropriate monthly installments to conform with the regular payroll dates for
salaried personnel of the Company and will be considered for upward adjustment
annually on or about January, based on the Company's evaluation of your
performance against mutually agreed upon objectives for the preceding fiscal
year. You will also be eligible for an annual cash bonus of up to 100% of base
salary based on the achievement of mutually agreed upon objectives and payable
in the first quarter following each year of completed service. You will be
granted Stock Options for 4,500,000 common shares of the Company's stock at a
strick price of $0.72 in January, 2002. Options will vest pro rata on a monthly
basis over the initial term of employment. Additional stock options will be
granted (the Annual Grant) in January following each year of completed service
with a strike price at the then fair market value. The total number of options
granted in the annual grant will be a minimum of 500,000 shares with no maximum
and will have three year cliff vesting; 1/3 becoming vested on each of the three
subsequent anniversaries of the grant date.

              (b) Benefits. During the Term of Employment, you will receive
payments to cover the expenses (grossed up for tax purposes) associated with
employee and family health insurance benefits, disability insurance, life
insurance not to exceed an annual cost of $20,000. You will be provided with
four (4) weeks of paid vacation per calendar year during the Term of Employment,
commencing on the date hereof. All vacation must be


<PAGE>


                                       2

used by December 31 of each year of the Term of Employment at which time any
unused vacation will expire and you will no longer be entitled to such unused
vacation time. No compensation shall be payable in respect of any unused
vacation days.

              (c) Expenses. During the Term of Employment, you shall be entitled
to be paid for or reimbursed for all reasonable expenses incurred by you in
performing services, including any expenses associated with a home office in New
York City, hereunder in accordance with the policies and procedures established
by the Company from time to time with respect to the senior executives of the
Company. In the event that you and the Company agree that relocation is in the
best interest of the Company, then the Company shall pay all expenses associated
with the sale of your New York residence and purchase of a residence in the new
location including realtor and/or broker fees, legal fees, bank fees,
Cooperative charges, stop loss on sale of New York residence if sold below
purchase price as well as home search trips for self and spouse, the moving of
all household goods and temporary living expenses, all expenses to be grossed up
for tax purposes.

         4.  COVENANT NOT TO COMPETE; CONFIDENTIALITY; ENFORCEABILITY; BREACH.

              (a) Non-Interference. You shall not, at any time during the time
commencing on the date hereof and continuing until the first anniversary of the
termination for any reason (including the expiration of the term thereof) of
your employment by the Company (the "Restricted Period"), directly or
indirectly, (i) recruit any employee of the Company or solicit or induce, or
attempt to solicit or induce, any employee of the Company to terminate his or
her employment with, or otherwise cease his or her relationship with the Company
or (ii) solicit, divert or take away, or attempt to solicit, divert or to take
away, the business or patronage of any of the clients, customers or accounts, or
prospective clients, customers or accounts, of the Company that were contacted,
solicited or served by the Company while you were employed or retained by, or
affiliated with the Company.

              (b) Non-Compete. You shall not, at any time during the Restricted
Period, directly or indirectly, own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be
employed or retained by, render services to, provide financing or advice to, or
otherwise be connected in any manner with any business that then competes with
any business of the Company (a "Competing Business"); provided, that nothing in
this Section 4(b) shall prohibit you (including your respective affiliates and
associates and any "group" (as such term is defined in the rules promulgated
under the Securities Exchange Act of 1934, as amended) of which such person is a
member) from acquiring up to one (1%) percent of any class of outstanding equity
securities of any corporation whose equity securities are regularly traded on a
national securities exchange or in the "over-the-counter market." The good faith
decision of the Board of Directors of the Company as to what constitutes a
Competing Business shall be final and binding upon you.

              (c) Confidentiality. (i) You acknowledge that all confidential
information concerning the Company's business, financial condition, operations,
strategies and prospects, including, but not limited to, customer, supplier and
distributor lists, trade secrets, plans, manufacturing techniques, sales,
marketing and expansion strategies, products, services, production, development,
technology and processes and all related technical information, procurement and
sales activities and procedures, promotion and pricing techniques and credit and
financial data relating to the Company are valuable, special and unique assets
of the Company (collectively, the "Confidential Information"); provided,
however, that Confidential Information shall not include any information that
(A) is or shall become generally known to the public (other than as a result of
a breach of this Agreement by you); (B) shall become available to a disclosing
party from an unaffiliated third party; provided, that such party shall not be
under any obligation of confidentiality to the Company which is known to you; or
(C) is required by law or court order to be disclosed; provided, that you shall
give the Company prompt written notice of any such legal or judicial process
requiring disclosure of Confidential Information and shall reasonably cooperate
with the Company, at the Company's expense, in any lawful action which the
Company desires to take to limit the disclosure required by such legal or
judicial process, and shall permit the Company to attempt, by appropriate legal
means, to limit and/or delay such disclosure. (D) Except as necessary to
disclose in the course of performing your duties.

                   (ii) You acknowledge and agree that all Confidential
Information is the exclusive property of the Company. You shall not disclose,
directly or indirectly, Confidential Information to any person or, directly or
indirectly, make use of or exploit for your own purposes or the benefit of any
other person (except as an officer, director or employee of the Company or its
affiliates) any Confidential Information.

<PAGE>

                                       3


                   (iii) You acknowledge and agree that all inventions, ideas,
sketches, designs, prototypes, developments or improvements made by you, either
alone or in conjunction with others, at any time or at any place during the Term
of Employment by the Company, whether or not reduced to writing or practice
during such Term of Employment, which relate directly to the business in which
the Company is engaged, shall be the exclusive property of the Company. You
shall promptly disclose any such invention, development or improvement to the
Company, and, at the request and expense of the Company, shall assign all of
your rights to the same to the Company. You shall sign all instruments necessary
for the filing and prosecution of any applications for or extension or renewals
of letters patent of the United States or any foreign country that the Company
desires to file.

                   (iv) All copyrightable work by you directly relating to the
Company's business during the Term of Employment is intended to be "work made
for hire" as defined in Section 101 of the Copyright Act of 1976, as amended,
and shall be the property of the Company. If the copyright to any copyrightable
work is not the property of the Company by operation of law, you will, without
further consideration, assign to the Company all right, title and interest in
such copyrightable work and will assist the Company and its nominees in every
way, at the Company's expense, to secure, maintain, and defend for the Company's
benefit copyrights and any extensions and renewals thereof in any and all
countries, such work to be and to remain the property of the Company whether
copyrighted or not.

              (d) Enforceability. You acknowledge and agree that the limitations
placed on you by this Section 4 are reasonable and are required for the
protection of the Company. You agree that if any such limitation is determined
in arbitration or by a court of competent jurisdiction to be unenforceable, you
agree and submit to the reduction of such limitation as the court or
arbitrator(s) deem reasonable. The limitations placed on you by this Section 4
are of the essence of this Agreement and they shall be construed and enforced
independently. You acknowledge and agree that the provisions set forth in this
Section 4 shall survive the termination or cancellation of this Agreement.

              (e) Breach. You acknowledge and agree that: (i) the Company will
be irreparably injured in the event of a material breach by you of any of your
obligations under this Section 4; (ii) monetary damages will not be an adequate
remedy for any such breach; (iii) the Company will be entitled to seek
injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach; (iv) the existence of any claims which you may have
against the Company, whether under this Agreement or otherwise, will not be a
defense to the enforcement by the Company of any of its rights under this
Section 4; and (v) the Company shall be entitled, without the necessity of
proving actual damages, to seek injunctive relief for any material breach of
this Section 4.

         5.   TERMINATION.

              (a) General. The Term of Employment shall be for the period
provided in Section 2 hereof unless it is earlier terminated in accordance with
the provisions of this Section 5.

              (b) Death and Disability. Your employment under this Agreement
shall terminate upon (i) your death, or (ii) in the event you become permanently
disabled, at the option of the Company, thirty (30) calendar days after the date
on which the Company shall have provided you with written notice of termination
because of your physical or mental incapacity on a permanent basis
("Disability"). You shall be deemed to have a Disability if you are unable, by
reason of any physical or mental incapacity, for a period of ninety (90)
substantially consecutive calendar days or the shorter periods aggregating one
hundred twenty (120) calendar days or more during any twelve (12) month period,
to perform your duties pursuant to this Agreement in a reasonably satisfactory
manner. In the event of any disagreement between you and the Company as to
whether you have a Disability, the question of such Disability shall be
submitted for decision to an impartial and reputable physician in New York
County, New York (the "Deciding Doctor") chosen by mutual agreement of the
Company and you or, failing such agreement, the Deciding Doctor shall be jointly
chosen by two physicians from New York County, New York (one of whom shall be
selected by the Company and the other by you). The decision of the Deciding
Doctor regarding whether you have a Disability shall be final and binding on the
Company and you. You shall submit to any medical examinations reasonably
necessary to enable the Deciding Doctor to make a decision regarding whether you
have a Disability.

              (c) Termination by the Company for "Cause". Except as otherwise
set forth herein, the Company may terminate your employment at any time during
the Term of Employment hereunder for "Cause";



<PAGE>

                                       4


provided, however, that the Company shall provide you with written notice
specifying in reasonable detail the basis therefor, and up to ten (10) days
after receipt of such notice in which to cure such "Cause," if it is reasonably
capable of being cured. For the purposes of this Agreement, "Cause" shall mean:
(i) knowingly or recklessly causing material injury to the Company's business or
reputation; (ii) willful misconduct in the performance of, or a willful failure
to perform in any material respect, your duties pursuant to this Agreement;
(iii) conviction of dishonest or fraudulent conduct whether or not in connection
with your employment; (iv) unlawful behavior involving moral turpitude whether
or not in connection with your employment; and/or (v) a material breach or
material violation of this Agreement (including any material violation of the
provisions of Section 4 hereof). All options vested as of the date of
termination shall be exercisable for two years after the date of such
termination.

              (d) Termination By You For Good Reason. You may terminate your
employment hereunder at any time during the Term of Employment for "Good Reason"
by providing the Company with prior written notice specifying the reasons
therefore and following the Company's failure to cure the same within ten (10)
calendar days after its receipt of such notice. Your employment shall terminate
at the end of such ten (10) calendar day period if the reason(s) given in the
notice for your termination have not been cured. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of any of the following: (i) the Company
requiring you to engage in any illegal or unethical act; (ii) a material breach
by the Company of this Agreement; or (iii) the assignment to you of duties
substantially inconsistent with your status as a senior executive officer of the
Company, or a substantial alteration in the nature or status of your
responsibilities from those as of the date hereof or as the same may be changed
from time to time. The Company will be required pay you the full balance of
compensation (pursuant to Section 3(a)(b)(c) hereof; due under any remaining
term of employment and for an additional twelve (12) months from the date of
termination. All options will immediately vest and be exercisable for two years
from the date of termination

              (e) Certain Obligations of the Company Following Termination of
Your Employment. Following the termination of your employment under the
circumstances described below, the Company shall pay to you in accordance with
its regular payroll practices the following compensation and provide the
following benefits in full satisfaction and final settlement of any and all
claims and demands that you now have or hereafter may have against the Company
(and its officers, directors, shareholders and affiliates) under this Agreement:

                   (i) In the event that your employment hereunder is terminated
by the Company other than for Cause or by you for Good Reason (pursuant to
Section 5(d) hereof), the following will occur:

                       (A) the Company will pay you all accrued and unpaid
compensation and benefits up to and including the date of termination and
reimbursement of business expenses incurred prior to termination pursuant to
Section 3(c) hereof;

                       (B) the Company will pay you continuing payments of Base
Salary and continuing benefits pursuant to Sections 3(a) and 3(b), respectively,
in accordance with the Company's regular payroll practice, for a period of
twelve (12) months from the date that your employment is terminated; provided,
however, that you have complied, and continue to comply, with Section 4 hereof;
and

                       (C) all stock options granted to you shall fully vest and
shall remain exercisable for two years; provided, however, that you have
complied and will continue to comply, with Section 4 hereof.

                   (ii) In the event that your employment is terminated by the
Company for Cause (pursuant to Section 5(c)), by you voluntarily other than for
Good Reason, or in the event that your employment term expires, all compensation
and rights to benefits from the Company pursuant to this Agreement shall cease
on the date of such termination or expiration, as the case may be; provided,
that you shall be entitled to all compensation and benefits (including
reimbursement of expenses) as may have already accrued as of such date or as
expressly provided in plans in which you were participating at such date or by
law, including all options that are vested as of the date of termination shall
be exercisable for two years.

                   (iii) In the event your employment is terminated by the
Company by reason of your death or Disability (pursuant to Section 5(b), all
compensation and rights to benefits from the Company pursuant to this Agreement
shall cease on the date of such death or termination, as the case may be;
provided that, you shall be



<PAGE>

                                       5


entitled to all compensation and benefits (including reimbursement of expenses)
as may have already accrued, including vested stock options as of such date or
as expressly provided in plans in which you participated at such date or by law.
Stock options will exercisable for two years by you or your estate.

              (f) Duties Upon Termination. Upon termination of your employment
with the Company for any reason, or upon expiration of the Term of Employment,
those duties and obligations set forth in Section 4 hereof shall continue and
bind you in accordance with the terms thereof .

         6. ASSIGNMENT. This Agreement is a personal contract, and except as
specifically set forth herein, your rights, obligations and interests herein may
not be sold, transferred or assigned. The Company may freely assign this
Agreement and any of its rights, obligations and interests hereunder. This
Agreement shall be binding upon and inure to the benefit of each party's
successors and permitted assigns.

         7. ENTIRE AGREEMENT; GOVERNING LAW; HEADINGS. This Agreement contains
the entire agreement between the parties with respect to your employment by the
Company, and the validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York applicable to
contracts entered into and to be performed wholly within said State. Regarding
any dispute or disagreement that may arise under, or as a result of, or in any
way relate to Section 4 of this Agreement, you hereby consent to the
jurisdiction of the Federal and State courts located in New York County and
waive any objections to such courts based on venue, including but not limited
to, forum non conveniens, in connection with any claim or dispute arising under
this Agreement. Each of the parties hereto irrevocably waives any and all right
to a jury trial in any legal proceedings arising out of or relating to this
Agreement. You hereby agree that any agreement or arrangement existing prior to
the date hereof regarding your employment by the Company is hereby terminated
and superseded by this Agreement (except to the extent of compensation accrued
for periods up to the date hereof and benefits in respect of periods up to the
date hereof and except for the stock option agreement between you and the
Company with respect to your membership on the Board of Directors). This
Agreement may not be changed orally, but only by agreement in writing signed by
the party against whom enforcement of any waiver, change, modification or
discharge is sought. Section and paragraph headings contained herein are for
convenience of reference only and shall not be considered a part of this
Agreement.

         8. NOTICES. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given (a) on the same day if
given by hand, (b) on the fifth business day after mailing if given by
registered or certified mail, return receipt requested, postage prepaid, (c) on
the next business day after it was deposited with the courier service if sent by
reputable overnight courier for next business day delivery, or (d) when received
if given by facsimile with confirmation, addressed to you at 333 East 53rd
Street, Apt 7E New York, NY or to the Company at 1689 Hawthorne Dr., Conroe, TX
77301-3284 or such other address as shall have been specified in writing by
either party to the other.

         9. ARBITRATION. Except as otherwise set forth in Section 7 above, any
dispute or disagreement that may arise under, or as a result of, or in any way
relate to, the interpretation, construction or application of this Agreement
shall be determined by binding arbitration. The parties may agree to submit the
matter to a single arbitrator or to several arbitrators, may require that
arbitrators possess special qualifications or expertise or may agree to submit a
matter to a mutually acceptable firm of experts for decision. In the event the
parties shall fail to thus agree upon terms of arbitration within twenty (20)
days from the first written demand for arbitration, then such disputed matter
shall be settled by arbitration under the Rules of the American Arbitration
Association, by three (3) arbitrators appointed in accordance with such Rules.
Such arbitration shall be held in New York City. Once a matter has been
submitted to arbitration pursuant to this Section 9, the decision of the
arbitrators reached and promulgated as a result thereof shall be final and
binding upon all parties, absent a showing in a court of competent jurisdiction
that the arbitrator's decision was arbitrary and capricious. The cost of
arbitration shall be shared equally by the parties and each party shall pay the
expenses of his/its attorneys, except that the arbitrators shall be entitled to
award the costs of arbitration, attorneys' and accountants' fees, as well as
other costs, to the party that they determine to be the prevailing party in any
such arbitration.

         10. RIGHT TO WITHHOLD. The Company shall have the right to make all
appropriate withholdings from your salary and other compensation which are
required by federal, state and local tax laws.


<PAGE>

                                       6

         11. SEVERABILITY. If any term or provision hereof is determined to be
invalid or unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, (b) any such invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction, and (c) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.

         12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement (and all signatures need not appear
on any one counterpart), and this Agreement shall become effective when one or
more counterparts has been signed by each of the parties hereto and delivered to
each of the other parties hereto.

         13. WAIVER, ETC. The failure of either of the parties hereto to at any
time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto to thereafter enforce each and every provision of this Agreement.

         14. AGREEMENT. The terms of this agreement shall inure to the benefit
of all parties, their successors and/or assigns.









         If the foregoing accurately reflects the agreement between us, please
confirm your acceptance and agreement by signing the attached copy of this
Agreement and returning the same to me.

                                         Sincerely,

                                         Synergy Technologies


                                         By: //s/ Tom Cooley
                                             ------------------




ACCEPTED AND AGREED:


//s/  Barry Coffey
----------------------
Barry J. Coffey