**EXHIBIT 10.77**

**EARTH BIOFUELS, INC.**

**2006 STOCK OPTION AND AWARD PLAN**

EARTH BIOFUELS,INC., a Delaware corporation (the “*Company*”),hereby adopts this 2006 Stock Option and Award Plan (the “*Plan*”),effective as of the 15th day of April, 2006, under which options to acquirestock of the Company or bonus stock may be granted from time to time toemployees, including officers and directors of the Company and/or itssubsidiaries. In addition, at the discretion of the board of directors or otheradministrator of this Plan, options to acquire stock of the Company or bonusstock may from time to time be granted under this Plan to other individuals whocontribute to the success of the Company or its subsidiaries but who are notemployees of the Company, all on the terms and conditions set forth herein.

1.             Purpose of the Plan. ThePlan is intended to aid the Company in maintaining and developing a managementteam, attracting qualified officers and employees capable of assisting in thefuture success of the Company, and rewarding those individuals who havecontributed to the success of the Company. It is designed to aid the Company inretaining the services of executives and employees and in attracting newpersonnel when needed for future operations and growth and to provide suchpersonnel with an incentive to remain employees of the Company, to use theirbest efforts to promote the success of the Company’s business, and to providethem with an opportunity to obtain or increase a proprietary interest in theCompany. It is also designed to permit the Company to reward those individualswho are not employees of the Company but who are perceived by management ashaving contributed to the success of the Company or who are important to thecontinued business and operations of the Company. The above aims will beeffectuated through the granting of nonqualified options (“*Options*”)to purchase shares of common stock of the Company, par value $0.001 per share(the “*Stock*”), or the granting of awardsof bonus stock (“*Stock Awards*”),all subject to the terms and conditions of this Plan. If the Company has aclass of securities registered under the Securities Exchange Act of 1934, asamended (the “Exchange Act”), it is intended that Options or Stock Awardsgranted pursuant to this Plan qualify for the exemption provided for in Rule16b-3 (“*Rule 16b-3*”) promulgated under theExchange Act or any amendment or successor rule of like tenor when granted inaccordance with the provisions of such rule.

2.             Adoption. The Plan shallbecome effective immediately on adoption by the board of directors of theCompany (the “*Board*”) and awards under thePlan can be made at that time or at any subsequent time.

3.             Administration of the Plan.Administration of the Plan shall be determined by the Board. Subject tocompliance with applicable provisions of governing law, the Board may delegateadministration of the Plan or specific administrative duties with respect tothe Plan, on such terms and to such committees of the Board as it deems proper.Any Option or Stock Award approved by the Board shall be approved by a majorityvote of those members of the Board in attendance at a meeting at which a quorumis present. Any Option or Stock Award approved by a committee designated by theBoard shall be approved as specified by the Board at the time of delegation.The interpretation and construction of the terms of the Plan by the Board or aduly authorized committee shall be final and binding on all participants in thePlan absent a showing of demonstrable error. No member of the Board or dulyauthorized committee shall be liable for any action taken or determination madein good faith with respect to the Plan.

The Board’s orduly authorized committee’s determination under the Plan (including withoutlimitation determinations of the persons to receive Options or Stock Awards,the form, amount, and timing of such Options or Stock Awards, the terms andprovisions of such Options or Stock Awards, and the agreements evidencing same)need not be uniform and may be made by the Board or duly authorized committeeselectively among persons who receive, or are eligible to receive, Options orStock Awards under the Plan, whether or not such persons are similarlysituated.

4.             Shares of Stock Subject to thePlan.  A total of 5,000,000 shares ofStock may be subject to, or issued pursuant to, Options or Stock Awards grantedunder the terms of this Plan. Any shares subject to an Option or Stock Awardunder the Plan, which Option or Stock Award for any reason expires or isforfeited, terminated, or surrendered unexercised as to such shares, shall beadded back to the total number of shares reserved for issuance under the termsof this Plan. If any right to acquire Stock granted under the Plan is exercisedby the delivery of shares

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of Stock or therelinquishment of rights to shares of Stock, only the net shares of Stockissued (the shares of Stock issued less the shares of Stock surrendered) shallcount against the total number of shares reserved for issuance under the termsof this Plan.  The number of shares ofStock subject to the Plan is subject to adjustment as set forth in Section 15hereof.

5.             Reservation of Stock on Grantingof Option.  At the time of grantingany Option under the terms of this Plan, there will be reserved for issuance onthe exercise of the Option the number of shares of Stock of the Company subjectto such Option. The Company may reserve either authorized but unissued sharesor issued shares that have been reacquired by the Company.

6.             Eligibility. Options orStock Awards under the Plan may be granted to employees, including officers anddirectors, of the Company or its subsidiaries, as may be existing from time totime, and to other individuals who are not employees of the Company as may bedeemed in the best interest of the Company by the Board or a duly authorizedcommittee. Such Options or Stock Awards shall be in the amounts, and shall havethe rights and be subject to the restrictions, as may be determined by theBoard or a duly authorized committee at the time of grant, all as may be withinthe general provisions of this Plan.

7.             Term of Options and CertainLimitations on Right to Exercise.

(a)           EachOption shall have the term established by the Board or duly authorizedcommittee at the time the Option is granted but in no event may an Option havea term in excess of five years.

(b)           Theterm of the Option, once it is granted, may be reduced only as provided for inthis Plan or under the written provisions of the Option.

(c)           Unlessotherwise specifically provided by the written provisions of the Option, noholder or his or her legal representative, legatee, or distributee will be, orshall be deemed to be, a holder of any shares subject to an Option unless anduntil the holder exercises his or her right to acquire all or a portion of theStock subject to the Option and delivers the required consideration to theCompany in accordance with the terms of this Plan and the Option, and then onlyto the extent of the number of shares of Stock acquired. Except as specificallyprovided in this Plan or as otherwise specifically provided by the writtenprovisions of the Option, no adjustment to the exercise price or the number ofshares of Stock subject to the Option shall be made for dividends or otherrights for which the record date is prior to the date the Stock subject to theOption is acquired by the holder.

(d)          Options under the Plan shall vest and become exercisable at such time or timesand on such terms as the Board or a duly authorized committee may determine atthe time of the grant of the Option.

(e)           Optionsgranted under the Plan shall contain such other provisions, including, withoutlimitation, further restrictions on the vesting and exercise of the Option, asthe Board or a duly authorized committee shall deem advisable.

(f)            Inno event may an Option be exercised after the expiration of its term.

8.             Exercise Price. The exerciseprice of each Option issued under the Plan shall be determined by the Board ora duly authorized committee on the date of grant.

9.             Payment of Exercise Price.The exercise of any Option shall be contingent on receipt by the Company ofcash, certified bank check to its order, or other consideration acceptable tothe Company; *provided that,*atthe discretion of the Board or a duly authorized committee, the writtenprovisions of the Option may provide that payment can be made in whole or inpart in shares of Stock of the Company that have been owned by the optionee formore than six months or by the surrender of Options to acquire Stock from the Companythat have been held for more than six months, which Stock or Options shall bevalued at their then fair market value as determined by the Board or a dulyauthorized committee. Any consideration approved by the Board or a dulyauthorized committee that calls for the payment of the exercise price over aperiod of more than one year shall provide for interest, which shall not be

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included as part of theexercise price, that is equal to or exceeds the imputed interest provided forin section 483 of the Code or any amendment or successor section of like tenor.

10.           Withholding. If the grant of aStock Award or the grant or exercise of an Option pursuant to this Plan, or anyother event in connection with any such grant or exercise, creates anobligation to withhold income and employment taxes pursuant to the Code orapplicable state or local laws, such obligation may, at the discretion of theBoard or a duly authorized committee at the time of the grant of the Option orStock Award and to the extent permitted by the terms of the Option or StockAward and the then governing provisions of the Code and the Exchange Act, besatisfied (i) by the holder of the Option or Stock Award delivering to theCompany an amount of cash equal to such withholding obligation; (ii) by theCompany withholding from any compensation or other amount owing to the holderof the Option or Stock Award the amount (in cash, Stock, or other property asthe Company may determine) of the withholding obligation; (iii) by the Companywithholding shares of Stock subject to the Option or Stock Award with a fairmarket value equal to such obligation; or (iv) by the holder of the Option orStock Award either delivering shares of Stock that have been owned by theholder for more than six months or canceling Options or other rights to acquireStock from the Company that have been held for more than six months with a fairmarket value equal to such requirements. In all events, delivery of shares ofStock issuable on exercise of the Option or on grant of the Stock Award shallbe conditioned upon and subject to the satisfaction or making provision for thesatisfaction of the withholding obligation of the Company resulting from thegrant or exercise of the Option, grant of the Stock Award, or any other event.The Company shall be further authorized to take such other action as may benecessary, in the opinion of the Company, to satisfy all obligations for thepayment of such taxes.

11.           Awards to Directors and Officers.To the extent the Company has a class of securities registered under theExchange Act, Options or Stock Awards granted under the Plan to directors andofficers (as used in Rule 16b-3 promulgated under the Exchange Act or anyamendment or successor rule of like tenor) intended to qualify for theexemption from section 16(b) of the Exchange Act provided in Rule 16b-3 shall,in addition to being subject to the other restrictions and limitations setforth in this Plan, be made as follows:

(a)           Atransaction whereby there is a grant of an Option or Stock Award pursuant tothis Plan must satisfy one of the following:

(i)            Thetransaction must be approved by the Board or a duly authorized committeecomposed solely of two or more non-employee directors of the Company (asdefined in Rule 16b-3);

(ii)           Thetransaction must be approved or ratified, in compliance with section 14 of theExchange Act, by either: the affirmative vote of the holders of a majority ofthe securities of the Company present or represented and entitled to vote at ameeting of the stockholders of the Company held in accordance with theapplicable laws of the state of incorporation of the Company; or, if allowed byapplicable state law, the written consent of the holders of a majority, or suchgreater percentage as may be required by applicable laws of the state ofincorporation of the Company, of the securities of the Company entitled tovote. If the transaction is ratified by the stockholders, such ratificationmust occur no later than the date of the next annual meeting of stockholders; or

(iii)          TheStock acquired must be held by the officer or director for a period of sixmonths subsequent to the date of the grant; *providedthat,*if the transaction involves a derivative security (as definedin section 16 of the Exchange Act), this condition shall be satisfied if atleast six months elapse from the date of acquisition of the derivative securityto the date of disposition of the derivative security (other than on exerciseor conversion) or its underlying equity security.

(b)           Anytransaction involving the disposition to the Company of its securities inconnection with Options or Stock Awards granted pursuant to this Plan shall:

(i)            beapproved by the Board or a duly authorized committee composed solely of two ormore non-employee directors; or

(ii)           beapproved or ratified, in compliance with section 14 of the Exchange Act, by 

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either: the affirmative vote of the holders of a majority of thesecurities of the Company present, or represented, and entitled to vote at ameeting duly held in accordance with the applicable laws of the state ofincorporation of the Company or, if allowed by applicable state law, thewritten consent of the holders of a majority, or such greater percentage as maybe required by applicable laws of the state of incorporation of the Company, ofthe securities of the Company entitled to vote; *provided that,*such ratification occurs no later than thedate of the next annual meeting of stockholders.

All of the foregoingrestrictions and limitations are based on the governing provisions of theExchange Act and the rules and regulations promulgated thereunder as of thedate of adoption of this Plan. If at any time the governing provisions areamended to permit an Option to be granted or exercised or Stock Award to begranted pursuant to Rule 16b-3 or any amendment or successor rule of like tenorwithout one or more of the foregoing restrictions or limitations, or the termsof such restrictions or limitations are modified, the Board or a dulyauthorized committee may award Options or Stock Awards to directors andofficers, and may modify outstanding Options or Stock Awards, in accordancewith such changes, all to the extent that such action by the Board or a dulyauthorized committee does not disqualify the Options or Stock Awards fromexemption under the provisions of Rule 16b-3 or any amendment or successor ruleof similar tenor.

12.           Stock Awards. The Board or aduly authorized committee may grant Stock Awards to individuals eligible toparticipate in this Plan, in the amount, and subject to the provisionsdetermined by the Board or a duly authorized committee. The Board or a dulyauthorized committee shall notify in writing each person selected to receive aStock Award hereunder as soon as practicable after he or she has been so selectedand shall inform such person of the number of shares he or she is entitled toreceive, the approximate date on which such shares will be issued, and theForfeiture Restrictions applicable to such shares. (For purposes hereof, theterm “Forfeiture Restrictions” shall mean any prohibitions against sale orother transfer of shares of Stock granted under the Plan and the obligation ofthe holder to forfeit his or her ownership of or right to such shares and tosurrender such shares to the Company on the occurrence of certain conditions.)The Board or a duly authorized committee may, at its discretion, require thepayment in cash to the Company by the award recipient of the par value of theStock. The shares of Stock issued pursuant to a Stock Award shall not be sold,exchanged, transferred, pledged, hypothecated, or otherwise disposed of duringsuch period or periods of time which the Board or a duly authorized committeeshall establish at the time of the grant of the Stock Award. If a Stock Awardis made to an employee of the Company or its subsidiaries, the employee shallbe obligated for no consideration other than the amount, if any, of the parvalue paid in cash for such shares, to forfeit and surrender such shares as heor shall have received under the Plan which are then subject to ForfeitureRestrictions to the Company if he or she is no longer an employee of theCompany or its subsidiaries for any reason; *providedthat,*in the event of termination of the employee’s employment byreason of death or total and permanent disability, the Board or duly authorizedcommittee, in its sole discretion, may cancel the Forfeiture Restrictions.Certificates representing shares subject to Forfeiture Restrictions shall beappropriately legended as determined by the Board or a duly authorizedcommittee to reflect the Forfeiture Restrictions, and the ForfeitureRestrictions shall be binding on any transferee of the shares.

13.           Assignment. At the time ofgrant of an Option or Stock Award, the Board or duly authorized Committee, inits sole discretion, may impose restrictions on the transferability of suchOption or Stock Award and provide that such Option shall not be transferableother than by will or the laws of descent and distribution or pursuant to aqualified domestic relations order as defined in the Code and that, except aspermitted by the foregoing, such Options or Stock Awards granted under the Planand the rights and privileges thereby conferred shall not be transferred,assigned, pledged, or hypothecated in any way (whether by operation of law orotherwise), and shall not be subject to execution, attachment, or similarprocess. On any attempt to transfer, assign, pledge, hypothecate, or otherwisedispose of the Option or Stock Award, or of any right or privilege conferredthereby, contrary to the provisions thereof, or on the levy of any attachmentor similar process on such rights and privileges, the Option or Stock Award andsuch rights and privileges shall immediately become null and void.

14.           Additional Terms and Provisions ofAwards. The Board or duly authorized committee shall have the right toimpose additional limitations on individual awards under the Plan. For example,and without limiting the authority of the Board or a duly authorized committee,an individual award may be conditioned on continued employment for a specifiedperiod or may be voided based on the award holder’s gross negligence in theperformance of his or her duties, substantial failure to meet written standardsestablished by the Company for the performance of

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his or her duties,criminal misconduct, or willful or gross misconduct in the performance of hisor her duties. In addition, the Board or a duly authorized committee mayestablish additional rights in the holders of individual awards at the time ofgrant. For example, and without limiting the authority of the Board or a dulyauthorized committee, an individual award may include the right to immediatepayment of the value inherent in the award on the occurrence of certain eventssuch as a change in control of the Company, all on the terms and conditions setforth in the award at the time of grant. The Board or a duly authorizedcommittee may. at the time of the grant of the Option or Stock Award, establishany other terms, restrictions, or provisions on the exercise of an Option orthe holding of Stock subject to the Stock Award as it deems appropriate. Allsuch terms, restrictions, and provisions must be set forth in writing at thetime of grant in order to be effective.

15.           Dilution or Other Adjustment.In the event that the number of shares of Stock of the Company from time totime issued and outstanding is increased pursuant to a stock split or a stockdividend, the number of shares of Stock then covered by each outstanding Optiongranted hereunder shall be increased proportionately, with no increase in thetotal purchase price of the shares then so covered, and the number of shares ofStock subject to the Plan shall be increased by the same proportion. Sharesawarded under the terms of a Stock Award shall be entitled to the same rightsas other issued and outstanding shares of Stock, whether or not then subject toForfeiture Restrictions, although any additional shares of Stock issued to theholder of a Stock Award shall be subject to the same Forfeiture Restrictions asthe Stock Award. In the event that the number of shares of Stock of the Companyfrom time to time issued and outstanding is reduced by a combination orconsolidation of shares, the number of shares of Stock then covered by eachoutstanding Option granted hereunder shall be reduced proportionately, with noreduction in the total purchase price of the shares then so covered, and thenumber of shares of Stock subject to the Plan shall be reduced by the sameproportion. Shares awarded under a Stock Award shall be treated as other issuedand outstanding shares of Stock, whether or not then subject to ForfeitureRestrictions. In the event that the Company should transfer assets to anothercorporation and distribute the stock of such other corporation without thesurrender of Stock of the Company, and if such distribution is not taxable as adividend and no gain or loss is recognized by reason of section 355 of the Codeor any amendment or successor statute of like tenor, then the total purchaseprice of the Stock then covered by each outstanding Option shall be reduced byan amount that bears the same ratio to the total purchase price then in effectas the market value of the stock distributed in respect of a share of the Stockof the Company, immediately following the distribution, bears to the aggregateof the market value at such time of a share of the Stock of the Company plusthe stock distributed in respect thereof. Shares issued under a Stock Awardshall be treated as issued and outstanding whether or not subject to ForfeitureRestrictions, although any stock of the other corporation to be distributedwith respect to the shares awarded under the Stock Award shall be subject tothe Forfeiture Restrictions then applicable to such shares and may be held bythe Company or otherwise subject to restrictions on transfer until theexpiration of the Forfeiture Restrictions. In the event that the Companydistributes the stock of a subsidiary to its stockholders, makes a distributionof a major portion of its assets, or otherwise distributes a significantportion of the value of its issued and outstanding Stock to its stockholders,the number of shares then subject to each outstanding Option and the Plan, orthe exercise price of each outstanding Option, may be adjusted in thereasonable discretion of the Board or a duly authorized committee. Sharesawarded under a Stock Award shall be treated as issued and outstanding, whetheror not subject to Forfeiture Restrictions, although any Stock, assets, or otherrights distributed shall be subject to the Forfeiture Restrictions governingthe shares awarded under the Stock Award and, at the discretion of the Board ora duly authorized committee, may be held by the Company or otherwise subject torestrictions on transfer by the Company until the expiration of such ForfeitureRestrictions. All such adjustments shall be made by the Board or dulyauthorized committee, whose determination upon the same, absent demonstrableerror, shall be final and binding on all participants under the Plan. Nofractional shares shall be issued, and any fractional shares resulting from thecomputations pursuant to this section shall be eliminated from the respectiveOption or Stock Award. No adjustment shall be made for cash dividends, for theissuance of additional shares of Stock for consideration approved by the Board,or for the issuance to stockholders of rights to subscribe for additional Stockor other securities.

16.           Options or Stock Awards to ForeignNationals. The Board or a duly authorized committee may, in order tofulfill the purposes of this Plan and without amending the Plan, grant Optionsor Stock Awards to foreign nationals or individuals residing in foreigncountries that contain provisions, restrictions, and limitations different fromthose set forth in this Plan and the Options or Stock Awards made to UnitedStates residents in order to recognize differences among the countries in law,tax policy, and custom. Such grants shall be made in an attempt to provide suchindividuals with essentially the same benefits as contemplated by a grant toUnited States residents under the terms of this Plan.

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17.           Listing and Registration of Shares.Unless otherwise expressly provided on the granting of an award under thisPlan, the Company shall have no obligation to register any securities issuedpursuant to this Plan or issuable on the exercise of Options granted hereunder.Each award shall be subject to the requirement that if at any time the Board ora duly authorized committee shall determine, in its sole discretion, that it isnecessary or desirable to list, register, or qualify the shares covered therebyon any securities exchange or under any state or federal law, or obtain theconsent or approval of any governmental agency or regulatory body as acondition of, or in connection with, the granting of such award or the issuanceor purchase of shares thereunder, such award may not be made or exercised inwhole or in part unless and until such listing, registration, consent, orapproval shall have been effected or obtained free of any conditions notacceptable to the Board or a duly authorized committee.

18.           Expiration and Termination of thePlan. The Plan may be abandoned or terminated at any time by the Board or aduly authorized committee except with respect to any Options or Stock Awardsthen outstanding under the Plan. The Plan shall otherwise terminate on theearlier of the date that is: (i) ten years after the date the Plan is adoptedby the Board; or (ii) ten years after the date the Plan is approved by thestockholders of the Company.

19.           Form of Awards. Awards grantedunder the Plan shall be represented by a written agreement which shall beexecuted by the Company and which shall contain such terms and conditions asmay be determined by the Board or a duly authorized committee and permittedunder the terms of this Plan.

20.           No Right of Employment.Nothing contained in this Plan or any Option or Stock Award shall be construedas conferring on a director, officer, or employee any right to continue orremain as a director, officer, or employee of the Company or its subsidiaries.

21.           Leaves of Absence. The Boardor duly authorized committee shall be entitled to make such rules, regulations,and determinations as the Board or duly authorized committee deems appropriateunder the Plan in respect of any leave of absence taken by the recipient of anyOption or Stock Award. Without limiting the generality of the foregoing, theBoard or duly authorized committee shall be entitled to determine (a) whetheror not any such leave of absence shall constitute a termination of employmentwithin the meaning of the Plan, and (b) the impact, if any, of any such leaveof absence on any Option or Stock Award under the Plan theretofore made to anyrecipient who takes such leave of absence.

22.           Amendment of the Plan. TheBoard or a duly authorized committee may modify and amend the Plan in anyrespect.  Subject to the foregoing and,if the Company is subject to the provisions of 16(b) of the Exchange Act, thelimitations of Rule 16b-3 promulgated under the Exchange Act or any amendmentor successor rule of like tenor, the Plan shall be deemed to be automaticallyamended as is necessary to maintain the awards made under the Plan in compliancewith the provisions of Rule 16b-3 promulgated under the Exchange Act or anyamendment or successor rule of like tenor.
| DATE: April 15, 2006 |   | ATTEST: |
|----------------------|--------|---------|
|                 |   |    |   |   |
|                 |   | By:     |   | /s/ Christopher Chambers |
|                 |   |    |   | Christopher Chambers, Secretary |
|                 |   |    |   |   |

 

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