Document:

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
(this “Agreement”) is made and effective as of September 18, 2012 between AgFeed Industries, Inc., a Nevada
corporation (the “Company”), and K. Ivan F. Gothner (the “Executive”).

 

WHEREAS, the Executive is employed
by the Company in a key employee capacity and the Executive’s services are valuable to the conduct of the business of the
Company; and

 

WHEREAS, the Company and the Executive
desire to specify the terms and conditions on which the Executive will continue employment with the Company as of the effective
date set forth above and under which the Executive may receive severance in the event that the Executive separates from service
with the Company under circumstances specified herein.

 

NOW, THEREFORE,
in consideration of the foregoing and the representations, warranties, covenants, agreements and conditions set forth in this Agreement,
and intending to be legally bound, the parties agree as follows:

 

1.   
       Employment.

 

(a)          Employment.
The Company shall employ the Executive, and the Executive shall be in the employ of the Company, from and after the date of this
Agreement, upon the terms and subject to the conditions set forth in this Agreement.

 

(b)          Position
and Duties.

 

(i)          The
Executive shall serve as the Chief Executive Officer of the Company (or in such other capacity as the Board of Directors of the
Company may assign to or confer upon the Executive from time to time), accountable to the Board of Directors. The Executive shall
have the duties and responsibilities customarily incident to such position, together with such other duties and responsibilities
as the Board of Directors may assign to or confer upon the Executive from time to time.

 

(ii)         The
Executive shall travel to such places, including, without limitation, the site of such facilities of the Company and its affiliates
as are established from time to time, at such times as are advisable for the performance of the Executive’s duties and responsibilities
under this Agreement.

 

(iii)        The
Executive shall submit to the Company all business, commercial and investment opportunities or offers presented to the Executive
or of which the Executive becomes aware which relate to the business of the Company (the “Company Opportunities”).
Unless approved by the Board of Directors of the Company, the Executive shall not accept or pursue, directly or indirectly, any
Company Opportunities on the Executive’s own behalf.

 

    	 

    	 

    

 

(c)          Commitment.
The Executive shall perform his duties and responsibilities under this Agreement in a professional, conscientious, reasonable and
competent manner. The Executive shall devote his full business time (except for vacation sick leave and authorized leaves of absence)
and his best efforts to the business and affairs of Company and shall comply with the policies and procedures of the Company. The
Executive may (i) participate in volunteer services for professional, educational, charitable, civic, religious or other similar
organizations, and (ii) manage his personal investments, provided that such activities do not interfere with the fulfillment of
the Executive’s duties and responsibilities under this Agreement or result in the Executive’s noncompliance with any
provision of this Agreement.

 

(d)          Other
Positions. The Executive currently serves, without additional compensation, as the Chairman of the Company’s Board of
Directors. In addition, if elected or appointed thereto, the Executive shall serve, without additional compensation, in one or
more offices or as a director of such affiliates of the Company as are established from time to time. Upon the termination of this
Agreement or the end of the Term (as defined below), unless the Executive continues in the employ of the Company, he shall immediately
resign as an officer of the Company and as an officer and director of all such affiliates.

 

2.     
     Term. The term of the Executive’s employment under this Agreement shall commence
on the date of this Agreement and shall continue until December 31, 2015, unless terminated at any time by mutual agreement
of the Company and the Executive or by either the Company or the Executive pursuant to Section 4 (the
“Term”). If the Term expires in accordance with this Agreement and the Executive remains employed
with the Company thereafter, then the Executive shall be an at-will employee of the Company during the period that the
Executive remains employed with the Company, except for any period during which the Executive is employed under any other
written employment agreement with the Company.

 

3.   
       Compensation and Benefits. The Executive shall be entitled to the following
compensation and benefits as his sole consideration for services rendered to the Company:

 

(a)          Base
Salary. The Executive shall receive a salary (“Base Salary”) at the initial rate of Five Hundred Thousand
Dollars ($500,000) per annum. For 2012, the Base Salary shall be payable retroactively to January 1, 2012 in recognition
of the Executive’s service prior to the date of this Agreement. Beginning with 2013, the Base Salary shall be subject to
an annual cost of living increase equal to the increase, if any, in the Consumer Price Index for All Urban Consumers for the previous
calendar year. The Base Salary also may be increased as deemed appropriate by the Board of Directors of the Company or the Compensation
Committee thereof. The Executive’s Base Salary shall be paid in accordance with the payroll practices of the Company that
are in effect from time to time.

 

(b)          Bonus.
The Executive shall be eligible to receive a cash bonus for the Company’s calendar year 2012 performance (the “2012
Bonus”). The 2012 Bonus shall have a target payout value of $400,000, based on achievement of the following performance
objectives:

 

	Performance Objective	 	Bonus Payout	 
	Successful completion of restatement of financial statements by 12/31/12	 	$	200,000	 
	Continued employment until 12/31/12	 	$	200,000	 

 

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To the extent the 2012 Bonus becomes
payable as a result of the performance objectives having been achieved (as determined by the Board of Directors or the Compensation
Committee thereof), the Company shall pay the 2012 Bonus to the Executive by no later than March 1, 2013. For years subsequent
to 2012, the Executive will be eligible to participate in such incentive compensation arrangements as the Board of Directors or
the Compensation Committee thereof establishes from time to time for the Executive, with the understanding that the parties intend
for the Executive’s total direct compensation (i.e., base salary plus target cash incentives and the grant date value of
equity awards) for each year of the Term to equal at least $1.2 million subject to an annual cost of living increase equal to
the increase, if any, in the Consumer Price Index for All Urban Consumers for the previous calendar year (such amount, as adjusted,
the “Target Total Direct Compensation”); provided, however, that if there is a material change in the assets
or the business of the Company, then the Compensation Committee may adjust the Target Total Direct Compensation as appropriate
to reflect comparable peer companies. If the Executive breaches any provision set forth in Sections 5, 6 or 7,
then Company, to the extent permitted by applicable law, may refuse to pay the Executive any bonus payments on the date otherwise
due pursuant to this Section 3(b) or on the terms of any such bonus plans.

 

(c)          Grant
of Stock Option. The Executive shall receive a grant of an option to purchase 1,400,000 shares of the Company’s common
stock on the date hereof (the “Grant Date”). The option shall have an exercise price per option share equal
to the fair market value of a share of the Company’s common stock on the Grant Date. The option shall be vested with respect
to one-third of the option shares on the Grant Date and shall vest with respect to one-third of the option shares on the first
anniversary of the Grant Date and the remaining one-third of the option shares on the second anniversary of the Grant Date, subject,
in each case, to the Executive remaining continuously employed until the applicable vesting date (or earlier termination without
Cause or for Good Reason). The terms of the option shall be set forth in a separate Stock Option Grant Agreement. For years subsequent
to 2012, the Executive will be eligible to receive additional grants of equity-based compensation as the Board of Directors or
the Compensation Committee thereof determines, with the understanding that the parties intend for the Executive’s total direct
compensation for each year of the Term to equal at least the Target Total Direct Compensation.

 

(d)          Benefits.
The Executive shall be entitled to participate in or receive benefits under any retirement benefit, welfare benefit, fringe benefit
or other employee benefit plans and arrangements that the Company establishes and amends from time to time for all senior management
employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements
(collectively, the “Benefits”). The Executive’s Benefits shall include reimbursement of business expenses
consistent with the Company’s current practice (which includes an office phone and a cell phone used for business) and five
(5) weeks of vacation per calendar year. The Company shall otherwise have no obligation to provide any such plans or arrangements
or to continue any such plans or arrangements in effect from time to time.

 

(e)          Business
Expenses. The Executive shall be entitled to receive reimbursement for all reasonable travel, entertainment and similar expenses
that the Executive incurs in performing his duties and responsibilities under this Agreement, subject to and on a basis consistent
with the expense reimbursement policies and practices of the Company that are in effect from time to time.

 

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(f)          Withholding.
All amounts payable to the Executive pursuant to this Section 3 or Section 4 are stated in gross amounts and, when
paid, shall be subject to such authorized deductions and withholding as may be agreed to by the Company and the Executive or as
are required by federal, state, local and other laws, regulations and rulings relating to taxes, unemployment compensation and
disability compensation.

 

4.    
      Early Termination.

 

(a)          Termination
Rights. Notwithstanding anything to the contrary in this Agreement, the Executive’s employment with the Company and this
Agreement may be terminated prior to the expiration of the Term as set forth in this Section 4.

 

(b)          Termination
for Cause. The Company may terminate the Executive’s employment and this Agreement for Cause (as defined below) immediately,
at any time, upon notice to the Executive. Such notice shall specify in reasonable detail the nature of the Cause. The existence
of Cause shall be determined in good faith by the Board of Directors of the Company. Upon termination of his employment for Cause,
the Executive shall be entitled to receive only his Base Salary and Benefits as accrued through the effective date of such termination
and shall forfeit any unpaid bonuses and any unaccrued or nonvested Benefits.

 

(c)          Termination
Other Than for Cause. The Company shall have the right to terminate the Executive’s employment and this Agreement for
any or no reason, upon thirty (30) days’ prior notice to the Executive, whereupon the Executive’s employment with the
Company and this Agreement shall terminate as of the effective date of termination as set forth in the termination notice. In the
event of the involuntary termination of his employment other than for Cause and other than as a result of death or Disability (as
defined below), if such termination also constitutes a “separation from service” within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), the Executive shall be entitled to receive the
following as compensation in a lump sum within thirty (30) days after the effective date of the Executive’s employment termination:

 

(i)          his
Base Salary and Benefits as accrued through the effective date of such termination; and

 

(ii)         an
amount equal to the greater of (A) the Executive’s then current Base Salary payable for the remainder of the Term or (B)
two (2) times the aggregate of (x) the Executive’s then current Base Salary and (y) the Executive’s target annual bonus
payout value for the calendar year in which the Executive’s employment terminates.

 

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Notwithstanding
the foregoing, the Company’s obligation to the Executive for any payments or other rights under this Subsection (c)
shall (x) be subject to the Executive having executed and delivered to the Company a release in substantially the form reasonably
satisfactory to the Company, within twenty-one (21) days of the Executive’s employment termination date, and such release
not having been revoked by the Executive (or his estate or representative), and (y) cease if the Company notifies the Executive
that the Executive is in material violation of any of the provisions of any of Sections 5 through 7; provided, that
the Company’s exercise of rights pursuant to this sentence shall not limit in any manner the exercise by the Company of any
other right or remedy in respect thereof. Except as otherwise required by applicable law or as provided by this Subsection (c),
the Company shall not have any further obligation to Executive with respect to any salary, bonus, compensation, severance, payments
or benefits after his employment termination date, and the Executive shall not be entitled to any other salary, bonus, compensation,
severance, payments or benefits from the Company after his employment termination date.

 

Notwithstanding
any provision in this Subsection (c) to the contrary, if the Executive is a Specified Employee (as defined below) at the
time the Executive’s employment terminates, then, to the extent any payment required to be made hereunder to the Executive
as a result of such termination of employment exceeds an amount equal to the lesser of (x) two times the Executive’s annual
rate of pay for the prior calendar year and (y) two times the dollar limitation in effect under Code Section 401(a)(17) for
the year in which such termination from employment occurs, such excess shall be paid to the Executive in a single cash lump sum
on the first business day after the date that is six months following such termination of employment.

 

(d)          Voluntary
Termination for Good Reason. The Executive may voluntarily terminate his employment and this Agreement for Good Reason (as
defined below) at any time upon at least thirty (30) days’ prior notice to the Company, in which event the Executive’s
employment with the Company and this Agreement shall terminate as of the effective date of termination as set forth in the termination
notice. In the event of his voluntary termination of employment for Good Reason, the Executive shall be entitled to all of the
severance benefits described in Subsection 4(c), subject to all of the conditions set forth therein.

 

(e)          Voluntary
Termination Other Than for Good Reason. The Executive may voluntarily terminate his employment and this Agreement other than
for Good Reason at any time upon at least thirty (30) days’ prior notice to the Company, in which event the Executive’s
employment shall terminate as of the effective date of termination as set forth in the termination notice. In the event of his
voluntary termination of employment other than for Good Reason, the Executive shall be entitled to receive only his Base Salary
and Benefits as accrued through the effective date of such termination and shall forfeit any unpaid bonuses and any unaccrued or
nonvested Benefits.

 

(f)          Death
or Disability.

 

(i)          The
Executive’s employment pursuant to this Agreement and this Agreement shall terminate automatically on the date of the Executive’s
death or Disability. In the event of the termination of the Executive’s employment due to his death or Disability, the Executive
(or, in the event of the Executive’s death, his estate) shall be entitled to receive only his Base Salary and Benefits as
accrued through the effective date of such termination and shall forfeit any unpaid bonuses and any unaccrued or nonvested Benefits.

 

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(ii)         The
Executive may designate a beneficiary to receive any remaining Base Salary, Benefits or other amounts payable under Sections
3 and 4 in the event of the Executive’s death after the Executive becomes entitled to receive any Base Salary,
Benefits or other amounts payable thereunder (the “Beneficiary”). The initial Beneficiary shall be designated
on Schedule A hereto. Changes to the designation of the Beneficiary shall be made by filing a written designation with the Company
in such form as the Company may provide and may be made by the Executive from time to time by similar action. If no such designation
or change is made by the Executive or if the Executive is not survived by his designated Beneficiary, any remaining Base Salary,
Benefits or other amounts payable under Sections 3 and 4 at the time of the Executive’s death shall be paid
to the Executive’s estate.

 

(g)          Administrative
Leave. In the event of the Company’s involuntary termination of the Executive’s employment and this Agreement for
any or no reason, or the Executive’s voluntary termination of his employment and this Agreement for any or no reason, the
Company may place the Executive on paid administrative leave and/or bar or restrict his access to the Company’s facilities,
contemporaneously with or at any time after the delivery of the termination notice.

 

(h)          No
Further Obligations. Except to the extent otherwise expressly set forth in this Section 4, the Company shall have no
further obligations to the Executive or the Executive’s beneficiaries or estate, and the Executive shall have no further
obligations to the Company, under this Agreement upon termination of the Executive’s employment with Company, except that
the Executive’s obligations under Sections 5, 6, and 7 shall remain in full force and effect
in accordance with their respective terms.

 

(i)          Responsibilities
Upon Termination. Upon the termination of his employment by the Company for whatever reason and irrespective of whether or
not such termination is voluntary on his part, the Executive shall return to the Company by his employment termination date all
of the property of the Company, which includes (regardless of the medium), without limitation, all files, memoranda, documents
and records (and all copies of other reproductions thereof), credit cards, keys and key cards, cell phone and related accessories,
and other instruments and equipment of any sort of the Company. In addition, the Executive shall provide any and all access codes
or passwords necessary to gain access to any computer, program or other equipment that belongs to the Company or any of its affiliates
or is maintained by the Company or any such affiliate on its property.

 

5.   
       Confidential Information.

 

(a)          Fiduciary
Duty. The Executive acknowledges and agrees that, as an employee of the Company, the Executive has a duty of loyalty to act
in the best interests of Company.

 

(b)          Receipt
as Fiduciary. All Confidential Information (as defined below) that the Executive obtains in the course of performing the Executive’s
duties and responsibilities under this Agreement shall be deemed to have been received by the Executive as a fiduciary of the Company.

 

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(c)          Unauthorized
Disclosure or Use. While the Executive is employed with the Company and thereafter, the Executive agrees not to (i) use any
Confidential Information for any purpose, (ii) disclose any Confidential Information to any person or entity, (iii) keep or make
copies of any documents, records or property of any nature whatsoever containing or reflecting any Confidential Information or
(iv) assist any third party in engaging in any of the foregoing, except to the extent reasonably necessary or appropriate in connection
with the performance of the Executive’s employment duties and responsibilities or expressly authorized by the Board of Directors
of the Company. Nothing in this Agreement reduces the Executive’s obligation to comply with applicable laws relating to trade
secrets, confidential information and unfair competition. Accordingly, notwithstanding the foregoing, the Executive’s obligations
under this Section 5(c) with respect to Confidential Information that constitutes a trade secret under applicable law shall
continue until such Confidential Information no longer constitutes a trade secret.

 

(d)          Legal
Obligation to Disclose. Notwithstanding the provisions of Section 5(c), the Executive may disclose Confidential Information
at such times, in such manner and to the extent such disclosure is required by applicable law, provided that the Executive (i)
provides the Company with prior written notice of such disclosure so as to permit the Company to seek a protective order or other
appropriate remedy, (ii) limits such disclosure to what is strictly required and (iii) attempts to preserve the confidentiality
of any such Confidential Information so disclosed.

 

(e)          Ownership;
Return of Information. The original and all copies of all documents, records and property of any nature whatsoever that are
in the Executive’s possession or control and that are the property of the Company or that relate to the business, customers,
suppliers, personnel or procedures of the Company, including all records, documents and property created by the Executive, shall
be and remain the exclusive property of the Company. Upon termination of the Executive’s employment with the Company (or
any time if requested by the Board of Directors of the Company), the Executive shall (i) deliver all such documents, records and
property to the Company and (ii) cooperate with the Company to destroy and/or delete, as requested by the Company, any electronically
stored copies of such documents, records and property.

 

6.   
       Noncompetition. The Executive acknowledges that the Executive will, during
the course of the Executive’s employment with the Company, obtain or acquire knowledge of Confidential Information,
which knowledge would, in the event the Executive were to become employed by or associated with a Conflicting Organization
(as defined below), provide invaluable benefits to the Conflicting Organization and cause irreparable harm to the Company.
For purposes of this Section 6 and Section 7, references to the “Company” include direct and indirect
subsidiaries of the Company. To protect this and other legitimate business interests of the Company, the Executive agrees
that, while he is employed with the Company and for a period of twenty-four (24) months after the last day of his
employment with the Company (regardless of the reason that such employment ceases), the Executive shall not directly or
indirectly:

 

(a)          own
or control, whether as shareholder, member, partner, director or otherwise, or manage, operate, be employed or compensated by,
or consult with, whether as an executive, officer, employee, consultant or otherwise, in any capacity where Confidential Information
would reasonably be considered useful to, any Conflicting Organization conducting or planning to conduct business in the Territory
(as defined below);

 

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(b)          undertake
any action on behalf of any Conflicting Organization in any way related to the sale or marketing of products or services that compete
with products or services researched, developed, assembled, produced, marketed, distributed, sold or repaired by the Company or
within the Company’s active research, development, expansion or business plans, to any current or prospective customers of
the Company as to whom the Executive, or persons reporting to the Executive, made sales or Substantial Sales Efforts (as defined
below), or provided customer support, within the twelve (12) month period preceding the last day of his employment with the Company
(regardless of the reason that such employment ceases);

 

(c)          
undertake any action on behalf of any person (including the Executive) or entity in any way related to the solicitation or encouragement
of any person who served as an employee, commissioned salesperson or consultant of, or who performed similar services for, the
Company within the twelve (12) month period preceding the last day of the Executive’s employment with the Company (regardless
of the reason that such employment ceases), to leave such person’s employment, engagement or other relationship with the
Company, unless such person has been separated from his employment, engagement or other relationship with the Company and each
of its affiliates for a period of six (6) consecutive months; or

 

(e)          engage
in any practice the purpose of which is to evade the provisions of this covenant not to compete;

 

provided, however, that
(i) the foregoing shall not prohibit the ownership of less than five percent (5%) of the securities of any corporation or other
entity that is listed on a national securities exchange or traded in the national over-the-counter market and (ii) the foregoing
shall not apply if the Company materially breaches its material obligation under the Agreement, the Executive provides notice of
such breach to the Company and the Company fails to cure such breach within ninety (90) days. The Company may sell, assign or otherwise
transfer this covenant not to compete, in whole or in part, to any person or entity that purchases all or any portion of the Business.
Recognizing the specialized nature of the Company, the Executive acknowledges and agrees that the duration, geographic scope and
activity restrictions of this covenant not to compete are reasonable.

 

7.  
        Rights to Intellectual Property.

 

(a)          Disclosure.
While the Executive is employed with the Company and for a period of twenty-four (24) months after the last day of his employment
with the Company (regardless of the reason that such employment ceases), the Executive shall provide the Company with written notice
of all Inventions (as defined below). All Inventions that the Executive discloses to others or attempts to develop, sell, patent,
trademark, copyright or use within twenty-four (24) months after the last day of his employment with the Company (regardless of
the reason that such employment ceases) shall be presumed to have been conceived during the Executive’s employment with the
Company, unless the Executive can establish clear and convincing evidence of specific facts that prove that he did not conceive
the relevant Invention during the term of his employment with the Company. Further, the Executive disclaims and shall not assert
rights in any Invention as having been made, conceived or acquired prior to his employment with the Company.

 

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(b)          Ownership;
Assignment; Cooperation. All Inventions shall be the sole and exclusive property of the Company. The Executive hereby assigns
to the Company all of his right, title and interest in and to all Inventions. During the term of the Executive’s employment
with the Company and at all times thereafter, upon request by an authorized officer of the Company, the Executive shall fully cooperate
with the Company to vest in the Company all of his right, title and interest in and to all Inventions and to obtain, defend and
enforce the Company’s rights in and to all Inventions. Such cooperation may include (i) reviewing, returning and executing
applications, assignments, renewals, cease and desist letters or other documents, (ii) testifying in suits or other proceedings
and (iii) taking such other actions that the Company reasonably requests from time to time.

 

(c)          Inventive
Records. The Executive agrees to create, maintain, preserve and make available to the Company, as part of the Company’s
property, complete and up-to-date records, including correspondence, prototypes, models and other written or tangible data, of
all activity relating to Inventions.

 

8.  
        Future Employment. The Executive acknowledges and agrees that
this Agreement shall not obligate the Company to employ or to continue to employ the Executive nor shall termination of the
Executive’s employment with the Company release the Executive from the provisions of this Agreement. Prior to accepting
any employment or other engagement with any other person or entity, including any Conflicting Organization, the Executive
agrees, and the Executive authorizes the Company, to inform such other person or entity of the existence and terms of this
Agreement and to provide such other person or entity with a copy of this Agreement. Upon request by an authorized officer of
the Company, provided that such request is made prior to the expiration of the Executive’s obligations under Section
6, the Executive shall also obtain from each new employer or contractor that is a Conflicting Organization a written
acknowledgement that the Executive will not be involved in the activities described in Section 6 in his capacity as an
employee, consultant or contractor of such Conflicting Organization. The Executive shall attend an exit interview upon
termination of employment with the Company to facilitate the Executive’s compliance with the terms of this
Agreement.

 

9.   
       Third-Party Confidentiality. The Executive acknowledges and agrees that
Company has disclosed that Company is now, and may be in the future, subject to duties to third parties to maintain
information in confidence and secrecy. By executing this Agreement, the Executive consents and agrees to be bound by any such
duties that the Company owes to third parties. The Executive represents and warrants that the Executive is not party to any
agreement containing any non-competition, confidentiality or other restrictions relating to (a) the nature of any employment
duties that the Executive is entitled to perform for the Company or (b) the disclosure or use of any information that
directly or indirectly relates to the nature of the business of the Company or the duties or responsibilities to be performed
by the Executive for the Company. The Executive further represents and warrants that the Executive has not disclosed or used,
and the Executive further agrees not disclose or use, while he is employed with the Company, any confidential
information owned by a previous employer acquired by the Executive as a result of any previous employment or under a
contractual obligation of confidentiality before his employment with the Company (unless the Company or any of its affiliates
acquired ownership of, or the right to use, such confidential information).

 

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10.         Certain
Definitions. As used in this Agreement:

 

(a)          “Cause”
means the Executive having: (i) violated any provision of Section 5, 6 or 7 of this Agreement or any non-competition
agreement, confidentiality agreement or similar agreement with the Company or any of its affiliates; (ii) materially violated any
provision of any section of this Agreement other than Section 5, 6 or 7, or any other obligations or conditions
of employment (such as failure to comply with the Company’s policies or procedures), and failure to cure such violation within
ten (10) days after demand by the Company (except that no cure period will be allowed for a second offense or for any conduct falling
within any of the remaining clauses of this definition); (iii) breached any fiduciary duty that the Executive owes to the
Company; (iv) become, in the reasonable opinion of the majority of the Board of Directors of the Company, as determined in
good faith, addicted or dependent on intoxicants or drugs of any nature; (v) committed any misdemeanor involving theft or deception
or any felony; or (vi) engaged in dishonesty, disloyalty or fraud involving the Company’s business, assets, employees, customer
or suppliers.

 

(b)          “Confidential
Information” means all ideas, information, knowledge and discoveries, whether or not patentable, trademarkable or copyrightable,
that are not generally known in the trade or industry and about which the Executive has knowledge as a result of his employment
with the Company or any of its affiliates, including product specifications, manufacturing procedures, methods, equipment, compositions,
technology, patents, know-how, inventions, improvements, designs, business plans, marketing plans, cost and pricing information,
internal memoranda, formula, development programs, sales methods, customer, supplier, sales representative, distributor and licensee
lists, mailing lists, customer usages and requirements, computer programs, information constituting “trade secrets”
under applicable law and other confidential or proprietary technical or business information and data. However, “Confidential
Information” shall not include any information that now or hereafter is in the public domain by means other than disclosure
by the Executive in violation of this Agreement (or any other agreement containing confidentiality obligations on the part of the
Executive).

 

(c)          “Conflicting
Organization” means any person (including the Executive as a sole proprietor) or entity engaged in or planning or attempting
to become engaged in the research, development, assembly, production, marketing, distribution, sale or repair of products or services
that compete with products or services researched, developed, assembled, produced, marketed, distributed, sold or repaired by the
Company or within the Company’s actual or demonstrably anticipated research, development, expansion or business plans.

 

(d)          “Disability”
means the absence of the Executive from the Executive’s duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness, which is determined to be total and/or permanent by
a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative
(such agreement as to acceptability not to be withheld unreasonably).  The determination of Disability shall be made by the Board
of Directors of the Company in good faith.

 

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(e)          “Good
Reason” means (i) any material violation by the Company of any provision of this Agreement and failure to cure such violation
within ten (10) days after demand by the Executive; (ii) other than for Cause, any reduction by the Company in the Executive’s
Base Salary or in the Executive’s bonus potential (as historically and consistently applied) that is not consistent with
the manner in which the Company established such bonus potential as for 2012 (but excluding any change in such items that applies
to substantially all other comparable level executives of the Company who are entitled thereto); or (iii) other than for Cause,
any material adverse change, without the prior consent of the Executive, in his conditions of employment with the Company from
such conditions of employment in effect as of the date of this Agreement, including any material reduction in the nature or scope
of the Executive’s title or responsibilities as in effect immediately after the date of this Agreement; provided that any
such reduction that results solely from becoming part of a larger organization following a merger or similar transaction shall
not be considered Good Reason unless the Executive’s scope of responsibilities, authority and/or opportunity is also reduced
or the business plan for the Company is materially changed. Notwithstanding anything to the contrary herein, the Executive’s
resignation shall not be considered to be for Good Reason unless the Executive provides written notice to the Company of the condition
constituting Good Reason within ninety (90) days of the initial existence of such condition, and the Company fails to remedy such
condition within thirty (30) days after receipt of such notice from the Executive.

 

(f)          “Inventions”
means all designs, discoveries, improvements, ideas and works of authorship, including novel or improved products, techniques,
methods, processes, formulae, samples, prototypes, selection of materials, systems and components, product adjustments and software,
whether or not patentable, trademarkable or copyrightable, that (i) relate to (A) the business of the Company or (B) the
Company’s actual or anticipated research or development or (ii) result from any work that the Executive performed for
Company.

 

(g)          “Specified
Employee” shall have the meaning given in Code Section 409A as determined in accordance with the methodology established
by the Company as in effect on the date of the Executive’s termination of employment that constitutes a “separation
from service” within the meaning of Code Section 409A.

 

(h)          “Substantial
Sales Efforts” means marketing, promotional or sales activities undertaken on behalf of the Company in an effort to secure
one or more foreseeable business opportunities with a current or prospective customer of the Company, which activities include
(i) in-person or voice communications and (ii) preparation of a quotation or proposal or conduct of an on-site visit, and which
activities, in the absence of any breach of this Agreement, enjoy a reasonable prospect of success.

 

(i)          “Territory”
means the United States, the People’s Republic of China and any other country in which (i) the Company or any of its subsidiaries
has direct operations, operates through a joint venture in which it has more than a nominal investment interest or has engaged
in substantial (and not isolated) marketing of its products or services and/or (ii) the Company or any of its subsidiaries, with
the Executive’s involvement or under the Executive’s direction, has planned to operate a facility or to engage in substantial
(and not isolated) efforts to market its products or services, or has considering operating a facility, in each of the cases described
in subclauses (i) and (ii) above, within the two (2) year period immediately preceding the Executive’s termination
of employment.

 

    	11

    	 

    

  

11.         Parachute
Payment Application

 

(a)          Notwithstanding
any other provision of this Agreement, if any payment under this Agreement, or under any other agreement with or plan of the Company
or its affiliates (in the aggregate, “Total Payments”), would constitute an “excess parachute payment”
(as defined below) and would, but for this Section 11(a), result in the imposition on the Executive of an excise tax (the “Excise
Tax”) under Code Section 4999, then the Total Payments to be made to the Executive shall either be (i) delivered in full,
or (ii) delivered in an amount equal to one dollar ($1.00) less than the amount that would result in any portion of such Total
Payment becoming subject to the Excise Tax, whichever of the foregoing results in the receipt by the Executive the greatest benefit
on an after-tax basis (taking into account the applicable federal, state and local income taxes and the Excise Tax).

 

(b)          Within
forty (40) days following notice by one party to the other of its belief that there is a payment or benefit due the Executive that
will result in an excess parachute payment, the Executive and the Company, at the Company’s expense, shall obtain the opinion
(which need not be unqualified) of nationally recognized tax counsel (“National Tax Counsel”) selected by the
Company’s independent auditors and reasonably acceptable to the Executive (which may be regular outside counsel to the Company),
which opinion sets forth (A) the amount of the Base Period Income (as defined below), (B) the amount and present value of the Total
Payments, (C) the amount and present value of any excess parachute payments determined without regard to any reduction of Total
Payments pursuant to this Section 11 and (D) the net after-tax proceeds to the Executive, taking into account the tax imposed under
Code Section 4999 if (x) the Total Payments were reduced in accordance with Section 11(a)(ii) or (y) the Total Payments were not
so reduced. The opinion of National Tax Counsel shall be addressed to the Company and the Executive and shall be binding upon the
Company and the Executive. If such National Tax Counsel opinion determines that Section 11(a)(ii) applies, then the Termination
Payment hereunder or any other payment or benefit determined by such counsel to be includable in Total Payments shall be reduced
or eliminated so that under the bases of calculations set forth in such opinion there will be no excess parachute payment. In such
event, payments or benefits included in the Total Payments shall be reduced or eliminated by applying the following principles,
in order: (1) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined
using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (2) the
payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier
payment date; and (3) cash payments shall be reduced prior to non-cash benefits; provided that if the foregoing order of
reduction or elimination would violate Code Section 409A, then the reduction shall be made pro rata among the payments or benefits
included in the Termination Payments (on the basis of the relative present value of the parachute payments).

 

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(c)          For
purposes of this Agreement: (A) the terms “excess parachute payment” and “parachute payments” shall have
the meanings assigned to them in Code Section 280G and such “parachute payments” shall be valued as provided therein.
Present economic value for purposes of this Agreement shall be calculated in accordance with Code Section 280G(d)(4); (B) the term
“Base Period Income” means an amount equal to the Executive’s “annualized includible compensation for the
base period” as defined in Code Section 280G(d)(1); (C) for purposes of the opinion of National Tax Counsel, the value of
any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance
with the principles of Code Sections 280G(d)(3) and (4), which determination shall be evidenced in a certificate of such auditors
addressed to the Company and the Executive; and (D) Executive shall be deemed to pay federal income tax and employment taxes at
the highest marginal rate of federal income and employment taxation, and state and local income taxes at the highest marginal rate
of taxation in the state or locality of Executive’s domicile (determined in both cases in the calendar year in which the
payments or benefits are accrued), net of the maximum reduction in federal income taxes that may be obtained from the deduction
of such state and local taxes.

 

(d)          If
such National Tax Counsel so requests in connection with the opinion required by this Section 11, the Executive and the
Company shall obtain, at the Company’s expense, and the National Tax Counsel may rely on, the advice of a firm of recognized
executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive solely
with respect to its status under Code Section 280G.

 

(e)          The
Company agrees to bear all costs associated with, and to indemnify and hold harmless, the National Tax Counsel of and from any
and all claims, damages, and expenses resulting from or relating to its determinations pursuant to this Section 11, except
for claims, damages or expenses resulting from the gross negligence or willful misconduct of such firm.

 

(f)          This
Section 11 shall be amended to comply with any amendment or successor provision to Sections 280G or 4999 of the Code.
If such provisions are repealed without successor, then this Section 11 shall be cancelled without further effect.

 

12.         Miscellaneous.

 

(a)          Survivability.
Notwithstanding anything in this Agreement to the contrary, the provisions of Sections 5, 6, 7, 8,
9 and 10 shall survive the expiration or termination of the term of this Agreement.

 

(b)          Notices.
All notices, demands, consents and other communications provided for by this Agreement shall be in writing and shall be deemed
to have been given at the time the same is delivered in person or is mailed by registered or certified mail or sent by reputable
overnight courier service (charges prepaid) addressed as follows:

 

	To the Company:	AgFeed Industries, Inc.
	 	100 Bluegrass Commons Blvd., Suite 310
	 	Hendersonville, Tennessee 37075

 

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	with a copy to:	Selig D. Sacks
	 	Foley & Lardner LLP
	 	90 Park Avenue
	 	New York, NY 10016-1314

 

Notices to the Executive shall be addressed to him
at his address reflected in the Company’s records. Either party wishing to change the address to which notices, requests,
demands and other communications under this Agreement shall be sent shall give notice of such change to the other party.

 

(c)          Assignment.
Except as otherwise set forth in Section 6, neither the Company nor the Executive may assign, transfer or otherwise encumber
this Agreement or its, his rights or obligations hereunder, in whole or in part, whether voluntarily or by operation of law, without
the prior consent of the other, and any attempted assignment without such consent shall be void and without legal effect.

 

(d)          Parties
in Interest. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective
heirs, personal representatives, permitted successors and permitted assigns. In addition, the Executive acknowledges and agrees
that the Company’s affiliates are third-party beneficiaries of this Agreement and shall have the right to enforce the provisions
of this Agreement to protect their respective rights and interests. There are and shall be no other third-party beneficiaries of
this Agreement.

 

(e)          Governing
Law; Consent to Jurisdiction. This Agreement shall be construed and interpreted according to the internal laws of the State
of Massachusetts, excluding any choice of law rules that may direct the application of the laws of another jurisdiction. Each party
stipulates that any dispute or disagreement between the parties as to the interpretation of any provision of, or the performance
of obligations under, this Agreement shall be commenced and prosecuted in its entirety in, and consents to the exclusive jurisdiction
and proper venue of, the federal or state courts located in the State of Massachusetts, and each party consents to personal and
subject matter jurisdiction and venue in such courts and waive and relinquish all right to attack the suitability or convenience
of such venue or forum by reason of their present or future domiciles, or by any other reason. Each party waives any right to trial
by jury with respect to any such dispute or disagreement. The parties acknowledge that all directions issued by the forum court,
including all injunctions and other decrees, will be binding and enforceable in all jurisdictions and countries.

 

    	14

    	 

    

 

(f)          Severability.
If any court of competent jurisdiction determines that the provisions of this Agreement, including the provisions set forth in
Section 5, 6 and 7, are illegal or otherwise unenforceable, then this Agreement shall be construed so that
the remaining provisions shall not be affected, but shall remain in full force and effect, and any such illegal or otherwise unenforceable
provisions shall be deemed, without further action on the part of any person or entity, to be modified, amended and/or limited
to the extent necessary to render the same valid and enforceable in such jurisdiction. Without limitation, the covenants contained
in Section 6 shall be construed as a series of separate covenants, one for each country within the Territory and each of
their respective states, provinces and other comparable political subdivisions, each of which shall be deemed to be separately
named herein and, in the case of Subsection 6(b), one for past (within the twelve (12) month period preceding the last
day of the Executive’s employment with Company) customers and one for the then current customers. Subject to the first sentence
of this Section 12(f), if any court of competent jurisdiction shall refuse to enforce any of the separate covenants deemed
to be included in Section 6, then such unenforceable covenant shall be deemed eliminated for the purpose of the applicable
proceeding to the extent necessary to permit the remaining separate covenants to be enforced. Notwithstanding anything to the
contrary in this Agreement, Company and its affiliates shall be entitled to the maximum protection available under the law in
respect of their respective rights under this Agreement, including Sections 5, 6 and 7.

 

(g)          Amendment
and Waiver. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge
is set forth in a writing signed by the Executive and an authorized officer of the Company. No action taken pursuant to this Agreement
shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties or covenants
contained in this Agreement. No waiver by either party at any time of any breach by the other party of, or compliance with, any
provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions at
the same or at any prior or subsequent time.

 

(h)          Equitable
Relief. The Company and the Executive agree that (i) any breach or threatened breach by the Executive of the provisions
of Section 5, 6 and 7 will result in irreparable injury to the Company for which a remedy at law would
be inadequate, and (ii) in addition to any relief at law that may be available to the Company for any such breach and
regardless of any other provision contained in this Agreement, the Company shall be entitled to injunctive and other
equitable relief as a court may grant, without the need to post a bond. This Section 12(h) shall not be construed to
limit the Company’s right to obtain equitable relief for other breaches of this Agreement under general equitable
standards.

 

(i)          Entire
Agreement. This Agreement supersedes all prior agreements, and, with the Stock Option Grant Agreement, constitutes a complete
and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. There have been and
are no representations, warranties or covenants relating to the subject matter of this Agreement by or between the parties other
than those set forth or provided for in this Agreement and, with respect to the stock option grant described in Section 3(c),
the Stock Option Grant Agreement.

 

(j)          Counterparts.
This Agreement may be executed by signature pages exchanged by facsimile, e-mail or other electronic transmission and in one or
more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(k)          Interpretive
Provisions. As used in this Agreement, the terms “including” and “include” shall mean “including
without limitation” and “include without limitation,” respectively.

 

    	15

    	 

    

  

(l)          Section
Headings. The Section headings contained in this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.

 

(m)        No
Strict Construction. Notwithstanding the fact that this Agreement has been drafted or prepared by one of the parties, each
of the parties confirms that both it and its counsel have reviewed, negotiated and adopted this Agreement as the joint agreement
and understanding of the parties. The language used in this Agreement shall be deemed to be the language chosen by the parties
to express their mutual intent, and no rule of strict construction shall be applied against any party.

 

[Signature page follows]

 

    	16

    	 

    

 

IN WITNESS WHEREOF,
the parties have duly executed and delivered this Employment Agreement on the day and year first above written.

 

	 	AgFeed Industries, Inc.
	 	 	 
	 	By: 	/s/ Gerald Daignault
	 	Name: 	Gerard Daignault
	 	Title:	Interim Chief Financial Officer
	 	 	 
	 	EXECUTIVE
	 	 	 
	 	/s/ K. Ivan F. Gothner
	 	Name: K. Ivan F. Gothner

 

    	17

    	 

    

 

Schedule A

BeneficiaryExecution Version

 

AGFEED INDUSTRIES,
INC.

2010 LONG-TERM INCENTIVE PLAN

 

STOCK OPTION
AGREEMENT FOR

 

NONQUALIFIED
STOCK OPTION

 

 

 

BETWEEN

 

AGFEED INDUSTRIES,
INC.

 

AND

 

K. Ivan F. Gothner

 

	Date of Grant:	September 18, 2012
	 	 
	Number of Shares:	1,400,000
	 	 
	Exercise Price:	$0.39/share
	 	 
	Option Expiration Date:	September 18, 2022

 

    	 

    	 

    

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

This Agreement, dated as of September 18,
2012 (the “Grant Date”), between AgFeed Industries, Inc. (“AgFeed” or the “Company”) and
K. Ivan F. Gothner (the “Optionholder”).

 

WITNESSETH:

 

1.  Grant of Option

 

Pursuant to the provisions of the AgFeed
Industries, Inc. 2010 Long-Term Incentive Plan (the “Plan”), AgFeed hereby grants to the Optionholder, subject to the
terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the right and option (the “Option”)
to purchase from AgFeed for cash, or for common stock, par value $0.001 per share of AgFeed (the “Common Stock”), subject
to the approval of the Committee, all or any part of an aggregate of 1,400,000 shares of Common Stock at the exercise price of
$0.39 per share; such option to be exercised as hereinafter provided. Notwithstanding anything to the contrary herein, to the extent
the number of shares of Common Stock subject to this Option exceed the number of shares of Common Stock available under the Plan
as of the date of this Agreement, the Option and the shares of Common Stock shall be granted and issued outside of the Plan, but
shall nevertheless be governed by the terms of the Plan as if this Option and such shares were granted under the Plan. This Option
is not intended to be an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
This Option is granted in consideration for services expected to be rendered by the Optionholder and for the Optionholder’s
agreement to certain obligations concerning confidential information, noncompetition, nonsolicitation and intellectual property
rights set forth in the Employment Agreement between the Optionholder and the Company dated the date hereof.

 

2.  Terms and Conditions

 

It is understood and agreed that the Option
evidenced hereby is subject to the following terms and conditions:

 

		(a)	Expiration Date. Subject to earlier termination upon or following the Optionholder’s
termination of employment or in connection with a Change of Control as provided in this Agreement, the Option granted hereby shall
expire on September 18, 2022. Upon termination or expiration of this Option, all rights of the Optionholder hereunder shall cease.
Notwithstanding anything to the contrary herein, for purposes of the Option, the Optionholder’s employment shall not be deemed
to terminate until his service as a director of the Company also terminates.

 

		(b)	Exercise of Option. This Option shall be vested and exercisable on the date of this Agreement
with respect to 466,666 shares of Common Stock. Except as otherwise provided in this section 2(b), this Option may be exercised
with respect to the remaining shares of Common Stock subject to this Option only to the extent that the Optionholder has been continuously
employed by the Company as set forth in the following vesting schedule:

 

    	1

    	 

    

 

	Continuous Employment Required Until:	 	Shares Vesting:
	 	 	 
	The First Anniversary of the Grant Date	 	466,667 shares (33.3%)   
	 	 	 
	The Second Anniversary of the Grant Date	 	466,667 shares (33.3%)

 

Subject to section 2(c) and section 2(e) herein,
this Option may be exercised in whole at any time, or from time to time in part, to the extent vested, prior to expiration as specified
in section 2(a). Any exercise shall be accompanied by a written notice to AgFeed specifying the number of shares as to which
the Option is being exercised. Notwithstanding anything contained in this Section 2(b) to the contrary, and subject to the terms
of the Plan, upon the Optionholder’s death, termination as a result of Disability, Retirement, or involuntary termination
without Cause or voluntary termination for Good Reason, the Option granted hereby shall become immediately exercisable in full.

 

		(c)	Registration. Notwithstanding anything in this Agreement to the contrary, this Option will be exercisable only to the
extent a Registration Statement on Form S-8 has been filed with respect to the Common Stock subject to this Option and to the extent
such Registration Statement is then effective and free from any stop order or other condition rendering such Registration Statement
unavailable for the offer and sale of the Common Stock subject to this Option.

 

		(d)	Payment of Exercise Price upon Exercise. At the time of any exercise, the exercise price of the shares as to which this
Option shall be exercised shall be paid in cash (or, subject to the conditions and limitations described in the Plan, by delivering
shares of Common Stock of AgFeed or by delivering a combination of such Common Stock and cash equal to the aggregate exercise price
of the shares being acquired, determined by reference to the exercise price per share set forth in Section 1 hereof) to AgFeed.

 

		(e)	Exercise upon Death, Disability, or Termination of Employment.

 

		(1)	In the event of the Optionholder’s death, Disability, Retirement, or involuntary termination without Cause, this Option
may be exercised, to the extent that the Optionholder was entitled to do so at the date of such death, termination as a result
of Disability, Retirement, or involuntary termination without Cause or voluntary termination for Good Reason, in whole at any time,
or from time to time in part, within one year after the date of such event, but in no event later than the expiration date specified
in section 2(a), and shall thereafter expire.

 

		(2)	In the event the Optionholder’s employment with the Company is voluntarily terminated by the Optionholder (other than
due to Retirement or Good Reason), this Option will expire upon such termination of employment.

 

		(3)	Notwithstanding anything herein to the contrary, in the event the Optionholder’s employment with the Company is terminated
for Cause, all rights to exercise this Option shall terminate upon such termination of employment.

 

    	2

    	 

    

 

		(4)	Notwithstanding the foregoing, if after the Optionholder’s employment with the Company is terminated, (a) the Company
determines that it could have terminated the Optionholder’s employment for Cause (other than due to the circumstances described
in clause (b) of the definition of Cause) had all relevant facts been known at the time of such termination or (b) the Company
determines that the Optionholder has breached any noncompetition, nonsolicitation, confidentiality or similar obligation owed by
the Optionholder to the Company or its affiliates, then the Company may terminate this Option immediately upon such determination,
and the Optionholder will be prohibited from exercising this Option thereafter. In such event, the Optionholder will be notified
of the termination of this Option.

 

		(5)	For purposes of this Agreement:

 

		(i)	“Cause” means, unless there is in effect an employment agreement applicable to
the Optionholder with a different definition (in which case such different definition shall apply), the Optionholder having: (a)
violated any non-competition agreement, confidentiality agreement or similar arrangement with the Company or any of its affiliates;
(b) materially violated any provision of any employment arrangement with the Company or any of its affiliates, or any obligations
or conditions of employment (such as failure to comply with the Company’s policies or procedures), and failure to cure such
violation within ten (10) days after demand by the Company (except that no cure period will be allowed for a second offense or
for any conduct falling within any of the remaining clauses of this definition); (c) breached any fiduciary duty that the Optionholder
owes to the Company or any of its affiliates; (d) become, in the reasonable opinion of the majority of the Board of Directors of
the Company, as determined in good faith, addicted or dependent on intoxicants or drugs of any nature; (e) committed any misdemeanor
involving theft or deception or any felony; or (f) engaged in dishonesty, disloyalty or fraud involving the Company’s or
any of its affiliate’s business, assets, employees, customer or suppliers.

 

		(ii)	“Disability” means, unless there is in effect an employment agreement applicable
to the Optionholder with a different definition (in which case such different definition shall apply), the Optionholder suffers
from an illness or other physical or mental impairment which prevents the Optionholder from performing his essential job duties
and responsibilities, with or without reasonable accommodation. The determination of Disability shall be made by the Board of Directors
of the Company in good faith.

 

    	3

    	 

    

 

		(iii)	“Good Reason” means, unless there is in effect an employment agreement applicable
to the Optionholder with a different definition (in which case such different definition shall apply), (a) any material violation
by the Company of any provision of this Agreement and failure to cure such violation within ten (10) days after demand by the Optionholder;
(b) other than for Cause, any reduction by the Company in the Optionholder’s base salary or in the Optionholder’s bonus
potential (as historically and consistently applied) that is not consistent with the manner in which the Company has established
such bonus potential as part of its past practices (but excluding any change in such items that applies to substantially all other
comparable level executives of the Company who are entitled thereto); or (c) other than for Cause, any material adverse change,
without the prior consent of the Optionholder, in his conditions of employment with the Company from such conditions of employment
in effect as of the date of this Agreement, including any material reduction in the nature or scope of the Optionholder’s
title or responsibilities as in effect immediately after the date of this Agreement (other than any such reduction that results
from becoming part of a larger organization following a merger or similar transaction). Notwithstanding anything to the contrary
herein, the Optionholder’s voluntary termination shall not be considered to be for Good Reason unless the Optionholder provides
written notice to the Company of the condition constituting Good Reason within ninety (90) days of the initial existence of such
condition, and the Company fails to remedy such condition within thirty (30) days after receipt of such notice from the Optionholder.

 

		(iv)	“Harmful Activity” means that the Optionholder does any one or more of the following:
(a) at any time, uses, publishes, sells, trades, or otherwise discloses “non-public information” of the Company
unless such activity was inadvertent, done in good faith, and did not cause significant harm to the Company; (b) after notice
from the Company, fails to return to the Company any document, data, or other item or items in the Optionholder’s possession
or to which the Optionholder has access that may involve “non-public information” of the Company; (c) while employed
by or providing services to the Company or within six months following termination of employment, upon the Optionholder’s
own behalf or upon behalf of any other person or entity that competes or plans to compete with the Company, (x) solicits or
entices for employment any employee of the Company or (y) solicits any customer of the Company that the Optionholder contacted,
called upon, solicited, interacted with, or became acquainted with, or learned of through access to information (whether or not
the information is or was “non-public information”) while employed by or providing services to the Company unless such
activity was inadvertent, done in good faith, and did not involve a customer who the Optionholder should have reasonably known
was a customer of the Company. 

 

    	4

    	 

    

 

		(v)	“Retirement” means the Optionholder’s resignation or termination of employment
(other than termination for Cause) upon the first to occur of the Optionholder’s attaining (a) age 65 or (b) age 60
with 10 years of service with the Company (including years of service granted by the Company as a result of a merger, acquisition,
or other transaction); further provided that the Committee may determine in its sole discretion that a resignation or termination
of employment under other circumstances shall be considered “Retirement” for purposes of the Plan.

 

		(f)	Change of Control:

 

		(1)	Unless the Committee otherwise determines, upon a Change of Control (as defined below), if the successor or surviving corporation
(or parent thereof) so agrees, then, without the consent of the Optionholder (or other person with rights in the Option), some
or all of this Option may be assumed, or replaced with the same type of award with similar terms and conditions, by the successor
or surviving corporation (or parent thereof) in the Change of Control transaction. If applicable, this Option to the extent assumed
by the successor or surviving corporation (or parent thereof) shall be appropriately adjusted, immediately after such Change of
Control, to apply to the number and class of securities which would have been issuable to the Optionholder upon the consummation
of such Change of Control had this Option been exercised, vested or earned immediately prior to such Change of Control, and such
other appropriate adjustments in the terms and conditions of this Option shall be made.

 

		(2)	If the provisions of paragraph (1) do not apply with respect to some or all of this Option, then all of this Option shall become
vested immediately prior to the Change of Control and shall be cancelled as of the date of the Change of Control in exchange for
a payment in, at the discretion of the Committee, cash and/or shares (which may include shares or other securities of any surviving
or successor entity or the purchasing entity or any parent thereof) equal to the excess of the Fair Market Value of the shares
subject to this Option on the date of the Change of Control covered by the vested portion of this Option that has not been exercised
over the exercise price of such shares under this Option, provided that if such excess is zero, then the Option shall be cancelled
without payment therefor.

 

		(3)	In the event that the Company terminates the Optionholder’s employment or service without Cause or the Optionholder terminates
the Participant’s employment or service for Good Reason in each case within one year following a Change of Control, then
the following provisions shall apply to any assumed portion of this Option or replacement awards described in paragraph (1) and
any Awards not cancelled in connection with the Change of Control pursuant to paragraph (2):

 

    	5

    	 

    

 

		(i)	Effective upon the date of the Optionholder’s termination of employment or service,
this Option or replacement award automatically shall vest in full; and 

 

		(ii)	At the election of the Optionholder, this Option or replacement awards shall be cancelled
as of the date of such termination in exchange for a payment in cash and/or shares (which may include shares or other securities
of any surviving or successor entity or the purchasing entity or any parent thereof) equal to the excess of the Fair Market Value
of the shares subject to this Option on the date of such termination covered by the portion of the Option that has not been exercised
over the exercise or grant price of such shares under this Option.

 

		(4)	A “Change of Control” shall be deemed to have occurred as of the first day that any one or more of the following
conditions is satisfied, including, but not limited to, the signing of documents by all parties and approval by all regulatory
agencies, if required:

 

		(i)	The stockholders approve a plan of complete liquidation or dissolution of the Company; or

 

		(ii)	One of the following is consummated: 

 

		(a)	An agreement for the sale or disposition of all or substantially all of the Company’s assets (other than to an Excluded
Person (as defined below));

 

		(b)	A merger, consolidation or other similar transaction involving the Company, other than (1) a merger, consolidation or other
similar transaction that would result in the voting securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), at least fifty
percent (50%) of the combined voting power of the voting securities of the Company (or such other surviving entity) outstanding
immediately after such merger, consolidation or reorganization, or (2) a merger, consolidation or other similar transaction that
would result in at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such other
surviving entity) outstanding immediately after such merger, consolidation or other similar transaction being held by an Excluded
Person; or

 

    	6

    	 

    
 

		(c)	The acquisition (other than an acquisition of securities from the Company in a private placement or as contemplated by subparagraph
(b) above) by any one person, entity or more than one person or entity acting as a group, other than an Excluded Person(s), of
ownership of the shares of the Company that, together with the shares then held by such person or group, constitutes more than
fifty percent (50%) of the combined voting power of the Company’s then outstanding voting securities; provided that if any
such person or group is considered to own more than fifty percent (50%) of the combined voting power of the Company’s then
outstanding voting securities, then the acquisition of additional stock by the same person, entity or group shall not be deemed
to cause a Change of Control.

 

An Excluded Person means: (i) the Company or any of
its affiliates, (ii) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its
affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock
in the Company.

 

		(g)	Harmful Activity. Notwithstanding anything in this Agreement to the contrary, if the Optionholder shall engage in any
Harmful Activity, then this Option, to the extent then unexercised and whether vested or unvested, shall immediately be forfeited
and canceled. The Committee shall make the determination as to whether the Optionholder engaged in a Harmful Activity and such
determination shall be final and conclusive, unless otherwise determined by a majority of disinterested members of the Board.

 

		(h)	Nontransferability. The Optionholder may, with the prior approval of the Committee, transfer this Option in accordance
with the provisions of Section 13 of the Plan. Without the prior approval of the Committee, this Option shall not be transferable
other than by will or by the laws of descent and distribution and this Option shall, during the lifetime of the Optionholder, be
exercisable only by such Optionholder.

 

		(i)	No Rights as Shareholder. The Optionholder shall have no rights as a shareholder with respect to any shares of Common
Stock subject to this Option prior to the date of issuance of a certificate or certificates for such shares.

 

		(j)	No Right to Continued Employment. This Option shall not confer upon the Optionholder any right to continue in the employ
of or service with the Company.

 

    	7

    	 

    

 

		(k)	Compliance with Law and Regulations; Recoupment. This Option and the obligation of the Company to sell and deliver shares
hereunder shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any government
or regulatory agency as may be required. The Company shall not be required to issue or deliver any certificates for shares of Common
Stock prior to (1) the listing of such shares on any stock exchange on which the Common Stock may then be listed and (2) the
completion of any registration or qualification of such shares under any federal or state law, or any rule or regulation of any
government body which a majority of the disinterested members of the Board shall, in their sole discretion, determine to be necessary
or advisable. If the Committee determines that recoupment of incentive compensation paid to the Optionholder pursuant to this Option
is required under any law or listing standard or any recoupment policy of the Company, then this Option will terminate immediately
on the date of such determination to the extent required by such law, listing standard or recoupment policy, any prior exercise
of this Option may be deemed to be rescinded and the Committee may recoup any such incentive compensation in accordance with such
recoupment policy or as required by law or listing standard. The Company shall have the right to offset against any other amounts
due from the Company to the Optionholder the amount owed by the Optionholder hereunder and any exercise price and withholding amount
tendered by the Optionholder with respect to any such incentive compensation.

 

		(l)	Restrictions on Resale. By accepting this Option, the Optionholder agrees not to sell any shares of Common Stock acquired
under this Option at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit
a sale. In addition, if required by underwriters for the Company, the Optionholder agrees to enter into a lock-up agreement with
respect to any shares of Common Stock acquired or to be acquired under this Option.

 

3.  Investment Representation

 

The Company may require the Optionholder
to furnish to the Company, prior to the issuance of any shares upon the exercise of all or any part of this Option, an agreement
(in such form as the Company may specify) in which the Optionholder represents that the shares acquired upon exercise are being
acquired for investment and not with a view to the sale or distribution thereof.

 

4.  Optionholder Bound
by Plan

 

The Optionholder hereby acknowledges receipt
of a copy of the Plan, prospectus, and any amendments thereto, and agrees to be bound by all the terms and provisions thereof,
which, to the extent relevant, are incorporated herein by reference as part of this Agreement. Capitalized terms used herein that
are not otherwise defined shall have the meanings set forth in the Plan.

 

    	8

    	 

    

  

5.  Withholding of Taxes

 

The Company will require that, as a condition
precedent to the exercise of this Option, the Optionholder make appropriate arrangements for the withholding of any applicable
taxes. The obligation of the Optionholder under this section to provide for the payment of withholding taxes may be satisfied,
subject to the provisions of Section 18(g) of the Plan, by electing to have the Company withhold certain of the shares that
would otherwise be issuable pursuant to the exercise of the Option granted hereby.

 

6.  Notices

 

Any notice hereunder to the Company shall
be addressed to it at its office at 100 Bluegrass Commons Blvd., Suite 310, Hendersonville, Tennessee 37075, Attention: Human Resources,
and any notice hereunder to Optionholder shall be addressed to him or her at the address below, subject to the right of AgFeed
to designate at any time hereafter in writing some other address.

 

    	9

    	 

    

 

IN WITNESS WHEREOF, AgFeed Industries,
Inc. has caused this Agreement to be executed by a duly authorized officer and the Optionholder has executed this Agreement, both
as of the day and year first above written.

 

	 	AGFEED INDUSTRIES, INC.
	 	 	 
	 	By:	/s/ Gerald Daignault
	 	 	  Name:  	Gerard Daignault
	 	 	  Title:  	Interim Chief Financial Officer

 

	 	OPTIONHOLDER
	 	 
	 	/s/ K. Ivan F. Gothner
	 	Name: K. Ivan F. Gothner

 

	 	Address:  	 
	 	 	 
	 	 	 

 

    	10

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