Document:

Biogold
      Fuels Corporation

    Employment
      Agreement

    

    

    This
      Employment Agreement (AAgreement@)
      is made
      and entered into this 1st
      day of
      May, 2008, (the “Effective Date”) by and between Biogold Fuels Corporation, a
      Nevada corporation and its subsidiaries (the ACompany@)
      and
      Steve Racoosin (AExecutive@).

    

    
      	 	
              A.

            	
              Executive
                has the experience to provide services to the Company of an extraordinary
                character which gives such services a unique
                value.

            

    

    

    
      	 	
              B.

            	
              The
                Company desires to retain the services of Executive, and Executive
                desires
                to be employed by the Company for the term of this
                Agreement.

            

    

    

    The
      Company and Executive, intending to be legally bound, hereby agree as
      follows:

    

    1. Employment.
      The
      Company hereby employs Executive as Chief Executive Officer of the Company.
      For
      the term of Executive=s
      employment, and upon the other conditions set forth in this Agreement, Executive
      accepts such employment and agrees to perform services for the Company, subject
      always to such resolutions as are established from time to time by the Board
      of
      Directors of the Company.

    

    2. Term.
      The term
      of Executive's employment hereunder shall be for a period of three (3) years,
      commencing on the Effective Date, and continuing for a period of three years
      from the Effective Date, subject to the termination provisions contained herein.
      If the parties mutually agree, the term shall be renewed for additional three
      year periods.

    

    
      
        3.
          Position
          and Duties. 

      

    

    

    3.1. Services
      with the Company.
      During
      the term of this Agreement, Executive agrees to perform such duties and exercise
      such powers related thereto as may from time to time be assigned to him by
      the
      Company's Board of Directors (the "Board"). Executive shall duly and diligently
      perform all duties assigned to him while in the employ of the Company. He shall
      be bound by and faithfully observe and abide by all rules and regulations of
      the
      Company which are brought to his notice or of which he should be reasonably
      aware.

    

    3.2. No
      Conflicting Duties.
      Executive shall devote sufficient productive time, ability, and attention to
      the
      business of the Company during the term of this Agreement in a manner that
      will
      serve the best interests of the Company. Except for vacations as provided herein
      and absences due to temporary illness, under an approved leave, or as required
      by applicable law, Executive agrees to devote his best efforts, and energies
      on
      a full time basis during the Employment Period to the performance of his duties
      hereunder and to advance the Company’s interests. Notwithstanding the foregoing,
      Executive acknowledges during his employment with the Company, Executive may
      engage in any other business activity, whether or not such business activity
      is
      pursued for profit, or other pecuniary advantage, including, without limitation,
      personal investments, conducting private business affairs, participating on
      boards of nonprofit foundations and similar activities which, in each such
      case,
      do not materially interfere with the services rendered by Executive under this
      Agreement.

    

    

    
      
        
        

      

      
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    3.3. Uniqueness
      of Executive's Services.
      Executive hereby represents and agrees that the services to be performed under
      the terms of this Agreement are of a special, unique, unusual, extraordinary,
      and intellectual character that gives them a unique value. Executive recognizes
      the uniqueness of the services he provides to the Company and realizes the
      Company may elect to purchase a life insurance policy to protect against
      Executive=s
      death
      for the benefit of the Company. In such event, Executive shall reasonably
      cooperate and take all steps necessary to assist Company in acquiring such
      policy or policies.

    

    4. Compensation.  

    

    4.1 Base
      Salary.
      As
      compensation for all services to be rendered by Executive under this Agreement,
      the Company shall pay according to its normal payroll procedures and policies
      to
      Executive a base annual salary of (“Base Salary”):

    

    
      	a)  	
              Two
                Hundred Seventy Five Thousand Dollars ($275,000) to be accrued in
                part
                until the Company receives at least $400,000 in additional funding
                after
                the Effective Date and then the salary shall be paid
                out;

            

    

    
      	b)  	
              Three
                Hundred Seventy Five Thousand Dollars ($375,000) upon completion
                and
                operation of the Company’s first waste to energy
                plant.

            

    

     

    Executive's
      Base Salary shall be reviewed at least annually; however, the Company shall
      not
      reduce the Executive’s Base Salary at any time during this
      Agreement.

    

    4.2 Options.
      In
      addition to the annual base salary set forth in Section 4.1 above, the Board
      may, in its sole discretion, award Executive bonus compensation in the form
      of
      stock options or stock awards under the Company’s then current employee stock
      option plan at intervals throughout the term of this Agreement and any renewal
      terms.

    

    4.3. Cash
      Incentive Bonus.
      The
      Company shall pay Executive an annual cash bonus (ACash
      Bonus@).
      The
      Board of Directors shall set the Cash Bonus in a fair and reasonable manner.
      Said Cash Bonus may be equal to up to seventy percent (70%) of Executive’s Base
      Salary. The Cash Bonus is subject to semi-annual review by the Board of
      Directors and shall be payable in semi-annual installments.

     

    4.4 Expenses.
      The
      Company shall reimburse Executive for all reasonable pre-approved business
      or
      travel expenses and office related expenses incurred by Executive in the
      performance of his duties; including but not limited to: airfare, motor vehicle
      rental, lodging, meals, telephone, copy costs, and supplies.  

    

    4.5
       Mobile
      Telephone.
      The
      Company will provide Executive with the exclusive use of a mobile (cellular
      and/or digital) telephone. Such use shall be reasonable in nature and will
      be
      predominately for business purposes.

    

    4.6 Auto
      Allowance.
      The
      Company shall pay Executive a monthly allowance of $850 for a vehicle and
      related auto expenses.

     

    
      
        
        

      

      
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     4.7 Stock
      and Option Registration Rights.
      In the
      event the Company conducts a public offering of the Company=s
      shares,
      the Company shall provide Executive with registration rights to all shares,
      warrants and options which Executive then holds or otherwise directly or
      constructively owns.

     

    
      
        5.
          Vacation,
          Sick Leave and Insurance

      

    

    

    5.1 Annual
      Vacation.
      Executive shall be entitled to fifteen (15) days vacation time each year without
      loss of compensation. In the event that Executive is unable for any reason
      to
      take the total amount of vacation time authorized herein during any year, any
      unused vacation time shall carry over from year to year. Vacation days will
      accrue at the rate of one and one quarter (1.25) days per each month of service
      rendered, which accrual shall start effective January 1, 2008. Any earned but
      unused vacation time will be paid to Executive based upon his annual rate of
      all
      compensation paid in the previous twelve months (12) upon termination or
      expiration of this Agreement.

     

    5.2. Sick
      Leave.
      Executive
      shall be entitled to twelve (12) days sick leave each year without loss of
      compensation. In the event that Executive is unable for any reason to take
      the
      total amount of vacation time authorized herein during any year, any unused
      vacation time shall carry over from year to year. Sick leave days will accrue
      at
      the rate of one (1) day per each month of service rendered. Any earned but
      unused sick leave will be paid to Executive based upon his annual rate of all
      compensation paid in the previous twelve months upon termination or expiration
      of this Agreement.

    

    5.3. Health
      Insurance.
      The
      Company shall use its best efforts to provide Executive and his immediate family
      members with comprehensive PPO or POS health insurance benefits which shall
      cover medical, dental and vision.

    

    6. Compensation
      Upon the Termination of Executive's Employment.

    

    6.1 Compensation
      Upon Termination For Good Reason or Not For Cause.
      In the
      event this Agreement is terminated by Company prior to its expiration for any
      reason except for Cause, as defined below, Executive shall be entitled to
      receive Executive's then current Base Salary for a period of three years
      following the date upon which he was terminated plus a three million dollar
      ($3,000,000) cash severance payment. Further, Executive shall retain all rights
      to vested shares and stock options, and all other rights earned during his
      term
      of employment under sections 4.2, 4.3, 4.4, 4.5, 4.6, and 4.7of this Agreement
      and any shares and options owned by Executive shall be registered by the Company
      with the US Securities and Exchange Commission.

    

    The
      benefits provided for in this provision are exclusive of any other rights or
      remedies which Executive would possess in the event the Company terminates
      the
      Agreement without cause. The Company agrees that in the event it terminates
      Executive=s
      employment without cause, Executive retains all rights and remedies available
      under the law, and the Company will not urge or otherwise argue or assert in
      any
      legal, including judicial or arbitration, proceeding that any provision of
      this
      Agreement as constitutes a waiver of rights by Executive.

    

    6.2 Compensation
      Upon Termination Upon Death.
      In the
      event that Executive's employment is terminated pursuant to section 10.2,
      Executive's beneficiary or beneficiary designated by Executive in writing to
      the
      Company, or in the absence of such beneficiary, Executive's estate, shall be
      entitled to receive Executive's then current Base Salary through sixty (365)
      days after the date of his death.

    

    
      
        
        

      

      
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    6.3
      Compensation Upon Termination Upon Disability.
      In the
      event that Executive’s employment is terminated pursuant to section 10.1,
      Executive shall be entitled to receive Executive’s then current Base Salary
      through three hundred sixty five (365) days after the date of his
      disability.

     

    7. Proprietary
      Matter.
      Except
      as permitted or directed by the Company, Executive shall not during the term
      of
      his employment or at any time thereafter divulge, furnish, disclose, or make
      accessible (other than in the ordinary course of the business of the Company)
      to
      anyone for use in any way any confidential, secret, or proprietary knowledge
      or
      information of the Company ("Proprietary Matter") which Executive has acquired
      or become acquainted with or will acquire or become acquainted with, whether
      developed by himself or by others, including, but not limited to, any trade
      secrets, confidential or secret designs, processes, formulae, software or
      computer programs, plans, devices or material (whether or not patented or
      patentable, copyrighted or copyrightable) directly or indirectly useful in
      any
      aspect of the business of the Company, any confidential customer, distributor
      or
      supplier lists of the Company, any confidential or secret development or
      research work of the Company, or any other confidential, secret or non-public
      aspects of the business of the Company. Executive acknowledges that the
      Proprietary Matter constitutes a unique and valuable asset of the Company
      acquired at great time and expense by the Company, and that any disclosure
      or
      other use of the Proprietary Matter other than for the sole benefit of the
      Company would be wrongful and would cause irreparable harm to the Company.
      Both
      during and after the term of this Agreement, Executive will refrain from any
      acts or omissions that would reduce the value of Proprietary Matter to the
      Company. The foregoing obligations of confidentiality, however, shall not apply
      to any knowledge or information which is now published or which subsequently
      becomes generally publicly known, other than as a direct or indirect result
      of
      the breach of this Agreement by Executive.

    

    8. Ventures.
      If,
      during the term of this Agreement, Executive is engaged in or associated with
      the planning or implementing of any project, program, or venture involving
      the
      Company and a third party or parties, all rights in the project, program, or
      venture shall belong to the Company and shall constitute a corporate opportunity
      belonging exclusively to the Company. Except as expressly approved in writing
      by
      the Company, Executive shall not be entitled to any interest in such project,
      program, or venture or to any commission, finder's fee or other compensation
      in
      connection therewith, other than the compensation to be paid to Executive as
      provided in this Agreement.

    

    9. Solicitation
      of Employees.

    

    9.1. Agreement
      Not to Solicit Employees.
      During
      his employment by the Company hereunder and for the one (1) year period
      following the termination of such employment for any reason, Executive shall
      not, either directly or indirectly, on his own behalf or in the service or
      on
      behalf of others solicit, divert or hire away, or attempt to solicit, divert
      or
      hire away any person then employed full time by the Company.

    

    
      
        
        

      

      
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    10. Termination
      Prior to Expiration of the Term.

    

    10.1
       Disability.
      Executive's employment shall terminate upon Executive becoming totally or
      permanently disabled for a period of six (6) months or more. For purposes of
      this Agreement, the term "totally or permanently disabled" or "total or
      permanent disability" means Executive's inability on account of sickness or
      accident, whether or not job related, to engage in regularly or to perform
      adequately his assigned duties under this Agreement. Prior to terminating the
      Agreement pursuant to this provision, the Company shall engage and consult
      one
      or more physicians as may be reasonable. 

    

    10.2
        Death
      of Executive.
       Executive's
      employment shall terminate immediately upon the death of Execu tive.
      

    

    10.3  Termination
      for Cause.
      The
      Company may terminate Executive's employment for ACause"
      (as hereinafter defined). No termination for ACause@
      may be
      invoked by Company without first providing Executive with at least thirty (30)
      days written notice to correct any breach, default or causation. Such written
      notice shall set forth with reasonable specificity the Company's basis for
      such
      notice of termination and Executive shall have thirty (30) days to correct
      the
      condition set forth in the notice.

     

    10.3.1. Cause
      Defined.
      For the
      purpose of this section, the termination of this Agreement by Company for any
      of
      the following reasons shall be considered termination for Cause:

    

    (i)
       Conviction
      of a criminal act involving fraud, embezzlement or breach of trust or other
      act
      which would prohibit Executive from holding his position under the rules of
      the
      Securities and Exchange Commission.

    

    (ii)
      Willful, knowing and malicious violation of written corporate policy or
rules
      of
      the Company.

    

    (iii)
      Willful, knowing and malicious misuse, misappropriation, or disclosure
of
      any of
      the Proprietary Matters.

    

    (iv)
      Misappropriation, concealment, or conversion of any money or
      property of
      the
      Company.

    

    (v)
      Being: i) under the habitual influence of intoxicating liquors while in the
      course
      of
      employment, or ii) under the influence of any controlled substance
      without a valid prescription.

    

    (vi)
      Intentional and non-trivial damage or destruction of property of the
Company.
      For purposes of this provision non-trivial is defined to mean damage
      occurring in the course of a single act or occurrence in an amount exceeding
      five thousand dollars ($ 5,000). 

    

    (vii)
      Reckless and wanton conduct which endangers the safety of other persons
      or property during the course of employment or while on premises
      leased or owned by the Company.

    

    (viii)
      Continued incapacity for more than 180 days on the part of Executive
to
      perform his duties, unless waived by the Company.

    

    
      
        
        

      

      
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    (ix)
      Intentional or negligent misrepresentation of facts or circumstances
about
      the
      Executive, the Company, or the Company’s operations to the Board.

    

    10.4  Termination
      of Employment By Executive for Good Reason.
      Notwithstanding any other provisions of this Agreement, Executive may terminate
      his employment immediately, at any time, for any reason on or after a Change
      in
      Control as defined below, or for good reason. For purposes of this Agreement,
      “Good Reason” shall include:

    

    
      	(i)  	
              Assignment
                by Company to Executive of any duties inconsistent in any substantial
                respect with the position, authority or responsibilities associated
                with
                Executive’s position as set forth in this Agreement, but excluding any
                isolated, insubstantial or inadvertent action not taken in bad faith
                which
                was promptly remedied by Company after receipt of notice by
                Executive;

            

    

    

    
      	(ii)  	
              Reduction
                by Company of Executive’s base salary during the Term from that provided
                in paragraph 4.1 of this Agreement. However, the accrual of Executive’s
                salary accrued pursuant to paragraph 4.1 does not constitute a reduction
                in pay;

            

    

    

    
      	(iii)  	
              In
                the event that there is a successor to Company, the failure of Company
                to
                obtain an agreement from any such successor that is satisfactory
                to
                Executive to perform the obligations of Company under this
                Agreement;

            

    

    

    
      	(iv)  	
              Failure
                of Company to fulfill any of its other obligations to Executive under
                this
                Agreement; and

            

    

    

    
      	(v)  	
              
                Inability
                  of the Executive to fulfill his duties for health
                  reasons.

              

            

    

     

    For
      purposes of this Agreement, “Change in Control” shall mean (A) the dissolution
      or liquidation of the Company; (B) a reorganization, merger or consolidation
      of
      the Company with one or more corporations as a result of which the Company
      is
      not the surviving corporation; (C) approval by the stockholders of the Company
      of any sale, lease, exchange or other transfer (in one or a series of
      transactions) of all or substantially all of the assets of the Company; (D)
      approval by the stockholders of the Company of any merger or consolidation
      of
      the Company in which the holders of voting stock of the Company immediately
      before the merger or consolidation will not own fifty percent (50%) or more
      of
      the voting shares of the continuing or surviving corporation immediately after
      such merger or consolidation; or (E) a change of fifty percent (50%) (rounded
      to
      the next whole person) in the membership of the Board of Directors of the
      Company within a twelve (12) month period, unless the election or nomination
      for
      election by stockholders of each new director within such period was approved
      by
      the vote of two-thirds (2/3) (rounded to the next whole person) of the directors
      then still in office who were in office at the beginning of the twelve (12)
      month period.

     

    10.5  Voluntary
      Termination of Employment By Executive For Other than Good
      Reason.
      Executive may voluntarily terminate his employment with the Company upon 30
      days
      prior written notice for other than Good Reason. Executive shall not be entitled
      to any further payments of compensation beyond Executive’s resignation date if
      Executive voluntarily resigns under this Section 10.5.

    

    
      
        
        

      

      
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    10.6.  Surrender
      of Records and Property.
      Upon
      termination of his employment with the Company, Executive shall deliver promptly
      to the Company all records, electronic media, manuals, books, blank forms,
      documents, letters, memoranda, notes, notebooks, reports, data, tables, and
      calculations or copies thereof, which are the property of the Company and which
      relate in any way to the business, products, practices or techniques of the
      Company, and all other property (keys, office equipment, computers, mobile
      phones, credit cards, etc.) of the Company and Proprietary Matter, including
      but
      not limited to, all documents which in whole or in part contain any trade
      secrets or confidential information of the Company, which in any of these cases
      are in his possession or under his control.

    

    10.7
      Additional
      Payments by Company.
      In the
      event that any payments under this Agreement or any other compensation, benefit
      or other amounts payable from the Company for the benefit of Executive are
      subject to the tax imposed by Section 4999 of the Internal Revenue Code of
      1986, as amended (the “Code”) (including any applicable interest and penalties,
      the “Excise Tax”), no such payment (“Parachute Payment”) shall be reduced
      (except for required tax withholdings) and the Company shall pay to Executive
      by
      the earlier of the date such Excise Tax is withheld from payments made to
      Executive or the date such Excise Tax becomes due and payable by Executive,
      an
      additional amount (the “Gross-Up Payment”) such that the net amount retained by
      Executive (after deduction of any Excise Tax on the Parachute Payments, taxes
      based upon the Tax Rate (as defined below) upon the payment provided for by
      this
      Section 5.3 and Excise Tax upon the payment provided for by this
      Section 5.3), shall be equal to the amount Executive would have received if
      no Excise Tax had been imposed. A Tax counsel chosen by the Company’s
      independent auditors, provided such person is reasonably acceptable to Executive
      (“Tax Counsel”), shall determine in good faith whether any of the Parachute
      Payments are subject to the Excise Tax and the amount of any Excise Tax, and
      Tax
      Counsel shall promptly notify Executive of its determination. The Company and
      Executive shall file all tax returns and reports regarding such Parachute
      Payments in a manner consistent with the Company’s reasonable good faith
      determination. For purposes of determining the amount of the Gross-Up Payment,
      Executive shall be deemed to pay taxes at the Tax Rate applicable at the time
      of
      the Gross-Up Payment. In the event that the Excise Tax is subsequently
      determined to be less than the amount taken into account hereunder at the time
      a
      Parachute Payment is made, Executive shall repay to the Company promptly
      following the date that the amount of such reduction in Excise Tax is finally
      determined the portion of the Gross-Up Payment attributable to such reduction
      (without interest). In the event that the Excise Tax is determined to exceed
      the
      amount taken into account hereunder at the time a Parachute Payment is made
      (including by reason of any payment the existence or amount of which cannot
      be
      determined at the time of the Gross-Up Payment), the Company shall pay Executive
      an additional amount with respect to the Gross-Up Payment in respect of such
      excess (plus any interest or penalties payable in respect of such excess) at
      the
      time that the amount of such excess is finally determined. The Company shall
      reimburse Executive for all reasonable fees, expenses, and costs related to
      determining the reasonableness of any Company position in connection with this
      paragraph and preparation of any tax return or other filing that is affected
      by
      any matter addressed in this paragraph, and any audit, litigation or other
      proceeding that is affected by any matter addressed in this Section 5.3 and
      an amount equal to the tax on such amounts at Executive’s Tax Rate. For the
      purposes of the foregoing, “Tax Rate” means Executive’s effective tax rate based
      upon the combined federal and state and local income, earnings, Medicare and
      any
      other tax rates applicable to Executive, all at the highest marginal rate of
      taxation in the country and state of Executive’s residence on the date of
      determination, net of the reduction in federal income taxes which could be
      obtained by deduction of such state and local taxes.”

    

    
      
        
        

      

      
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    11. 
Assignment/Successors.
      This
      Agreement shall not be assignable, in whole or in part, by either party without
      the written consent of the other party except that Company may, without the
      consent of Executive, assign its rights and obligations under this Agreement
      to
      any corporation, firm or other business entity (i) with or into which the
      Company may merge or consolidate, or (ii) to which the Company may sell or
      transfer all or substantially all of its assets or of which fifty percent (50%)
      or more of the equity investment and of the voting control is owned, directly
      or
      indirectly, by, or is under common ownership with, the Company. After any such
      assignment by the Company and such written agreement by the assignee, the
      Company shall be discharged from all further liability hereunder and such
      assignee shall thereafter be deemed to be the Company for the purposes of all
      provisions of this Agreement including this section.

    

    This
      Agreement shall be binding upon, and inure to the benefit of, both parties
      and
      their respective successors and assigns, including any corporation or other
      entity with which, or into which, the Company may be merged or which may succeed
      to its assets or business, provided, however, that the obligations of Executive
      are personal and shall not be assigned by Executive.

     

    12.
       Indemnification.
      The
      company shall indemnify Executive as provided in the California Corporations
      Code, Company Articles or Company's Bylaws in effect at the commencement of
      this
      Agreement. The scope of indemnification to which Executive is entitled shall
      not
      be diminished, but may be expanded by the Company, by amendment of the Company's
      Bylaws, Articles of Incorporation or otherwise. Executive shall indemnify and
      hold the Company harmless from all liability for loss, damages or injury
      resulting from the negligence or misconduct of Executive. The Parties are
      concurrently entering into a separate indemnification agreement to provide
      indemnification for the Executive, attached hereto at Exhibit
      A
      (the
“Indemnification Agreement”).

    

    13.
      Miscellaneous.

    

    13.1
       Governing
      Law.
      This
      Agreement is made under and shall be government by and construed in accordance
      with the laws of the State of California. 

    

    13.2  Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties relating to the subject
      matter hereof and supersedes all prior agreements and understandings with
      respect to such subject matter with the exception of the Indemnification
      Agreement which is incorporated by reference, and the parties hereto have made
      no agreements, representations or warranties relating to the subject matter
      of
      this Agreement which are not set forth herein. Any dispute(s) or differences(s)
      which arise during the course of this Agreement and which either involve its
      interpretation or meaning, or relate to performance required hereunder shall
      be
      submitted to and resolved by binding arbitration; provided, however, that the
      parties are not waiving and are expressly reserving their right to seek
      injunctive relief by judicial process. Nevertheless, the parties may, by
      subsequent consent, agree to submit requests for injunctive relief to an
      arbitrator or arbitration panel. If either party shall, in the opinion of the
      other party, be in breach of or default in the performance or observance of
      any
      term or condition of this Agreement, the non-defaulting party shall notify
      the
      defaulting party in writing of such fact, and the defaulting party shall have
      ten (10) days from the receipt of such notice to remedy or correct such breach
      or default. If the non-defaulting party asserts that the breach or default
      has
      not been timely and properly cured, it may commence arbitration as described
      herein and ask the arbitrator to deem this Agreement terminated and/or grant
      such relief as is shown appropriate. In the event the parties are unable to
      agree upon an arbitrator to hear and resolve their differences (hereinafter
      the
ADispute@),
      each
      party shall designate one person licensed as an attorney in California. Said
      two
      attorneys shall select the neutral arbitrator. Unless agreed upon by the parties
      to the contrary, arbitration shall be by a single, neutral arbitrator
      (hereinafter, the AArbitrator@).
      If the
      two designated attorneys cannot agree on the selection of the Arbitrator, the
      attorneys shall each select one arbitrator. The two arbitrators so selected
      shall then confer and jointly select a third arbitrator who shall preside over
      the parties=
      dispute
      as Arbitrator. The Arbitrator shall have the full and absolute authority to
      interpret this Agreement, to deem conduct by the parties as either in compliance
      with or in breach of this Agreement, to terminate this Agreement, and (if a
      breach is found) to award appropriate damages or relief. The Dispute shall
      be
      settled in accordance with then existing substantive law and, to the fullest
      extent possible, with California substantive law. While evidence may be
      accepted, omitted, considered or excluded in the discretion of the Arbitrator,
      the Arbitrator shall be bound by the California rules of evidence and by the
      California Arbitration Act (CCP 1280 et seq.). The final decision of the
      Arbitrator shall be served on the parties, in writing, within twenty (20) days
      after conclusion of the arbitration hearing. The Arbitrator=s
      decision shall be binding and conclusive. Neither party shall pursue, prosecute
      or otherwise file any legal action or proceeding (other than to seek injunctive
      relief as described above). Except as provided in CCP 1286.2, no appeal shall
      be
      taken from the Arbitrator=s
      decision or from any subsequent court order confirming said decision. The
      parties shall equally advance the costs incurred by arbitration. The Arbitrator,
      however, shall have the discretion to award such costs as well as
      attorneys=
      fees to
      the party prevailing in the arbitration proceedings. 

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    13.3  Withholding
      Taxes.
      The
      Company may withhold from any benefits payable under this Agreement all federal,
      state, city or other taxes as shall be required pursuant to any law or
      governmental regulation or ruling. 

    

    13.4 Amendments.
      No
      amendment or modification of this Agreement shall be deemed effective unless
      made in writing signed by the parties hereto. 

    

         
      13.5 No
      Wavier.
      No term
      or condition of this Agreement shall be deemed to have been waived nor shall
      there be any estoppel to enforce any provisions of this Agreement, except by
      a
      statement in writing signed by the party against whom enforcement of the waiver
      or estoppel is sought. Any written waiver shall not be deemed a continuing
      waiver unless specifically stated, shall operate only as to the specific term
      or
      condition waived and shall not constitute a waiver of such term or condition
      for
      the future or as to any act other than that specifically waived. 

    

    13.6 Severability.
      To the
      extent any provision of this Agreement shall be invalid or unenforceable, it
      shall be considered deleted here from and the remainder of such provision and
      of
      this Agreement shall be unaffected and shall continue in full force and effect.
      

    

    13.7 Survival.
      Sections
      4.7, 7, 8, and 9 shall survive termination of this Agreement. 

    

    13.8 Notices.
      Any and
      all notices, requests or other communications required or permitted in or by
      any
      provision of this Agreement shall be in writing and may be delivered personally
      or by certified mail directed to the addressee at such person=s
      or
      entity=s
      last
      known post office address, and if given by certified mail, shall be deemed
      to
      have been delivered when deposited in such, mail postage prepaid. 

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    13.9 Legal
      Proceedings.
      In the
      event of legal proceedings, including arbitration as set forth in Section 13.2
      above, the prevailing party shall be entitled, in addition to such relief as
      is
      deemed to be appropriate, to recover such costs and reasonable
      attorneys=
      fees as
      are incurred therein.

    

    13.10 Section
      409A.
      Unless
      otherwise expressly provided, any payment of compensation by Company to
      Executive, whether pursuant to this Agreement or otherwise, shall be made within
      two and one-half months (21⁄2 months) after the later of the end of the calendar
      year of the Company’s fiscal year in which Executive’s right to such payment
      vests (i.e.,
      is not
      subject to a “substantial risk of forfeiture” for purposes of Code Section 409A
      of the Internal Revenue Code of 1986, as amended (“Code”)). To the extent that
      any severance payments (including payments on termination for “good reason”)
      come within the definition of “involuntary severance” under Code Section 409A,
      such amounts up to the lesser of two times the Executive’s annual compensation
      for the year preceding the year of termination or two times the 401(a)(17)
      limit
      for the year of termination, shall be excluded from “deferred compensation” as
      allowed under Code Section 409A, and shall not
      be
      subject to the following Code Section 409A compliance requirements. All payments
      of “nonqualified deferred compensation” (within the meaning of Section 409A) are
      intended to comply with the requirements of Code Section 409A, and shall be
      interpreted in accordance therewith. Neither party individually or in
      combination may accelerate any such deferred payment, except in compliance
      with
      Code Section 409A, and no amount shall be paid prior to the earliest date on
      which it is permitted to be paid under Code Section 409A. In the event that
      Executive is determined to be a “key employee” (as defined in Code Section
      416(i) (without regard to paragraph (5) thereof)) of Company at a time when
      its
      stock is deemed to be publicly traded on an established securities market,
      payments determined to be “nonqualified deferred compensation” payable following
      termination of employment shall be made no earlier than the earlier of (i)
      the
      last day of the sixth (6th) complete calendar month following such termination
      of employment, or (ii) Executive’s death, consistent with the provisions of Code
      Section 409A.  Any payment delayed by reason of the prior sentence shall be
      paid out in a single lump sum at the end of such required delay period in order
      to catch up to the original payment schedule.  Notwithstanding anything
      herein to the contrary, no amendment may be made to this Agreement if it would
      cause the Agreement or any payment hereunder not to be in compliance with Code
      Section 409A.

    

    

    This
      Agreement is executed on the Effective Date at Los Angeles,
      California.

    
      	 	 	 	 
	Company:	 	 	Executive:  
	 	 	 	 
	 	 	 	 
	By: 
              /s/ Walter Wendland	 	 	/s/ Steve
              Racoosin
	
              
Title:
Director	 	 	
              

              Steve
                Racoosin 

            
	 	 	 	 

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    Indemnification
      Agreement

    

    
      
         

      

      
        11Biogold
      Fuels Corporation

    Employment
      Agreement

    

    

    This
      Employment Agreement (AAgreement@)
      is made
      and entered into this 1st
      day of
      May, 2008, (the “Effective Date”) by and between Biogold Fuels Corporation, a
      Nevada corporation and its subsidiaries (the ACompany@)
      and
      Chris Barsness (AExecutive@).

    

    
      	 	
              A.

            	
              Executive
                has the experience to provide services to the Company of an extraordinary
                character which gives such services a unique
                value.

            

    

    

    
      	 	
              B.

            	
              The
                Company desires to retain the services of Executive, and Executive
                desires
                to be employed by the Company for the term of this
                Agreement.

            

    

    

    The
      Company and Executive, intending to be legally bound, hereby agree as
      follows:

    

    1. Employment.
      The
      Company hereby employs Executive as Chief Financial Officer of the Company.
      For
      the term of Executive=s
      employment, and upon the other conditions set forth in this Agreement, Executive
      accepts such employment and agrees to perform services for the Company, subject
      always to such resolutions as are established from time to time by the Board
      of
      Directors of the Company.

    

    2. Term.
      The term
      of Executive's employment hereunder shall be for a period of three (3) years,
      commencing on the Effective Date, and continuing for a period of three years
      from the Effective Date, subject to the termination provisions contained herein.
      If the parties mutually agree, the term shall be renewed for additional three
      year periods.

    

    
      
        3. 
          Position
          and Duties. 

      

    

    

    3.1. Services
      with the Company.
      During
      the term of this Agreement, Executive agrees to perform such duties and exercise
      such powers related thereto as may from time to time be assigned to him by
      the
      Company's Board of Directors (the "Board") or the Chief Executive Officer.
      Executive shall duly and diligently perform all duties assigned to him while
      in
      the employ of the Company. He shall be bound by and faithfully observe and
      abide
      by all rules and regulations of the Company which are brought to his notice
      or
      of which he should be reasonably aware.

    

    3.2. No
      Conflicting Duties.
      Executive shall devote sufficient productive time, ability, and attention to
      the
      business of the Company during the term of this Agreement in a manner that
      will
      serve the best interests of the Company. Except for vacations as provided herein
      and absences due to temporary illness, under an approved leave, or as required
      by applicable law, Executive agrees to devote his best efforts, and energies
      on
      a full time basis during the Employment Period to the performance of his duties
      hereunder and to advance the Company’s interests. Notwithstanding the foregoing,
      Executive acknowledges during his employment with the Company, Executive may
      engage in any other business activity, whether or not such business activity
      is
      pursued for profit, or other pecuniary advantage, including, without limitation,
      personal investments, conducting private business affairs, participating on
      boards of nonprofit foundations and similar activities which, in each such
      case,
      do not materially interfere with the services rendered by Executive under this
      Agreement.

    

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    3.3. Uniqueness
      of Executive's Services.
      Executive hereby represents and agrees that the services to be performed under
      the terms of this Agreement are of a special, unique, unusual, extraordinary,
      and intellectual character that gives them a unique value. Executive recognizes
      the uniqueness of the services he provides to the Company and realizes the
      Company may elect to purchase a life insurance policy to protect against
      Executive=s
      death
      for the benefit of the Company. In such event, Executive shall reasonably
      cooperate and take all steps necessary to assist Company in acquiring such
      policy or policies.

    

    4. Compensation.  

    

    4.1 Base
      Salary.
      As
      compensation for all services to be rendered by Executive under this Agreement,
      the Company shall pay according to its normal payroll procedures and policies
      to
      Executive a base annual salary of (“Base Salary”):

    

    	a)  	
            Two
              Hundred Thousand Dollars ($200,000) until the Company receives at least
              $1,000,000 in additional funding after the Effective Date, at which
              time
              Executive’s salary shall be increased to Two Hundred Fifty Thousand
              Dollars ($250,000);

          

    	b)  	
            Three
              Hundred Fifty Thousand Dollars ($350,000) upon completion and operation
              of
              the Company’s first waste to energy
              plant.

          

     

    Executive's
      Base Salary shall be reviewed at least annually; however, the Company shall
      not
      reduce the Executive’s Base Salary at any time during this
      Agreement.

    

    4.2 Options.
      In
      addition to the annual base salary set forth in Section 4.1 above, the Board
      may, in its sole discretion, award Executive bonus compensation in the form
      of
      stock options or stock awards under the Company’s then current employee stock
      option plan at intervals throughout the term of this Agreement and any renewal
      terms.

    

    4.3. Cash
      Incentive Bonus.
      The
      Company shall pay Executive an annual cash bonus (ACash
      Bonus@).
      The
      Board of Directors shall set the Cash Bonus in a fair and reasonable manner.
      Said Cash Bonus may be equal to up to seventy percent (70%) of Executive’s Base
      Salary. The Cash Bonus is subject to semi-annual review by the Board of
      Directors and shall be payable in semi-annual installments.

    

    4.4 Expenses.
      The
      Company shall reimburse Executive for all reasonable pre-approved business
      or
      travel expenses and office related expenses incurred by Executive in the
      performance of his duties; including but not limited to: airfare, motor vehicle
      rental, lodging, meals, telephone, copy costs, and supplies.  

    

    4.5
       Mobile
      Telephone.
      The
      Company will provide Executive with the exclusive use of a mobile (cellular
      and/or digital) telephone. Such use shall be reasonable in nature and will
      be
      predominately for business purposes.

    

    4.6 Auto
      Allowance.
      The
      Company shall pay Executive a monthly allowance of $850 for a vehicle and
      related auto expenses.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     4.7 Stock
      and Option Registration Rights.
      In the
      event the Company conducts a public offering of the Company=s
      shares,
      the Company shall provide Executive with registration rights to all shares,
      warrants and options which Executive then holds or otherwise directly or
      constructively owns.

     

    
      
        5. 
          Vacation,
          Sick Leave and Insurance

      

    

    

    5.1 Annual
      Vacation.
      Executive shall be entitled to fifteen (15) days vacation time each year without
      loss of compensation. In the event that Executive is unable for any reason
      to
      take the total amount of vacation time authorized herein during any year, any
      unused vacation time shall carry over from year to year. Vacation days will
      accrue at the rate of one and one quarter (1.25) days per each month of service
      rendered, which accrual shall start effective January 1, 2008. Any earned but
      unused vacation time will be paid to Executive based upon his annual rate of
      all
      compensation paid in the previous twelve months (12) upon termination or
      expiration of this Agreement.

    5.2. Sick
      Leave.
      Executive
      shall be entitled to twelve (12) days sick leave each year without loss of
      compensation. In the event that Executive is unable for any reason to take
      the
      total amount of vacation time authorized herein during any year, any unused
      vacation time shall carry over from year to year. Sick leave days will accrue
      at
      the rate of one (1) day per each month of service rendered. Any earned but
      unused sick leave will be paid to Executive based upon his annual rate of all
      compensation paid in the previous twelve months upon termination or expiration
      of this Agreement.

    

    5.3. Health
      Insurance.
      The
      Company shall use its best efforts to provide Executive and his immediate family
      members with comprehensive PPO or POS health insurance benefits which shall
      cover medical, dental and vision.

    

    6. Compensation
      Upon the Termination of Executive's Employment.

    

    6.1 Compensation
      Upon Termination For Good Reason or Not For Cause.
      In the
      event this Agreement is terminated by Company prior to its expiration for any
      reason except for Cause, as defined below, Executive shall be entitled to
      receive Executive's then current Base Salary for a period of three years
      following the date upon which he was terminated plus a one million dollar
      ($1,000,000) cash severance payment. Further, Executive shall retain all rights
      to vested shares and stock options, and all other rights earned during his
      term
      of employment under sections 4.2, 4.3, 4.4, 4.5, 4.6, and 4.7 of this Agreement
      and any shares and options owned by Executive shall be registered by the Company
      with the US Securities and Exchange Commission.

    

    The
      benefits provided for in this provision are exclusive of any other rights or
      remedies which Executive would possess in the event the Company terminates
      the
      Agreement without cause. The Company agrees that in the event it terminates
      Executive=s
      employment without cause, Executive retains all rights and remedies available
      under the law, and the Company will not urge or otherwise argue or assert in
      any
      legal, including judicial or arbitration, proceeding that any provision of
      this
      Agreement as constitutes a waiver of rights by Executive.

    

    6.2 Compensation
      Upon Termination Upon Death.
      In the
      event that Executive's employment is terminated pursuant to section 10.2,
      Executive's beneficiary or beneficiary designated by Executive in writing to
      the
      Company, or in the absence of such beneficiary, Executive's estate, shall be
      entitled to receive Executive's then current Base Salary through sixty (365)
      days after the date of his death.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    6.3
      Compensation Upon Termination Upon Disability.
      In the
      event that Executive’s employment is terminated pursuant to section 10.1,
      Executive shall be entitled to receive Executive’s then current Base Salary
      through three hundred sixty five (365) days after the date of his
      disability.

     

    7. Proprietary
      Matter.
      Except
      as permitted or directed by the Company, Executive shall not during the term
      of
      his employment or at any time thereafter divulge, furnish, disclose, or make
      accessible (other than in the ordinary course of the business of the Company)
      to
      anyone for use in any way any confidential, secret, or proprietary knowledge
      or
      information of the Company ("Proprietary Matter") which Executive has acquired
      or become acquainted with or will acquire or become acquainted with, whether
      developed by himself or by others, including, but not limited to, any trade
      secrets, confidential or secret designs, processes, formulae, software or
      computer programs, plans, devices or material (whether or not patented or
      patentable, copyrighted or copyrightable) directly or indirectly useful in
      any
      aspect of the business of the Company, any confidential customer, distributor
      or
      supplier lists of the Company, any confidential or secret development or
      research work of the Company, or any other confidential, secret or non-public
      aspects of the business of the Company. Executive acknowledges that the
      Proprietary Matter constitutes a unique and valuable asset of the Company
      acquired at great time and expense by the Company, and that any disclosure
      or
      other use of the Proprietary Matter other than for the sole benefit of the
      Company would be wrongful and would cause irreparable harm to the Company.
      Both
      during and after the term of this Agreement, Executive will refrain from any
      acts or omissions that would reduce the value of Proprietary Matter to the
      Company. The foregoing obligations of confidentiality, however, shall not apply
      to any knowledge or information which is now published or which subsequently
      becomes generally publicly known, other than as a direct or indirect result
      of
      the breach of this Agreement by Executive.

    

    8. Ventures.
      If,
      during the term of this Agreement, Executive is engaged in or associated with
      the planning or implementing of any project, program, or venture involving
      the
      Company and a third party or parties, all rights in the project, program, or
      venture shall belong to the Company and shall constitute a corporate opportunity
      belonging exclusively to the Company. Except as expressly approved in writing
      by
      the Company, Executive shall not be entitled to any interest in such project,
      program, or venture or to any commission, finder's fee or other compensation
      in
      connection therewith, other than the compensation to be paid to Executive as
      provided in this Agreement.

    

    9. Solicitation
      of Employees.

    

    9.1. Agreement
      Not to Solicit Employees.
      During
      his employment by the Company hereunder and for the one (1) year period
      following the termination of such employment for any reason, Executive shall
      not, either directly or indirectly, on his own behalf or in the service or
      on
      behalf of others solicit, divert or hire away, or attempt to solicit, divert
      or
      hire away any person then employed full time by the Company.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    10. Termination
      Prior to Expiration of the Term.

    

    10.1
       Disability.
      Executive's employment shall terminate upon Executive becoming totally or
      permanently disabled for a period of six (6) months or more. For purposes of
      this Agreement, the term "totally or permanently disabled" or "total or
      permanent disability" means Executive's inability on account of sickness or
      accident, whether or not job related, to engage in regularly or to perform
      adequately his assigned duties under this Agreement. Prior to terminating the
      Agreement pursuant to this provision, the Company shall engage and consult
      one
      or more physicians as may be reasonable. 

    

    10.2
        Death
      of Executive.
       Executive's
      employment shall terminate immediately upon the death of Execu tive.
      

    

    10.3  Termination
      for Cause.
      The
      Company may terminate Executive's employment for ACause"
      (as hereinafter defined). No termination for ACause@
      may be
      invoked by Company without first providing Executive with at least thirty (30)
      days written notice to correct any breach, default or causation. Such written
      notice shall set forth with reasonable specificity the Company's basis for
      such
      notice of termination and Executive shall have thirty (30) days to correct
      the
      condition set forth in the notice.

     

    10.3.1. Cause
      Defined.
      For the
      purpose of this section, the termination of this Agreement by Company for any
      of
      the following reasons shall be considered termination for
      Cause:

    (i)
       Conviction
      of a criminal act involving fraud, embezzlement or breach of trust or other
      act
      which would prohibit Executive from holding his position under the rules of
      the
      Securities and Exchange Commission.

    

    (ii)
      Willful, knowing and malicious violation of written corporate policy or
rules
      of
      the Company.

    

    (iii)
      Willful, knowing and malicious misuse, misappropriation, or disclosure
of
      any of
      the Proprietary Matters.

    

    (iv)
      Misappropriation, concealment, or conversion of any money or property
of
      the
      Company.

    

    (v)
      Being: i) under the habitual influence of intoxicating liquors while in the
      course
      of
      employment, or ii) under the influence of any controlled substance
      without a valid prescription.

    

    (vi)
      Intentional and non-trivial damage or destruction of property of the
Company.
      For purposes of this provision non-trivial is defined to mean damage
      occurring in the course of a single act or occurrence in an amount exceeding
      five thousand dollars ($ 5,000). 

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (vii)    Reckless
      and wanton conduct which endangers the safety of other persons
      or property during the course of employment or while on premises
      leased or owned by the Company.

    

    (viii)  
      Continued incapacity for more than 180 days on the part of Executive
to
      perform his duties, unless waived by the Company.

    

    (ix)     
      Intentional or negligent misrepresentation of facts or circumstances
about
      the
      Executive, the Company, or the Company’s operations to the Board.

    

    10.4  Termination
      of Employment By Executive for Good Reason.
      Notwithstanding any other provisions of this Agreement, Executive may terminate
      his employment immediately, at any time, for any reason on or after a Change
      in
      Control as defined below, or for good reason. For purposes of this Agreement,
      “Good Reason” shall include:

    

    	(i)  	
            Assignment
              by Company to Executive of any duties inconsistent in any substantial
              respect with the position, authority or responsibilities associated
              with
              Executive’s position as set forth in this Agreement, but excluding any
              isolated, insubstantial or inadvertent action not taken in bad faith
              which
              was promptly remedied by Company after receipt of notice by
              Executive;

          

    

    	(ii)  	
            Reduction
              by Company of Executive’s base salary during the Term from that provided
              in paragraph 4.1 of this Agreement;

          

    

    	(iii)  	
            In
              the event that there is a successor to Company, the failure of Company
              to
              obtain an agreement from any such successor that is satisfactory to
              Executive to perform the obligations of Company under this
              Agreement;

          

    

    	(iv)  	
            Failure
              of Company to fulfill any of its other obligations to Executive under
              this
              Agreement; and

          

    
      

      	(v)  	
              
                Inability
                  of the Executive to fulfill his duties for health
                  reasons.

              

            

       

    

    For
      purposes of this Agreement, “Change in Control” shall mean (A) the dissolution
      or liquidation of the Company; (B) a reorganization, merger or consolidation
      of
      the Company with one or more corporations as a result of which the Company
      is
      not the surviving corporation; (C) approval by the stockholders of the Company
      of any sale, lease, exchange or other transfer (in one or a series of
      transactions) of all or substantially all of the assets of the Company; (D)
      approval by the stockholders of the Company of any merger or consolidation
      of
      the Company in which the holders of voting stock of the Company immediately
      before the merger or consolidation will not own fifty percent (50%) or more
      of
      the voting shares of the continuing or surviving corporation immediately after
      such merger or consolidation; or (E) a change of fifty percent (50%) (rounded
      to
      the next whole person) in the membership of the Board of Directors of the
      Company within a twelve (12) month period, unless the election or nomination
      for
      election by stockholders of each new director within such period was approved
      by
      the vote of two-thirds (2/3) (rounded to the next whole person) of the directors
      then still in office who were in office at the beginning of the twelve (12)
      month period.

     

    10.5  Voluntary
      Termination of Employment By Executive For Other than Good
      Reason.
      Executive may voluntarily terminate his employment with the Company upon 30
      days
      prior written notice for other than Good Reason. Executive shall not be entitled
      to any further payments of compensation beyond Executive’s resignation date if
      Executive voluntarily resigns under this Section 10.5.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    10.6.  Surrender
      of Records and Property.
      Upon
      termination of his employment with the Company, Executive shall deliver promptly
      to the Company all records, electronic media, manuals, books, blank forms,
      documents, letters, memoranda, notes, notebooks, reports, data, tables, and
      calculations or copies thereof, which are the property of the Company and which
      relate in any way to the business, products, practices or techniques of the
      Company, and all other property (keys, office equipment, computers, mobile
      phones, credit cards, etc.) of the Company and Proprietary Matter, including
      but
      not limited to, all documents which in whole or in part contain any trade
      secrets or confidential information of the Company, which in any of these cases
      are in his possession or under his control.

    

    10.7  Additional
      Payments by Company.
      In the
      event that any payments under this Agreement or any other compensation, benefit
      or other amounts payable from the Company for the benefit of Executive are
      subject to the tax imposed by Section 4999 of the Internal Revenue Code of
      1986, as amended (the “Code”) (including any applicable interest and penalties,
      the “Excise Tax”), no such payment (“Parachute Payment”) shall be reduced
      (except for required tax withholdings) and the Company shall pay to Executive
      by
      the earlier of the date such Excise Tax is withheld from payments made to
      Executive or the date such Excise Tax becomes due and payable by Executive,
      an
      additional amount (the “Gross-Up Payment”) such that the net amount retained by
      Executive (after deduction of any Excise Tax on the Parachute Payments, taxes
      based upon the Tax Rate (as defined below) upon the payment provided for by
      this
      Section 5.3 and Excise Tax upon the payment provided for by this
      Section 5.3), shall be equal to the amount Executive would have received if
      no Excise Tax had been imposed. A Tax counsel chosen by the Company’s
      independent auditors, provided such person is reasonably acceptable to Executive
      (“Tax Counsel”), shall determine in good faith whether any of the Parachute
      Payments are subject to the Excise Tax and the amount of any Excise Tax, and
      Tax
      Counsel shall promptly notify Executive of its determination. The Company and
      Executive shall file all tax returns and reports regarding such Parachute
      Payments in a manner consistent with the Company’s reasonable good faith
      determination. For purposes of determining the amount of the Gross-Up Payment,
      Executive shall be deemed to pay taxes at the Tax Rate applicable at the time
      of
      the Gross-Up Payment. In the event that the Excise Tax is subsequently
      determined to be less than the amount taken into account hereunder at the time
      a
      Parachute Payment is made, Executive shall repay to the Company promptly
      following the date that the amount of such reduction in Excise Tax is finally
      determined the portion of the Gross-Up Payment attributable to such reduction
      (without interest). In the event that the Excise Tax is determined to exceed
      the
      amount taken into account hereunder at the time a Parachute Payment is made
      (including by reason of any payment the existence or amount of which cannot
      be
      determined at the time of the Gross-Up Payment), the Company shall pay Executive
      an additional amount with respect to the Gross-Up Payment in respect of such
      excess (plus any interest or penalties payable in respect of such excess) at
      the
      time that the amount of such excess is finally determined. The Company shall
      reimburse Executive for all reasonable fees, expenses, and costs related to
      determining the reasonableness of any Company position in connection with this
      paragraph and preparation of any tax return or other filing that is affected
      by
      any matter addressed in this paragraph, and any audit, litigation or other
      proceeding that is affected by any matter addressed in this Section 5.3 and
      an amount equal to the tax on such amounts at Executive’s Tax Rate. For the
      purposes of the foregoing, “Tax Rate” means Executive’s effective tax rate based
      upon the combined federal and state and local income, earnings, Medicare and
      any
      other tax rates applicable to Executive, all at the highest marginal rate of
      taxation in the country and state of Executive’s residence on the date of
      determination, net of the reduction in federal income taxes which could be
      obtained by deduction of such state and local taxes.”

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    11. Assignment/Successors.
      This
      Agreement shall not be assignable, in whole or in part, by either party without
      the written consent of the other party except that Company may, without the
      consent of Executive, assign its rights and obligations under this Agreement
      to
      any corporation, firm or other business entity (i) with or into which the
      Company may merge or consolidate, or (ii) to which the Company may sell or
      transfer all or substantially all of its assets or of which fifty percent (50%)
      or more of the equity investment and of the voting control is owned, directly
      or
      indirectly, by, or is under common ownership with, the Company. After any such
      assignment by the Company and such written agreement by the assignee, the
      Company shall be discharged from all further liability hereunder and such
      assignee shall thereafter be deemed to be the Company for the purposes of all
      provisions of this Agreement including this section.

    

    This
      Agreement shall be binding upon, and inure to the benefit of, both parties
      and
      their respective successors and assigns, including any corporation or other
      entity with which, or into which, the Company may be merged or which may succeed
      to its assets or business, provided, however, that the obligations of Executive
      are personal and shall not be assigned by Executive.

    

    

    12.
       Indemnification.
      The
      company shall indemnify Executive as provided in the California Corporations
      Code, Company Articles or Company's Bylaws in effect at the commencement of
      this
      Agreement. The scope of indemnification to which Executive is entitled shall
      not
      be diminished, but may be expanded by the Company, by amendment of the Company's
      Bylaws, Articles of Incorporation or otherwise. Executive shall indemnify and
      hold the Company harmless from all liability for loss, damages or injury
      resulting from the negligence or misconduct of Executive. The Parties are
      concurrently entering into a separate indemnification agreement to provide
      indemnification for the Executive, attached hereto at Exhibit
      A
      (the
“Indemnification Agreement”).

    

    13.
      Miscellaneous.

    

    13.1
       Governing
      Law.
      This
      Agreement is made under and shall be government by and construed in accordance
      with the laws of the State of California. 

    

    13.2  Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties relating to the subject
      matter hereof and supersedes all prior agreements and understandings with
      respect to such subject matter with the exception of the Indemnification
      Agreement which is incorporated by reference, and the parties hereto have made
      no agreements, representations or warranties relating to the subject matter
      of
      this Agreement which are not set forth herein. Any dispute(s) or differences(s)
      which arise during the course of this Agreement and which either involve its
      interpretation or meaning, or relate to performance required hereunder shall
      be
      submitted to and resolved by binding arbitration; provided, however, that the
      parties are not waiving and are expressly reserving their right to seek
      injunctive relief by judicial process. Nevertheless, the parties may, by
      subsequent consent, agree to submit requests for injunctive relief to an
      arbitrator or arbitration panel. If either party shall, in the opinion of the
      other party, be in breach of or default in the performance or observance of
      any
      term or condition of this Agreement, the non-defaulting party shall notify
      the
      defaulting party in writing of such fact, and the defaulting party shall have
      ten (10) days from the receipt of such notice to remedy or correct such breach
      or default. If the non-defaulting party asserts that the breach or default
      has
      not been timely and properly cured, it may commence arbitration as described
      herein and ask the arbitrator to deem this Agreement terminated and/or grant
      such relief as is shown appropriate. In the event the parties are unable to
      agree upon an arbitrator to hear and resolve their differences (hereinafter
      the
ADispute@),
      each
      party shall designate one person licensed as an attorney in California. Said
      two
      attorneys shall select the neutral arbitrator. Unless agreed upon by the parties
      to the contrary, arbitration shall be by a single, neutral arbitrator
      (hereinafter, the AArbitrator@).
      If the
      two designated attorneys cannot agree on the selection of the Arbitrator, the
      attorneys shall each select one arbitrator. The two arbitrators so selected
      shall then confer and jointly select a third arbitrator who shall preside over
      the parties=
      dispute
      as Arbitrator. The Arbitrator shall have the full and absolute authority to
      interpret this Agreement, to deem conduct by the parties as either in compliance
      with or in breach of this Agreement, to terminate this Agreement, and (if a
      breach is found) to award appropriate damages or relief. The Dispute shall
      be
      settled in accordance with then existing substantive law and, to the fullest
      extent possible, with California substantive law. While evidence may be
      accepted, omitted, considered or excluded in the discretion of the Arbitrator,
      the Arbitrator shall be bound by the California rules of evidence and by the
      California Arbitration Act (CCP 1280 et seq.). The final decision of the
      Arbitrator shall be served on the parties, in writing, within twenty (20) days
      after conclusion of the arbitration hearing. The Arbitrator=s
      decision shall be binding and conclusive. Neither party shall pursue, prosecute
      or otherwise file any legal action or proceeding (other than to seek injunctive
      relief as described above). Except as provided in CCP 1286.2, no appeal shall
      be
      taken from the Arbitrator=s
      decision or from any subsequent court order confirming said decision. The
      parties shall equally advance the costs incurred by arbitration. The Arbitrator,
      however, shall have the discretion to award such costs as well as
      attorneys=
      fees to
      the party prevailing in the arbitration proceedings. 

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    13.3  Withholding
      Taxes.
      The
      Company may withhold from any benefits payable under this Agreement all federal,
      state, city or other taxes as shall be required pursuant to any law or
      governmental regulation or ruling. 

    

    13.4 Amendments.
      No
      amendment or modification of this Agreement shall be deemed effective unless
      made in writing signed by the parties hereto. 

    

         
      13.5 No
      Wavier.
      No term
      or condition of this Agreement shall be deemed to have been waived nor shall
      there be any estoppel to enforce any provisions of this Agreement, except by
      a
      statement in writing signed by the party against whom enforcement of the waiver
      or estoppel is sought. Any written waiver shall not be deemed a continuing
      waiver unless specifically stated, shall operate only as to the specific term
      or
      condition waived and shall not constitute a waiver of such term or condition
      for
      the future or as to any act other than that specifically waived. 

    

    13.6 Severability.
      To the
      extent any provision of this Agreement shall be invalid or unenforceable, it
      shall be considered deleted here from and the remainder of such provision and
      of
      this Agreement shall be unaffected and shall continue in full force and effect.
      

    

    13.7 Survival.
      Sections
      4.7, 7, 8, and 9 shall survive termination of this Agreement. 

    

    13.8 Notices.
      Any and
      all notices, requests or other communications required or permitted in or by
      any
      provision of this Agreement shall be in writing and may be delivered personally
      or by certified mail directed to the addressee at such person=s
      or
      entity=s
      last
      known post office address, and if given by certified mail, shall be deemed
      to
      have been delivered when deposited in such, mail postage prepaid. 

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    13.9 Legal
      Proceedings.
      In the
      event of legal proceedings, including arbitration as set forth in Section 13.2
      above, the prevailing party shall be entitled, in addition to such relief as
      is
      deemed to be appropriate, to recover such costs and reasonable
      attorneys=
      fees as
      are incurred therein.

    

    13.10 Section
      409A.
      Unless
      otherwise expressly provided, any payment of compensation by Company to
      Executive, whether pursuant to this Agreement or otherwise, shall be made within
      two and one-half months (21⁄2 months) after the later of the end of the calendar
      year of the Company’s fiscal year in which Executive’s right to such payment
      vests (i.e.,
      is not
      subject to a “substantial risk of forfeiture” for purposes of Code Section 409A
      of the Internal Revenue Code of 1986, as amended (“Code”)). To the extent that
      any severance payments (including payments on termination for “good reason”)
      come within the definition of “involuntary severance” under Code Section 409A,
      such amounts up to the lesser of two times the Executive’s annual compensation
      for the year preceding the year of termination or two times the 401(a)(17)
      limit
      for the year of termination, shall be excluded from “deferred compensation” as
      allowed under Code Section 409A, and shall not
      be
      subject to the following Code Section 409A compliance requirements. All payments
      of “nonqualified deferred compensation” (within the meaning of Section 409A) are
      intended to comply with the requirements of Code Section 409A, and shall be
      interpreted in accordance therewith. Neither party individually or in
      combination may accelerate any such deferred payment, except in compliance
      with
      Code Section 409A, and no amount shall be paid prior to the earliest date on
      which it is permitted to be paid under Code Section 409A. In the event that
      Executive is determined to be a “key employee” (as defined in Code Section
      416(i) (without regard to paragraph (5) thereof)) of Company at a time when
      its
      stock is deemed to be publicly traded on an established securities market,
      payments determined to be “nonqualified deferred compensation” payable following
      termination of employment shall be made no earlier than the earlier of (i)
      the
      last day of the sixth (6th) complete calendar month following such termination
      of employment, or (ii) Executive’s death, consistent with the provisions of Code
      Section 409A.  Any payment delayed by reason of the prior sentence shall be
      paid out in a single lump sum at the end of such required delay period in order
      to catch up to the original payment schedule.  Notwithstanding anything
      herein to the contrary, no amendment may be made to this Agreement if it would
      cause the Agreement or any payment hereunder not to be in compliance with Code
      Section 409A.

    

    

    This
      Agreement is executed on the Effective Date at Los Angeles,
      California.

    
      	 	 	 	 
	Company:	 	 	Executive:  
	 	 	 	 
	 	 	 	 
	 	 	 	 
	By: 
              /s/ Steve Racoosin	 	 	/s/ Chris
              Barsness
	
              
Title: 
CEO	 	 	
              
Chris
              Barsness
	 	 	 	 

    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    

    

    Exhibit
      A

    

    Indemnification
      Agreement

    

    
      
         

      

      
        11

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