Document:

asbform10q080930_ex10-2.htm

    
      
         

      

      
        
        

        
          
            

          

        

      

      
         

        Exhibit
10.2

        FIRST
AMENDMENT TO THE CARDIOTECH INTERNATIONAL, INC.

        EMPLOYEE
STOCK PURCHASE PLAN

      

    

    WHEREAS, AdvanSource
Biomaterials Corporation (the “Company”) maintains the CardioTech International,
Inc. Employee Stock Purchase Plan, effective as of October 16, 2007 (the
“Plan”);

     

    WHEREAS, in Section 19 of the
Plan, the Company, through its Board of Directors, has reserved the right to
amend the Plan at any time and for any reason; and

     

    WHEREAS, the Company desires
to amend the Plan to adjust the initial offering period and to amend the
provisions for adjustment in the event of certain equity restructuring events
and corporate transactions.

     

    NOW, THEREFORE, the Plan is
hereby amended effective as of October 16, 2007, as follows:

     

    
      	
              1.  

            	
              By
      revising the second sentence of Section 4 to read as
    follows:

            

    

     

    “The
first Offering Period shall commence on March 1, 2008 and shall continue until
August 31, 2008.”

     

    
      	
              2.  

            	
              By
      revising the first sentence of Section 18(a) to read as
      follows:

            

    

     

    Subject
to any required action by the stockholders of the Company, the number of Shares
covered by each option under the Plan that has not yet been exercised, the
number of Shares that have been authorized for issuance under the Plan but have
not yet been placed under option, the price per Share of Common Stock covered by
each option under the Plan that has not yet been exercised, and any other Share
limits set forth in the Plan shall be proportionately adjusted for any stock
split, reverse stock split, stock dividend, combination, reclassification of the
Common Stock (including any such change in the number of Shares of Common Stock
effected in connection with a change in domicile of the Company), divestiture
(including a spin-off), rights offering, any dividend or distribution to holders
of Shares of Common Stock other than an ordinary cash dividend, or any other
similar change in capitalization effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of
consideration.”

     

    
      	
              3.  

            	
              By
      deleting the second paragraph of Section 18(b) in its
      entirety.

            

    

     

    
      	
              4.  

            	
              Except
      as provided above, the Plan shall remain in full force and
      effect.

            

    

     

     

    
      	 	ADVANSOURCE
      BIOMATERIALS CORPORATION
	 	 
	 	 
	
               
      

            	By:  /s/ Michael F.
      Adams

    

    
      	
               
      

            	
              On
      Behalf of Its Board of
Directorsasbform10q080930_ex10-3.htm

    
      
         

      

      
         

        
          
            

          

        

      

      
         

        Exhibit
10.3

        SECOND
AMENDMENT TO THE CARDIOTECH INTERNATIONAL, INC.

        EMPLOYEE
STOCK PURCHASE PLAN

         

        
        

      

    

     

    WHEREAS, CardioTech
International, Inc. (the “Company”) maintains the CardioTech International, Inc.
Employee Stock Purchase Plan, effective as of October 16, 2007, as amended (the
“Plan”);

     

    WHEREAS, in Section 19 of the
Plan, the Company, through its Board of Directors, has reserved the right to
amend the Plan at any time and for any reason; and

     

    WHEREAS, the Company desires
to amend the Plan to increase the maximum number of shares a Plan participant
may purchase during each offering period.

     

    NOW, THEREFORE, the Plan is
hereby amended effective as of August 26, 2008, as follows:

     

    
      	
              1.  

            	
              By
      revising Section 7(a) to read as
follows:

            

    

     

    On the
Offering Date of each Offering Period, each eligible Employee participating in
such Offering Period shall be granted an option to purchase on each Purchase
Date a number of Shares of the Company’s Common Stock determined by dividing
such Employee’s Contributions accumulated prior to such Purchase Date and
retained in the Participant’s account as of the Purchase Date by the applicable
Purchase Price; provided, however, that the maximum number of Shares an Employee
may purchase during each Offering Period shall be 23,000 Shares (subject to any
adjustment pursuant to Section 18 below), and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and
12.

     

    
      	
              2.  

            	
              Except
      as provided above, the Plan shall remain in full force and
      effect.

            

    

     

    IN WITNESS WHEREOF, the
Company has caused this Second Amendment to the Plan to be executed on this
26th
day of August, 2008.

              

     

    
      	 	 CARDIOTECH
      INTERNATIONAL, INC.
	 	 
	 	 
	
               
      

            	
              By:  /s/ Michael F.
      Adams

            

    

    
      	
               
      

            	
                    
      On Behalf of Its Board of
Directorsenergyking_10qsba-ex1001.htm

     

    Exhibit
10.1

     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement dated as of February , 2008 (this "Agreement") is entered
into by and between Gallagher's Heating & Air Conditioning, Inc., a
California corporation (the "Employer"), and Timothy E. Gallagher (the
"Employee").

     

    1.
Employment. The Employer hereby employs the Employee and the Employee hereby
accepts employment with the Employer upon the terms and subject to the
conditions set forth herein.

     

    2. Duties
and Responsibilities. The Employee shall be employed in such positions and hold
such titles as may determined by the Board of Directors of the Employer from
time to time. The Employee shall perform all services and tasks requested or
assigned to of the Employee or otherwise reasonably incident to any position
held by the Employee. The Employee shall be subject to the direction and control
of the Board of Directors of the Employer and all such officers of the Employer
as the Board of Directors or any senior officers of the Employer may determine
from time to time. The Employee will devote his best efforts and his full time
and attention to the performance of his duties, except for paid time off as
permitted by Employer's general policies. The employment relationship between
the parties shall be governed by the general employment policies, practices and
rules of the Employer, including without limitation any employee handbook,
except that when the terms of this Agreement differ from or are in conflict with
the Employer's general employment policies, practices or rules, this Agreement
shall control.

     

    Without
limiting the foregoing, as part of his duties and responsibilities and without
any additional compensation, if requested by the Employer, the Employee shall
act as the qualifier for the Employer's licenses, maintain in good standing all
of his individual licenses that may be used to qualify the Employer's licenses
and take all such other actions as may be required, desired or requested by the
Employer to act as the qualifier for the Employer or otherwise qualify the
Employer licenses or enable the Employer to obtain all such licenses.
Notwithstanding the other provisions of this Agreement, at the option of the
Employer, unless the Company elects to select an earlier date, the Employee's
obligations under this paragraph shall continue notwithstanding any expiration
or termination of this Agreement or the Employee's employment until the later of
the date that is one hundred and eighty (180) days after the date the Employee's
employment terminates or the date on which this Agreement is then scheduled to
expire (currently December 31, 2009 and as such date may be extended); provided,
however, that during any such period that the Employee is required by the
Employer to perform such services but is not being paid as an employee (e.g, the
Employee is providing such services after he has voluntarily terminated his
employment under Section 6(d) or after the period for which the Employer is
required to pay the Employee his base compensation pursuant to Section 6.3(a) or
6.3(e)) the Employer shall compensate the Employee for acting as the qualifier
for the Employer and providing such qualification services at a reasonable
market rate for providing such services (which reasonable market rate shall be
based upon the fees being paid to other individuals providing similar services
to similar companies in the same general markets in which the Employer
operates), as determined in good faith by the Employer; and provided further
that the Employee shall assist the Employer as and whenever requested to assist
the Employer to transition to another qualifier. If and to the extent that the
Employee acts as the qualifier for the Employer pursuant to this Agreement, the
Employer shall indemnify, defend and hold harmless the Employee from and against
any and all claims, actions, demands, losses, damages, costs and expenses
arising from claims asserted or brought against the Employee by any third party
to the extent arising out of the Employee's provision of qualifying services for
the Employer under this Agreement, except in each case for any that arise due to
the Employee's bad faith, willful misconduct or gross negligence, any breach of
his obligations under this Agreement or, unless the Employee reasonably believed
that his conduct was lawful (or not unlawful), any violation of law by the
Employee.

     

    
      
        
        

      

      
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    3.
Compensation. As compensation for his services under the terms of this
Agreement:

     

    (a) The
Employee shall be paid an annual salary of $150,000, payable in accordance with
the then-current payroll policies of the Employer (such annual salary is herein
referred to as the "Base Salary").

     

    (b) The
Employee may also be selected to participate in certain additional incentive
programs pursuant to which the Employee may receive additional compensation (the
"Additional Compensation"), payable in accordance with the then-current payroll
policies of the Employer with respect to the types of such
compensation.

     

    The
Employee also shall be entitled to vacation or paid time off and holiday pay in
accordance with the policies applicable to the Employer's exempt salaried
employees generally.

     

    4. Term.
Subject to earlier termination as provided in this Agreement, the term of the
Employee's employment under this Agreement shall be for a term commencing on the
date of this Agreement and ending on December 31, 2009, subject to extension
thereafter by mutual written agreement of the Employer and the Employee. The
period commencing on the date of this Agreement and expiring on the scheduled
expiration date of this Agreement (including any extension of such date) is
referred to herein as the "Term."

     

    5.
Non-Competition, Non-Solicitation and Confidentiality.

     

    (a)
During the period the Employee is employed by the Employer or any other Buckeye
Company (as defined below) and, in the case of a termination of employment
pursuant to Section 6(e) of this Agreement prior to the date on which the Term
is then scheduled to expire (as the Employer is required to continue to pay the
Employee his base salary as provided in Section 6(e) through such date as if he
continued to be employed during such period), thereafter until the date on which
the Term is scheduled to expire, the Employee shall not:

     

    (i)
Directly or indirectly accept employment with, or render any service to or on
behalf of, any person, firm or corporation that engages in the Territory (as
defined below) in the heating, air conditioning, cooling, ventilation or indoor
air quality business or any other business that may be conducted in by the
Employer or any Buckeye Company or any similar business (each of the foregoing
businesses, a "Competitive Business"); or

     

    (ii)
Directly or indirectly own, manage, operate, finance or control or participate
in the ownership, management, operation, financing or control of, or be
connected as a principal, agent, representative, consultant, advisor, investor,
owner, partner, financier, manager or joint venturer with, or permit his name to
be used by or in connection with, any Competitive Business anywhere in the
Territory; provided, however, that the Employee may (A) invest as an investor in
the voting securities of any person that is a reporting company under the
Securities Exchange Act of 1934, as amended, so long as (1) the aggregate amount
of such securities that the Employee owns directly or indirectly is less than
two percent (2%) of the total outstanding voting securities of such person, and
(2) the Employee has no other affiliation with such person, and (B) own shares
of stock of Buckeye Ventures, Inc., a Nevada corporation
("Buckeye");

     

    
      
        
        

      

      
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    The term
"Competitive Business" shall be deemed to include any business that the Employee
knows is conducted in any material respect by the Employer or any other Buckeye
Company within the Territory. The Employee acknowledges that upon the
effectiveness of this Agreement the Employer will have business locations in Los
Molinos, California and Yuba City, California and will provide and/or will have
the ability to provide goods and services to customers anywhere within the
Territory. The term "Buckeye Company" shall mean the Employer and its direct and
indirect affiliates, including without limitation Buckeye and each parent,
subsidiary, partnership, limited liability company, joint venturer or other
related entity or any other entity directly or indirectly controlled by Buckeye.
The term "Territory" shall mean the area that consists of each business location
of the Employer and a fifty (50) mile radius from each such business location
(which if no additional locations are opened by the Employer after the date
hereof shall mean only anywhere within either (i) Los Molinos, California or a
fifty (50) mile radius of Los Molinos, California or (ii) Yuba City, California
or a fifty (50) mile radius of Yuba City, California).

     

    (b)
During the period the Employee is employed by the Employer or any other Buckeye
Company and for a period of two (2) years after
the Employee ceases to be employed by the Employer or any other Buckeye Company
for any reason, whether before or after the expiration of the Term,
except that in the case of a termination of employment pursuant to Section 6(e)
of this Agreement prior to the date on which the Term is then scheduled to
expire (as the Employer is required to continue to pay the Employee his base
salary as provided in Section 6(e) through such date as if he continued to be
employed during such period), such period shall extend to the date that is two
(2) years following the date the Term is scheduled to expire, the Employee shall
not:

     

    (i)
Contact, deal with or in any way solicit any person or entity that is then or at
any time during the prior three (3) years before such date was a customer of the
Employer or a customer of any other Buckeye Company with which the Employee had
actual contact or actual knowledge in an effort to (A) cause or induce, or act
in a manner that has the effect of causing or inducing, such person or entity to
purchase or otherwise obtain the benefit or use of any products or services that
are provided by any Buckeye Company or the Employer from another person or
entity, or (B) disrupt, damage, impair or interfere with, or act in any manner
that has the effect of disrupting, damaging, impairing or interfering with, any
existing or potential (1) agreement, (2) arrangement, (3) course of dealing, or
(4) negotiations between any Buckeye Company and any such person or entity;
or

     

    (ii)
Solicit the employment of any person who is or was employed by the Employer or
any Buckeye Company, or contact any such person in an effort to or in any manner
that suggests that such person should terminate or consider terminating such
person's employment or other relationship with the Employer or with any Buckeye
Company (other than any person who has ceased to be so employed for a period of
at least one year).

     

    (c) It is
the desire and intent of each of the parties that the provisions of Section 5(a)
and Section 5(b) of this Agreement shall be enforced to the fullest extent
permissible under applicable law. Accordingly, if any particular portion of
Section 5(a) and Section 5(b) shall be adjudicated to be invalid or
unenforceable, such Section shall be deemed amended to (i) reform the particular
portion to provide for such maximum restrictions as will be valid and
enforceable, or if that is not possible, then (ii) delete therefrom the portion
thus adjudicated to be invalid or unenforceable.

     

    
      
        
        

      

      
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    (d)
During the period during which the Employee is employed by the Employer or by
any other Buckeye Company and at all times thereafter (regardless of the reason
for termination of the Employee's employment), the Employee will not divulge or
appropriate to his own use or to the use of others any secret, confidential or
proprietary information (the "Confidential Information") pertaining to the
business of, or acquired from other persons or entities by, the Employer,
Buckeye or any other Buckeye Company. Such Confidential Information includes,
without limitation, trade secrets; customer lists; customer prospect lists;
acquisition target lists; names, addresses, contact persons and other
identifying information of customers, prospective customers and acquisition
targets; the needs and preferences of customers and prospective customers;
knowledge that customers or prospective customers possess or may possess a
willingness to use the types of products or services offered by Employer,
Buckeye or any other Buckeye Company; business methods, plans and strategies;
marketing methods, plans and strategies; financial data; pricing information;
other terms (including expiration dates) of customer contracts; and cost
information, obtained by the Employee as a consequence of his employment,
affiliation, agreements or position with the Employer, Buckeye or any other
Buckeye Company. For purposes of this Agreement, Confidential Information does
not include any information that is or becomes generally available to and known
by the public (other than as a result of an unpermitted disclosure directly or
indirectly by the Employee). The Employee will not remove any item of
Confidential Information from the premises of any Buckeye Company except as the
Employee's duties as an employee shall require or as otherwise authorized by ,
the Employer, and upon any termination of the Employee's employment, the
Employee shall immediately return all items (including without limitation all
copies thereof) of Confidential Information, whether in printed, computer or
other form, as well as all analyses, compilations, studies, reports, manuals,
memoranda, notes, correspondence, charts, diagrams, designs, computer programs,
sales formats, supplier lists and other documents (including without limitation
all copies thereof), whether in printed, computer or other form, prepared by or
for the Employee or in the Employee's possession or control that contain or are
based in whole or in part upon such information, to the Employer or as otherwise
directed by the Employer.

     

    (e) The
Employee acknowledges that Section 5(a), Section 5(b) and Section 5(d) of this
Agreement are expressly for the benefit of the Employer, that the Employer would
be irreparably injured by a violation of Section 5(a), Section 5(b) or Section
5(d), and that the Employer would have no adequate remedy at law in the event of
such violation. Therefore, the Employee acknowledges and agrees that, in
addition to any other remedies available, injunctive relief, specific
performance or any other appropriate equitable remedy (without any bond or other
security being required) are appropriate remedies to enforce compliance with
Section 5(a), Section 5(b) and Section 5(d).

     

    (f) The
Employee further acknowledges that the covenants contained in Section 5(a),
Section 5(b) and Section 5(d) of this Agreement are of the essence of this
Agreement, and agrees that the existence of any breach by the Employer of any
provision of this Agreement, or the existence of any claim or cause of action of
the Employee against the Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Employer of
the provisions of Section 5(a), Section 5(b) or Section 5(d). Instead, in the
event of any breach by Employer of any provision of this Agreement, the
Employee's remedy shall be to bring an independent action for breach of contract
against the Employer (except in the case of a dispute that is the subject of
Section 7, in which case the Employee's remedy is to invoke the dispute
resolution mechanism set forth therein).

     

    
      
        
        

      

      
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    (g) THE PROVISIONS OF THIS SECTION 5 SHALL CONTINUE IN
EFFECT PURSUANT TO THEIR TERMS, NOTWITHSTANDING THE EXPIRATION OF THE TERM OR
ANY OTHER TERMINATION OF THIS AGREEMENT. No restriction contained in any
part of this Section 5 is intended or shall be deemed to limit any other
provision contained in this Section 5 or any other rights or remedies of the
Employer or any other Buckeye Company, whether under this Agreement, any other
agreement, or by law or otherwise.

     

    (h) In
the case of a termination of the Employee's employment pursuant to Section 6(e)
where the Employer wrongfully ceases to pay the salary payments required to be
paid pursuant to Section 6(e), the Employee may elect, by written notice to the
Employer, to waive his rights to such payments and in such event the time
periods in this Section 5 which were to extend to or from the date the Term was
then scheduled to expire shall instead be determined as if the Employee
voluntarily resigned on (and, as the case may be, extend only to or from) the
date the Employee ceased to be employed (or, if later, the date the Employer
wrongfully ceased to make such salary payments to the Employee pursuant to
Section 6(e)).

     

    6.
Termination of Employment.

     

    (a) For
Due Cause. Nothing herein shall prevent the Employer from terminating, without
prior notice, the Employee for "Due Cause" (as hereinafter defined), in which
event the Employee shall be entitled to receive his Base Salary on a pro rata
basis to the date of termination and any Additional Compensation that has been
awarded to or earned by the Employee but not yet paid.

     

    The term
"Due Cause" shall mean (i) the Employee has (A) committed a willful serious act,
such as fraud, embezzlement or theft, (B) committed any act against the Employer
or any other Buckeye Company intending to enrich himself at the expense of the
Employer or any Buckeye Company, or (C) made any unauthorized use or disclosure
of any trade secret or other confidential information (including any
Confidential Information), whether pertaining to the business of the Employer or
any Buckeye Company or otherwise, (ii) the Employee has been convicted of a
felony or commits an act constituting a felony, (iii) the Employee has engaged
in conduct which has caused or could cause material, significant or serious
injury, whether monetary or otherwise, to the Employer or any other Buckeye
Company, (iv) the Employee, in carrying out his duties hereunder, has been
guilty of negligence or willful misconduct, (v) in the good faith determination
of the Employer, the Employee's performance, or the performance of the business
operations for which the Employee is responsible, has failed to meet the goals
and expectations established by the Employer, (vi) in the good faith
determination of the Employer, the Employee has violated in any material way any
of the Employer's rules, policies or procedures (including without limitation
those set forth in any employee handbook, or (vii) in the good faith
determination of the Employer, the Employee has otherwise materially breached
this Agreement (including, without limitation, any failure to perform the duties
assigned to him in accordance with this Agreement) and has not remedied such
breach within five business days (or such longer period of time not to exceed
thirty (30) days if the cure is commenced within five (5) business days, is
diligently pursued in good faith and reasonably requires more than five (5)
business days to remedy) after receipt of written notice from the Employer
specifying in reasonable detail the nature of the breach.

     

    
      
        
        

      

      
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    (b) Due
to Death. In the event of the death of the Employee, this Agreement shall
terminate on the date of death and the estate of the Employee shall be entitled
to receive the Employee's Base Salary (on a pro rata basis) through the date of
the Employee's death and any Additional Compensation that has been awarded to or
earned by the Employee but not yet paid.

     

    (c)
Disability. In the event the Employee suffers a "Disability" (as hereinafter
defined), this Agreement shall terminate on the date designated by the Employer
and the Employee shall be entitled to receive his Base Salary (on a pro rata
basis) through the end of the month in which his employment is terminated due to
the Disability and any Additional Compensation that has been awarded to or
earned by the Employee but not yet paid. For purposes of this Agreement,
"Disability" shall mean the inability or incapacity (by reason of a medically
determinable physical or mental impairment) of the Employee to perform the
duties and responsibilities related to the job or position with the Employer
described in Section 2 of this Agreement for a period that lasts, or that can be
reasonably expected to last, more than one hundred and eighty (180) days. Such
inability or incapacity shall be documented to the reasonable satisfaction of
the Employer by appropriate correspondence from a physician or physicians
selected by the Employer and reasonably acceptable to the Employee, and the
Employee agrees to submit to an examination by such physician or physicians for
the purpose of making such determination.

     

    (d)
Voluntary Termination. The Employee may voluntarily terminate his employment
under this Agreement at any time by providing at least ninety (90) days' prior
written notice (or such shorter period as the Employer may elect after receiving
such notice) to the Employer. In such event, the Employee shall be entitled to
receive his Base Salary until the date his employment terminates and any
Additional Compensation that has been awarded to or earned by the Employee but
not yet paid.

     

    (e)
Constructive Termination Prior to Expiration of Term.

     

    (i) If,
prior to the expiration of the Term, the Employer:

     

    (A)
terminates the employment of the Employee for any reason other than (1) for Due
Cause, (2) as a result of the death of the Employee or (3) because of a
Disability;

     

    (B)
decreases the Employee's Base Salary below the level provided for by the terms
of Section 3(a) of this Agreement; or

     

    (C)
materially breaches any provision of this Agreement and such breach is not cured
by the Employer within fifteen (15) days (or such longer period not to exceed
thirty (30) days if the cure is being diligently pursued in good faith and
reasonably requires longer than fifteen (15) days to cure) after receipt of
written notice from the Employee specifying in reasonable detail the nature of
such breach, then such action by the Employer, unless consented to in writing by
the Employee, shall be deemed to be a constructive termination by the Employer
of the Employee's employment ("Constructive Termination"); provided, however,
that except in the case of a termination by the Employer pursuant to clause (A)
above, no Constructive Termination shall be deemed to have occurred unless the
Employee notifies the Employer of the Employee's election to treat such event as
a Constructive Termination within thirty (30) days of the occurrence of such
event.

     

    
      
        
        

      

      
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    (ii) In
the event of a Constructive Termination the Employee may terminate his
employment without being in breach hereof, and the Employee shall be entitled to
receive (X) his Base Salary through the balance of the Term either, at the
option of the Employer, payable in a lump sum (but discounted by a reasonable
factor as mutually determined by the Employer and the Employee) or in accordance
with the then-current payroll policies of the Employer, and (Y) any Additional
Compensation that has been awarded to or earned by the Employee but not yet
paid.

     

    (iii) In
the event of the death or Disability of the Employee following a Constructive
Termination, the amounts set forth in Section 6(e)(ii) of this Agreement shall
continue to be owing and shall be paid to the estate of the Employee or to the
Employee, as applicable. ).

     

    (f)
Benefits. Upon any termination of the Employee's employment as provided in this
Section 6 all rights and benefits the Employee (or his estate) may have under
any benefit plans or programs of the Employer shall be determined in accordance
with the terms and conditions of such plans or programs applicable in the case
of employees who voluntarily terminate their employment (e.g., the Employee
shall be entitled to any vested amounts under the 401(k) plan and to be paid for
any accrued and unpaid vacation through the date of termination)

     

     

    7.
Arbitration of Certain Disputes. In the event that the Employer advises the
Employee that he is being terminated for Due Cause pursuant to Section 6(a) and
the Employee disputes such determination and instead claims that he is being
terminated pursuant to Section 6(e), the Employee must notify the Employer of
his disagreement regarding the grounds for termination within thirty (30) days
following the date of termination. The Employee agrees that if he fails to
deliver such notice within such thirty (30) day period, he will lose the right
to dispute whether the termination was pursuant to Section 6(e), and he shall be
limited to the rights and remedies provided for in Section 6(a). In the event
that the Employee notifies the Employer of his disagreement within such thirty
(30) day period, the dispute shall be resolved in accordance with the following
provisions:

     

     

    (a) The
Employee shall, within ten (10) days of notifying the Employer of his
disagreement, file a demand for arbitration with the American Arbitration
Association.

     

    (b) The
dispute shall be resolved by a confidential, binding arbitration pursuant to the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association, as modified by the agreement of the parties as set
forth below.

     

    (c) The
dispute shall be resolved by a single neutral arbitrator, who shall be selected
by agreement of the parties, or selected in accordance with American Arbitration
Association procedures if the parties cannot agree.

     

    
      
        
        

      

      
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    (d) The
Employer and the Employee agree to engage in expedited discovery (including both
document production and depositions) so that each party can obtain disclosure of
relevant, non-privileged materials in a manner that will permit the close of
discovery, and then the hearing on the merits, to occur within sixty (60) days
after the filing of the arbitration demand, unless the parties mutually agree to
extend such period.

     

    (e) The
sole issue to be resolved by the arbitrator shall be whether the termination was
for Due Cause. If the arbitrator rules that the termination was not for Due
Cause, the relief to be ordered by the arbitrator shall be limited to ordering
the Employer to comply with the provisions of Section 6(e)(ii).

     

    (f) Each
party shall bear its own expenses (including without limitation the fees and
expenses of legal counsel and accountants) in connection with such arbitration
and the Employer and the Employee shall each bear one-half of the arbitrator's
fees and expenses.

     

    The
Employee agrees that, pending the resolution of any dispute described in this
Section 7, he shall continue to be bound by the provisions of Section 5
(including Section 5(a) and Section 5(b)). The Employee further agrees that,
following the resolution of any dispute described in this Section 7, he shall
continue to be bound by the provisions of Section 5, with the duration of the
period provided for in Section 5(a) and Section 5(b) determined by the outcome
of the arbitration.

     

    8.
Withholding. All payments and benefits under this Agreement for which
withholding is required under applicable law will be made subject to the
required withholding.

     

    9.
Notices. All notices, requests, demands and other communications given under or
by reason of this Agreement shall be in writing and shall be deemed given when
delivered in person or when mailed, by certified mail (return receipt
requested), postage prepaid, addressed as follows (or to such other address as a
party may specify by notice pursuant to this provision):

    
    

     

    
      	 	
              (a) If to
      the Employer, addressed to it at:

               

            	 
	 	

              c/o
      Buckeye Ventures, Inc.

              4455 Lamont Street

              Suite
      3

              San
      Diego, California 92109

              Attn:
      Board of Directors

               

            	 
	 	
              with a
      copy to Buckeye, addressed to it at:

               

            	 
	 	
              Buckeye Ventures,
      Inc.

              4455 Lamont Street

              Suite 3

              San Diego,
      California 92109

              Attn:
      President

               

            	 
	 	
              (b) If to
      the Employee, addressed to him at:

               

            	 
	 	
              25259
      Lincoln

              Los Molinos,
      California 96055

            	 

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    10.
Controllinq Law. The execution, validity, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the internal
laws (and not the conflicts of law provisions) of the State of
California.

     

    11.
Additional Instruments. The Employee and the Employer shall execute and deliver
any and all additional instruments and agreements that may be necessary or
proper to carry out the purposes of this Agreement. Without limiting the
generality of the foregoing, in the event that the Employer so requests, the
Employee agrees to sign acknowledge and confirm from time to time his
obligations under Section 5.

     

    12.
Entire Aqreement; Amendments; Waivers; Termination. This Agreement contains the
entire agreement of the Employee and the Employer relating to the matters
contained herein and supersedes all prior agreements and understandings, oral or
written, between the Employee and the Employer with respect to the subject
matter hereof, excluding any existing records of the Employer (or any
predecessor of the Employer) relating to the Employee's employment, which
records may continue to be considered by the Employer in making any
determinations permitted or provided for hereunder. This Agreement may be
amended, modified or supplemented, but only in writing approved by Buckeye or
the board of directors of the Employer and signed by each of the parties hereto.
Any term of this Agreement may be waived only with the written consent of the
party sought to be bound, and the waiver by either party to this Agreement of a
breach of any provision of the Agreement by the other party shall not operate or
be construed as a waiver by such party of any subsequent breach by such other
party.

     

    13.
Reformation and Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal and enforceable but so as to most nearly
retain the intent of the parties, and if such modification is not possible, such
provision shall be severed from this Agreement, and in either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.

     

    14.
Assiqnments. The Employer may assign this Agreement to any affiliate of Buckeye
or the Employer or any person or entity succeeding to all or substantially all
of the business interests of Buckeye or the Employer by merger or otherwise. The
rights and obligations of the Employee under this Agreement are personal to him,
and no such rights, benefits or obligations shall be subject to voluntary or
involuntary alienation, assignment or transfer, except as otherwise expressly
contemplated in Section 6(b) and Section 6(e)(iii) of this
Agreement.

     

    15.
Effect of Aqreement. Subject to the provisions of Section 14 of this Agreement
with respect to assignments, this Agreement shall be binding upon the Employee
and his heirs, executors, administrators, legal representatives and assigns and
upon the Employer and its respective successors and assigns, except as otherwise
contemplated hereby.

     

    16.
Exercise of Riqhts and Remedies. The rights and remedies in this Agreement shall
not be exclusive, but are intended to be cumulative with all other rights and
remedies of the Employer and each other Buckeye Company, whether under this
Agreement, any other agreement, law or otherwise. No delay of or omission in the
exercise of any right, power or remedy accruing to any party as a result of any
breach or default by any other party under this Agreement shall impair any such
right, power or remedy, nor shall it be construed as a waiver of or acquiescence
in any such breach or default, or of any similar breach or default occurring
later.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    17.
Execution. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute but
one and the same instrument.

     

    18.
Termination. Pursuant to certain documents entered into in connection with the
Merger Agreement, the Stockholder has obtained certain security interests in the
shares of stock and/or certain assets of the Company. In the event that as a
result of the Stockholder's exercise of its rights with respect to such security
interests under these documents, the Stockholder becomes the owner of all or
substantially all of the shares of stock of the Company or all or substantially
all of the business or assets of the Company, this Agreement shall automatically
terminate without any further liability on the part of either party, except that
the provisions in Section 5 that relate to the customers, employees or persons
or entities otherwise engaged by Buckeye or any other Buckeye Company (other
than the Company) and that relate to any Confidential Information of Buckeye or
any other Buckeye Company (other than the Company) and any related provisions
required for the enforcement thereof, shall survive such termination for the
periods provided for in this Agreement.

     

    IN WITNESS WHEREOF, the Employee and the
Employer have executed this Agreement effective as of the date first above
written.

     

     

    
      	
              Employer:

            	
              Employee:

            
	 
      	 
      
	
              GALLAGHER'S
      HEATING

              &
      AIR CONDITIONING, INC.

               

              By:
      /s/ Larry Weinstein

              Larry
      Weinstein – CFO

            	
              /s/
      Timothy E. Gallagher

              Timothy
      E. Gallagher

            

    

     

    10

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