Document:

Dated
the 6th day of February, 2012 

 

Bizzingo,
Inc. 

 

and 

 

Sun
Enterprise Group, Ltd. 

 

JOINT-VENTURE
AGREEMENT 

 

    	 

    	 

    

 

Table
of Contents  

 

	Chapter 1.	 	 	 
	 	 	 	 
	1.	 	General 	3
	 	 	 	
	2.	 	Parties	3
	 	 	 	 
	3.	 	Establishment of Joint Venture Company	4
	 	 	 	 
	4.	 	Purposes, Scope and Scale of Business	5
	 	 	 	 
	5.	 	Total Amount of Investment and Registered Capital	5
	 	 	 	 
	6.	 	Responsibilities of the Parties	8
	 	 	 	 
	7.	 	Doing Business	10
	 	 	 	 
	8.	 	Board of Directors	10
	 	 	 	 
	9.	 	Management Organs	14
	 	 	 	 
	10.	 	Labor Management	18
	 	 	 	 
	11.	 	Taxation, Finance, Accounting and Audit	19
	 	 	 	 
	12.	 	Foreign Exchange Management	20
	 	 	 	 
	13.	 	Distribution of Profits	20
	 	 	 	 
	14.	 	Term of Joint Venture	21
	 	 	 	 
	15.	 	Dissolution of the Joint Venture Company	21
	 	 	 	 
	16.	 	Disposition of Assets	23
	 	 	 	 
	17.	 	Insurance and Confidentiality	23
	 	 	 	 
	18.	 	Amendment of the Agreement	24
	 	 	 	 
	19.	 	Liability for Breach	24
	 	 	 	 
	20.	 	Force Majeure	24
	 	 	 	 
	21.	 	Governing Law and Resolution of Disputes	25
	 	 	 	 
	22.	 	Languages	25
	 	 	 	 
	23.	 	Effectiveness of the Agreement and Others	25

  

    	2

    	 

    

   

JOINT
VENTURE AGREEMENT  

 

Chapter
1. General 

 

In
accordance with the laws of the Hong Kong Special Administrative Region (hereinafter referred to as “Hong Kong”) of the
People’s Republic of China (hereinafter referred to as “China”), Bizzingo Inc., established in accordance with the laws
in Nevada, United States of America (hereinafter referred to as “USA”) with its principal office at 63 Main Street, Suite
202, Flemington, New Jersey 08822, USA (hereinafter referred to as “BIZZ” for the First Party) and Sun Enterprise Group
(Cayman Island) Limited, established in accordance with the laws of Hong Kong with its principal office located at Oriental Plaza
W3, Room 1208, East Chang’an Ave., Dongcheng District, Beijing, China PR 100738 (“hereinafter referred to as “SUN”)
or the Second Party) hereby agree to establish a joint venture company with investment jointly contributed by the parties, at Hong
Kong, China, based on the principles of equality and mutual benefit as well as through friendly negotiations on this 6 day of January
2012. The parties shall hereinafter be referred to individually as the “Party” or collectively as the “Parties”. 

 

Chapter
2. Parties 

 

Article
1 

 

The
Parties to this Agreement shall be as follows: 

 

First
Party: Bizzingo, Inc. 

 

Its
registered domicle: State of Nevada, USA 

 

Its
registered address: 63 Main Street, Suite 202, Flemington, NJ 08822, USA 

 

Its
legal representative: Douglas Toth 

 

Title:
CEO 

 

Nationality:
American 

 

Second
Party: Sun Enterprise Group (Cayman Island), Ltd. 

 

Its
registered domcile:, Clifton House, 75 Fort Street, PO Box 1350, George Town, Grand Cayman KY1-1108, Cayman Islands. 

 

Its
registered address: Oriental Plaza W3, Room 1208, East Chang’an Ave., Dongcheng District, Beijing, China PR 100738 

 

    	3

    	 

    

 

Its authorized representative:
Alex Cherepakhov  

 

Title:
CEO

 

Nationality: American 

 

Chapter
3. Establishment of the Joint Venture Company 

 

Article
2 

 

Based
on the laws of Hong Kong the Parties hereto agree to set up “Newco, Ltd.”, a joint venture company with limited liability,
in Hong Kong, China (hereinafter referred to as the “JVC” or “Newco”). 

 

Based
on the laws of China using Chinese and Foreign Investment and other related laws and regulations of China, the JVC hereby may,
if necessary, establish a wholly owned subsidiary in China (hereinafter referred to as the “Subsidiary” or “WFOE”
or “Chinese Newco”) subject to the agreement of the parties. 

 

Article
3 

 

The name of the JVC its
legal address shall be as follows: TBD 

 

Name in Chinese: TDD 

 

Name in English: TBD 

 

Legal
Address: TBD 

 

Article
4 

 

The
JVC shall be a legal entity established under the laws of Hong Kong, and all activities of the JVC shall be done in accordance
with the laws, decrees, rules and regulations of Hong Kong, while at the same time shall be protected thereunder and receive the
privileges thereunder. 

 

Article
5 

 

The
JVC will be a limited liability company. Each Party shall be entitled to the profits in accordance with the ratio of its shareholding
in the capital of the JVC, which its investment bears to the registered capital, and shall share risks and profits within the limit
of the capital contributed by it, all as provided in Chapter 5. The Subsidiary shall also be a limited liability company under
the laws of China, where as the wholly owned subsidiary, the JVC shall be entitled to its entire profits. 

 

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Chapter
4. Purposes, Scope and Scale of Business 

 

Article
6 

 

The
purpose of the joint venture is, under the common idea of strengthening economic and technical cooperation between the Parties,
to provide SaaS (Software as a service) products to Chinese businesses by delivering collaborative intranet abilities and connectivity
to international businesses through the Bizzingo business social networking platform( hereinafter referred to as “Business”).
This operation will be developed in China through the Subsidiary to be established in China, by providing high quality professional
management and strong marketing to achieve the economic development of thereby attaining economic benefits satisfactory to the
Parties. 

 

Article
7 

 

The
business scope of the JVC shall be as follows: 

 

	(1)		To establish the Subsidiary in China and to operate and manage the business of the
Subsidiary conduct its business in the software and social networking for businesses using the Technology (as defined herein)
(all inclusive networking, product promotion, marketing and sales, ecommerce, product design, customer service and the like);
and

 

	(2)		Coordinate the business efforts between the BIZZ and SUN with the Subsidiary.

 

The
business scope of the Subsidiary shall be as follows: 

 

	(1)		Software development and the development and operation
of a social network platform for businesses in China using the Technology (as defined herein) (all inclusive networking, product
promotion, marketing and sales, operations, product design, customer service and the like); and

 

	(2)		Such new business as may be agreed to between the Parties.

 

Chapter
5. Total Amount of Investment and Registered Capital 

 

Article
8 

 

The
share capital of the JVC at the commencement of the joint venture of the Parties hereunder shall be as provided in this Chapter
5. 

 

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 Article
9 

 

The
investment amount and ratio of shareholding of the Parties shall be as follows: 

 

 

	BIZZ:	US$0,000,000
	 	 
	SUN:	US$0,000,000

 

Article
10 

 

The
ratio of shareholding of the Parties shall be as follows: 

  

	BIZZ:	50%
	 	 
	SUN:	50%

 

Article
11 

 

	1.		BIZZ shall contribute its technology (“Technology”) to the JVC pursuant to
a License Agreement between BIZZ and JVC promptly after the execution of this Agreement (“License Agreement”). The shares
in the JVC will be as stipulated in Article 9 and 10 hereof.

 

Article
12 

 

	1.		Subject to the following paragraphs of this Article 12,
before any shares in the JVC (“Shares”) may be sold or otherwise transferred or disposed of by a shareholder of the
JVC (the “Selling Shareholder”) (including transfer by gift), all the other shareholders of the JVC (“Remaining
Shareholders”) shall have a right of first refusal (“Right of First Refusal”) to purchase such Shares (“Selling
Shares”); and Parties shall have the right to co-sale (“Co-Sale”) in accordance with the terms of this Article.

 

Right
of First Refusal 

 

	2.		Before the transfer of any Selling Shares, the Selling
Shareholder shall deliver to the JVC and the Remaining Shareholders a written notice (“Transfer Notice”) stating:

 

	(a)		The Selling Shareholder’s intention to sell or otherwise transfer or otherwise dispose
of such Selling Shares;

 

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	(b)		The name of each proposed purchaser or other transferee (a “Proposed Transferee”);

 

	(c)		The number of Selling Shares to be transferred to each Proposed Transferee; and

 

	(d)		The bona fide cash price and/or other consideration for which, and other terms and
conditions on which, the Selling Shareholder proposes to transfer the Selling Shares (“Offered Terms”).

 

The
Transfer Notice shall constitute an irrevocable offer by the Selling Shareholder to sell the Selling Shares at the Offered Terms
to the Remaining Shareholders. 

 

	3.		Each Remaining Shareholder shall have the right, by serving
notice to the Selling Shareholder at any time within fourteen (14) days after receipt of the Transfer Notice (“Purchase Right
Period”), to purchase its Pro Rata Share (as defined below) of all or any of such Selling Shares at the same price and upon
the same terms (or terms as similar as reasonably possible) as the Offered Terms, and the Selling Shareholder shall, upon receipt
of the notice of purchase from the Remaining Shareholder, sell such Selling Shares to such Remaining Shareholder pursuant to such
terms. In respect of a Remaining Shareholder, his “Pro Rata Share” for the purposes of this Article shall mean the ratio
of (i) the number of Shares held by such Remaining Shareholders bears to (ii) the total number of Shares held by all Remaining
Shareholders.

 

Co-Sale 

 

	4.		The Parties shall have a co-sale right to sell a proportionate part of its Shares to
the Proposed Transferee together with such Selling Shareholder in the proposed sale or transfer on the same terms offered by such
Proposed Transferee.

 

	5.		The Parties may sell all or any part of that number of Shares equal to the product
obtained by multiplying (i) the Selling Shares that the Selling Shareholder proposed to sell or transfer to the Proposed Transferee,
by (ii) a fraction, the numerator of which is the number of Shares (on an as-converted basis) owned by the Party at the time the
co-sale right is exercised and the denominator of which is the total number of Shares (on an as-converted basis) owned by the
Selling Shareholders and the Party on the same day.

 

	6		If the Proposed Transferee prohibits such transfer or
otherwise refuses to purchase Shares from the Party exercising its co-sale right hereunder, the Selling Shareholder shall not
sell or transfer its Selling Shares to such Proposed Transferee unless and until, simultaneously with such sale or transfer, the
Selling Shareholder shall itself purchase such amount of Shares as provided in item 5 above from the Party for the same consideration
and on the same terms.

 

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General 

 

	7.		If any of the Selling Shares proposed in the Transfer Notice to be transferred are
not purchased by the Remaining Shareholders or affected by any Co-Sale right, then the Selling Shareholder may sell or otherwise
transfer or dispose of such Selling Shares which have not been purchased to the Proposed Transferee(s) at the Offered Terms,such
sale or other transfer shall be completed and consummated within thirty (30) days after the expiration of the Purchase Right Period.
If the Selling Shares described in the Transfer Notice are not transferred to the Proposed Transferee(s) within such thirty (30)
day period, such Selling Shareholder shall not transfer or dispose of any Selling Shares unless such Selling Shares are first
re-offered to the Remaining Shareholders in accordance with this Article.

 

	8.		The Right of First Refusal and Co-Sale right set forth in this Article shall not apply
to any transfer of Shares (i) to the holding company or the wholly-owned subsidiary of the Selling Shareholder or a wholly-owned
subsidiary of the holding company of the Selling Shareholder (each a “Permitted Transferee”) provided that in each case
the Selling Shareholder shall remain to be bound by this Agreement and the Permitted Transferee shall agree to be bound by this
Agreement and that the Selling Shareholder shall procure the Permitted Transferee shall not transfer its Shares except to the
Selling Shareholder or other Permitted Transferee(s) and further that after the transfer such Permitted Transferee shall remain
qualified to be a Permitted Transferee as defined above; or (ii) consequential to the exercise of the rights and powers by the
chargee or mortgagee under a charge or mortgage of the Shares.

 

Chapter
6. Responsibilities of the Parties 

 

Article
13 

 

Immediately
following the execution of this Agreement, the Parties will prepare and agree upon an annual budget for the initial fiscal year
of operation of the JVC and Subsidiary, and thereafter, within sixty (60) days prior to the commencement of a new fiscal year,
the Board of Directors shall cause management of the JVC and Subsidiary to prepare the annual budget for each forthcoming fiscal
year which shall be unanimously approved by the Board of Directors (each an “Annual Budget”). In the preparation of an
Annual Budget, each Party shall disclose or cause to be disclosed in the Annual Budget any transactions or proposed transactions
between the JVC and/or Subsidiary and an affiliate of any Party, Board of Director, General Manager, Executive Director, Deputy
General Manager, or other officer of the JVC or Subsidiary, or an affiliate of any of the foregoing. The term “affiliate”
means any party that controls, or is in common control of, another party. 

 

    	8

    	 

    

 

Subject
to the approval of the Annual Budget by the Parties or the Board of Directors as provided herein, each Party shall endeavor to
perform the following items under its responsibility provided that such and cost and expense shall be borne by the JVC or Subsidiary: 

 

	1.		Responsibilities of BIZZ;

 

	(1)		Entering into and execution of the License Agreement, and authorizing and legally
ensuring the JVC and its Subsidiary as the exclusive agent in respect of the Technology and its trademark, patent or propriety
technology (if applicable) within the territory of People’s Republic of China and Hong Kong and Macau Special Administrative Zone
as well as Taiwan province (“Territory”), an as the non-exclusive agent to market, sell and distribute the Technology
outside the Territory.

 

	(2)		Providing the Technology and other necessary information agreed in the License Agreement,
to the extent necessary for the execution of the License Agreement. Localization of Technology in order to accommodate the requirements
of Territory and provide the timetable for localization.

 

	(3)		Reasonable training of the technicians and employees of the JVC or the Subsidiary,
to the extent necessary for the execution of the License Agreement. Dispatching the professional technical staff located in China
for the purpose of marketing and training as required by the JVC and the Subsidiary.

 

	(4)		Meeting the technological requirements for the JVC or the Subsidiary in localization,
upgrading and further development of platform and SaaS products.

 

	(5)		Daily operation and management of the JVC.

 

	(6)		Other matters reasonably requested by the JVC.

 

	2.		Responsibilities of SUN;

 

	(1)		Establishment of the JVC in Hong Kong and Assisting the JVC to establish the Subsidiary
in China (if necessary). Assisting JVC to Apply and negotiate approval application to the pertinent Chinese government agencies
registration, acquisition of business license and other matters required for the establishment and continuous operation of the
Subsidiary. Assisting JVC to distribute the products and establish the sales channel.

 

	(2)		Providing the professional management team and the marketing expertise, as well as
communications support, and media relationships along established sales channels.

 

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	(3)		Assisting JV to engage the management personnel requested by the JVC and seconding
management personnel, technicians, workers and other necessary personnel who are the Chinese nationality and have sufficient experiences
or assisting in recruiting such personnel, and assisting in resolving labor management problems.

 

	(4)		Assisting in obtaining entry visas, processing work permits and arranging for travel
needed by the foreign nationality personnel of the JVC and by the personnel of BIZZ as well as assisting in availing conveniences
for the daily life of foreign personnel.

 

	(5)		Providing the JVC with guidance on the relevant laws and regulations of China concerning
the establishment, operation and carrying out of business of the JVC.

 

	(6)		Assisting the JVC and the Subsidiary in obtaining tax and other benefits according
to concerned regulations granting benefits of the Chinese government and the Hong Kong Region Government.

 

	(7)		Assisting in processing the remittance of foreign exchanges needed by the JVC.

 

	(8)		Other matters reasonably requested by the JVC.

 

Chapter
7. Doing Business 

 

Article 14 

 

The
JVC shall establish the Subsidiary in China to do business provided in Article 7 above in China. 

 

Article
15 

 

The
trademark(s) and Patents used by the JVC and the Subsidiary shall be as described on Appendix A hereof. 

 

Chapter
8. Board of Directors 

 

Article
16 

 

The
JVC and the Subsidiary shall establish a Board of Directors, and the date of registration of the JVC and the Subsidiary respectively,
shall be the date of establishment of the Board of Directors of the JVC and the Subsidiary respectively. 

 

    	10

    	 

    

 

Article
17 

 

	1.		The Board of Directors of the JVC and the Subsidiary shall each be composed of five
(5) Directors (including Honorary Chairman, Chairman and Vice Chairman), of whom two (2) shall be nominated by BIZZ, two (2) by
SUN, and one (1) mutual appointed. The term of a Director shall be three (3) years. Provided that each Party may change the director
nominated and dispatched by it during the term by giving thirty (30) days prior notice to the other Party. Provided that any damages
caused thereby shall be borne by the concerned Party who shall hold other Party harmless. The term of the new Director nominated
as the result of the change shall be the remaining term of his predecessor. If upon the expiration of the term of a Director,
each Party desires the same person to continue his/her position, then such Director shall be re-nominated.

 

	2.		The Board of Directors the JVC and the Subsidiary shall have one each of the Honorary
Chairman, Chairman and Vice Chairman, and unless as otherwise resolved among the Parties, the Chairman shall be nominated and
dispatched by SUN, the Vice Chairman to be nominated and dispatched by BIZZ, and the Honorary Chairman by SUN. The term of the
Honorary Chairman and Vice Chairman will not be fixed. Provided that he will have the position of Director.

 

	3.		Each Party shall cause the directors appointed by them respectively to approve the
establishment of the Subsidiary by the JVC in China at the first board meeting of the JVC.

 

	4.		Concurrent with the execution hereof, (i) BIZZ and SUN shall have agreed on the terms
and provisions of the Articles of Association or similar governing document for each of the JVC and Subsidiary, and (ii) shall
have filed and recorded such documents with the appropriate governmental agencies.

 

Article
18 

 

	1.		The Board of Directors shall be the highest organ of the JVC and the Subsidiary and
shall decide the following important matters (hereinafter referred to as “Matters Requiring the Board Approval”) which
shall be included in the Articles of Association of the JVC and Subsidiary as appropriate.

 

	(1)		Amendment of the Articles of Association of the JVC and the Subsidiary.

 

	(2)		Dissolution and suspension of the JVC and the Subsidiary or extension of the term
of the joint venture.

 

	(3)		Increase of the registered capital of the JVC or the Subsidiary and transfer of interests
thereof.

 

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	(4)		Accept or create new members to the JVC or Subsidiary.

 

	(5)		Merger of the JVC and the Subsidiary with another economic organization.

 

	(6)		Sale of all or substantial portion of the assets of the JVC and the Subsidiary.

 

	(7)		Taking over substantial assets from another economic organization.

 

	(8)		Approval of the Annual Budget (other than the initial Annual Budget), settlement and
annual accounting of the JVC and the Subsidiary.

 

	(9)		Determine the amount of any distribution of profits from the JVC or Subsidiary to
its members and determine the timing of such distributions.

  

	(10)		Deciding annual and long and medium term investment and borrowing plans.

 

	(11)		Deciding on the proposals for the annual distribution of profits and disposition of
Loss of the JVC and the Subsidiary.

 

	(12)		Approval of the principles of property disposal procedures, selection of the liquidation
committee, report of the liquidation and the like of the JVC and the Subsidiary.

 

	(13)		Increase the number of members to the Board of Directors from the current five(5)
members,

 

	(14)		Approval of the principles of property disposal procedures, selection of the liquidation
committee, report of the liquidation and the like of the JVC and the Subsidiary.

 

	(15)		Entering into any material contract with the JVC or Subsidiary, which includes any
lease, debt, pledge or other arrangement, or the amendment or termination of such material contract.,

 

	(16)		Deciding important rules and system of the JVC and the Subsidiary.

 

	(17)		Deliberation and decision of agenda proposed by a Director.

 

	(18)		Sublicense of the intellectual property rights.

 

	(19)		Except as otherwise stated herein, elect officers of the JVC or Subsidiary.

 

	(20)		Such other items for which approval of the Board of Directors is required under this
Agreement or the Articles of Association.

 

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	2.		Of the resolutions of the Board of Directors, the matters provided in preceding Paragraph
1, Items (1) through (15) shall require the unanimous vote of all the Directors or their proxies in attendance.

 

	3.		Of the resolutions of the Board of Directors, the matters as provided in preceding
Paragraph 1, items (16) through (20) shall require the affirmative vote of 2/3 or more of the Directors or their proxies in attendance.

 

	4.		The detailed rules concerning the Board of Directors not provided in this Agreement
shall follow relevant provisions of the Articles of Association or the rules of the Board of Directors of the JVC and the Subsidiary.

 

Article
19 

 

The
Chairman, for each company, shall be the legal representative of the JVC and the Subsidiary. Each Chairman shall represent the
acts of the JVC and the Subsidiary, externally in accordance with the decision of the Board of Directors. If the Chairman is unable
to perform his duties, the Vice Chairman shall perform the duties on behalf of the Chairman. If the Vice Chairman is also unable
to perform the duties, a Director in the other predetermined by the Board of Directors shall perform the duties of the Chairman. 

 

Article
20 

 

	1.		In principle, the meeting of the Board of Directors shall be held at least once a
year at the location of the JVC and the Subsidiary or such other location convenient to the members, and the Chairman for each
company shall have the responsibility for convening the meeting. By agreement of the Chairman and the Vice Chairman, the meeting
may be held at another place. When more than one-third of the Directors request, the Chairman shall call the meeting. The first
meeting of the Board of Directors shall be held within thirty (30) days after the establishment of each company.

 

	2.		The Chairman of each entity shall send a notice in writing to each respective Director
stating the agenda of the ordinary or extraordinary meeting of the Board of Directors, date and place of his company. Provided
that the number of days may be reduced upon unanimous agreement in advance of the Directors.

 

	3.		The quorum of the meeting of the Board of Directors
of each company shall be constituted upon the presence of majority of members or proxies as provided herein, and falling short
thereof, the quorum will not be constituted and any resolution made thereby shall be void. If a Director is unable to attend the
meeting of the Board of Directors, he may exercise his voting right by sending his proxy to the meeting of the Board of Directors
with the submission of the power of attorney. Each Party shall be responsible for causing the directors nominated and sent by
it or proxies to attend the meeting of the Board of Directors and secure their attendance.

 

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	4.		Upon agreement of the Chairman and the Vice Chairman of each company, the convening
of the meeting of the Board of Directors and resolution may be substituted by writing such as facsimile circulated and resolved
by all of its Directors.

 

	5.		Of the reasonable expenses to be incurred in connection with attending the meeting
of the Board of Directors, travel expenses, transportation expenses, lodging expenses meals and other the Board of Directors meeting
related expenses shall be borne by each company.

 

	6.		The minutes of the meeting of the Board of Directors shall be made in two languages,
English and Chinese, which shall be equally valid. The company shall keep the minutes for the duration of its term after the directors
or proxies attended affixed their signatures, and shall send without delay a copy thereof to each Director after the meeting of
the Board of Directors is finished.

 

Chapter
9. Management Organs 

 

Article
21 

 

	1.		The JVC and the Subsidiary shall each set up the operation management organ below
the Board of Directors and shall cause to take charge of the daily operation management affairs.

 

	2.		The Board of Directors of the JVC and the Subsidiary shall each designate one Executive
Director to take charge of the daily operation, management and administration. Under the Executive Director, there shall be one
General Manager, one Deputy General Manager and one senior management officer.

 

	3.		The Board of Directors of JVC and the Subsidiary shall appoint the person nominated
by BIZZ as the Executive Director and General Manager and the person nominated by SUN as the Deputy General Manager, and shall
decide their authority, compensation and dismissal. The initial Executive Director and General Manager shall be Douglas Toth.
The initial Deputy General Manager shall be determined by SUN. For other senior management officers, the Board of Directors shall
decide the establishment, number, selection, authority, remuneration, dismissal and the like shall be decided and selected by
the Board of Directors in accordance with the need in performing the affairs of the JVC and the Subsidiary.

 

	4.		The terms of the Executive Director, the General Manager and the Deputy General Manager
shall be three (3) years and may be renewed. In the case of replacement during the term, the Party who nominated and sent him
shall send thirty (30) days advance notice to the other Party and the Board of Directors, and shall bear all damages caused thereby,
and hold other Party harmless.

 

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Article
22 

 

	1.		The JVC and the Subsidiary shall each have the system under the guidance of the Board
of Directors and the Executive Director shall be the highest person responsible for daily operation and management affairs. The
Executive Director may also be appointed as General Manager and therefore act in dual capacity. The Executive Director shall represent
the company externally within the scope of authority given by the Board of Directors, and internally shall exercise the authority
over daily operation management. In disposing important matters, the Executive Director and General Manager shall consult with
the Deputy General Manager.

 

	2.		When the General Manager is unable to perform his duties, the Deputy General Manager
shall perform the duties of the General Manager in his/her behalf.

 

	3.		The General Manager shall set up departments within the operation management organ
and appoint the department managers to head each department. The department manager shall be responsible for the affairs of department
in charge, handle such matters as may be entrusted by the Executive Director, the General Manager and the Deputy General Manager
shall be responsible to the Executive Director.

 

	4.		The General Manager and Deputy General Manager shall make decision together of the
followings:

 

	(1)		Deciding the management policy, and plans for production, sale and procurement for
the long and medium terms.

 

	(2)		Appointment and dismissal of the managing director and other high-ranking officer
of the JVC and the Subsidiary as well as deciding their scope of authority and compensation.

 

	(3)		Establishment of management control organs, division and branch of the JVC and the
Subsidiary as well as deciding and revocation of the authority thereof.

 

	(5)		Establishment of the standards concerning the labor conditions such as wages of personnel
and workers of the JVC and the Subsidiary, and their bonus, welfare and the like.

 

	(6)		Any deadlock between the General Manager and Deputy General Manager regarding any
decision above shall be resolved by the Board of Directors.

 

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Article
23 

 

The
General Manager shall be responsible to the Executive Director directly and shall perform the following listed duties. 

 

	1.		Submitting the following drafts or plans to the Executive
Director and carrying out

after approval by the Board of Directors.

 

	(1)		Annual Business Plan.

 

	(2)		Management policy and medium and long term development plans of the JVC and the Subsidiary.

 

	(3)		Selection, authority, remuneration and dismissal of department managers and senior
management officers (including the Deputy General Manager).

 

	(4)		Rules and systems concerning the operation management of the JVC and the Subsidiary.

 

	(5)		Other matters which require the decision of the Board of Directors.

 

	2.		In compliance with the resolutions of the Board of Directors,
making decisions independently and carrying out the following matters.

 

	(1)		Ready-state implementation of items (1) through (5) of the preceding paragraph.

 

	(2)		Establishment of the operation management organs below the department managers and
the selection of personnel.

 

	(3)		Employment, dismissal, assignment, awards, punishment and the like of personnel and
workers.

 

	(4)		Establishment of various rules, regulations and criteria concerning the daily operation
management affairs.

 

	(5)		Plan for training of personnel and workers and arrangement for execution.

 

	(6)		Negotiation, conclusion and performance of contracts representing the company.

 

	(7)		Other important matters in the daily operation.

 

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 Article
24 

 

The
Deputy General Manager shall be responsible to the Executive Director directly and shall perform the following listed duties with
fully consulting with the Executive Director: 

 

		1.	Submitting the following drafts or plans
                                                                                                                                                                                    to the Executive Director and carrying out after approval by the Board of Directors. 

 

	(1)		Annual business finance plan.

 

	(2)		Annual budget, settlement of accounts, dividends, disposition of losses of the JVC
and the Subsidiary.

 

	(3)		Plans for procurement, management and enforcement of finances and investments.

 

		2.	In compliance with the resolutions of the Board of Directors,
making decisions independently and carrying out the following matters. 

 

	(1)		Wages, wage form, compensation, welfare, labor protection criteria.

 

	(2)		Finance and accounting management related affairs.

 

Article
25 

 

The
Executive Director, the General Manager and the Deputy General Manager may not become the President or the Vice President of another
economic organization without prior approval of the Board of Directors, and may not involve in commercial activities of another
economic organization competing against the company, except that Douglas Toth is an officer and director of BIZZ and 2D to 3D,
LLC. 

 

In
the event that the Executive Director, the General Manager or the Deputy General Manager commits any dishonest act or brings substantial
economic loss to the company by dereliction of his duties, or there is a just reason indicating that he is not a appropriate person
for the job, he may be dismissed at any time according to the resolution of the Board of Directors without making any compensation.
After dismissal as aforesaid, the new Executive Director, the new General Manager and the new Deputy General Manager shall be nominated
by the Party who nominated the former Executive Director, the former General Manager and the former Deputy General Manager and
shall be appointed by the Board of Directors, their term to be the remaining term of the predecessors. 

 

    	17

    	 

    

  

Chapter
10. Labor Management 

 

Article
26 

 

	1.		For the matters concerning the recruitment, employment, dismissal and resignation,
wages, labor insurance, welfare, rewards, penalty and other matters concerning the staff and workers of the JVC, the Executive
Director General Manager shall decide the detailed implementing methods according to the standards reviewed and decided by the
Board of Directors shall be determined by the Board of Directors and establish the employment rules of the JVC and other related
regulations.

 

	2.		For the matters concerning the recruitment, employment, dismissal and resignation,
wages, labor insurance, welfare, rewards, penalty and other matters concerning the staff and workers of the Subsidiary, the Executive
Director General Manager shall decide the detailed implementing methods according to the standards reviewed and decided by the
Board of Directors shall be determined by the Board of Directors in accordance with the Regulations of the People’s Republic of
China on Labor Management in Joint Ventures Using Chinese and Foreign Investment and its Implementation Rules, and other related
laws and regulations, and establish the employment rules of the Subsidiary and other related regulations.

 

Article
27 

 

Wage
level, system and welfare of the staffs and workers of the Subsidiary shall be decided by the Board of the directors or the General
Manager as authorized by the Board in accordance with the related laws and regulations of China and the standards decided by the
Board of Directors. Such matters shall be adjusted in principle every year according to the business situation of the Subsidiary. 

 

Article
28 

 

The
Subsidiary shall decide employment of the staffs and workers according to the business need and employ by selecting superior persons
through the testing method. The Subsidiary shall separately enter into a labor contract with each staff and worker to be employed
and file it with the agency in charge. 

 

Article
29 

 

The
Subsidiary shall have the right to hand out, depending on the degree, reprimand, fine, pay reduction, demotion, suspension of working,
advising retirement, dismissal and the like to the staffs and workers who violated various rules of the Subsidiary and the labor
contract, and report the results thereof to the agency in charge. 

 

    	18

    	 

    

  

Article
30 

 

	1.		The criteria of salary, insurance, welfare and travel expenses shall be determined
by the Board of Directors and the General Manager shall have the responsibility for the details thereof.

 

	2.		All pay and compensation of the high-ranking management personnel of the JVC may be
fixed in USD or RMB.

 

Chapter
11. Taxes; Finance; Accounting Audit 

 

Article
31 

 

	1.		The JVC shall pay taxes in accordance with relevant laws and regulations of Hong Kong
and receive tax preference according to relevant laws and regulations.

 

	2.		The Subsidiary shall pay taxes in accordance with relevant laws and regulations of
China and receive tax preference according to relevant laws and regulations.

 

Article
32 

 

	1.		The accounting of the JVC and the Subsidiary shall follow the International Accounting
System (“IFRS”).

 

	2.		The fiscal year of the JVC and the Subsidiary shall be from January 1 by the solar
calendar of each year to December 31. Provided that the first fiscal year shall be from the date of establishment of the JVC to
December 31 of the relevant year.

 

	3.		The accounting of the JVC and the Subsidiary shall employ the accrual basis and the
double entry system, which are used internationally. The completeness in procedures, the perfectness in the contents and the timeliness
shall be the principles.

 

	4.		In principle, all vouchers, slips, balance sheets, and books shall be prepared in
Chinese. Provided that in case where the Board of the Directors deems it necessary, they shall be prepared in Chinese and English.

 

	5.		The Subsidiary may use RMB as the currency for its books.

 

Article
33 

 

	1.		The JVC and Subsidiary shall prepare a loss and profit statement, balance sheets and
other fiscal year reports for each quarter and each fiscal year. The quarterly report shall be sent within thirty (30) days of
the end of the relevant quarter, to each Party and at the same time, the Subsidiary’s financial information shall be submitted
to concerned authorities of China.

 

    	19

    	 

    

  

	2.		The JVC and the Subsidiary shall prepare the accounting report of each fiscal year
by the end of March of the following year, and report to the Board of Directors after obtaining audit by a certified public accountant
registered in China. Upon approval thereby, the JVC and the Subsidiary shall send it to each Party and at the same time, the Subsidiary
will submit such report to concerned authorities of China. All reports and financial statements shall be prepared in both Chinese
and English.

 

Article
34 

 

Each
Party may invite a certified public accountant from outside China to have the quarterly and annual financial situation of the JVC
and the Subsidiary audited, and the other Party shall give its consent thereto. The Party conducting the audit shall notify the
JVC and the Subsidiary thirty (30) days beforehand and the JVC shall cooperate with such audit and make available all books and
financial records of the JVC. Provided that expenses incurred for the audit shall be borne by the Party conducting the audit. 

 

Article
35 

 

The
Directors of the JVC may examine vouchers and accounting records of the JVC and the Subsidiary from time to time. 

 

Chapter
12. Foreign Exchange Management 

 

Article
36 

 

Foreign
exchange management of the Subsidiary shall follow the Foreign Exchange Control Regulations of the People’s Republic of China and
the rules for relevant management method. 

 

Article
37 

 

After
obtaining the business license, the Subsidiary may open foreign currency accounts and RMB accounts at a bank inside China, which
the Bank of China or the State Foreign Exchange Control Bureau of china (or branch Bureau) and the Executive Director General Manager
of the Subsidiary recognize. 

 

Chapter
13. Distribution of Profits 

 

Article
38 

 

	1.		Profits and losses of the JVC and Subsidiary shall be allocated equally between the
Parties. The distribution of profits of the JVC and the timing of such distributions shall be determined by the Board of Directors
as described in Article 18(9).

 

    	20

    	 

    

 

Article
39 

 

Except
where there is an unavoidable situation, the distribution of profits to each Party shall be deposited in the bank account designated
by each Party within thirty (30) days after the resolution of the Board of Directors of the JVC and deposit charges shall be deducted
from the profits distributed to each Party. 

 

Chapter
14. Term of the Joint Venture 

 

Article
40 

 

	1.		The term of the joint venture shall be thirty (30) years, which shall be computed
from the date of issuance of the business license of the JVC unless prior written termination notice is given by one Party to
another or an event occurs as described in Article 41. Such term may be extended under the same or new terms and conditions with
the written consent of both Parties, at least six (6) months prior to the expiration date.

 

Chapter
15 Dissolution 

 

Article
41 

 

	1.		Upon occurrence of any of the events described in (a) through (d) below, any Party
(excepting the Party falling under items (b) and (d) of this paragraph) may notify in writing the other Party demanding the consultation
of the continued existence of the JVC or the Subsidiary. If within thirty (30) days from such notice, the Parties cannot reach
an agreement on the resolution (including the failure of a defaulting party to cure any default in item (b) or the bankruptcy
of any party stated in (d) continues to exist), then in such event, the License Agreement shall automatically terminate, and the
Board of Directors of the JVC and the Subsidiary shall submit an application for dissolution to the appropriate regulatory body
and upon obtaining approval of the approving authorities shall dissolve the JVC and the Subsidiary. In that event, each Party
shall have the obligation to cause the Directors or their proxies nominated and sent by it to attend the meeting of the Board
of Directors and to vote affirmatively for the dissolution of the JVC or the Subsidiary.

 

	(a)		Where the JVC or the Subsidiary recorded the losses continuously for five fiscal years
(excepting the first fiscal year) or the enumerated amount of losses of the JVC or the Subsidiary exceed 300% of registered capital.

 

    	21

    	 

    

  

	(b)		Any Party does not perform its obligations provided in this Agreement or the Articles
of Association of the JVC or the Subsidiary pursuant to the principles of good faith and mutual trust, or materially breaches
the provisions of this Agreement or those of the Articles of Association, so that the business of the JVC or the Subsidiary can
no longer be carried out of the business of the JVC or the Subsidiary is materially impaired.

 

	(c)		Force majeure provided in Article 51 of this Agreement occurred, as a result of which
the JVC or the Subsidiary suffered substantial loss and the business cannot be continued.

 

	(d)		The JVC, the Subsidiary or a Party is filed against or files for an application for
bankruptcy.

  

		2.	When the Parties agree on the dissolution, an application for dissolution
shall be pursued to wind up the business and affairs of the JVC in accordance with the applicable law and be submitted as well
as be dissolved through approval of the approving authorities. 

 

		3.	When the Parties agree on the dissolution, an application for dissolution
shall be pursued to wind up the business and affairs of the Subsidiary in accordance with the applicable law and be submitted as
well as be dissolved through approval of the approving authorities. 

 

Article
42 

 

	1.		When the a dispute exists regarding the JVC or Subsidiary where the Board of Directors
or the Parties cannot reach a special resolution regarding an operation and management issue, both Parties shall exercise good
faith effort to come to an amicable resolution.

 

	2.		If the Board of Directors or the Parties cannot reach a special resolution regarding
a Dispute stated in paragraph 1 above (“Dead Lock”), and such unresolved condition continues for more than sixty (60)
days (“Dead Lock Period”), then the following shall apply:

 

	(1)		In principal, as soon as possible after the occurrence
of a Dead Lock Period, the JVC or the Subsidiary, as the case may be, shall be automatically dissolved through the resolution
of the board of directors and shareholder’s meeting.

 

	(2)		The License Agreement granted by the BIZZ to JVC shall
terminate simultaneously upon the expiration of the Dead Lock Period.

 

    	22

    	 

    

  

Chapter
16. Disposition of Assets 

 

Article
43 

 

	1.		When the JVC is dissolved upon
expiration of the term of the joint venture or for other Cause as stated herein, the License Agreement shall automatically terminate
and the JVC shall be liquidated expeditiously in accordance with the relevant laws and regulations of Hong Kong. «need
to confirm law procedure»The assets of the JVC, excluding the License Agreement,shall be caused to be appraised by an organization
with the international reputation, which is recognized by the Board of Directors and shall be sold according to the appraised
amount at the most favorable prices. In the event that a Party desires to purchase the assets of the JVC, the sale will be made
at the appraised amount after obtaining consent of the Parties. The right to use the land shall be disposed according to the laws
and rules. All licenses issued among the Parties and JVC, shall automatically be terminated for no value.

 

	2.		When dissolving, the JVC shall organize the liquidation committee and liquidate the
properties. The details thereof shall follow the Articles of Association.

 

	3.		When dissolving, the Subsidiary shall follow the same procedures as stated in this
Article 43 and in accordance with the relevant laws and regulations of China. The Subsidiary shall organize the liquidation committee
and liquidate the properties, where the assets of the Subsidiary shall be appraised and sold at the most favorable prices. The
details thereof shall follow the Article of Association of the Subsidiary.

 

Article
44 

 

The
properties remaining after the liquidation shall be distributed to the Parties according to the then investment ratio of the Parties.
The JVC shall calculate the amount of each Party to be distributed in USD. 

 

Chapter
17. Insurance and Confidentiality 

 

Article
45 

 

Regarding
the various insurances of the JVC, the Board of Directors of the JVC shall study and decide the objects to be insured, types of
insurance, value to be insured, insurance term and the like. 

 

Article
46 

 

The
Parties shall not disclose to any third party any confidential information of the other Party obtained in connection with this
Agreement, and take measures to ensure that its employees, representatives, agents and consultants do not to disclose. The obligation
above shall survive for two (2) years after the expiration or the termination of this Agreement. 

 

    	23

    	 

    

  

Chapter
18. Amendment of the Agreement 

 

Article
47 

 

Amendment
of this Agreement or documents attached hereto shall be valid only when agreed upon by the Parties, prepared the contents of the
agreement in writing, signed, applied to the approving authorities and obtained approval. 

 

Chapter
19. Liabilities for Breach 

 

Article
48 

 

In
the event that a Party has failed to pay the entire amount of investment by the time limit provided in Article 11 of this Agreement,
the failing Party shall pay to the JVC a penalty of 0.3% per day on the amount unpaid starting from the payment due date. If payment
is not made until the lapse of one month from the payment due date, any of the non-failing Party may notify in writing asking for
payment and if no payment is made until the lapse of one (1) month after the date of notice, the failing Party shall lose all the
rights and ownership granted in this Agreement and in the governing Articles of Association and may not demand the refund of investment
already made. The failing Party shall be liable to the other Party and the JVC to compensate damages caused thereby. 

 

Article
49 

 

If
a Party breaches this Agreement, as a result of which the other Party or the JVC or the Subsidiary suffered damages (including
in the event of the dissolution according to Article 42), the breaching Party shall be liable to the other Party and the JVC or
the Subsidiary to compensate damages. 

 

Chapter
20. Force Majeure 

 

Article
50 

 

If
the performance of this Agreement is directly affected or cannot be performed according to its provisions by the occurrence or
consequences of force majeure which were unpreventable or unavoidable, such as earthquake, typhoon, fire, flood, strike, war (regardless
whether declared or not), and other unforeseeable cause, the Party affected by force majeure shall notify the other Party of the
force majeure situation and within fifteen (15) days submit the documents describing the details of the situation, and stating
the reasons why this Agreement cannot be performed or cannot be performed partially, or why it is necessary to extend the entire
or partial performance. The other Party shall study the measures according to the degree of influence the concerned force majeure
will have on the performance of this Agreement, and shall decide whether the Party affected by force majeure should be exempt partially
from performing the obligation, or whether only part or the entire Agreement should be postponed, and whether the JVC or the Subsidiary
should continue considering Article 42, paragraph, item (3) 

 

    	24

    	 

    

  

Chapter
21. Governing Law and Resolution of Disputes 

 

Article
51 

 

All
disputes arising from the performance of this Agreement or in connection with this Agreement shall be resolved by the Parties through
amicable consultation. If a dispute is not resolved within sixty (60) days, it should be settled by Hong Kong International Arbitration
Center (“HKIAC”) for arbitration. The arbitration shall be conducted in English and the arbitration awards will be binding
and final to the parties. 

 

Article
52 

 

Pending
the resolution of a dispute after the occurrence thereof, the responsibilities and obligations provided in this Agreement and the
Articles of Association of the JVC and the Subsidiary shall be performed continuously. 

 

Chapter
22. Languages 

 

Article
53 

 

This
Agreement is prepared in English and Chinese. The Agreement in such languages shall be equally valid. In case of conflict, the
English version shall govern. 

 

Chapter
23. Effectiveness of the Agreement and Others 

 

Article
54 

 

	1.		This Agreement and the Articles of Association of the Subsidiary shall be subject
to the authorization of the Chinese government of the approving authorities and shall become into effect as of the date of authorization.

 

	2.		If conditions are attached in the authorization by the approving authorities, the
Parties shall abide by such conditions.

 

    	25

    	 

    

  

Article
55 

 

Notices
to be given between the Parties and from the JVC as well as the Subsidiary to the Parties concerning this Agreement shall be given
to the addresses below in writing or by telegraph, telex or facsimile. The Party shall notify the other Party of the change of
address in writing, or by telegraph, telex or facsimile. 

 

First
party 

 

Bizzingo,
Inc. 

63
Main Street, Suite 202 

Flemington,
NJ 08822 

Tel:
908-968-0838 

Fax:646-349-5811 

 

Second
Party 

 

Sun
Enterprise Group, Ltd. 

Oriental
Plaza W3, Room 1206, 

East
Chang’an Ave., Dongcheng District, 

Beijing,
China PR 100738 

Tel: 01085189669 

Fax:
01085189797 

 

Article
56 

 

When
any of the provisions of this Agreement are held invalid under the relevant laws and regulations, all other provisions shall remain
valid. 

 

Article
57 

 

The
Article of Association of the JVC and the Subsidiary shall be written in accordance with the terms and conditions set forth in
this Agreement. In case of discrepancy in interpreting the provisions of the Articles of Association of the JVC and/or the Subsidiary
and those of this Agreement, the provisions of this Agreement shall govern. 

 

Article
58 

 

This
Agreement shall not be nullified by the replacement of the legal representatives or authorized representatives of the Parties. 

 

Article
59 

 

The
legal representatives or authorized representatives of the Parties execute this Agreement on 8th of February 2012. 

 

    	26

    	 

    

  

Article
60 

 

This
Agreement shall be prepared in originals each in English and each Party shall keep one set and two sets shall be submitted to the
approving authorities. 

 

Article
61 

 

The
Parties shall cause the JVC and the Subsidiary to have the first meeting of the Board of Directors to approve those items, which
are made as the duties of the JVC and the Subsidiary in this Agreement. 

 

Article
62 

 

Neither
party shall provide to the JVC and the Subsidiary any illegal information, such as information collected or processed by using
the illegal or unjust method; information which is immoral or harmful to good custom or the social order; information infringing
intellectual property of others; information invading the honor, private life and character of others; and false or exaggerated
information. If an action, claim, protest or criminal charges are brought by a third party against the JVC or Subsidiary because
of such information having been made available by either Party or its directors or employees, such Party shall at its expense and
under its responsibility hold the JVC and the Subsidiary harmless and compensate damages caused thereby to the JVC and the Subsidiary. 

 

Article
64 

 

Other
matters not provided in this Agreement and difference in interpreting the provisions of this Agreement, the Parties shall decide
upon consultation. 

 

    	27

    	 

    

 

[SIGNATURES
ON FOLLOWING PAGE] 

 

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives. 

 

Date: February 9, 2012 

 

	ATTEST:	 	BIZZINGO, INC.
	 	 	 
		 	
	Name:	 	By: Douglas Toth
	Witness:	 	Its: Chief Executive Officer & Chairman of the Board

 

	ATTEST:	 	SUN ENTERPRISE GROUP
	 	 	(HONG KONG), LTD
	 	 	 
	 	 	 
	Name:	 	By: Alex Cherepakhov
	Witness:	 	Its: Chief Executive Officer

 

LEGAL AGENT: 

 

_________________________ 

 

By: _____________________________ 

 

     __________________,
Partner 

 

    	28

    	 

    

  

[SIGNATURES
ON FOLLOWING PAGE] 

 

IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized representatives. 

  

Date: February 9, 2012 

 

	ATTEST:	 	BIZZINGO, INC.
	 	 	 
	 	 	 
	Name:	 	By: Douglas Toth
	Witness:	 	Its: Chief Executive Officer & Chairman of the Board

 

	ATTEST:	 	SUN ENTERPRISE GROUP
	 	 	(HONG KONG), LTD
	 	 	 
	 	 	
	Name:	 	By: Alex Cherepakhov
	Witness:	 	Its: Chief Executive Officer

 

LEGAL AGENT: 

 

_________________________ 

 

By: _____________________________ 

 

     __________________,
Partner 

 

    	29Unassociated Document

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the 9th day of February 2012, by and between Sagebrush Gold, Ltd., a Nevada corporation with an address of 1640 Terrace Way, Walnut Creek, California, 94597 and   Stephen D. Alfers, an individual residing at 1918 Bryce Court, Evergreen, Colorado 80439 (“Executive”).  As used herein, the “Effective Date: of this Agreement shall mean the date first set forth above.

 

W I T N E S S E T H:

 

WHEREAS, the Executive desires to be employed by the Company as its Chairman of the Board of Directors and Chief Executive Officer and the Company wishes to employ Executive in such capacity;

 

NOW, THEREFORE, in consideration of the foregoing recitals and the respective covenants and agreements of the parties contained in this document, the Company and Executive hereby agree as follows:

 

1.           Employment and Duties.  The Company agrees to employ and Executive agrees to serve as the Company's Chief Executive Officer.  The duties and responsibilities of Executive shall include the duties and responsibilities as the Board of Directors of the Company (the “Board”) may from time to time assign to Executive.

 

Executive shall devote substantially all of his working time and efforts during the Company's normal business hours to the business and affairs of the Company and its subsidiaries and to the diligent and faithful performance of the duties and responsibilities duly assigned to him pursuant to this Agreement.  Provided that none of the additional activities interferes with the performance of the duties and responsibilities of Executive or are determined by the inconsistent with the position, standing, stature, reputation or best interests of the Company, nothing in this Section 1, shall prohibit Executive from (a) serving as a consultant, director or member of a committee, paid or unpaid, for entities that , in the good faith determination of the Board, do not compete or present the appearance of competition with the Company or otherwise create, or could create, in the good faith determination of the Board, a conflict of interest or appearance of a conflict of interest with the business of the Company; (b) delivering lectures, fulfilling speaking engagements, and any writing or publication relating to his area of expertise (c) serving as a director or trustee of any governmental, charitable or educational organization; or (d) engaging in additional activities in connection with personal investments and community affairs; provided that such activities are not inconsistent with Executive’s duties under this Agreement..  In addition to the above and notwithstanding any other provision of this Agreement to the contrary, Executive may continue his service for current clients Franco-Nevada Corporation and Western States Minerals Corporation and their respective affiliated companies.

 

  

1

  

 

2.           Term.  The term of this Agreement shall commence on the Effective Date and shall continue through December 31, 2015 and shall be automatically renewed for successive one (1) year periods thereafter unless either party provides the other party with written notice of his or its intention not to renew this Agreement at least 120 days prior to the expiration of the initial term or any renewal term of this Agreement.  “Employment Period”  or “Term” shall mean the initial term plus renewals, if any.

 

3.           Place of Employment.  Executive's services shall be performed at the Company's offices located in Golden, Colorado. The parties acknowledge, however, that Executive may be required to travel in connection with the performance of his duties hereunder.

 

4.           Base Salary.  During the Term, Executive shall initially be paid an aggregate annual base salary at the rate of $250,000 per year (the “Base Salary”), payable in equal installments during each year in accordance with the payroll practices for the executives of the Company. The Compensation Committee of the Board, or if there is no Compensation Committee the Board, shall review Employee’s salary from time to time and may, in its sole discretion, make a recommendation to the Board of Directors to increase but not decrease it. The Board of Directors has the final authority to approve Base Salary adjustments.

 

5.           Bonuses.

 

(a) Signing Bonus – Upon execution of this Agreement, Executive shall receive a cash signing bonus of $500,000 (“Signing Bonus”).  Said signing bonus shall be paid to Executive within five (5) business days of execution of this Agreement.

 

(b) Annual Bonus - In addition to the Base Salary, Executive shall be entitled to receive an annual bonus (the “Bonus”) (if earned) for each calendar year during the Term for which services are performed under this Agreement.  The performance criteria for any particular calendar year shall be established by the Board no later than 90 days after the commencement of such calendar year  and prompt notice thereof provided to Executive.  Executive’s Bonus for a calendar year shall equal 100% of his annualized Base Salary (“Target Bonus”) for that year if target levels of performance for that year  are achieved, with greater or lesser amounts  paid for performance above and below target as determined by the Board. The Bonus may be paid in cash or in stock, or in a combination thereof in accordance with any Company bonus plans available for senior executives, or in the absence of such plans, as determined by the Board.  Any Bonus for a calendar year shall be subject to Executive’s continued employment with the Company through the end of the calendar year in which it is earned and shall be paid after the conclusion of the calendar year in accordance with the Company’s regular bonus payment policies in the year following the year with respect to which the Bonus relates, and in any case not later than two and one half (2-1/2) months following the end of the year with respect to which a Bonus is earned.

 

6.           Equity Awards.

 

(a)  Initial Equity Grant  -  Executive shall be issued on the Effective Date an initial equity grant of 12,000,000 restricted shares of the Company’s common stock.  The Company will undertake to register 3,000,000 shares of common stock (the “Registrable Equity Grant”) underlying the Initial Equity Grant with the Securities and Exchange Commission (the “SEC”)  on a Registration Statement on Form S-1 (or, in the alternative, if the Company is so eligible, register the equity incentive plan pursuant to which such Initial Equity Grant was issued with the SEC on a Registration Statement on Form S-8  (such registration statement on Form S-1 or S-8, the “Registration Statement”)), which Registrable Equity Grant shall vest upon the earlier of (i) one year from the date of issuance of the Initial Equity Grant or (ii) the date such Registration Statement is declared effective by the SEC.  The remaining shares underlying the Initial Equity Grant shall vest in accordance with the schedule set forth on Exhibit A, attached hereto.  Executive agrees that he shall be solely responsible for any and all elections to be made under Internal Revenue Code (the “Code”) Section 83(b) and the payment of all taxes associated therewith shall be the sole responsibility of Executive.  Executive shall provide Company with a copy of any election made under Section 83(b) of the Code.

 

  

2

  

 

(b)  Initial Option Grant- Executive shall be awarded, on the Effective Date, a ten-year option to purchase 10,000,000 shares of the Company’s common stock, exercisable at a per share price equal to the closing price of the Company’s common stock on the trading day immediately prior to the date of issuance of the Initial Option Grant, which shall be vested in full on the Effective Date.

 

(c)  Annual Long Term Incentives  - The Executive shall be eligible to participate in any long term incentive plans adopted by the Company from time to time, and shall otherwise be eligible for annual long term incentive awards in the discretion of the Board.

 

7.           Indemnification.  To the fullest extent permitted by law and the Company’s articles of incorporation and bylaws, the Company hereby indemnifies Executive and holds him harmless from the Effective Date, through the Term, and after the period of Executive’s employment hereunder, from and against all loss, costs, damages, and expenses including, without limitation, legal expenses of counsel (which expenses the Company will, to the extent so permitted, advance to Executive as the same are incurred) arising out of or in connection with the fact that Executive are or was a director, officer, attorney, employee, or agent of the Company or serving in such capacity for another corporation at the request of the Company.  This indemnification is in addition to that provided in the Company’s certificate of incorporation and bylaws.

 

8.           D&O Insurance.  The Company shall cover Executive under directors and officers liability insurance from the Effective Date, through the Term, and, while potential liability exists, after the period of Executive’s employment hereunder, on the most favorable terms as provided to any other director or executive officer of the Company.

 

9.           Expenses.  Executive shall be entitled to prompt reimbursement by the Company for all reasonable ordinary and necessary travel, entertainment, and other expenses incurred by Executive while employed (in accordance with the policies and procedures established by the Company for its senior executive officers) in the performance of his duties and responsibilities under this Agreement; provided, that Executive shall properly account for such expenses in accordance with Company policies and procedures.  In addition, Executive shall be entitled to reimbursement of legal fees incurred by Executive in connection with negotiation of this Agreement.

 

10.           Other Benefits.  During the term of this Agreement, the Executive shall be eligible to participate in incentive, stock purchase, savings, retirement (401(k)), and welfare benefit plans, including, without limitation, health, medical, dental, vision, life (including accidental death and dismemberment) and disability insurance plans (collectively, "Benefit Plans"), in substantially the same manner and at substantially the same levels as the Company makes such opportunities available to the Company's managerial or salaried executive employees.  The Executive shall be entitled to 25 days of paid time off (in addition to the usual national holidays) during each contract year during which he serves hereunder (“Paid Time Off”).  Paid Time Off not taken during a calendar year may not be carried forward in the next contract year unless otherwise provided in the Benefit Plans or by written Company policy, as from time to time implemented and updated.

 

  

3

  

 

11.           Termination of Employment.

 

(a)           For Cause, Disability, Death or Resignation Without Good Reason.

 

Executive may terminate his employment at any time, for any reason, upon 30 days prior notice to Company; provided that the Company may in its sole discretion, elect to waive all or any part of any notice period.  If the Executive’s employment is terminated during the Term by the Company for Cause, if Executive voluntarily terminates employment with the Company other than for Good Reason at any time, or if Executive’s employment terminates due to death or Disability, the Company shall pay to the Executive (or, if applicable, his estate) in a lump sum (i) any unpaid portion of Executive’s accrued Base Salary and unused Paid Time Off; (ii) any amounts payable to Executive pursuant to the terms of any pension or welfare benefit plan, and (iii) any expense reimbursements payable pursuant to the Company’s reimbursement policy (the “Accrued Obligations”).  Except in the case of termination due to Death or Disability, unvested equity grants shall be forfeited as of the date of termination, and any vested equity awards shall be treated as specified in the applicable equity plan and award agreement.  In the case of termination due to Death or Disability any unvested equity grants shall be forfeited as of the date of termination, and any vested equity awards  shall be treated as specified in the applicable equity plan and award agreement.  In the case of any termination due to Resignation Without Good Reason prior to the one (1) year anniversary of this Agreement, fifty (50%) percent of the Signing Bonus shall be also be required to be repaid to the Company by the Executive  and Company shall be entitled to a right of setoff from any and all amounts, shares or other payments due Executive with respect to such recovery.

 

(b)           Termination Without Cause or Resignation For Good Reason in Absence of Change in Control.  Company may terminate Executive’s employment at any time without Cause upon 30 days prior written notice to Executive.  Upon Executive’s involuntary termination of employment by the Company without Cause outside of a Change in Control Period (as defined in subsection (c) below), or Executive’s resignation for Good Reason outside of a Change in Control Period, the Term shall end and, in addition to the Accrued Obligations, Executive shall be entitled to receive a lump sum severance payment in an amount equal to (x) two (2) times (y) the sum of  (i) Executive’s then in effect Base Salary, plus (ii) Executive’s Bonus Amount (defined below). In addition, the Initial Equity Grant shall fully and immediately vest.   Except for the Initial Equity Grant, any unvested equity grants shall be forfeited as of the date of termination, and any vested equity awards shall be treated as specified in the applicable equity plan and award agreement.   For the avoidance of doubt, the nonextension of the Term by the Company pursuant to Section 1 shall not be treated as a termination without Cause hereunder.

 

  

4

  

 

(c)           Termination Without Cause or Resignation For Good Reason Prior to, Upon or Following a Change in Control.  Upon Executive’s termination of employment by the Company without Cause within six months prior to, upon, or within 24 months following a Change in Control (“Change in Control Period”) or Executive’s Resignation for Good Reason during a Change in Control Period, the Term shall end and, in addition to the Accrued Obligations, Executive shall be entitled to receive a lump sum severance payment in an amount equal to (x) three times (y) the sum of (i) Executive’s then in effect Base Salary, plus (ii) Executive’s Bonus Amount (defined below).  In addition, any unvested equity awards that were granted prior to the Change in Control Period, including the Initial Equity Grant, the Iniitial Option Grant, any Annual Long Term Incentive awards, or any other equity awards made during the Term, shall fully and immediately vest (and in the case of options become exercisable), and otherwise shall be treated as specified in the applicable equity plan and award agreement.  For the avoidance of doubt, the nonextension of the Term by the Company during a Change in Control Period shall be treated as a termination without Cause under this Section 11(c). If Executive’s employment is terminated during the portion of the Change in Control Period that is six months prior to an anticipated Change in Control, Executive will become entitled to all payments and accelerated vesting benefits pursuant to this Section 11(c) upon the occurrence of the Change in Control at any time from the date of termination of Executive’s employment and twelve months thereafter.

 

(d)           Nonrenewal by Company.  If the Company provides notice to Executive pursuant to Section 2 that the Term will not be extended, the Term shall end on the scheduled date and, in addition to the Accrued Obligations, Executive shall be entitled to receive a lump sum severance payment in an amount equal to the sum of (i) Executive’s then in effect Base Salary, plus (ii) the Bonus actually paid to Executive with respect to the fiscal year immediately preceding the year in which Term ends. Any unvested equity grants shall be forfeited as of the date of termination, and any vested equity awards shall be treated as specified in the applicable equity plan and award agreement.

 

(e)           Welfare Benefits.  Executive’s eligibility to participate in the Company’s medical, dental, and vision benefit plans and other insured welfare benefits (such as life, accident, and disability coverage) will terminate upon Executive’s termination of employment according to the terms of the relevant benefit plan.  Executive may elect to participate in medical, dental, and vision benefits provided through an outside vendor, in conjunction with continued insurance coverage available to Executive under the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) at COBRA rates for up to eighteen (18) months.  In the event Executive is entitled to severance payment benefits pursuant to Section 11(b), 11(c) or 11(d) above, the Company shall continue to provide all welfare benefits provided to Executive immediately before such termination (including, without limitation, health and life insurance, but excluding disability insurance) for a period following Executive’s termination of employment equal to the period with respect to which Executive’s Base Salary is paid as severance, at the Company’s sole cost; provided, however, that to the extent Executive becomes re-employed and eligible for benefits with another employer prior to the expiration of such period, Executive will elect such benefits and promptly notify the Company so that the Company will have no further obligation to provide benefits under this subsection (e) unless, and then only to the extent that, the benefits that are being provided by the Company are more favorable than such benefits provided by the other company.  Any medical, dental and vision continuation coverage provided pursuant hereto shall be deemed “alternative coverage” for purposes of COBRA.

 

  

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(f)           Release of Claims.  The payment and provision of any and all severance benefits pursuant to Sections 11(b), (c) and (d) above shall be conditioned upon and subject to execution of a Release of Claims by Executive at the time of termination of employment substantially in the form attached to this Agreement as Exhibit B.  All lump-sum payments due pursuant to this Agreement shall be payable at the time specified in such Release of Claims.  The payment of the Accrued Obligations is not subject to Executive’s execution of a Release of Claims.

 

(g) No Obligation to Mitigate Executive shall not be required to mitigate the amount of any payment provided for in this Section 11 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 11 be reduced by any compensation earned by the Executive as the result of employment by another employer or business or by profits earned by Executive from any other source at any time before and after the termination date. The Company’s obligation to make any payment pursuant to, and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other right that the Company may have against Executive for any reason.

 

12.           Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

 

(a)           Bonus Amount.  “Bonus Amount” shall mean the average of actual Annual Bonuses payable under Section 5 to Executive with respect to the two fiscal years immediately preceding the contract year which the Executive’s employment terminates; provided, however, in the event Section 11(c) applies, the Bonus Amount shall be the Executive’s Target Bonus under Section 5 for the year in which the Change in Control occurs.

 

(b)           Change in Control.  “Change in Control” shall mean the occurrence of any one or more of the following: (i) the accumulation (if over time, in any consecutive twelve (12) month period), whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50.1% or more of the shares of the outstanding Common Stock of the Company, whether by merger, consolidation, sale or other transfer of shares of Common Stock (other than a merger or consolidation where the stockholders of the Company prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger or consolidation), (ii) a sale of all or substantially all of the assets of the Company or (iii) during any period of twelve (12) consecutive months, the individuals who, at the beginning of such period, constitute the Board, and any new director whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the 12-month period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board; provided, however, that the following acquisitions shall not constitute a Change of Control for the purposes of this Agreement: (A) any acquisitions of Common Stock or securities convertible, exercisable or exchangeable into Common Stock directly from the Company or from any affiliate of the Company, or (B) any acquisition of Common Stock or securities convertible, exercisable or exchangeable into Common Stock by any employee benefit plan (or related trust) sponsored by or maintained by the Company.

 

  

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(c)           Cause.  “Cause” shall mean:

 

(i)           conviction of a felony or a crime involving fraud or moral turpitude; or

 

(ii)           theft, material act of dishonesty or fraud, intentional falsification of any employment or Company records, or commission of any criminal act which impairs Executive’s ability to perform appropriate employment duties for the Company; or

 

(iii)           intentional or reckless conduct or gross negligence materially harmful to the Company or the successor to the Company after a Change in Control , including violation of a non-competition or confidentiality agreement; or

 

(iv)           willful failure to follow lawful instructions of the person or body to which Executive reports; or

 

(v)           gross negligence or willful misconduct in the performance of Executive’s assigned duties.  Cause shall not include mere unsatisfactory performance in the achievement of Executive’s job objectives.

 

(d)           Disability.  “Disability” means a physical or mental illness, injury, or condition that prevents Executive from performing substantially all of Executive’s duties associated with Executive’s position or title with the Company for at least 90 days in a 12-month period.

 

(e)           Resignation for Good Reason.  Resignation for “Good Reason” shall mean, without the express written consent of Executive, the occurrence of one of the following arising on or after the Effective Date, as determined in a manner consistent with Treasury Regulation Section 1.409A-1(n)(2)(ii):

 

(i)           a material reduction or change in Executive’s title or job duties, responsibilities and requirements inconsistent with Executive’s position with the Company and Executive’s prior duties, responsibilities and requirements,

 

(ii)           any reduction of Executive’s then in effect Base Salary or Executive’s Target Bonus as set forth in Sections 4 and 5 above.;

 

(iii)           following a Change in Control, Executive not serving as the chief executive officer of the surviving entity to the Company;

 

(iv)           Executive’s refusal to relocate to a facility or location more than thirty (30) miles from the Company’s Golden, Colorado offices; or

 

(v)           any material breach of this Agreement by Company.

 

  

7

  

 

In the case of Executive’s allegation of Good Reason, (i) Executive shall provide written notice to the Company of the event alleged to constitute Good Reason within 30 days after the initial occurrence of such event, and (ii) the Company shall have the opportunity to remedy the alleged Good Reason event within 30 days from receipt of notice of such allegation (the “Cure Period”).  If not remedied within the Cure Period, Executive may submit a written notice of termination, provided that the notice of termination must be given no later than 45 days after the expiration of the Cure Period; otherwise, Executive is deemed to have accepted such event, or the Company’s remedy of such event, that may have given rise to the existence of Good Reason; provided, however, such acceptance shall be limited to the occurrence of such event and shall not waive Executive’s right to claim Good Reason with respect to future similar events.

 

13.           Golden Parachute Limitation.  Notwithstanding any other provision of this Agreement, in the event that it shall be determined that the aggregate payments or distributions by the Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”), constitute “excess parachute payments” (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) that would be subject to the excise tax imposed by Section 4999 of the Code or any successor provision (collectively, “Section 4999”) or any interest or penalties with respect to such excise tax (the total excise tax, together with any interest and penalties, are hereinafter collectively referred to as the “Excise Tax”)), then the Payments shall be either (a) delivered in full, or (b) delivered to such lesser extent that would result in no portion of the Payments being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable Federal, state or local income and employment taxes and the Excise Tax, results in the receipt by Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be subject to the Excise Tax.  In the event that the Payments are to be reduced pursuant to this Section 6, such Payments shall be reduced such that the reduction of compensation to be provided to Executive as a result of this Section 13 is minimized.  In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis (but not below zero).  All calculations required pursuant to this Section 13 shall be performed in good faith by nationally recognized registered public accountants or tax counsel selected by the Company.

 

14. Confidential Information.

 

(a)           The Executive recognizes, acknowledges and agrees that he has had and will continue to have access to secret and confidential information regarding the Company, its subsidiaries and their respective businesses (“Confidential Information”), including but not limited to, its products, methods, formulas, software code, patents, sources of supply, customer dealings, data, know-how, trade secrets and business plans, provided such information is not in or does not hereafter become part of the public domain, or become known to others through no fault of the Executive.  The Executive acknowledges that such information is of great value to the Company, is the sole property of the Company, and has been and will be acquired by him in confidence.  In consideration of the obligations undertaken by the Company herein, the Executive will not, at any time, during or after his employment hereunder, reveal, divulge or make known to any person, any information acquired by the Executive during the course of his employment, which is treated as confidential by the Company, and not otherwise in the public domain. The provisions of this Section 14 shall survive the termination of the Executive’s employment hereunder.

 

  

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(b)           The Executive affirms that he does not possess and will not rely upon the protected trade secrets or confidential or proprietary information of any prior employer(s) in providing services to the Company or its subsidiaries.

 

(c)           In the event that the Executive’s employment with the Company terminates for any reason, the Executive shall deliver forthwith to the Company any and all originals and copies, including those in electronic or digital formats, of Confidential Information; provided, however, Executive shall be entitled to retain (i) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, personal files and phone books, (ii) information showing his compensation or relating to reimbursement of expenses, (iii) information that he reasonably believes may be needed for tax purposes and (iv) copies of plans, programs and agreements relating to his employment, or termination thereof, with the Company.

 

15.           Non-Competition and Non-Solicitation.

 

(a)           The Executive agrees and acknowledges that the Confidential Information that the Executive has already received and will receive is valuable to the Company and that its protection and maintenance constitutes a legitimate business interest of the Company, to be protected by the non-competition restrictions set forth herein. The Executive agrees and acknowledges that the non-competition restrictions set forth herein are reasonable and necessary and do not impose undue hardship or burdens on the Executive.

 

(b)           The Executive hereby agrees and covenants that during the Term and for a period of twelve months thereafter, he shall not, without the prior written consent of the Company:

 

	
  

	
(i) recruit, solicit, attempt to persuade, or assist in the recruitment or solicitation of, any employee of the Company who was an employee, officer or agent of the Company during the three month period immediately preceding the date of Executive’s termination for the purpose of employing the individual or obtaining the individual’s services or otherwise causing the individual to leave employment with the Company;

 

(ii) solicit or divert to any competing business any customer or prospective customer with which Executive had contact during the twelve months prior to leaving the Company

 

	
  

	
(c)

	
become employed by or perform professional services of the type provided to the Company  for any direct competitor of the Company, including by directly or indirectly taking any of the following actions:

 

	
  

	
(1)

	
serving as an employee, agent, consultant, officer, or director of any such entity; or

 

  

9

  

 

	 	
(2)

	
inducing or attempting to induce any customer, supplier, or business relation of the Company to cease doing business with the Company, or in any other way interfering with the relationship between any customer, supplier or business relation and the Company.

 

16.           Section 409A.

 

The provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

 

To the extent that Executive will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by Section 409A, (a) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (b) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; provided that the foregoing clause (b) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (c) such payments shall be made on or before the last day of the taxable year following the taxable year in which you incurred the expense.

 

A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination constitutes a “Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement references to a “termination,” “termination of employment” or like terms shall mean Separation from Service.

 

Each installment payable hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section 1.409A-2(b)(2)(iii).  Each payment that is made within the terms of the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral” rule.  Each other payment is intended to be a payment upon an involuntary termination from service and payable pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that regulation, with any amount that is not exempt from Code Section 409A being subject to Code Section 409A.

 

  

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Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s termination, then only that portion of the severance and benefits payable to Executive pursuant to this Agreement, if any, and any other severance payments or separation benefits which may be considered deferred compensation under Section 409A (together, the “Deferred Compensation Separation Benefits”), which (when considered together) do not exceed the Section 409A Limit (as defined herein) may be made within the first six (6) months following Executive’s termination of employment in accordance with the payment schedule applicable to each payment or benefit.  Any portion of the Deferred Compensation Separation Benefits in excess of the Section 409A Limit otherwise due to Executive on or within the six (6) month period following Executive’s termination will accrue during such six (6) month period and will become payable in one lump sum cash payment on the date six (6) months and one (1) day following the date of Executive’s termination of employment.  All subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if Executive dies following termination but prior to the six (6) month anniversary of Executive’s termination date, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Compensation Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

 

For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x) to the amounts payable prior to March 15 following the year in which Executive terminations plus (y) the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Company’s taxable year preceding the Company’s taxable year of Executive’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any IRS guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

 

17.           Clawback Rights. (a) The Bonus (the “Clawback Benefits”) shall be subject to “Company Clawback Rights” as follows: During the period that the Executive is employed by the Company and  upon the termination of the Executive’s employment and for a period of three (3) years thereafter, if there is a Restatement (as defined below) of any financial results from which any Clawback Benefits to Executive shall have been determined, Executive agrees to repay any Clawback Benefits amounts which were determined by reference to any Company financial results which were later restated (as defined below), to the extent the Clawback Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on the Restatement of the Company’s financial information.  All Clawback Benefits amounts resulting from such restated financial results shall be retroactively adjusted by the Compensation Committee to  take into account the restated results, and any excess portion  of  the Clawback Benefits  resulting from such restated results shall be immediately surrendered to the Company  and if not so surrendered within ninety (90) days of the revised calculation being provided to the Executive by the Compensation Committee following a publicly announced Restatement, the Company shall have the right to take any and all action to effectuate such adjustment. The calculation of the Revised Clawback Benefits amount shall be determined by the Compensation Committee in good faith and in accordance with applicable law, rules and regulations.  All determinations by the Compensation Committee with respect to the Clawback Rights shall be final and binding on the Company and Executive.  The Clawback Rights shall be subject to applicable law, rules and regulations. For purposes of this Section 17, a restatement of financial results that requires a repayment of a portion of the Clawback Benefits amounts shall mean “a restatement resulting from material non-compliance of the Company with any financial reporting requirement under the federal securities laws and shall not include a restatement of financial results resulting from subsequent changes in accounting pronouncements or  requirements which were not in effect on the date the financial statements were originally prepared (“Restatement”)”.  The parties acknowledge it is their intention that the foregoing Clawback Rights as relates to Restatement conform in all respects to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd Frank Act”) and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd Frank Act and any and all rules and regulations promulgated thereunder from time to time in effect.  Accordingly, the terms and provisions of this Agreement shall be deemed automatically amended from time to time to assure compliance with the Dodd Frank Act and such rules and regulation as hereafter may be adopted and in effect.

 

  

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18. Miscellaneous.

 

(a)           The Executive acknowledges that the services to be rendered by him under the provisions of this Agreement are of a special, unique and extraordinary character and that it would be difficult or impossible to replace such services.  Furthermore, the parties acknowledge that monetary damages alone would not be an adequate remedy for any breach by the Executive of Section 14 or Section 15 of this Agreement. Accordingly, the Executive agrees that any breach or threatened breach by him of Section 14 or Section 15 of this Agreement shall entitle the Company, in addition to all other legal remedies available to it, to apply to any court of competent jurisdiction to seek to enjoin such breach or threatened breach. The parties understand and intend that each restriction agreed to by the Executive hereinabove shall be construed as separable and divisible from every other restriction, that the unenforceability of any restriction shall not limit the enforceability, in whole or in part, of any other restriction, and that one or more or all of such restrictions may be enforced in whole or in part as the circumstances warrant. In the event that any restriction in this Agreement is more restrictive than permitted by law in the jurisdiction in which the Company seeks enforcement thereof, such restriction shall be limited to the extent permitted by law. The remedy of injunctive relief herein set forth shall be in addition to, and not in lieu of, any other rights or remedies that the Company may have at law or in equity.

 

(b) In the event that the Board determines there has been a material restatement of financial results, the Board of Directors will review all incentive payments that were made to the Executive and other executive officers (collectively “Executive Officer”) on the basis of having met or exceeded specific performance targets in grants or awards made after January 1, 2012 which occur during the three-year period prior to the restatement.  If such payments would have been lower had they been calculated based on such restated results, the Board will, to the extent permitted by governing law, seek to recoup for the benefit of our company such payments to the Executive Officers, including Executive, who are found personally responsible for the material restatement, as determined by the Board.  For purposes of this policy, the term “executive officers” shall have the meaning given such term in Rule 3b-7 under the Securities Exchange Act of 1934, as amended, and the term “incentive payments” means bonuses and awards under applicable Company incentive compensation plans or, in the absence of such plans and with regard to Executive, under this Agreement. .

 

 (c) Neither the Executive nor the Company may assign or delegate any of their rights or duties under this Agreement without the express written consent of the other.

 

  

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(d) Employment Taxes.  Any payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes. The Company shall deduct, from all payments made hereunder, all applicable taxes, including income tax, FICA and FUTA, and other appropriate deductions.(e)This Agreement constitutes and embodies the full and complete understanding and agreement of the parties with respect to the Executive’s employment by the Company, supersedes all prior understandings and agreements, whether oral or written, between the Executive and the Company, and shall not be amended, modified or changed except by an instrument in writing executed by the party to be charged (it being understood that, pursuant to Section 6, equity awards shall govern with respect to the subject matter thereof). The invalidity or partial invalidity of one or more provisions of this Agreement shall not invalidate any other provision of this Agreement. No waiver by either party of any provision or condition to be performed shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent time.

 

(f)           This Agreement shall inure to the benefit of, be binding upon and enforceable against, the parties hereto and their respective successors, heirs, beneficiaries and permitted assigns.

 

(g)           The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

(h)           All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when personally delivered, sent by registered or certified mail, return receipt requested, postage prepaid, or by reputable national overnight delivery service (e.g. Federal Express) for overnight delivery to the party at the address set forth in the preamble to this Agreement, or to such other address as either party may hereafter give the other party notice of in accordance with the provisions hereof.  Notices shall be deemed given on the sooner of the date actually received or the third business day after deposited in the mail or one business day after deposited with an overnight delivery service for overnight delivery.

 

(i)           This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without reference to principles of conflicts of laws and each of the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state courts located in the County and State of New York.

 

(j)           This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one of the same instrument. The parties hereto have executed this Agreement as of the date set forth above.

 

(k)           The Executive represents and warrants to the Company, that he has the full  power and authority to enter into this Agreement and to perform his obligations hereunder and that the execution and delivery of this Agreement and the performance of his obligations hereunder will not conflict with any agreement to which Executive is a party.

 

  

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(l)           The Company represents and warrants to Executive that it has the full power and authority to enter into this Agreement and to perform its obligations hereunder and that the execution and delivery of this Agreement and the performance of its obligations hereunder will not conflict with any agreement to which the Company is a party.

 

[Signature page follows immediately]

 

  

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IN WITNESS WHEREOF, the Executive and the Company have caused this Executive Employment Agreement to be executed as of the date first above written.

 

 

	 	 
SAGEBRUSH GOLD, LTD.

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	 
Name:

Title:

	 
	 	 	 	 
	 	 	 	 
	 	 
STEPHEN D. ALFERS

	 
	 	 	 	 
	 	 	 	 
	 	 	 
	 	 	 	 

 

  

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Exhibit A

 

Vesting of Restricted Stock Grant

 

	
i.

	
6,000,000 shares of restricted common stock (less any amount of Registrable Equity Grants previously vested pursuant to paragraph 6(a) hereof) shall vest on the earlier of (a) such date that the Company consummates a secondary public offering of its securities in which the Company receives gross proceeds of at least $7,000,000 or (b) one (1)year from the Effective Date of this Agreement;

	
ii.

	
3,000,000 shares of restricted common stock shall vest two (2) years from the Effective Date of this Agreement; and

	
iii.

	
3,000,000 shares of restricted common stock shall vest three (3) years from the Effective Date of this Agreement.

 

  

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Exhibit B

 

FORM OF RELEASE OF CLAIMS

 

17

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