Document:

Letter Agreement dated June 13, 2007

    EXHIBIT
      10.1

     

    

     

    June
      13,
      2007

    

     

    Surge
      Global Energy, Inc.

    2220
      EL
      Camino Real, #440

    San
      Diego, California

    92130

     

    Attention: President

     

    Peace
      Oil
      Corp.

    c/o
      2220
      El Camino Real, #440

    San
      Diego, California

    92130

     

    Attention: President

     

    Gentlemen:

     

    Re: Offer
      to Purchase (the "Offer") - Red Earth Assets of Peace Oil
      Corp.

     

    North
      Peace Energy Corp. ("NPEC" or "Purchaser") hereby offers to purchase from Peace
      Oil Corp. ("POC" or "Vendor"), all of Vendor's interests as
      follows:

     

    
      	
              1.

            	
              In
                this Offer, the following expressions shall have the meanings hereinafter
                ascribed thereto, namely:

            

    

     

    
      	 	
              (a)

            	
              "Assets"
                means Petroleum and Natural Gas Rights, Tangibles, and Miscellaneous
                Interests;

            

    

     

    
      	 	
              (b)

            	
              "Closing"
                means the closing of the transactions contemplated by this Offer
                in
                accordance with the provisions
                hereof;

            

    

     

    
      	 	
              (c)

            	
              "Guarantor"
                or "Surge" means Surge Global Energy,
                Inc.;

            

    

     

    
      	 	
              (d)

            	
              "Lands"
                means the lands as further described in the POC land schedule (the
                "Land
                Schedule") except as otherwise expressly noted in the Land Schedule
                and
                includes all the Petroleum Substances within, upon or under those
                Lands,
                together with the right to explore for and recover Petroleum Substances
                to
                the extent those rights are granted by the
                Leases;

            

    

     

    
      	 	
              (e)

            	
              "Leases"
                means the leases, (including all oil sands leases), reservations,
                permits,
                licences or other documents of title insofar as they relate to the
                Lands,
                and any document of title issued in substitution for, amendment of
                or in
                addition to any of them;

            

    

     

    
      	 	
              (f)

            	
              "Miscellaneous
                Interests" means the entire interest of Vendor in and to all property,
                assets and rights other than the Petroleum and Natural Gas Rights
                or
                Tangibles, to the extent pertaining to the Petroleum and Natural
                Gas
                Rights, the Lands or Tangibles and to which Vendor is entitled at
                the
                Closing Date, including, without limitation, the entire interest
                of Vendor
                in:

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (i)

            	
              all
                contracts, agreements, and documents and all engineering and geological
                records to the extent that they relate to the Petroleum and Natural
                Gas
                Rights or the Tangibles;

            

    

     

    
      	 	
              (ii)

            	
              all
                subsisting rights to enter upon, use and occupy the surface of any
                of the
                Lands or any lands that may be crossed to gain access to the
                Lands;

            

    

     

    
      	 	
              (iii)

            	
              all
                Petroleum Substances produced from the Lands except those that are
                beyond
                the wellhead at the Effective Date or sales proceeds in respect of
                such
                Petroleum Substances if the Petroleum Substances have already passed
                to
                Purchaser; and

            

    

     

    
      	 	
              (iv)

            	
              the
                Seismic Data; and

            

    

     

    
      	 	
              (v)

            	
              the
                Wells, including the wellbores and
                casing.

            

    

     

    
      	 	
              (g)

            	
              "Petroleum
                and Natural Gas Rights" means the entire interest of Vendor in the
                Lands
                and Leases;

            

    

     

    
      	 	
              (h)

            	
              "Petroleum
                Substances" means oil sands, petroleum, natural gas and related
                hydrocarbons and all other substances whether liquid or solid and
                whether
                hydrocarbons or not, including without limitation, sulphur, the rights
                to
                which are granted by the Leases;

            

    

     

    
      	 	
              (i)

            	
              "Seismic
                Data" means Vendor's proprietary seismic data, if any, covering the
                Lands
                and Leases or which is located within one mile of the Assets, however,
                any
                partially owned seismic data will require the approval of third parties
                owning an interest in the data to the transfer of such
                data;

            

    

     

    
      	 	
              (j)

            	
              "Tangibles"
                means the entire interest of Vendor in and to all tangible depreciable
                property and assets situated in, on, under or about the Lands, relating
                to
                the Petroleum and Natural Gas Rights appurtenant thereto, or used
                or
                useful in connection therewith, or with production, treatment, processing,
                gathering, compression, transportation, injection, storage or other
                operations thereon including, without limitation, the well equipment
                and
                casing relating to Vendor's wells on the Lands, if any, and all spare
                parts and inventory; and

            

    

     

    
      	 	
              (k)

            	
              "Wells"
                means all producing, shut-in, water sources, observation, disposal,
                injection, suspended and similar wells located on the Lands or relating
                to
                the operations of the Lands, if any, but excluding abandoned
                wells.

            

    

     

    
      	
              2.

            	
              The
                purchase price payable by Purchaser to Vendor for the Assets shall
                be
                Twenty Million Dollars ($20,000,000.00) (Canadian funds) (hereinafter
                referred to as the "Purchase Price"). The Purchase Price shall include
                allocations to:

            

    

     

    
      	 	
              (a)

            	
              Petroleum
                and Natural Gas Rights - 90% of the Purchase Price less
                $1.00;

            

    

     

    
      	 	
              (b)

            	
              Tangibles
                - 10% of the Purchase Price; and

            

    

     

    
      	 	
              (c)

            	
              Miscellaneous
                Interests - $1.00.

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Purchaser
                shall within twenty-four hours of execution by all parties of this
                Offer
                submit a deposit in the amount of 22.5% of the Purchase Price (the
                "Deposit"). The Deposit shall be non-refundable if the agreement
                resulting
                from acceptance of this Offer is terminated by Purchaser for any
                reason or
                circumstance other than a default of Vendor of the terms and conditions
                outlined herein; which, for clarity, include a failure to satisfy
                any of
                the conditions in paragraph 6. In this circumstance, the forfeiture
                of such Deposit (and any interest earned thereon) shall be Vendor's
                sole
                remedy.

            

    

     

    In
      the
      event Purchaser shall not have closed the acquisition transaction described
      herein by:

     

    
      	 	
              (i)

            	
              June 28,
                2007, Stikeman Elliott LLP shall release $2 million dollars of the
                Deposit to Vendor to be used by Vendor to satisfy previously existing
                debt
                obligations to 1304146 Alberta Ltd. pursuant to a promissory note in
                the principal amount of $1,500,000 and for general corporate purposes;
                

            

    

     

    
      	 	
              (ii)

            	
              July
                29, 2007, Stikeman Elliott LLP shall release an additional $1 million
                dollars of the Deposit to Vendor to be used by Vendor to satisfy
                previously existing debt obligations to 1304146 Alberta Ltd. pursuant
                to a
                promissory note in the principal amount of $1,000,000;
                and

            

    

     

    
      	 	
              (iii)

            	
              August
                29, 2007, Stikeman Elliott LLP shall release the remaining balance
                of the
                Deposit (plus any accrued interest) to Vendor to be used by Vendor
                to
                satisfy previously existing debt obligations to 1304146 Alberta Ltd.
                pursuant to a promissory note in the principal amount of $1,500,000
                and
                for general corporate purposes, 

            

    

     

    and
      in
      each case, the portion of the Deposit so released shall be deemed to be a loan
      to Vendor with per annum interest at Royal Bank of Canada prime payable as
      at
      the applicable date of release, with principal plus interest of all such loans
      in any event to be repayable on or prior to September 1, 2008, and
      evidenced in each case by a promissory note and general security agreement
      by
      Vendor in favour of Purchaser, incorporating the provisions herein and such
      other terms and conditions as may be satisfactory to Purchaser, acting
      reasonably.

     

    
      	
              4.

            	
              The
                Purchase Price shall be payable as
                follows:

            

    

     

    
      	 	
              (a)

            	
              the
                Deposit of Four Million Five Hundred Thousand Dollars ($4,500,000.00)
                shall be payable to Vendor's solicitors, Stikeman Elliott LLP, in
                trust,
                within twenty-four hours of execution by all parties of this
                Offer;

            

    

     

    
      	 	
              (b)

            	
              Ten
                Million Five Hundred Thousand Dollars ($10,500,000.00) shall be payable
                to
                Vendor by wired funds or bank draft at Closing;
                and

            

    

     

    
      	 	
              (c)

            	
              the
                balance of the Purchase Price ($5,000,000.00) shall be paid by the
                issuance at Closing of 2,272,727 common shares (the "Shares") of
                Purchaser at a deemed share price of $2.20 per Share, and such number
                of
                Shares shall be subject to adjustment based upon the statement of
                adjustments, as will be more particularly described in the PSA, as
                hereinafter defined. The Shares shall be subject to a one year hold
                period
                and may not be encumbered, transferred, assigned, sold or conveyed
                to any
                other person by Vendor prior to such
                time.

            

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    
      	
              5.

            	
              The
                effective date of this transaction shall be the Closing Date (the
                "Effective Date"). The Closing Date shall be June 28, 2007 or any
                other
                date agreed to in writing by Vendor and Purchaser but not later than
                September 1, 2007 (the "Closing
                Date").

            

    

     

    
      	
              6.

            	
              The
                agreement resulting from acceptance of this Offer by Vendor shall
                be
                subject to the following conditions in favour of
                Purchaser:

            

    

     

    
      	 	
              (a)

            	
              Purchaser
                or its agents shall, prior to the PSA Date referred to in paragraph
                8
                below, be entitled to complete to its full satisfaction, due diligence
                relating to the Assets, including title matters affecting the Assets
                and
                upon completion of same shall be satisfied that it wishes to proceed
                with
                the purchase of the Assets;

            

    

     

    
      	 	
              (b)

            	
              the
                transaction shall be subject to receipt by Vendor prior to Closing
                of all
                third party consents and waivers of rights of first refusal, if any,
                as
                may be required and is subject to all necessary governmental and
                regulatory approvals, on terms and conditions satisfactory to Purchaser
                acting reasonably;

            

    

     

    
      	 	
              (c)

            	
              Vendor
                warrants that on Closing, the Assets will be free and clear of all
                liens,
                charges, encumbrances and adverse claims created by, through or under
                Vendor except for the applicable Crown Lessor Royalty. In particular,
                the
                non-convertible, absolute gross overriding royalty created by Royalty
                Agreement dated March 2, 2007 between POC and 1304146 Alberta Ltd.
                shall
                be terminated and such royalty reconveyed to POC prior to the Closing
                Date, on terms and conditions satisfactory to
                Purchaser;

            

    

     

    
      	 	
              (d)

            	
              on
                Closing, there shall be no outstanding commitments to make capital
                expenditures in respect of the Assets, other than those that have
                been
                disclosed in writing, and are acceptable, to
                Purchaser;

            

    

     

    
      	 	
              (e)

            	
              there
                shall have been no material adverse physical change in the Assets
                between
                the time of this Offer and the Closing
                Date;

            

    

     

    
      	 	
              (f)

            	
              Purchaser
                being satisfied in its sole discretion, acting reasonably, with the
                terms
                and conditions of all contracts, agreements and documents affecting
                the
                Assets, including agreements for the sale, processing or transportation
                of
                Petroleum Substances and all contracts, agreements and documents
                relative
                to the rights to enter, use and occupy the surface of the Lands and
                the
                Assets;

            

    

     

    
      	 	
              (g)

            	
              that
                there are no take or pay obligations or other gas contracts associated
                with the Assets;

            

    

     

    
      	 	
              (h)

            	
              Vendor
                providing at Closing releases and registerable discharges from all
                parties
                holding security interests in the Assets, including any by 1304146
                Alberta
                Ltd.;

            

    

     

    
      	 	
              (i)

            	
              Vendor
                confirming that the Assets are not subject to any agreements which
                include
                an area of mutual interest;

            

    

     

    
      	 	
              (j)

            	
              on
                or before September 1, 2007, Purchaser shall have completed equity
                financing for not less than $20 million on terms and conditions
                satisfactory to Purchaser in its sole
                discretion.

            

    

     

    
      	 	
              (k)

            	
              Vendor
                shall represent and warrant that in respect of the Assets Vendor
                has paid
                all burdens or encumbrances amounts owing by them;
                and

            

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      	 	
              (l)

            	
              Vendor
                shall represent and warrant that it holds its thirty percent undivided
                working interests in the Assets in accordance with Vendor's Land
                Schedule.
                Vendor's interests are subject to Crown royalty and/or Freehold Royalty
                in
                accordance with the Land Schedule, and is not subject to reduction
                by
                virtue of conversion or other alteration of the interest to any third
                party under existing documents.

            

    

     

    
      	
              7.

            	
              Upon
                acceptance of the Offer, neither Surge nor Vendor shall directly
                or
                indirectly, discuss, negotiate with, entertain, solicit or accept
                any
                offers from any third parties other than Purchaser relating to the
                sale of
                the Assets or convey any of the Assets to any third parties. In addition,
                both parties agree to only disclose, if necessary, minimum disclosure
                requirements to comply with applicable securities laws or to those
                of its
                representatives, legal or financial advisors or lenders who have
                a need to
                know such information in connection with the consummation of the
                transactions described herein. The disclosing party will inform,
                and seek
                comments from the other party, prior to any public release of such
                information.

            

    

     

    
      	
              8.

            	
              Vendor
                and Purchaser shall enter into a formal purchase and sale agreement
                (the
                "PSA") by the close of business on June 25, 2007, (the "PSA Date")
                embodying the terms of this Offer and such other representations
                and
                warranties, covenants, indemnities and conditions as are normally
                provided
                for in formal purchase and sale agreements of oil and gas properties
                in
                Canada. Warranties and representations shall survive closing for
                a period
                of eighteen (18) months. Surge shall execute the PSA as guarantor
                of
                Vendor's obligations thereunder. The parties shall act reasonably
                and in
                good faith in negotiating and settling the terms of the PSA. In the
                event
                the parties are unable to settle the terms of the PSA by June 25,
                2007
                after acting reasonably and in good faith, the agreement resulting
                from
                this Offer shall terminate and the Deposit shall forthwith be returned
                to
                Purchaser. Thereafter, the parties shall have no obligations to one
                another arising from this Offer.

            

    

     

    
      	
              9.

            	
              This
                Offer shall remain open for acceptance by Vendor until midnight
                (Calgary time) on Wednesday,
                June 13, 2007,
                after which time it shall be null and void. Vendor may accept this
                Offer
                by executing and returning to Purchaser the enclosed duplicate copy
                of
                this letter by the aforesaid time and date specified. Upon receipt
                of this
                Offer signed by Vendor, and subject to the conditions set out in
                paragraph
                6 herein, all terms contained herein shall be binding upon the parties
                until such time as this Offer is replaced by the
                PSA.

            

    

     

    
      	
              10.

            	
              Vendor
                represents and warrants that at closing no person will have any agreement,
                option, right or privilege (including , without limitation, whether
                by
                law, pre-emptive right, right of first refusal, contract or otherwise)
                to
                purchase, convert into, exchange for or otherwise require the conveyance
                of any of the Assets, nor any agreement, option, right or privilege
                capable of becoming any such agreement, option, right or privilege,
                to
                purchase, convert into, exchange for or otherwise require the conveyance
                of any of the Assets.

            

    

     

    
      	
              11.

            	
              This
                letter is intended to be legally binding on each of the parties
                hereto.

            

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    Should
      you have any questions concerning this matter please contact the undersigned
      at
      262-6024.

     

    Yours
      truly,

     

    
      	
              NORTH
                PEACE ENERGY CORP.

               

              /s/
                Louis Dufresne        

              Louis
                Dufresne

              President

            	 	
              AGREED
                TO AND ACCEPTED 

              THIS
                13th
                DAY OF JUNE, 2007

              PEACE
                OIL CORP.

               

              Per:
                /s/ David Perez        

              Per:
                President

            
	 	 	
               

              AGREED
                TO AND ACCEPTED 

              THIS
                13th
                DAY OF JUNE, 2007

              SURGE
                GLOBAL ENERGY, INC.

               

              Per:
                /s/ David Perez        

              Per:
                CEO & Chairman

            

    

    

     

    -6-<PAGE>

                                                                    Exhibit 10.1

                             RECLAMATION CONSULTING
                             AND APPLICATIONS INC.

                              EMPLOYMENT AGREEMENT
                              --------------------

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of June
11, 2007, by and between NIGEL HORSLEY ("Employee") and RECLAMATION CONSULTING
AND APPLICATIONS, INC., a Colorado Corporation with its principal place of
business at 940 Calle Amanecer Suite E, San Clemente, CA 92673 ("Company").

                                    RECITALS

         The company is in the business of manufacturing and marketing asphalt,
cement and related products release agents in liquid form that are non-toxic,
non-explosive and environmentally compatible, the formulation and ingredients of
which are confidential.

         Employee has experience in the businesses conducted and to be conducted
by the Employer, or in related businesses, and desires to be employed by the
Company, and the Company desires to employee the Employee, on the terms and
conditions specified below

                                    COVENANTS

         In consideration of the recitals and mutual covenants contained herein,
the parties agree that:

         1. EMPLOYMENT. The Company will employ Employee to serve as Vice
President of Communications and Investor Relations with the duties listed and
defined by the Company or the Board, in connection with the Company's operations
and Employee does hereby accept such employment, all subject to the terms and
provisions of this Agreement. Employee represents that he is legally free to
enter into this agreement and that it does not conflict with any of his duties
or obligations to any other person and that he is not in any way restricted by
any duties or obligations to any other person from contributing his knowledge
and talents to the Company in performing his duties hereunder.

         2. TERM. This Agreement shall have an initial term of two years.
Thereafter, which the Agreement shall be automatically renewed for additional
one-year periods unless the Company notifies Employee of its intent not to renew
the Agreement at least 30 days prior to the expiration of the term.
Notwithstanding the foregoing, the Company or the Employee may at any time
terminate this Agreement and the employment relationship on or after June 11,
2008 with 30 days' notice to the other party, with the consequences hereinafter
set forth.

         3. COMPENSATION.

                  (a)      Base Salary. From June 11, 2007 to June 10, 2008, the
                           Company shall pay Employee an annual salary of
                           $130,000. On June 11, 2008, if the Company's net
                           profit equals or exceeds $250,000, then Employee's
                           annual salary shall be increased to $156,000.

                                       1

<PAGE>

                  (b)      Annual Bonus. In the event that the Company's net
                           profit equals or exceeds $250,000, Employee is
                           entitled to receive an annual bonus in an amount
                           equal to 10% of his annual salary. In addition,
                           Employee is entitled to receive an additional bonus
                           in an amount equal to 10% of his annual salary for
                           each additional $250,000 the Company earns in net
                           profit. Notwithstanding the foregoing, the total
                           amount of Employee's annual bonus shall not exceed an
                           amount that is 30% of Employee's annual salary.

                  (c)      Stock Options. The Company shall issue Employee
                           options to purchase 1,000,000 shares of the Company's
                           restricted common stock at an exercise price of
                           $0.175. The options shall vest immediately upon
                           issuance and expire on June 10, 2012.

         4. DUTIES. Employee agrees to devote his energies to the business of
the Company and agrees to perform such reasonable responsibilities and duties as
may be assigned to him from time to time by the Company or by the Company's
board of directors, which shall be consistent with his position as Vice
President Communications. In no event shall the Employee be precluded from
activities in professional societies, or from lecturing or writing in areas of
his professional expertise for reasonable periods, and Employee shall be
entitled to retain fees, honoraria, publication royalties and similar
compensation paid as a result of such activities.

         5. ADDITIONAL BENEFITS. The Company agrees to reimburse Employee
promptly for or to pay on behalf of Employee, any reasonable expenses heretofore
or hereafter incurred by Employee (to the extent not paid by others) in the
furtherance of the goals of the Company upon submission of a satisfactory
accounting by Employee, and to provide Employee with the following additional
benefits:

                  (a)      A minimum of three weeks annual paid vacation.
                           Vacation shall accrue on a monthly basis or part
                           thereof; however, once unused vacation has accrued to
                           a maximum of three weeks, accrual of additional
                           vacation shall cease until the balance of accrued
                           vacation has been reduced below six weeks. The
                           Company will not cause the vacation accrual to cease
                           by withholding its approval of any of the Employee's
                           vacation requests.

                  (b)      Any other standard benefits that may be established
                           by the Company or its affiliates for its employees.

         6. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. During the term of this
Agreement, Employee will have access to certain "Proprietary Information"
(defined below). Employee shall not during the term of his engagement, or at any
time thereafter, disclose any such Proprietary Information, directly or
indirectly, or use such Proprietary Information in any way, except as required
in the course of Employee's engagement with Company. All Proprietary
Information, which Employee shall prepare, use, or come into contact with, shall
be and remain the sole property of Company. For purposes of this Agreement,
"Proprietary Information" shall mean all information proprietary and
confidential to Company and shall include, but shall not be limited to,
confidential records, customer lists, customer leads or lead sources, files,
pricing information, marketing ads or strategies, equipment, quotation guides,
outstanding quotations, books, records, manuals, training materials, calling or

                                       2

<PAGE>

business cards, correspondence, files, contracts, orders, messages, memoranda,
notes, circulars, agreements, bulletins, invoices, receipts, or any other
confidential papers or information concerning Company, its customers or
potential customers. Notwithstanding a termination of this Agreement or of
Employee's engagement with Company, the terms of this Section 6 shall survive
the termination of this Agreement and Employee's engagement with Company and
shall thereafter remain of full force and effect.

         7. CONFIDENTIALITY AFTER TERMINATION OF EMPLOYMENT. Employee agrees
that upon termination of employment, he or she shall surrender promptly to the
Company any and all documents and property of the Company, including, but not
limited to reports, drawings, manuals, correspondence, customer lists and other
Confidential Information which he or she may possess, and all other materials
and all copies thereof relating in any way to the Company's business, or in any
way obtained by the Employee during the course of his employment, and that he
shall not retain any copies, notes or abstracts of the foregoing. Employee
further agrees that such documents, lists and information shall be and remain
the sole property of the Company. All of the terms of paragraph 2.8 shall remain
in full force and effect both during the continuation of employment of Employee
by the Company and after the termination of employment for any reason.

         8. CONFIDENTIALITY. Employee agrees to execute standard Company
documents establishing the Employee's duties of confidentiality and the rights
of the Company to all inventions, trade secrets, etc., developed by the Employee
in the course of his employment, namely the EMPLOYEE NON-DISCLOSURE AND
NON-COMPETITION AGREEMENT.

         9. NON-COMPETITION. Employee agrees that during the term of his
employment by Company, Employee will not engage in any way whatsoever, directly
or indirectly, in any business that is competitive with the Company and its
subsidiaries and affiliate operations, nor solicit or in any other manner work
for or assist any business which is competitive to the Company and its
subsidiaries and affiliate operations.

         10. NON-PARTICIPATION IN COMPETITIVE ACTIVITIES. During the term of
this agreement, Employee will undertake no planning for or organization of any
business activity competitive with the work he performs as an Employee of the
Company and its subsidiaries and affiliate operations, and Employee will not
combine or participate with other employees of the Company and its subsidiaries
and affiliate operations for the purpose of organization of any such competitive
business activity.

         11. ASSIGNMENT TO COMPANY OF PROPRIETARY RIGHTS. Employee agrees to
execute any and all documents and take any and all other actions necessary or
desirable for the assignment to the Company and its subsidiaries and affiliate
operations of all of his interests in any Confidential Information, trade
secrets, copyrightable materials and patentable or patented ideas developed by
him, alone or in conjunction with others, in the course of his employment by the
Company.

         12. INJUNCTIVE RELIEF. The parties hereto agree and acknowledge that
many of the rights conveyed by this Agreement are of a unique and special nature
and that the Company and its subsidiaries and affiliate operations will not have
an adequate remedy at law in the event of failure of Employee to abide by its
terms and conditions, nor will money damages adequately compensate for such
injury. It is, therefore, agreed between the parties that in the event of breach
by Employee of Employee's covenants contained in this Agreement, the Company and
its subsidiaries and affiliate operations shall have the rights, among other
rights, to damages sustained thereby and to a preliminary or permanent
injunction to restrain Employee from the prohibited acts. Employee agrees that
this Paragraph shall survive for one year after the termination of his
employment, and Employee shall be bound by its terms for a period of one year

                                       3

<PAGE>

subsequent to the termination of his employment, providing that the Company and
its subsidiaries and affiliate operations continue to conduct the same business
or businesses as they were conducting during the period of this Agreement.
Nothing herein contained shall in any way limit or exclude any and all other
rights granted by law or equity to the Company and its subsidiaries and
affiliate operations.

         13. TERMINATION OF EMPLOYMENT. If Employee's employment terminates or
is terminated, the rights and obligations of the parties shall depend upon the
reason for termination. Termination may occur for any one of the following
reasons: termination by the Company for cause, termination by the Company
without cause, termination by Employee without cause, termination by Employee
with cause, or termination of Employee by reason of his death or long-term
disability.

                  (a)      Termination by Company for Cause. In the event of
                           termination by the Company for cause, which shall
                           consist only of specific actions knowingly and
                           intentionally taken by Employee to the specific
                           material detriment of the Company and not reasonably
                           intended by him to benefit the company, the Employee
                           will receive all unpaid salary, bonuses, and other
                           benefits accrued through the last day of employment.
                           Employee agrees, if he is so terminated for cause,
                           that, for a period of one year following the
                           termination of employment of the Employee, Employee
                           will not engage in any way whatsoever, directly or
                           indirectly, in any business that is competitive with
                           the Company and its subsidiaries and affiliates
                           utilizing any Proprietary Information acquired while
                           organizing, founding, or acting as an officer,
                           director or employee of the Company, its subsidiaries
                           or affiliates, nor solicit customers, investors,
                           service providers, or strategic partners of the
                           Company, with the Company's, or its subsidiary's or
                           affiliates' business whether by interfering with or
                           raiding their employees, or disrupting or interfering
                           with their relationships with customers, investors,
                           service providers, or strategic partners. Employee
                           will have thirty days after termination by the
                           Company for cause to challenge the termination.
                           Employee may challenge the termination by the Company
                           for cause by sending written notice to that effect to
                           the Company via registered or certified mail,
                           postmarked no later than 30-days from the date that
                           employee received notice from the Company that
                           Employee was being terminated by the Company for
                           cause. The Company and Employee will each select an
                           arbitrator who will each review the facts surrounding
                           the termination and the challenge. The arbitrators
                           will decide whether the Company was justified in
                           terminating the Employee for cause. If the
                           arbitrators cannot agree whether the Company was
                           justified in terminating Employee for cause, the
                           arbitrators will select a third arbitrator who will
                           make the determination of whether the Company was
                           justified in terminating the Employee for cause. The
                           arbitration proceeding shall be conducted in
                           accordance with the provisions of California's
                           Arbitration act, Code of Civil Procedure, Sections
                           1280, et seq. The Company and Employee agree to abide
                           by the decision of the arbitration.

                           If the arbitrators agree or if the third arbitrator
                           determines, as applicable, that the Company was not
                           justified in terminating the Employee for cause,
                           within 72 hours of receiving the arbitration decision
                           that the termination by the Company for cause was not
                           justified, the Company will pay Employee back pay for
                           all salaries and benefits from the date of

                                       4

<PAGE>

                           termination through the date of the arbitration
                           decision. The termination will then be treated as a
                           termination by the Company without cause, subject to
                           the provisions of subparagraphs

                  (b)      TERMINATION BY COMPANY WITHOUT CAUSE. In the event of
                           that the Company terminates this Agreement on or
                           before June 10, 2008, Employee shall continue to
                           receive his annual salary as provided under Section
                           3(a) of this Agreement as though he had remained
                           employed through June 10, 2008, provided that he
                           executes and delivers a general release of claims in
                           a form acceptable to the Company and was not in
                           material breach of any provisions of this Agreement.

         14. NOTICES. All notices, requests, demands and other communications to
be given hereunder shall be in writing and shall be deemed to have been duly
given on the date of personal service or transmission by fax if such
transmission is received during the normal business hours of the addressee, or
on the first business day after sending the same by overnight courier service or
by telegram, or on the third business day after mailing the same by first class
mail, or on the day of receipt if sent by certified or registered mail,
addressed as set forth below, or at such other address as any party may
hereafter indicate by notice delivered as set forth in this Section 14:

         If to the Company:                  Reclamation Consulting &
                                             Applications, Inc.
                                             940 Calle Amanecer, Suite E
                                             San Clemente, CA 92673
                                             Attn:    Mr. Gordon W. Davies
                                                      President

         With a copy (which shall
         not constitute notice) to:          August Law Group, P.C.
                                             The Atrium
                                             19200 Von Karman Ave., Suite 900
                                             Irvine, California  92612
                                             Attn:    Kenneth S. August, Esq.
                                                      President

         If to Employee:                     Nigel Horsley
                                             Suite 602, 1199 Marinaside Crescent
                                             Vancouver, BC, V6Z 2Y2

         15. BINDING AGREEMENT; ASSIGNMENT. This Agreement shall constitute the
binding agreement of the parties hereto, enforceable against each of them in
accordance with its terms. This Agreement shall inure to the benefit of each of
the parties hereto, and their respective successors and permitted assigns;
PROVIDED, however, that this Agreement may not be assigned (whether by contract
or by operation of law) by Employee without the prior written consent of the
Company.

         16. ENTIRE AGREEMENT. This Agreement constitutes the entire and final
agreement and understanding between the parties with respect to the subject
matter hereof and the transactions contemplated hereby, and supersedes any and
all prior oral or written agreements, statements, representations, warranties or
understandings between the parties, all of which are merged herein and
superseded hereby.

                                       5

<PAGE>

         17. WAIVER. No waiver of any provision of this Agreement shall be
deemed to be or shall constitute a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.

         18. HEADINGS. The headings provided herein are for convenience only and
shall have no force or effect upon the construction or interpretation of any
provision hereof.

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

         20. FURTHER DOCUMENTS AND ACTS. Each party agrees to execute such other
and further documents and to perform such other and further acts as may be
reasonably necessary to carry out the purposes and provisions of this Agreement.

         21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California applicable to the
performance and enforcement of contracts made within such state, without giving
effect to the law of conflicts of laws applied thereby. In the event that any
dispute shall occur between the parties arising out of or resulting from the
construction, interpretation, enforcement or any other aspect of this Agreement,
the parties hereby agree to accept the exclusive jurisdiction of the Courts of
the State of California. In the event either party shall be forced to bring any
legal action to protect or defend its rights hereunder, then the prevailing
party in such proceeding shall be entitled to reimbursement from the
non-prevailing party of all fees, costs and other expenses (including, without
limitation, the reasonable expenses of its attorneys) in bringing or defending
against such action.

         22. SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any one or more provisions is determined to be illegal,
indefinite, invalid or otherwise unenforceable, in whole or in part, by any
court of competent jurisdiction, then the remaining provisions of this Agreement
and any partially unenforceable provisions to the extent enforceable in the
pertinent jurisdiction, shall continue in full force and effect and shall be
binding and enforceable on the parties.

                                   EMPLOYEE

                                   /S/ Nigel Horsley
                                   --------------------------------------------
                                   Nigel Horsley

                                   RECLAMATION CONSULTING AND APPLICATIONS, INC.

                                   /S/ Michael C. Davies
                                   --------------------------------------------
                                   By: Michael C. Davies
                                   Its: Chief Executive Officer

                                       6

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