Document:

Exhibit 10.1

                              ENGAGEMENT AGREEMENT

AGREEMENT made as of the 1st day of March 2006 between Capital Gold Corporation,
a Delaware Corporation having an office at 76 Beaver Street, 26th Floor, New
York, NY 10005 (hereinafter referred to as the "CORPORATION"), and Christopher
M. Chipman, an individual residing at 4014 Redwing Lane, Audubon, PA 19407
(hereinafter referred to as "CHIPMAN").

IN CONSIDERATION OF the premises and mutual covenants and conditions herein
contained, the CORPORATION and CHIPMAN hereby agree as follows:

1.    Engagement. The CORPORATION agrees to engage CHIPMAN, and CHIPMAN agrees
      to serve the CORPORATION as a Chief Financial Officer for the CORPORATION
      upon the terms and conditions hereafter set forth. The duties of CHIPMAN
      shall be consistent with his position as an executive, and shall be those
      duties customarily performed by an executive of his experience.

2.    Term. This Agreement becomes effective on March 1, 2006, and shall expire
      on February 28, 2007, with an option for an additional 12 months, if
      mutually agreed upon by both parties, subject to provisions of Article 6
      herein provided.

3.    Compensation And Other Benefits.

      (a)   For his services to the CORPORATION during the TERM, the CORPORATION
            shall pay CHIPMAN a fee ("Fee") at the annual base rate of Ninety
            Thousand ($90,000) Dollars payable at $7,500 per month.

      (b)   At the inception of this Agreement, the CORPORATION shall grant
            50,000 stock options at an exercise price of $0.34 per share to
            CHIPMAN at the same time and on the same terms and conditions as
            those granted to other employees and/or executives. Such Options
            shall vest at the rate of 10,000 stock options per month for every
            month that this Agreement is not terminated pursuant to sections 6
            below.

      (c)   As an independent contractor, CHIPMAN will not participate in the
            CORPORATION'S Group Medical program or 401K pension program.

4.    Services. CHIPMAN agrees to serve the CORPORATION faithfully and to the
      best of his ability, and shall devote fifty percent (50%) of his business
      time, attention and energies to the business of the CORPORATION during the
      regular business hours and at any other time during the week as reasonably
      requested by the CORPORATION and/or required by the demands of his
      position. All services required to be rendered by CHIPMAN may be rendered
      for the benefit of any of the CORPORATION'S affiliates or subsidiaries,
      but no liability shall attach to such affiliate or subsidiary for the
      payment of any compensation hereunder.

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5.    Expenses. During the period of his engagement, CHIPMAN will be reimbursed
      for his reasonable and necessary expenses incurred by him pursuant to his
      engagement hereunder, such expenses to include necessary travel and
      related costs incurred on behalf of the CORPORATION and in commuting to
      and from the CORPORATION's offices in New York as well as lodging expenses
      while in New York, NY, if necessary, upon submission of appropriate
      receipts or vouchers therefore.

6.    Termination.

      (a)   The CORPORATION may discharge CHIPMAN for cause at any time as
            provided herein. For purposes hereof, "cause" shall mean the willful
            engaging by CHIPMAN in illegal conduct or gross misconduct which is
            demonstrably and materially injurious to the CORPORATION. For
            purposes of this Agreement, no act, or failure to act, on CHIPMAN's
            part shall be deemed "willful" unless done, or omitted to be done,
            by CHIPMAN not in good faith and without reasonable belief that
            CHIPMAN's action or omission was in the best interest of the
            CORPORATION. Notwithstanding the foregoing, CHIPMAN shall not be
            deemed to have been terminated for Cause unless and until the
            CORPORATION delivers to CHIPMAN a copy of a resolution duly adopted
            by the affirmative vote of not less than three-quarters of the
            entire membership of the Board at a meeting of the Board called and
            held for such purpose (after reasonable notice to CHIPMAN and an
            opportunity for CHIPMAN, together with counsel, to be heard before
            the Board) finding that, in the good faith opinion of the Board,
            CHIPMAN was guilty of conduct set forth above and specifying the
            particulars thereof in detail.

      (b)   This Agreement shall terminate upon the death or disability of
            CHIPMAN. For purposes of this subsection (b), "disability" shall
            mean the inability of CHIPMAN effectively to substantially provide
            the services hereunder by reason of any medically determinable
            physical or mental impairment which can be expected to result in
            death or which has lasted or can be expected to last for a
            continuous period of not less than twelve (12) months.

      (c)   CHIPMAN shall have the right to terminate this Agreement upon not
            less than thirty (30) days prior written notice of termination.

7.    Effect of Termination.

      (a)   In the event that this Agreement is terminated for "cause" pursuant
            to subsection 6(a), the CORPORATION shall pay CHIPMAN, at the time
            of such termination, only the fees due and payable to him through
            the date of the termination of this Agreement.

      (b)   In the event that this Agreement is terminated by the CORPORATION at
            any time without "cause", as defined in subsection 6(a), the
            CORPORATION shall pay to CHIPMAN, at the time of such termination,
            the fees otherwise due and payable to him through the last day of
            the then current term of this Agreement or six months from such
            termination, which ever is shorter.

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      (c)   In the event this Agreement is terminated at his election pursuant
            to subsection 6(c) or due to CHIPMAN's death or disability pursuant
            to 6(b), the CORPORATION shall pay to CHIPMAN, at the time of such
            termination, the fees otherwise due and payable to him through the
            last day of the month in which such termination occurs.

8.    Trade Secrets And Non-Disclosure. CHIPMAN hereby acknowledges that certain
      trade secrets of the CORPORATION are valuable, special and unique assets
      of the CORPORATION'S business. Such trade secrets include but are not
      limited to its customer lists and the sources of its materials and
      products. CHIPMAN hereby covenants that he will not, during or after the
      term of his employment, disclose any of the foregoing secrets or any part
      thereof to any firm, person or corporation or any entity for any reason or
      purpose whatsoever. In the event of a breach or threatened breach by
      CHIPMAN of the provisions of this Paragraph, the CORPORATION shall be
      entitled to proceed in any court for an injunction restraining CHIPMAN
      from disclosing, in whole or in part, any of the aforesaid trade secrets,
      or from rendering such service to any person, firm, corporation,
      association or any entity to whom such trade secrets, in whole or in part,
      have been disclosed, or are threatened to be disclosed. Nothing herein
      contained shall be construed as prohibiting the CORPORATION from pursuing
      any other remedies for such breach or threatened breach, including the
      recovery of damages from CHIPMAN and/or from proceeding pursuant to the
      arbitration provisions of this Agreement.

9.    Non-Compete. Without the prior written approval of the CORPORATION'S Chief
      Executive Officer or President, Chipman shall not, directly or indirectly,
      during the term of this agreement and until the end of twelve (12) months
      after termination:

      (a)   Engage in a "Competing Business" in the "Territory", as those terms
            are defined below. "Competing Business" shall mean any business that
            mines or produces minerals which is competitive with the
            CORPORATION'S or any of its Affiliates, as conducted or under
            development at any time during the term of this agreement
            "Territory" shall mean anywhere in Mexico.

      (b)   Make any public statement or perform or do any other act prejudicial
            or injurious to the reputation or goodwill of the CORPORATION or any
            of its Affiliates or otherwise interfere with the CORPORATION'S
            business or that of any of its Affiliates.

10.   Notices. Any notice or other communication pursuant to this Agreement
      shall be in writing and shall be sent by telecopy or by certified or
      registered mail addressed to the respective parties as follows:

            (i)   If to the CORPORATION, to:

                        Capital Gold Corporation
                        76 Beaver Street, 26th Floor
                        New York, NY 10005
                        Tel. No.: (212) 344-5158
                        Fax No..: (212) 344-4537
                        Attention: VP of Corporate Development

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            (ii)  If to CHIPMAN, to:

                        Christopher M. Chipman
                        4014 Redwing Lane
                        Audubon, PA 19407
                        Tel. No.:  (610) 631-2263
                        Fax No.: _______________

or to such other address as the parties shall have designated by notice to the
other parties given in accordance with this section. Any notice or other
communication shall be deemed to have been duly given if personally delivered or
mailed via registered or certified mail, postage prepaid, return receipt
requested, or, if sent by telecopy, when confirmed.

11.   Modification. No modification or waiver of this Agreement or any provision
      hereof shall be binding upon the party against whom enforcement of such
      modification or waiver is sought unless it is made in writing and signed
      by or on behalf of both parties hereto.

12.   Miscellaneous. (a) This Agreement shall be subject to and construed in
      accordance with the laws of the State of New York.

      (b)   The waiver by either party of a breach of any provision of this
            Agreement by the other party shall not operate and be construed as a
            waiver or a continuing waiver by that party of the same or any
            subsequent breach of any provision of this Agreement by the other
            party.

      (c)   If any provisions of this Agreement or the application thereof to
            any person or circumstance shall be determined by any court of
            competent jurisdiction to be invalid or unenforceable to any extent,
            the remainder hereof, or the application of such provision to
            persons or circumstances other than those as to which it is so
            determined to be invalid or unenforceable, shall not be affected
            thereby, and each provision hereof shall be valid and shall be
            enforced to the fullest extent permitted by law.

      (d)   This Agreement shall be binding on and inure to the benefit of the
            parties hereto and their respective heirs, executors and
            administrators, successors and assigns.

      (e)   This Agreement shall not be assignable in whole or in part by either
            party, except that the CORPORATION may assign this Agreement to and
            it shall be binding upon any subsidiary or affiliate of the
            CORPORATION or any person, firm or corporation with which the
            CORPORATION may be merged or consolidated or which may acquire all
            or substantially all of the assets of the CORPORATION.

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      IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto
as of the date first above written.

CAPITAL GOLD CORPORATION

By: /s/ Jeff Pritchard
   -------------------------------------
   Jeff Pritchard, VP of Corporate Development

/s/ Christopher M. Chipman
-------------------------------------
Christopher M. Chipman, CPA

                                       5EXECUTIVE EMPLOYMENT AGREEMENT

      This Executive Employment Agreement ("Agreement") is made effective as of
January 1, 2006 ("Effective Date"), by and between AUXILIO, Inc., a Nevada
corporation ("Company") and Joseph J. Flynn ("Executive").

      The parties agree as follows:

      1. Employment. Company hereby employs Executive, and Executive hereby
accepts such employment, upon the terms and conditions set forth herein.

      2. Duties.

            2.1 Position. Executive is employed as Chief Executive Officer and
Chairman of the Board of Directors and shall have the duties and
responsibilities assigned by the Company's Board of Directors both upon initial
hire and as may be reasonably assigned from time to time. Executive shall
perform faithfully and diligently all duties assigned to Executive. Company
reserves the right to modify Executive's position and duties at any time in its
sole and absolute discretion.

            2.2 Best Efforts/Full-time. Executive will expend Executive's best
efforts on behalf of Company and its subsidiaries, and will abide by all
policies and decisions made by Company, as well as all applicable federal, state
and local laws, regulations or ordinances. Executive will act in the best
interest of Company at all times. Executive shall devote Executive's full
business time and efforts to the performance of Executive's assigned duties for
Company, unless Executive notifies the Board of Directors in advance of
Executive's intent to engage in other paid work and receives the Board of
Directors' express written consent to do so.

      3. Term.

            3.1 Initial Term. The employment relationship pursuant to this
Agreement shall be for an initial term commencing on the Effective Date set
forth above and continuing for a period of 2 (two) years following such date
("Initial Term"), unless sooner terminated in accordance with paragraph 7 below.

            3.2 Renewal. On completion of the Initial Term specified in
subparagraph 3.1 above, this Agreement will automatically renew for subsequent
12 month terms unless either party provides advance written notice to the other
that such party does not wish to renew the Agreement for a subsequent 12 months.
In the event either party gives notice of nonrenewal pursuant to this
subparagraph 3.2, this Agreement will expire at the end of the current term.

      4. Compensation.

            4.1 Base Salary. As compensation for Executive's performance of
Executive's duties hereunder, Company shall pay to Executive an initial Base
Salary of $180,000 for the first year, payable in accordance with the normal
payroll practices of Company, less required deductions for state and federal
withholding tax, social security and all other employment taxes and payroll
deductions. In the event Executive's employment under this Agreement is
terminated by either party, for any reason, Executive will be entitled to
receive Executive's Base Salary prorated to the date of termination. Such amount
shall eligible for increase to $195,000 effective January 1, 2007 in accordance
with the provisions set forth in Exhibit A.

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            4.2 Incentive Compensation. Executive will be eligible to earn
incentive compensation in accordance with the provisions set forth in Exhibit A.

            4.3 Equity Compensation. Executive will be granted stock options to
purchase 100,000 shares of the Company's Common Stock at an exercise price equal
to the fair market value of the stock on the date of grant. The options will
vest over three years.

      5. Customary Fringe Benefits. Executive will be eligible for all customary
and usual fringe benefits generally available to executives of Company subject
to the terms and conditions of Company's benefit plan documents. Company
reserves the right to change or eliminate the fringe benefits on a prospective
basis, at any time, effective upon notice to Executive.

      6. Business Expenses. Executive will be reimbursed for all reasonable,
out-of-pocket business expenses incurred in the performance of Executive's
duties on behalf of Company. To obtain reimbursement, expenses must be submitted
promptly with appropriate supporting documentation in accordance with Company's
policies.

      7. Termination of Executive's Employment.

            7.1 Termination for Cause by Company. Although Company anticipates a
mutually rewarding employment relationship with Executive, Company may terminate
Executive's employment immediately at any time for Cause. For purposes of this
Agreement, "Cause" is defined as: (a) acts or omissions constituting gross
negligence, recklessness or willful misconduct on the part of Executive with
respect to Executive's obligations or otherwise relating to the business of
Company; (b) Executive's material breach of this Agreement; and (c) Executive's
conviction or entry of a plea of nolo contendere for fraud, misappropriation or
embezzlement, or any felony or crime of moral turpitude. In the event
Executive's employment is terminated in accordance with this subparagraph 7.1,
Executive shall be entitled to receive Executive's Base Salary prorated to the
date of termination. All other Company obligations to Executive pursuant to this
Agreement will become automatically terminated and completely extinguished.
Executive will not be entitled to receive the Severance Payment described in
subparagraph 7.3 below.

            7.2 Termination Without Cause by Company/Severance; Change of
Control.

            (a) Company may terminate Executive's employment under this
Agreement without Cause at any time on thirty (30) days' advance written notice
to Executive. In the event of (i) such termination without Cause, or (ii)
Executive's inability to perform the essential functions of Executive's position
due to a mental or physical disability or Executive's death, or (iii) in the
event of the termination of Executive without Cause following a "Change of
Control" (as defined in Section 7.2(b) below), Executive will receive the Base
Salary then in effect, prorated to the date of termination, and a "Severance
Payment" equivalent to (a) payment of compensation for an additional 6 months,
payable in accordance with Company's regular payroll cycle or lump sum, and (b)
an additional provision of accelerating all unvested stock options and warrants
provided that Executive: (i) complies with all surviving provisions of this
Agreement as specified in subparagraph 13.8 below; and (ii) executes a full
general release, releasing all claims, known or unknown, that Executive may have
against Company arising out of or any way related to Executive's employment or
termination of employment with Company.

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            (b) As used herein, "Change of Control" means: (i) a sale of all or
substantially all of the assets of the Company; (ii) a merger or consolidation
in which the Company is not the surviving entity and in which the holders of the
Company's outstanding voting stock immediately prior to such transaction own,
immediately after such transaction, securities representing less than fifty
percent (50%) of the voting power of the entity surviving such transaction or,
where the surviving entity is a wholly-owned subsidiary of another entity, the
surviving entity's parent; or (iii) a reverse merger in which the Company is the
surviving entity but the shares of common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities of the surviving entity's parent, cash or
otherwise, and in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
Company or, where the Company is a wholly-owned subsidiary of another entity.

            (c) In the event that the benefits provided to you under this
Agreement, and any other agreements, plans or arrangements to which you may be a
party with the Company, cause you to incur an excise tax under Section 4999 of
the Internal Revenue Code of 1986 (the "Code") or any corresponding provisions
of applicable state tax law in connection with a Change of Control, then the
Company will pay you an additional amount sufficient to reimburse you for (i)
the excise tax imposed on such benefits, and (ii) the federal and state income,
employment and excise taxes, determined on a fully "grossed-up" basis, imposed
on the benefits payments provided. The Company shall be entitled to withhold
from the payment required hereunder such taxes as it may be required to withhold
under applicable tax law, and any such withheld taxes shall be treated as paid
to you hereunder.

            7.3 Voluntary Resignation by Executive for Good Reason/Severance.
Executive may voluntarily resign Executive's position with Company for Good
Reason, at any time on thirty (30) days' advance written notice. In the event of
Executive's resignation for Good Reason, Executive will be entitled to receive
the Base Salary then in effect, prorated to the date of termination, and the
Severance Payment described in subparagraph 7.3. above, provided Executive
complies with all of the conditions in subparagraph 7.3. above. All other
Company obligations to Executive pursuant to this Agreement will become
automatically terminated and completely extinguished. Executive will be deemed
to have resigned for Good Reason in the following circumstances: (a) Company's
material breach of this Agreement; (b) Executive's Base Salary is reduced by
more than 10% below Executive's salary in effect at any time during the
preceding twelve months, unless the reduction is made as part of, and is
generally consistent with, a general reduction of senior executive salaries; (c)
Executive's position and/or duties are modified so that Executive's duties are
no longer consistent with the position of a senior executive or Executive no
longer reports to the Board of Directors; and (d) Company relocates Executive's
principal place of work to a location more than sixty (60) miles from the
Company headquarters in Mission Viejo, without Executive's prior written
approval.

<PAGE>

            7.4 Voluntary Resignation by Executive Without Good Reason.
Executive may voluntarily resign Executive's position with Company without Good
Reason, at any time after the Initial Term, on thirty (30) days' advance written
notice. In the event of Executive's resignation without Good Reason, Executive
will be entitled to receive only the Base Salary for the thirty-day notice
period and no other amount for the remaining months of the current term, if any.
All other Company obligations to Executive pursuant to this Agreement will
become automatically terminated and completely extinguished. In addition,
executive will not be entitled to receive the Severance Payment described in
subparagraph 7.2 above.

            7.5 Termination of Employment Upon Nonrenewal. In the event either
party decides not to renew this Agreement for a subsequent 12 months in
accordance with subparagraph 3.2 above, the Agreement will expire, Executive's
employment with Company will terminate and Executive will only be entitled to
Executive's Base Salary paid through the last day of the current term. All other
Company obligations to Executive pursuant to this Agreement will become
automatically terminated and completely extinguished. Executive will not be
entitled to the Severance Payment described in subparagraph 7.3 above.

      8. No Conflict of Interest. During the term of Executive's employment with
Company and during any period Executive is receiving payments from Company,
Executive must not engage in any work, paid or unpaid, that creates an actual or
potential conflict of interest with Company. Such work shall include, but is not
limited to, directly or indirectly competing with Company in any way, or acting
as an officer, director, employee, consultant, stockholder, volunteer, lender,
or agent of any business enterprise of the same nature as, or which is in direct
competition with, the business in which Company is now engaged or in which
Company becomes engaged during the term of Executive's employment with Company,
as may be determined by the Board of Directors in its sole discretion. If the
Board of Directors believes such a conflict exists during the term of this
Agreement, the Board of Directors may ask Executive to choose to discontinue the
other work or resign employment with Company. If the Board of Directors believes
such a conflict exists during any period in which Executive is receiving
payments pursuant to this Agreement, the Board of Directors may ask Executive to
choose to discontinue the other work or forfeit the remaining severance
payments. In addition, Executive agrees not to refer any client or potential
client of Company to competitors of Company, without obtaining Company's prior
written consent, during the term of Executive's employment and during any period
in which Executive is receiving payments from Company pursuant to this
Agreement.

      9. Confidentiality and Proprietary Rights. Executive agrees to read, sign
and abide by Company's Employee Innovations and Proprietary Rights Assignment
Agreement, which is provided with this Agreement and incorporated herein by
reference.

<PAGE>

      10. Non-Solicitation.

            10.1 Nonsolicitation of Customers or Prospects. Executive
acknowledges that information about Company's customers is confidential and
constitutes trade secrets. Accordingly, Executive agrees that during the term of
this Agreement and for a period of one (1) year after the termination of this
Agreement, Executive will not, either directly or indirectly, separately or in
association with others, interfere with, impair, disrupt or damage Company's
relationship with any of its customers or customer prospects by soliciting or
encouraging others to solicit any of them for the purpose of diverting or taking
away business from Company.

            10.2 Nonsolicitation of Company's Employees. Executive agrees that
during the term of this Agreement and for a period of one (1) year after the
termination of this Agreement, Executive will not, either directly or
indirectly, separately or in association with others, interfere with, impair,
disrupt or damage Company's business by soliciting, encouraging or attempting to
hire any of Company's employees or causing others to solicit or encourage any of
Company's employees to discontinue their employment with Company.

      11. Injunctive Relief. Executive acknowledges that Executive's breach of
the covenants contained in paragraphs 8-10 (collectively "Covenants") would
cause irreparable injury to Company and agrees that in the event of any such
breach, Company shall be entitled to seek temporary, preliminary and permanent
injunctive relief without the necessity of proving actual damages or posting any
bond or other security.

      12. Agreement to Arbitrate. To the fullest extent permitted by law,
Executive and Company agree to arbitrate any controversy, claim or dispute
between them arising out of or in any way related to this Agreement, the
employment relationship between Company and Executive and any disputes upon
termination of employment, including but not limited to breach of contract,
tort, discrimination, harassment, wrongful termination, demotion, discipline,
failure to accommodate, family and medical leave, compensation or benefits
claims, constitutional claims; and any claims for violation of any local, state
or federal law, statute, regulation or ordinance or common law. Claims for
workers' compensation, unemployment insurance benefits and Company's right to
obtain injunctive relief pursuant to paragraph 11 above are excluded. For the
purpose of this agreement to arbitrate, references to "Company" include all
parent, subsidiary or related entities and their employees, supervisors,
officers, directors, agents, pension or benefit plans, pension or benefit plan
sponsors, fiduciaries, administrators, affiliates and all successors and assigns
of any of them, and this agreement shall apply to them to the extent Executive's
claims arise out of or relate to their actions on behalf of Company.

            12.1 Consideration. The mutual promise by Company and Executive to
arbitrate any and all disputes between them rather than litigate them before the
courts or other bodies, provides the consideration for this agreement to
arbitrate.

            12.2 Initiation of Arbitration. Either party may exercise the right
to arbitrate by providing the other party with written notice of any and all
claims forming the basis of such right in sufficient detail to inform the other
party of the substance of such claims. In no event shall the request for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claims would be barred by the applicable statute of
limitations.

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            12.3 Arbitration Procedure. The arbitration will be conducted in
Irvine, California by a single neutral arbitrator and in accordance with the
then current rules for resolution of employment disputes of the American
Arbitration Association ("AAA"). The parties are entitled to representation by
an attorney or other representative of their choosing. The arbitrator shall have
the power to enter any award that could be entered by a judge of the trial court
of the State of California, and only such power, and shall follow the law. In
the event the arbitrator does not follow the law, the arbitrator will have
exceeded the scope of his or her authority and the parties may, at their option,
file a motion to vacate the award in court. The parties agree to abide by and
perform any award rendered by the arbitrator. Judgment on the award may be
entered in any court having jurisdiction thereof.

            12.4 Costs of Arbitration. Each party shall bear one half the cost
of the arbitration filing and hearing fees, and the cost of the arbitrator.

      13. General Provisions.

            13.1 Successors and Assigns. The rights and obligations of Company
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of Company. Executive shall not be entitled to assign any
of Executive's rights or obligations under this Agreement.

            13.2 Waiver. Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
or prevent that party thereafter from enforcing each and every other provision
of this Agreement.

            13.3 Attorneys' Fees. Each side will bear its own attorneys' fees in
any dispute unless a statutory section at issue, if any, authorizes the award of
attorneys' fees to the prevailing party.

            13.4 Severability. In the event any provision of this Agreement is
found to be unenforceable by an arbitrator or court of competent jurisdiction,
such provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment
of such arbitrator or court, the unenforceable provision shall be deemed
deleted, and the validity and enforceability of the remaining provisions shall
not be affected thereby.

            13.5 Interpretation; Construction. The headings set forth in this
Agreement are for convenience only and shall not be used in interpreting this
Agreement. This Agreement has been drafted by legal counsel representing
Company, but Executive has participated in the negotiation of its terms.
Furthermore, Executive acknowledges that Executive has had an opportunity to
review and revise the Agreement and have it reviewed by legal counsel, if
desired, and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.

<PAGE>

            13.6 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the United States and the State of California.
Each party consents to the jurisdiction and venue of the state or federal courts
in Irvine, California, if applicable, in any action, suit, or proceeding arising
out of or relating to this Agreement.

            13.7 Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be delivered as follows with notice deemed given
as indicated: (a) by personal delivery when delivered personally; (b) by
overnight courier upon written verification of receipt; (c ) by telecopy or
facsimile transmission upon acknowledgment of receipt of electronic
transmission; or (d) by certified or registered mail, return receipt requested,
upon verification of receipt. Notice shall be sent to the addresses set forth
below, or such other address as either party may specify in writing.

            13.8 Survival. Sections 8 ("No Conflict of Interest"), 9
("Confidentiality and Proprietary Rights"), 10 (Nonsolicitation), 11
("Injunctive Relief"), 12 ("Agreement to Arbitrate"), 13 ("General Provisions")
and 14 ("Entire Agreement") of this Agreement shall survive Executive's
employment by Company.

      14. Entire Agreement. This Agreement, including the Employee Innovations
and Proprietary Rights Assignment Agreement incorporated herein by reference and
Company's stock option plan and related option documents described in paragraph
4.3 of this Agreement, constitutes the entire agreement between the parties
relating to this subject matter and supersedes all prior or simultaneous
representations, discussions, negotiations, and agreements, whether written or
oral. This Agreement may be amended or modified only with the written consent of
Executive and the Board of Directors of Company. No oral waiver, amendment or
modification will be effective under any circumstances whatsoever.

THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.

Dated:
       -----------------------------       -------------------------------------
                                           Joseph Flynn

Dated:                                  By:
       -----------------------------       -------------------------------------
                                           Michael D. Vanderhoof
                                           Compensation Committee Chairperson
                                           AUXILIO, Inc.
                                           27401 Los Altos, Suite 100
                                           Mission Viejo, CA  92691

<PAGE>

                                    EXHIBIT A

                           INCENTIVE COMPENSATION PLAN

      Incentive Compensation:

            Participation in the Executive Bonus Plan. The plan will be based on
            7.5% of EBITDA for 2006 and 2007. The bonus, if any, will be paid on
            a semi-annual basis in August and March based on the relevant second
            quarter 10Q and 10K filed with the SEC. The EBITDA described in this
            Exhibit A is calculated as if the bonus to be paid to the Executives
            has not been paid and therefore the expense has not been accrued and
            counted as an expense on the Company's income statement.

      Base Salary Adjustments:

            Upon the Company achieving positive EBITDA from Operations for 2006,
            net of any accrual for the Executive Bonus Plan, the Executive's
            Base Salary will be adjusted to reflect an annual Base Salary of
            $195,000 beginning January 1st 2007.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]