Document:

DONAL R. SCHMIDT, JR.
                              EMPLOYMENT AGREEMENT

This EMPLOYMENT  AGREEMENT (this "Agreement"),  dated as of ________,  2010 (the
"Effective Date"), is made and entered into between Sun River Energy,  Inc. (the
"Company") and Donal R. Schmidt, Jr. ("Executive").

                                    RECITALS

         WHEREAS,  the Company desires to employ Executive and Executive desires
to serve in the employ of the Company pursuant to the terms of the Agreement;

         WHEREAS,  this Agreement is being entered into  contemporaneously  with
the closing of the  transaction  contemplated by the Purchase and Sale Agreement
(the  "PSA")  between  FTP Oil and Gas LP ("FTP")  as seller and the  Company as
buyer attached  hereto as Exhibit A, pursuant to which certain or all of the oil
and gas  interests of FTP,  which is  wholly-owned  by Executive and Thimothy S.
Wafford,  have been acquired by the Company and this Agreement shall only become
effective upon the closing of the purchase and sales transaction contemplated by
the PSA;

         WHEREAS,  the Company and  Executive  desire to set forth in writing in
this  Agreement the terms and conditions of their  agreement and  understandings
with respect to the employment of Executive.

                                    AGREEMENT

         NOW, THEREFORE,  in consideration of the mutual promises and agreements
herein  contained  and other good and  valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.   Employment.

       Position and Duties of Executive.  During the Term  (hereafter  defined),
Executive  shall be employed by the  Company  and shall serve as  President  and
Chief Executive  Officer  ("CEO") of the Company,  upon the terms and subject to
the conditions set forth in this  Agreement.  During the Term,  Executive  shall
perform  such  duties and have such  powers as are the type and nature  normally
assigned to similar  executive  officers of a corporation of the size,  type and
stature  of  the  Company  and  as  provided  in  the   Company's   articles  of
incorporation and bylaws; provided that such duties and powers may be determined
and modified by the Board of Directors of the Company (the "Board") from time to
time.  It is agreed  that,  to the  extent  permitted  by law and the  Company's
articles of  incorporation  and bylaws and subject to the rights of shareholders
and the Board, Executive shall have the executive and operational authority over
the business and affairs of the Company subject to those  constraints set by the
independent  members of the Board and the  constraints of internal  controls and
procedures and Sarbanes Oxley related  policies and procedures and  Compensation
Committee  controls and all other Board controls;  including the following:  (i)
the  authority to make  acquisitions  of operating  equipment  and  exploration,
drilling,  and  production  services  on behalf of the  Company in the  ordinary
course of  business  but not  capital  acquisitions  of assets nor  expenditures
exceeding approved AFE's by more than 20%;

<PAGE>

and (ii) the authority to incur debt less than $250,000 on behalf of the Company
in the  ordinary  course of  business.  So long as  Executive  is serving as CEO
pursuant  to this  Agreement  as limited by current and  proposed  SEC Rules and
Regulations,  the Company  agrees that it will use its  commercially  reasonable
efforts  to  cause  the  Board  to  nominate  Executive  to be  elected  by  the
shareholders at any meeting or pursuant to any consent whereby the  shareholders
shall vote to elect  directors  of the Board and  recommend  that the  Company's
shareholders  vote in favor of Executive and the Company  shall solicit  proxies
for the election of Executive.

       Performance. During the Term, Executive shall faithfully,  diligently and
to the best of his ability perform such duties as are determined by the Board of
the Company from time to time (which duties shall be consistent  with his titles
and positions as set forth above) as limited by the Board,  its  committees  and
internal  controls and procedures and Sarbanes Oxley,  and shall devote his full
business time, energy and best efforts to fulfill his duties.  Executive may not
engage, directly or indirectly,  in any other business,  investment, or activity
that interferes with Executive's performance of Executive's duties hereunder, is
contrary to the interest of the Company or any of its subsidiaries,  or requires
any  significant  portion of  Executive's  business  time.  To the extent not in
conflict  with the  preceding  sentence,  Executive  shall be  permitted  to (i)
continue his current  investing and related business  activities with other than
with Competing Businesses  (hereafter  defined),  (ii) make investments in other
than Competing Businesses, (iii) engage in charitable,  nonprofit, civic, board,
consulting or community  activities for which Executive receives no compensation
or other pecuniary  advantage  unless  otherwise  approved by the Board and (iv)
engage in such other  activities that are approved in advance by the Board.  For
purposes of this Agreement, "Competing Business" means any individual, business,
firm, company, partnership, joint venture, organization, or other entity that is
primarily involved in the business of leasing, acquiring,  exploring, producing,
gathering,  transporting,  storing or  marketing  of  hydrocarbons  and  related
products  and  the  exploration   potential  of  geographical   areas  on  which
hydrocarbon  exploration  prospects are located or otherwise competes with or is
engaged in a similar  busineses  to that of the  Company  during the Term in the
Restricted  Area and subject to section 6. For purposes of this  Agreement,  the
"Restricted  Area" means  anywhere  within a 50 mile  radius of any  location in
which the Company has actual oil and gas  properties  during the Term the United
States.

       Place of  Work.  During  the  Term,  Executive  shall  primarily  perform
services under this Agreement at the Company's  headquarters,  which shall be in
Dallas County, Texas. However,  Executive understands that he may be required to
travel in connection with the performance of his duties.

2. Term.  Subject to earlier  termination  as  hereafter  provided,  Executive's
employment  hereunder  shall be for a term of three (3)  years,  subject  to and
commencing  on  the  Effective  Date  of  the  Purchase  and  Sale   Transaction
contemplated  by  the  PSA  (the  "Asset  Sale").  Following  the  initial  Term
Executive's  employment shall be for additional one (1) year terms unless either
party to this Agreement  notifies the other in writing at least ninety (90) days
prior to the end of the initial Term (hereafter defined) or at least ninety (90)
days prior the end of any one (1) year extension of Executive's employment.  The
"Term" as used in this Agreement  shall refer to the initial three (3) year term
and any one (1) year renewal terms as provided in this  paragraph.  If Executive
remains  employed by the Company  after the  expiration  of the Term,  Executive
shall  become an at-will  employee  and,  except for Sections 6, 7, 8 and 9, the
terms of this Agreement shall not apply to such employment.  Upon termination of
this Agreement Company shall pay to Executive only the wages earned by Executive
through  Executive's  last day of employment  under this  Agreement and any such
other  amounts as provided in Section 5.  Nonrenewal  of the Term as provided in
this paragraph will not affect the Company's or  Executive's  other  obligations
that expressly survive pursuant to the terms of this Agreement.

<PAGE>

3.       Compensation for Employment.
         ---------------------------

       (a) First Year  Compensation.  In consideration for all services rendered
by Executive under this Agreement during the first year of the Term, the Company
shall  not  pay  Executive  any  cash  compensation  but  shall  provide  annual
compensation in the form of stock options ("Base  Compensation") as follows: the
Company shall issue to Executive  Stock Options  ("Stock  Options")  exercisable
into one million  (1,000,000)  shares of Common Stock of the Company pursuant to
the terms of the 2010 Sun River Energy,  Inc.  Stock Option and Award  Incentive
Plan,  as amended  (the  "Stock  Plan").  The Stock  Options  shall be issued to
Executive on the  Effective  Date and shall be earned and vest 1/36th each month
thereafter  (each a "Vesting  Date") during the Term.  The exercise price of the
Stock  Options  shall  equal the  average  fair  market  value of a share of the
Company's  common stock on the Effective Date of the PSA is between the Parties.
Finally, the Company shall cause Common Stock obtained through the Stock Options
to be registered pursuant to the terms of the Stock Plan on Form S-8.

      (b)Subsequent  Year  Compensation.   In  consideration  for  all  services
rendered by Executive under this Agreement following the first year of the Term,
the Company  shall  begin to pay,  in year Two and Three of the Term,  Executive
cash  compensation in an amount  determined by the Board, in its sole discretion
("Cash  Compensation");  provided  that  such  amount  shall  not be  less  than
Three-Hundred Thousand Dollars ($300,000.00),  starting at year 2 (less required
withholdings)  without Executive's  written consent.  Cash Compensation shall be
earned and payable  periodically  in equal  installments  in accordance with the
Company's normal payroll practices beginning in year Two of the Term,  including
applicable  deductions and  withholdings.  Cash  Compensation will be subject to
annual review pursuant to the Company's normal review policy for other similarly
situated  executives of the Company and any changes in Cash Compensation will be
communicated  in  writing  to  Executive.  Following  the  first  year  of  this
Agreement, the term "Base Compensation" shall consist only of Cash Compensation,
including any annual adjustments pursuant to the terms of this Agreement.

      (c) Bonus Plan. Executive shall be eligible to receive an annual bonus for
each year ending during the Term in cash, as shall be determined by the Board in
its sole discretion ("Bonus"). The Bonus shall be payable either pursuant to the
terms of a bonus  plan  adopted by the  Board,  or in the form of equity  awards
granted in accordance with the terms of the Stock Plan, provided,  however, that
the Bonus payable with respect to the period beginning May 1, 2010 and ending on
April 30, 2013 shall be payable in accordance  with the terms and conditions set
forth in Exhibit C, attached hereto and incorporated herein. At the Board's sole
discretion, the cash bonus may be paid in an equivalent value of common stock as
of date of bonus. Any such payment,  is not subject to any repurchase  agreement
in place at the time of payment.

      (d)Reimbursement of Expenses.  The Company will advance,  pay or reimburse
Executive,  in  accordance  with the regular  policies of the  Company,  for all
reasonable and business  expenses  incurred by Executive in furtherance of or in
connection with performing his obligations  under this Agreement during the Term
and consistent with the Company's annual budget.

<PAGE>

      (e) Other Benefits.  Executive is entitled to participate  during the Term
in any group health insurance plan,  long-term disability insurance plan, equity
or cash  incentive  compensation  plan,  401(k) plan,  and any other  benefit or
welfare  program or policy that is made  available,  from time to time, to other
executives of the Company,  on a basis  consistent with such  participation  and
subject  to the terms of the plan  documents,  as such  plans  may be  modified,
amended, terminated, or replaced from time to time.

      (f) Fringe Benefits. During his employment pursuant to this Agreement, and
except as otherwise  provided in this Agreement,  Executive shall be entitled to
participate  on  substantially  the same  terms and  conditions  in the  Company
sponsored fringe benefits generally  provided to similarly  situated  personnel,
such as vacation and sick pay.

      (g)Withholding.  As a  condition  of the receipt of any payment or benefit
hereunder, the Company shall be entitled to withhold any federal, state or local
taxes, in the reasonable judgment of Company, required by law to be withheld.

4.       Termination.
         -----------

          (a)  Termination by Executive.  Executive may terminate his employment
under this Agreement at any time for any of the following reasons;  however, the
events in Sections 4(a)(i)-(iv) are only referred to as "Good Reason"):

         (i) without  Executive's  prior  written  consent,  there is a material
reduction in Executive's authority,  duties or responsibilities with the Company
from that set forth in Section 1 except in the event of a merger;

                  (ii) the Company fails in a material way to fulfill its
obligations under Section 3;

                  (iii) the Company does not fulfill its  obligations  under
Section 11 in  connection  with a Change in Control; or

         (iv) other than due to  Executive's  death or voluntary  resignation by
Executive from the Board.

For  purposes  of the Good Reason  events  specified  in Sections  4(a)(i)-(iv),
Executive  shall only have Good Reason to  terminate  his  employment  if he has
provided to the Company a written notice  describing what Executive  believes is
Good Reason within ninety (90) days of such purported action (or failure to act)
of the  Company  and the  Company  has failed to cure such  circumstance  within
thirty (30) days of receipt of said notice from Executive. If Executive fails to
terminate his employment for Good Reason within sixty (60) days of the Company's
failure  to timely  cure such  circumstance,  then such  circumstance  shall not
constitute "Good Reason" for purposes of this Agreement.

<PAGE>

          (b)  Termination  by the Company.  The Company shall have the right to
terminate Executive's  employment under this Agreement at any time; however, the
following reasons (the events in Sections  5(b)(i)-(vii) only are referred to as
"Cause"):

         (i) the Executive's death;

                  (ii)  the  Executive's   Disability.   For  purposes  of  this
Agreement,  "Disability"  means a  physical  or  mental  infirmity  which in the
judgment of the Board impairs the Employee's  ability to  substantially  perform
his duties pursuant to this Agreement and which infirmity continues for a period
of at least 120 days in any 365 day period or for which  Employee  is  receiving
long-term disability benefits;

          (iii) the  substantial  and continued  willful failure by Executive to
perform his duties hereunder,  or a material breach or threatened breach of this
Agreement by Executive,  in either case which  results,  or could  reasonably be
expected  to result,  in material  harm to the  business  or  reputation  of the
Company,  which failure or breach is not corrected (if correctable) by Executive
within 30 days after  written  notice of such  failure or breach is delivered to
Executive by the Company;

         (iv) a serious breach of trust,  including,  but not limited to, theft,
embezzlement,  self-dealing,  prohibited  disclosure to unauthorized  persons or
entities  of  confidential  or  proprietary  information  of or  relating to the
Company  or the  engaging  by  Employee  in any  prohibited  business  which  is
competitive with the business of the Company and its subsidiaries, affiliates or
associated entities.  Termination under this subsection requires a uniamous vote
of Board with Executive  abstaining  and to the extent  Thimothy S. Wafford is a
director, his abstaining;

          (v)  a  violation  of  the  Company's  code  of  business  conduct  or
equivalent code of policy, or Board Policies or restrictions or directions which
violation is not corrected (if  correctable)  by Executive  within 30 days after
written notice of such violation is delivered to Executive by the Company;

          (vi)  the  commission by Executive of any criminal act involving
moral  turpitude or a felony which results in  a conviction;

          (vii)  failure to maintain  current SEC  Reporting  as required by SEC
Rules and  Regulations  that is  directly  attributable  to the  actions  of the
Executive.

         (c) Notice of Termination. Any termination of Executive's employment by
the Company or by Executive,  other than  termination as a result of Executive's
death, shall be communicated by written notice of termination to the other party
hereto in accordance  with Section 13, which notice shall  indicate the specific
termination  provision in this  Agreement  relied upon,  the  effective  date of
termination  of Executive's  employment  and set forth in reasonable  detail the
facts  and  circumstances   claimed  to  provide  a  basis  for  termination  of
Executive's employment under the provision so indicated.  If Executive elects to
terminate his employment for Good Reason, Executive must first provide notice of
the existence of a Good Reason event, and the Company shall have the opportunity
to remedy such Good Reason event in accordance with Section 4(a).

<PAGE>

5.       Obligations Upon Termination.

         (a)  The  Company's   Obligations  to  Executive  Upon  Termination  by
Executive  for Good  Reason or Upon  Termination  by the  Company for Other Than
Cause. In the event Executive  terminates his employment with Good Reason or the
Company  terminates  Executive  for other than Cause,  the Company shall have no
further  liability  or  obligation  to  Executive  under  this  Agreement  or in
connection  with  his  employment  hereunder,  except  for (i) any  unpaid  Base
Compensation  accrued  through the date of  termination;  (ii) any  unreimbursed
expenses  properly  incurred prior to the date of termination,  (iii) any awards
previously  granted  pursuant  to the Stock Plan that have fully  vested and, if
applicable, exercisable, on the date of such termination of employment, (iv) any
amounts  or rights  to which  Executive  is  entitled  under  any other  written
agreements with the Company or written Company policy or pursuant to any Company
benefit or welfare plans in effect on the date of  termination,  and (v) in year
two,  one  lump-sum  payment  of  severance  pay equal to two (2) times the Base
Compensation  (at the rate then in effect at the time of such  termination)  and
(vi) beginning in year three and any  subsequent  year in which this contract is
in effect,  one  lump-sum  payment of  severance  pay equal to two (2) times the
annualized  Base  Compensation  Rate (at the rate  then in effect at the time of
such termination) for the remainder of the Term.  Payments under clauses (i) and
(ii) shall be paid to  Executive  by the Company  within ten (10) days after the
date of the termination of Executive's employment.  Payments under clauses (iii)
and (iv) shall be paid to Executive by the Company  pursuant to the terms of the
applicable  agreements  or plans.  Payments  under  clause  (v) shall be paid to
Executive by the Company  within thirty (30) days after the date of  termination
of  Executive's  employment.  Each payment made in accordance  with this Section
6(a) shall be treated as a separate  payment for purposes of Section 409A of the
Code,  to the  extent  Section  409A of the Code  applies to such  payments.  In
addition,  in the event (i) the Company  terminates the  Executive's  employment
under this agreement  other than For Cause or (ii) the Executive  terminates his
employment  under this  Agreement for Good Reason within one year of a Change of
Control,  all of the Stock Options  Executive  shall vest as of the date of such
termination.

        (b)  Termination by Executive  without Good Reason or Termination by the
Company for Cause. In the event that Executive terminates his employment without
Good  Reason  or  the  Company  terminates   Executive  for  Cause,  all  future
compensation  and benefits to which  Executive is otherwise  entitled under this
Agreement  shall  cease  and  terminate  as of the date of  termination  and the
Company shall have no further  liability or  obligation to Executive  under this
Agreement or in connection  with his  employment  hereunder,  except for (i) any
unpaid  Base  Compensation  accrued  through the date of  termination,  (ii) any
unreimbursed  expenses properly  incurred prior to the date of termination,  and
(iii) any  amounts  or rights to which  Executive  is  entitled  under any other
written agreements with the Company or written Company policy or pursuant to any
Company benefit or welfare plans in effect on the date of termination.  Payments
under clauses (i) and (ii) shall be paid to Executive by the Company  within ten
(10) days after the date of termination of Executive's employment.  Payments and
benefits  under  clause  (iii)  shall  be  paid  to  Executive  pursuant  to the
provisions of the applicable agreements or plans.

<PAGE>

        (c) Benefits  after  Termination.  Upon any  termination  of Executive's
employment,  Executive  (and  his  eligible  dependents)  shall be  entitled  to
continuation  of all group medical,  dental and other health  benefits that were
being provided to Executive (and his eligible  dependents)  immediately prior to
his termination of employment in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), and the terms of the Company's
benefit plans,  as such may be amended from time to time. In the event Executive
elects COBRA continuation  coverage for Executive and/or his eligible dependents
and Executive's  terminated his employment under Section I) above or the Company
terminated  his  employment  under  SectiI4(c)  above,  the Company will pay the
entire  cost of the COBRA  premiums  for such  continuation  coverage  until the
earlier of (i) the date twelve  (12) months  after  Executive's  termination  of
employment  or (ii) the date that  Executive or any  qualified  beneficiary  (as
defined in COBRA) ceases to be eligible for COBRA continuation  coverage under a
Company  plan for any  reason  other  than  failure  to pay  premiums;  provided
however, if coverage of Executive (and his eligible dependents) is not permitted
by such plans for any portion of such twelve (12) month period,  then,  for such
period when coverage is not permitted, the Company agrees to reimburse Executive
for the premium costs for individual  medical and dental insurance  coverage for
Executive (and his eligible  dependents)  pursuant to a policy providing similar
benefits as Executive (and his eligible  dependents)  were  receiving  under the
Company's   plans  on  the  date  such   coverage   was  no  longer   permitted.
Notwithstanding  the foregoing,  the Company reserves the right to amend, modify
or terminate its benefit plans at any time in a manner that affects employees of
the Company generally.  To the extent any such benefits are otherwise taxable to
Executive, such benefits shall, for purposes of Section 409A of the Code and the
regulations  and other  guidance  issued  thereunder,  be  provided  as separate
monthly in-kind payments of those benefits, and to the extent those benefits are
subject  to and not  otherwise  excepted  from  Section  409A of the  Code,  the
provision  of in-kind  benefits  during one  calendar  year shall not affect the
in-kind benefits to be provided in any other calendar year;

        (d) Resignation from Board and Officership. Upon the termination of this
Agreement or Executive's  employment for any reason,  if Executive serves on the
Board of the Company or any affiliate of the Company,  or holds a position as an
officer or committee  member of the Company or an officer or committee member of
any affiliate of the Company,  at the time of such termination,  Executive shall
promptly  resign from all such  positions by delivery of written  notice to such
effect, and if he does not provide such written notice,  shall be deemed to have
resigned from all such positions at the time of such termination.

        (e)  Section  409A of the  Code  Compliance.  The  parties  intend  this
Agreement,  and any payments made pursuant to this Article 6, to comply with the
requirements  of Section 409A of the Code,  and shall  interpret  this Agreement
consistently with such intent. To the extent (i) any payments to which Executive
becomes  entitled  under this  Agreement,  or any  agreement or plan  referenced
herein,  in connection  with  Executive's  termination  of  employment  with the
Company constitutes  deferred  compensation subject to Section 409A of the Code,
and (ii) executive is deemed at the time of such termination of employment to be
a "specified  employee"  under  Section  409A of the Code,  then such payment or
payments  shall not be made or commence  until the earlier of (x) the expiration
of the six (6) month period  measured from the date of  Executive's  "separation
from service" (as such term is defined in the Treasury Regulations issued under

<PAGE>

Section  409A of the Code)  with the  Company;  and (y) the date of  Executive's
death following such  separation from service.  Any such delayed amounts will be
paid to Executive in a single lump sum, with  interest  from the date  otherwise
payable at the prime rate as published in The Wall Street Journal on the date of
Executive's termination of employment with the Company.

       (f) Change of Control.  For purposes of this Agreement,  the term "Change
of Control"  shall have the same  meaning as in the Stock Plan.  Notwithstanding
the foregoing provisions of a "Change in Control," in the event any compensation
or  benefit  provided  to the  Executive  as a result of a Change in  Control is
subject to Section  409A of the Internal  Revenue Code of 1986,  as amended (the
"Code"),  then, in lieu of the foregoing  definition and to the extent necessary
to comply with the  requirements  of Section 409A of the Code, the definition of
"Change in Control" for purposes of such Award shall be the definition  provided
by Section 409A of the Code.

6.  Corporate  Opportunities.  Except as otherwise  provided in this  Agreement,
during the Term,  if any business  opportunities  related to the business of the
Company are rejected by the Board after proper presentation thereof by Executive
to the Board,  Executive  shall be free to pursue such  opportunity  for his own
account  or to  present  such  opportunity  to  third  parties,  so long as such
opportunity  is on terms and  conditions no more  favorable to him or such third
parties as he  presents  it to than  those  originally  presented  to the Board.
Except as  otherwise  provided  in this  Agreement,  if,  during  the Term,  any
business  opportunities related to the business of the Company are not initially
presented to the Board,  Executive shall not pursue such opportunity for his own
account or present such opportunity to third parties.

7.       Nondisclosure and Non-Interference.
         ----------------------------------

         (a) Confidential Information" means any information,  knowledge or data
of any  nature and in any form  (including  information  that is  electronically
transmitted  or stored on any form of  magnetic  or  electronic  storage  media)
relating  to the past,  current or  prospective  business or  operations  of the
Company  and its  subsidiaries,  that  at the  time or  times  concerned  is not
generally known to persons  engaged in businesses  similar to those conducted or
contemplated by the Company and its subsidiaries  (other than information  known
by such persons through a violation of an obligation of  confidentiality  to the
Company),  whether  produced by the Company and its subsidiaries or any of their
consultants,  agents or independent contractors or by Executive,  and whether or
not marked confidential,  including, without limitation, information relating to
the  Company's or its  subsidiaries'  products  and  services,  business  plans,
business  acquisitions,  processes,  product or service research and development
methods  or  techniques,  training  methods  and other  operational  methods  or
techniques,  quality assurance  procedures or standards,  operating  procedures,
files, plans, specifications, proposals, drawings, charts, graphs, support data,
trade secrets,  supplier  lists,  supplier  information,  purchasing  methods or
practices, distribution and selling activities,  consultants' reports, marketing
and engineering or other technical studies,  maintenance records,  employment or
personnel data,  marketing data,  strategies or techniques,  financial  reports,
budgets,  projections,  cost analyses, price lists and analyses, employee lists,
customer  lists,  customer  source lists,  proprietary  computer  software,  and
internal notes and memoranda relating to any of the foregoing.

<PAGE>

          (b) Nondisclosure of Confidential Information. Executive shall hold in
a fiduciary capacity for the benefit of the Company all Confidential Information
which shall have been obtained by Executive during Executive's employment by the
Company and shall use such Confidential  Information  solely within the scope of
his employment with and for the exclusive benefit of the Company.  At the end of
the employment term,  Executive  agrees (i) not to communicate,  divulge or make
available to any person or entity (other than the Company) any such Confidential
Information,  except upon the prior written  authorization  of the Company or as
may be required  by law or legal  process,  and (ii) to deliver  promptly to the
Company any Confidential Information in his possession, including any duplicates
thereof and any notes or other  records  Executive  has  prepared  with  respect
thereto.  In the event that the provisions of any applicable law or the order of
any court would require  Executive to disclose or otherwise  make  available any
Confidential  Information  then  Executive  shall give the Company  prompt prior
written  notice of such required  disclosure  and an  opportunity to contest the
requirement of such  disclosure or apply for a protective  order with respect to
such Confidential Information by appropriate proceedings.

         (c) Non-Interference. Executive shall not solicit, induce, influence or
attempt to influence any supplier, lessor, licensor, or any other person who has
a business relationship with the Company or its subsidiaries, or who on the date
of termination of Executive's  employment hereunder is engaged in discussions or
negotiations  to enter  into a  business  relationship  with the  Company or its
subsidiaries,  to discontinue or reduce the extent of such relationship with the
Company or its  subsidiaries.  Executive  shall not make contact with any of the
employees of the Company or its subsidiaries with whom he had contact during the
course of his  employment  with the Company for the purpose of  soliciting  such
employee  for  hire,  whether  as an  employee  or  independent  contractor,  or
otherwise  disrupting  such  employee's  relationship  with the  Company  or its
subsidiaries.  Executive further agrees that during the Term and for a period of
one year thereafter,  Executive shall not hire any employee of the Company as an
employee or independent contractor,  whether or not such engagement is solicited
by Executive.

8.       Protection of Information.
         -------------------------

          (a) The Company shall disclose to Executive,  or place  Executive in a
position to have access to or develop, trade secrets or confidential information
of the Company;  and/or shall entrust  Executive with business  opportunities of
the Company; and/or shall place Executive in a position to develop business good
will on behalf of the Company.

          (b) Executive  further agrees that during the Term and for a period of
one year  thereafter,  Executive shall not disclose or utilize,  for Executive's
personal  benefit or for the direct or indirect  benefit of any other  person or
entity, or for any other reason, whether for consideration or otherwise,  during
the  Term  or  at  any  time  thereafter,  any  information,   ideas,  concepts,
improvements,  discoveries which are conceived,  made, developed, or acquired by
Executive,  individually  or in  conjunction  with  others,  during  Executive's
employment  by the Company  (whether  during  business  hours or  otherwise  and
whether on the Company's  premises or  otherwise)  which relate to the business,
products, or services of the Company (including, without

<PAGE>

limitation, all such business ideas, prospects, proposals or other opportunities
which are developed by Executive during his employment hereunder,  or originated
by any third  party  and  brought  to the  attention  of  Executive  during  his
employment  hereunder,  together with information  relating thereto  (including,
without limitation,  data, memoranda,  opinions or other written,  electronic or
charted means,  or any other trade secrets or other  confidential or proprietary
information   of  or   concerning   the   Company))   (collectively,   "Business
Information"),  except  those  subject to Section 6.  Moreover,  all  documents,
drawings,  notes,  files,  data,  records,   correspondence,   manuals,  models,
specifications,  computer programs,  E-mail, voice mail,  electronic  databases,
maps,  and all  other  writings  or  materials  of any type  embodying  any such
Business Information created during Executive's  employment are and shall be the
sole and exclusive  property of the Company.  Upon  termination  of  Executive's
employment by the Company, for any reason,  Executive promptly shall deliver all
Business  Information,  and all copies thereof,  to the Company.  As a result of
knowledge  of  confidential  Business  Information  of  third  parties,  such as
customers,  suppliers,  partners,  joint ventures, and the like, of the Company,
Executive also agrees to preserve and protect the  confidentiality of such third
party  Business  Information to the same extent,  and on the same basis,  as the
Company's Business Information.

         (c) Upon termination of this Agreement for any reason,  Executive shall
promptly  return to the Company all of the property of the  Company,  including,
without limitation,  automobiles,  equipment,  computers, fax machines, portable
telephones, printers, software, credit cards, manuals, customer lists, financial
data, letters, notes, notebooks,  reports and copies of any of the above and any
Confidential  Information and Business  Information that is in the possession or
under the control of  Executive,  regardless  of the form in which it is held or
maintained.

9. Injunctive Relief.  Executive  acknowledges that a breach by Executive of any
provision of Section 7 and Section 8 would cause immediate and irreparable  harm
to the  Company  for which an adequate  monetary  remedy does not exist;  hence,
Executive  agrees  that,  in the  event  of a breach  or  threatened  breach  by
Executive  of the  provisions  of  Section  7 and  Section 8 during or after the
employment term, the Company shall be entitled to injunctive relief  restraining
Executive from  violation of any such Section  without the necessity of proof of
actual  damage,  except as required by  non-waivable,  applicable  law.  Nothing
herein  shall be construed as  prohibiting  the Company from  pursuing any other
remedy at law or in equity to which the Company may be entitled under applicable
law in the event of a breach or threatened breach of this Agreement by Executive
including, but not limited to, enforcing any obligations of Executive to Company
under any option, restricted stock or other agreement with the Company, recovery
of costs and expenses such as reasonable  attorney's  fees incurred by reason of
any such breach and actual  damages  sustained by the Company as a result of any
such breach.

10.  Severability.  Should a court determine that any paragraph or sentence,  or
any  portion  of  a  paragraph  or  sentence  of  this  Agreement,  is  invalid,
unenforceable,  or  void,  this  determination  shall  not have  the  effect  of
invalidating or validating the remainder of the paragraph, sentence or any other
provision  of this  Agreement.  If the final  judgment  of a court of  competent
jurisdiction   declares  that  any  term  or  provision  hereof  is  invalid  or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision

<PAGE>

with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,  and
this Agreement shall be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior  sentence,  the parties hereto
agree to replace such invalid or  unenforceable  term or provision  with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.

11. Successors. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their  respective  heirs and successors,  and the Company
agrees  that in the event of a Change in  Control,  the  Company  shall take all
actions  necessary so that the surviving entity in the Change in Control assumes
this  Agreements,  and the  obligations  and  duties of the  Company  under this
Agreement. Except pursuant to the immediately preceding sentence, the rights and
obligations of the Company  pursuant to this  Agreement may not be assigned,  in
whole or in part,  by the  Company  to any other  person or entity  without  the
express  written  consent of Executive.  This Agreement is personal to Executive
and may not be assigned or delegated by him, and any such  purported  assignment
or delegation shall be null and void.

12.  No  Waiver.  The  failure  of  either  party to  insist  in any one or more
instances upon  performance  of any terms or conditions of this Agreement  shall
not be construed as a waiver of future performance of any such term, covenant or
condition  but the  obligations  of either  party  with  respect  thereto  shall
continue in full force and effect.

13.  Notices.  Any notice given  hereunder  shall be in writing and be delivered
either by  personal  delivery,  by  telecopy  or  similar  facsimile  means,  by
certified or registered mail (postage prepaid and return receipt requested),  or
by express courier or delivery service, addressed to the applicable party hereto
as the following address:

         (a)      To the Company:           Sun River Energy, Inc.
                                            Attn: Vince D'Antonio
                                            305 South Andrews Avenue
                                            Suite 204
                                            Fort Lauderdale, FL 33301
                                            Telecopy No.:     (954) 463-4554

                  With copies to:           *

         (b)      To Executive:             Donal R. Schmidt, Jr.
                                            5950 Berkshire Lane, Suite 1650
                                            Dallas, TX 75225
                                            Telecopy No.: 214-739-9192

<PAGE>

                  With copies to:           Haynes and Boone, LLP
                                            2323 Victory Avenue, Suite 700
                                            Dallas, Texas 75219-7673
                                            Attn: W. Bruce Newsome
                                            Telecopy No.: 214-200-0636

Or such  other  address  and  number  as  either  party  shall  have  previously
designated by written  notice to the other party in the manner  hereinafter  set
forth.  Notices  shall be deemed  given when  received,  if sent by  telecopy or
similar  facsimile means and received at or prior to 5:00 p.m. central time on a
business day in Dallas,  TX or the next  business day in Dallas,  TX if received
after 5:00 p.m.  central time on a business day in Dallas,  TX or if received on
any other day (confirmation of such receipt by confirmed facsimile  transmission
being  deemed  receipt of  communications  sent by telecopy  or other  facsimile
means); and when delivered and receipted for if hand-delivered,  sent by express
courier or delivery service, or sent by certified or registered mail.

14.  Entire  Agreement.  There are no oral  representations,  understandings  or
agreements with the Company or any of its officers, directors or representatives
covering the same subject  matter as this  Agreement  except as set forth in the
PSA,  the Stock  Plan,  Rights of First  Refusal  (as  attached  hereto)  or the
agreement  herein to  register  the  Common  Stock or any share  under the Stock
Options.  This Agreement  supersedes all previous employment  agreements between
Executive and the Company and, along with the PSA, the Stock Plan, and Rights of
First  Refusal (as  attached  hereto) and the  agreement  herein to register the
Common Stock or any share under the Stock Options  contains the final,  complete
and exclusive  understanding  and agreement  between the parties with respect to
the subject matter hereof and cannot be amended, modified or supplemented in any
respect  except by subsequent  written  agreement  entered into by both parties;
provided,  however,  that in the  event  the  Company  determines,  in its  sole
discretion,  that an  amendment,  modification  or  supplement  is necessary for
purposes of compliance  with or exemption from the  requirements of Section 409A
of Code (or any regulations or other guidance issued  thereunder),  and to avoid
the  imposition  of  additional  tax  on  Executive,  Executive  agrees  not  to
unreasonably withhold his consent to such amendment,  modification or supplement
or to unreasonably  condition his consent on the renegotiation by the Company of
any other provision of this Agreement. Nothing in this Agreement shall supersede
the terms of the PSA,  the Stock  Plan,  Rights of First  Refusal  (as  attached
hereto) or the agreement  herein to register the Common Stock or any share under
the Stock Options.

15.  Counterparts.  This Agreement may be executed in one or more  counterparts,
each of which will be deemed to be an original copy of this  Agreement,  and all
of which,  when taken  together,  shall be deemed to constitute one and the same
Agreement.  The exchange of copies of this  Agreement and of signature  pages by
facsimile transmission shall constitute effective execution and delivery of this
Agreement  as to the parties and may be used in lieu of the  original  Agreement
for all purposes.  Signatures of the parties  transmitted by facsimile  shall be
deemed to be their original signatures for any purpose whatsoever.

16.      Captions.  The captions  herein are for the convenience of reference of
the parties and are not to be construed as part of the terms of this Agreement.

<PAGE>

17.  Applicable Law This Agreement  shall be governed by and construed under the
internal laws of the State of Texas without  regard to principles of conflict of
laws. Venue of any litigation arising from this Agreement shall be in the United
States District Court for the Northern  District of Texas,  Dallas Division or a
state district court of competent  jurisdiction  in Dallas  County,  Texas.  The
Company and  Executive  consent to personal  jurisdiction  of the United  States
District Court for the Northern  District of Texas,  Dallas  Division or a state
district court of competent jurisdiction in Dallas County, Texas for any dispute
relating  to or arising  out of this  Agreement,  agree  that the United  States
District Court for the Northern  District of Texas,  Dallas  Division or a state
district court of competent jurisdiction in Dallas County, Texas shall be deemed
to be a convenient forum and agree not to assert (by way or motion, as a defense
or otherwise) that such  litigation has been brought in an  inconvenient  forum,
that the venue of such  litigation  is  improper or that this  Agreement  or the
subject matter of this Agreement may not been enforced in or by such court.

18.  Insurance and  Indemnification.  During the Term, the Company shall use its
commercially  reasonable  efforts to maintain  one or more  Director and Officer
("D&O")  insurance  policies,  or riders  thereto,  that provide  separate  (not
jointly covering other officers and directors of the Company) insurance coverage
to Executive, with a policy period from the beginning of the Term and continuing
until the date that is six years after the date Executive's  employment with the
Company  terminates,  insuring  Executive  for  claims  up to  $10,000,000  (the
"Individual Policy"), or provide similar financial arrangements with the consent
of  Executive,  which  consent shall not be  unreasonably  withheld,  delayed or
conditioned.  The  Executive's  indemnification  rights  under the  articles  of
incorporation  and bylaws of the  Company  may not be reduced in any manner from
those rights in effect on the Effective Date.

19.      Certain  Further  Payments by Executive.  To the extent not  prohibited
by IRS rules and  regulations as amended:

        (a) Tax Reimbursement  Payment.  In the event that any amount or benefit
paid or distributed  to Executive  pursuant to this  Agreement,  the Plan or the
Option Agreement,  taken together with any amounts or benefits otherwise paid or
distributed  to  Executive  by the Company or any  affiliated  company  that are
treated as parachute  payments  under  Section 280G of the Code (such  payments,
collectively,  the "Covered  Payments"),  are or become  subject to the tax (the
"Excise Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed,  the Company shall pay to Executive an  additional  amount
(the  "Tax  Reimbursement  Payment"),  such  that  the net  amount  retained  by
Executive with respect to such Covered  Payments,  after deduction of any Excise
Tax on the Covered  Payments  and any  Federal,  state and local  income tax and
Excise Tax on the Tax Reimbursement Payment provided for by this Section 19, but
before  deduction  for any  Federal,  state or local  income or  employment  tax
withholding  on such Covered  Payments,  shall be equal to one-half (1/2) of the
amount of the Covered  Payments.  The time for payment of the Tax  Reimbursement
Payment is set forth in Section 19(e).

<PAGE>

     (b) Assumptions for Calculation. For purposes of determining whether any of
the  Covered  Payments  will be subject to the Excise Tax and the amount of such
Excise Tax,

(i) such Covered  Payments  will be treated as "parachute  payments"  within the
meaning of Section 280G of the Code, and all  "parachute  payments" in excess of
the "base  amount" (as defined  under  Section  280G(b)(3) of the Code) shall be
treated as subject to the Excise Tax, unless,  and except to the extent that, in
the good faith judgment of a public  accounting firm appointed by the Company or
tax counsel  selected by such accounting firm (the  "Accountants"),  the Company
has a reasonable  basis to conclude  that such Covered  Payments (in whole or in
part) either do not  constitute  "parachute  payments"  or represent  reasonable
compensation  for personal  services  actually  rendered  (within the meaning of
Section  280G(b)(4)(B)  of the Code) in excess  of the  "base  amount,"  or such
"parachute payments" are otherwise not subject to such Excise Tax; and

(ii) The value of any non-cash benefits or any deferred payment or benefit shall
be determined by the  Accountants  in accordance  with the principles of Section
280G of the Code.

       (c) Assumed Tax Rates.  For purposes of determining the amount of the Tax
Reimbursement Payment, Executive shall be deemed to pay all taxes at the highest
applicable  marginal rate of taxation  with respect to Federal,  state and local
income taxes for the calendar year in which the Tax Reimbursement  Payment is to
be made (without regard to applicable deductions).

       (d)  Subsequent  Adjustment.   In  the  event  that  the  Excise  Tax  is
subsequently  determined  by the  Accountants  or pursuant to any  proceeding or
negotiations  with the Internal Revenue Service to be less than the amount taken
into account  hereunder  in  calculating  the Tax  Reimbursement  Payment  made,
Executive  shall  repay to the  Company,  at the time  that the  amount  of such
reduction in the Excise Tax is finally determined, the portion of such prior Tax
Reimbursement  Payment that would not have been paid if such Excise Tax had been
applied initially  calculating such Tax Reimbursement  Payment, plus interest on
the amount of such  repayment at the rate provided in Section  1274(b)(2)(B)  of
the Code.  Notwithstanding  the  foregoing,  in the event any portion of the Tax
Reimbursement  Payment  to be  refunded  to the  Company  has  been  paid to any
Federal,  state or local tax authority,  repayment thereof shall not be required
until actual  refund or credit of such portion has been made to  Executive,  and
interest  payable to the Company shall not exceed interest  received or credited
to  Executive  by such  tax  authority  for the  period  it held  such  portion.
Executive  and  Company  shall  mutually  agree  upon the course of action to be
pursued (and the method of allocating the expenses  thereof) if Executive's good
faith claim for refund or credit is denied (in whole or in part);  provided that
Executive shall remain  responsible to repay the Company for any such unrefunded
Tax Reimbursement  Payments to the extent Executive  ultimately prevails in such
claim.

<PAGE>

      In the event that the Excise Tax is later determined by the Accountants or
pursuant to any proceeding or negotiations  with the Internal Revenue Service to
exceed the amount taken into account hereunder at the time the Tax Reimbursement
Payment is made  (including,  but not  limited  to, by reason of any payment the
existence  or  amount  of  which  cannot  be  determined  at the time of the Tax
Reimbursement  Payment),  the Company shall make an additional Tax Reimbursement
Payment in respect of such excess  (plus any  interest or penalty  payable  with
respect to such  excess)  at the time that the amount of such  excess is finally
determined.

      (e) Timing of Payments. The Tax Reimbursement Payment (or portion thereof)
provided for in Section 19(a) above shall be paid to Executive on the day of the
payment of the Covered Payments;  provided,  however, that if the amount of such
Tax Reimbursement  Payment (or portion thereof) cannot be finally  determined on
or before the date on which  payment is due, the Company  shall pay to Executive
by such date an amount  estimated  in good  faith by the  Accountants  to be the
minimum amount of such Tax Reimbursement  Payment and shall pay the remainder of
such Tax  Reimbursement  Payment (together with interest at the rate provided in
Section  1274(b)(2)(B)  of the  Code)  as  soon  as the  amount  thereof  can be
determined, but in no event later than forty-five (45) days after payment of the
related  Covered  Payment.  In the event  that the amount of the  estimated  Tax
Reimbursement  Payment exceeds the amount  subsequently  determined to have been
due, subject to the provisions of Section 19(d), such excess shall be payable by
Executive to the Company on the fifth  business day after written  demand by the
Company  for payment  (together  with  interest at the rate  provided in Section
1274(b)(2)(B) of the Code).  Notwithstanding  anything to the contrary contained
herein,  in no event shall any payments be made  pursuant to this Section  19(e)
after the end of  Executive's  taxable year next following  Executive's  taxable
year in  which  Executive  remits  any  related  taxes to the  Internal  Revenue
Service.

20. No Mitigation. Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
and the  amount  of any  payment  provided  for in this  Agreement  shall not be
reduced by any  compensation  earned by Executive as the result of employment by
another employer after the date of termination of Executive's employment.

21.      Attorney Fees and Other Costs.

The  Parties  agree that all  reimbursements  of  attorney  fees and other costs
pursuant to this  Section 18 shall be done in a manner that either  exempts such
payments  from  Section  409A of the Code,  or, in the  event  exemption  is not
available, complies with Section 409A of the Code.

22. Survival. Except as expressly provided herein, the termination of employment
of Executive and the  termination  of the Term shall cause a termination of this
Agreement.

23.  Agreement  Drafted  Equally by the Parties.  This Agreement shall be deemed
drafted equally by both the parties.  Its language shall be construed as a whole
and  according  to its fair  meaning.  Any  presumption  or  principle  that the
language is to be construed against any party shall not apply.

<PAGE>

24.  Withholding.  All  amounts  paid under this  Agreement  (including  without
limitation Base Salary or severance pay) shall be paid less all applicable state
and  federal  tax  withholdings  and  any  other  withholdings  required  by any
applicable jurisdiction.

25.  References.  References in this  Agreement,  to the Plan, PSA or the Option
Agreement shall also include any amendments to such plan or agreements.

                                                 * * * * * *

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

                                     Sun River Energy, Inc.
                                     a Colorado corporation

                                     By:          ___________________________
                                     Name:        ___________________________
                                     Title:       ___________________________
                                     Date:        ___________________________

                         -----------------------------------------------------
                                    Donal R. Schmidt, Jr.
                                    Date:        ____________________________

<PAGE>

                                    EXHIBIT A

                                 FORM OF PURCHASE AND SALE AGREEMENT ("PSA")

<PAGE>

                                    EXHIBIT B

           TERMS OF RIGHT OF FIRST REFUSAL ("RIGHTS OF FIRST REFUSAL")
           -----------------------------------------------------------

     1. First  Refusal on Sale of Shares.  If the  Executive or a transferee  or
assignee of Executive (the "Selling  Shareholder")  proposes to sell all or part
of his shares of common stock, the following provisions shall apply:

                  (a) Notice:  The Selling  Shareholder shall first give written
         notice  (the  "Option  Notice")  to the  Company,  which  notice  shall
         identify the  prospective  purchaser  and shall set forth in reasonable
         detail the terms and conditions  upon which such sale is proposed to be
         made, and shall be accompanied by copies of the bona fide offer and any
         other information furnished to or by the prospective purchaser(s). Such
         notice shall  automatically  grant to the Company an option to purchase
         that  portion of the Shares of the Selling  Shareholder  proposed to be
         assigned or sold upon the same terms and conditions as contained in the
         bona fide offer.

                  (b) Shares Covered by Option: The option granted herein to the
         Company  must be  exercised  by the  Company as to the entire  interest
         being offered (the "Offered  Shares"),  unless the Selling  Shareholder
         consents to a sale or transfer of less than the entire interest.

                  (c) Exercise of Option:  The Company,  at its sole discretion,
         may,  within  thirty (30) days after  receipt of the Option Notice (the
         "Option Period"),  give written notice to the Selling  Shareholder (the
         "Acceptance Notice"), signed by the Company, that the Company elects to
         exercise such option,  evidencing its agreement to purchase the Offered
         Shares.

                  (d) Closing of Sale: Closing on the sale of the Offered Shares
         to the Company shall take place at the  principal  place of business of
         the Company ten (10) days after the  expiration of the Option Period or
         at such other  place and time as agreed to by the  Selling  Shareholder
         and the Company.

                  (e) Failure to Exercise Option: If the option is not exercised
         within  the  Option  Period  as to  the  Offered  Shares,  the  Selling
         Shareholder  may sell or transfer the Offered Shares within thirty (30)
         days thereafter to the prospective purchaser named in the Option Notice
         at a price and on terms no more  favorable than described in the Option
         Notice.

                  (f) Subsequent  Transfers:  The Selling  Shareholder shall not
         otherwise  sell or transfer the Offered  Shares to any person after the
         termination of said sixty (60) day period without again  complying with
         this Section.

                  (g) No Pledges:  The Executive and each transferee or assignee
         of the Executive  further  agrees and  covenants  not to pledge,  lend,
         hypothecate or otherwise grant any interest in the shares of the common
         stock,  without the prior written  consent of the Company,  in its sole
         discretion.  The  Company  shall be  entitled  to redeem  the shares of
         common stock at the purchase  price  thereof in the event of any breach
         of this section.

<PAGE>

                                    EXHIBIT C

  [Assuming this is not a Section 162(m) Plan under the Internal Revenue Code]

         DESCRIPTION OF BONUS PLAN FOR 2011, 2012, AND 2013 FISCAL YEARS

For the Company's  fiscal years ending April 30, 2011, April 30, 2012, and April
30, 2013, Executive shall be entitled to receive a bonus upon the achievement of
an  increase in  Billions  of Cubic Feet  Equivalent  ("BCFE") of the Company as
compared to the prior fiscal year as described  below, as approved by the Board,
subject to the terms set forth herein. The BCFE increase,  if any, incurred from
fiscal year to fiscal  year shall be  calculated  based upon the proved  reserve
valuations  reported by Company at the end of each fiscal year  purusuant to the
Company's reporting requirements as a publically-traded company under the United
States  Securities  Laws,  as  currently   administered  by  the  Unites  States
Securities & Exchange Comission; provided, however, that such reserve valuations
shall not  include any  reserves  attributable  to reserves  acquired by Company
pursuant to the PSA.  Any bonus  payable for any fiscal year shall be  pro-rated
based upon the number of days, if less than 365,  that  Executive is employed by
the Company  during such fiscal  year if the  Executive  is not  employed by the
Company  at the end of the  fiscal  year.  Any bonus  payable  pursuant  to this
Exhibit C shall be paid no later  than 2 1/2 months  following  the close of the
fiscal year to which such bonus relates.  Except as otherwise  provided  herein,
Executive  must be  employed  on the last day of the  applicable  fiscal year in
order to be eligible to receive a bonus with respect to such fiscal year.

For each increase in BCFE of the Company from one fiscal year as compared to the
prior fiscal year, the Executive shall received  $62,500 with the maximum annual
payment being $2,500,000.

By way of example,  if Executive  begins  employment  with the Company on May 1,
2010 and for the April 30, 2011 fiscal  year,  the Company  achieves a 15.5 BCFE
net increase over the April 30, 2010 fiscal year end BCFE,  then Executive would
be entitled to the following bonus for the fiscal year end April 30, 2011:

                            15.5 x $62,500 = $968,750

If instead for the April 30, 2011 fiscal  year,  the Company  achieves a 40 BCFE
increase over the April 30, 2010 fiscal year end BCFE,  then Executive  would be
entitled to the following bonus for the fiscal year end April 30, 2011:

                            40 x $62,500 = $2,500,000

If, instead for the April 30, 2011 fiscal year,  the Company  achieves a 55 BCFE
increase over the April 30, 2010 fiscal year end BCFE,  then Executive  would be
entitled to the following bonus for the fiscal year end April 30, 2011:

          55 x $62,500 = $3,437,500 which is the maximum of $2,500,000
            so the Executive would receive the maximum of $2,500,000

<PAGE>

In the  event  Executive  is  terminated  without  Cause  or he  terminates  his
employment  for Good Reason in  accordance  with Section 4(c) of the  Employment
Agreement,  then Executive  shall be entitled to a pro-rata bonus for the fiscal
year of termination,  subject to the Company's achievement of the BCFE goals for
such year, and payable at the time such bonus would have been paid had executive
remained  employed.  For fiscal year ended April 30,  2011,  for the purposes of
calculating this bonus,  Executive will be deemed to have started work on May 1,
2010 even if the actual start date is later than that date. If there is not BCFE
increase  with  respect  to such  fiscal  year,  no bonus  shall be  payable  to
Executive. By way of example, if Executive commences employment with the Company
on June 1, 2010, his employment  will be deemed to have commenced on May 1, 2010
and if Executive  terminates  his employment for Good Reason on January 1, 2011,
and the Company  achieves a 20 BCFE  increase for the April 30, 2011 fiscal year
as compared to the April 30, 2010 fiscal year end BCFE,  then Executive shall be
entitled to the following bonus:

       20 x $62,500 x [245 days of actual employment/365 days] = $839,041THIMOTHY S. WAFFORD
                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT  AGREEMENT (this "Agreement"),  dated as of ________,  2010
(the "Effective Date"), is made and entered into between Sun River Energy,  Inc.
(the "Company") and Thimothy S. Wafford ("Executive").

                                    RECITALS

         WHEREAS,  the Company desires to employ Executive and Executive desires
to serve in the employ of the Company pursuant to the terms of the Agreement;

         WHEREAS,  this Agreement is being entered into  contemporaneously  with
the closing of the  transaction  contemplated by the Purchase and Sale Agreement
(the  "PSA")  between  FTP Oil and Gas LP ("FTP")  as seller and the  Company as
buyer attached  hereto as Exhibit A, pursuant to which certain or all of the oil
and gas  interests of FTP,  which is  wholly-owned  by Executive and Thimothy S.
Wafford,  have been acquired by the Company and this Agreement shall only become
effective upon the closing of the purchase and sales transaction contemplated by
the PSA;

         WHEREAS,  the Company and  Executive  desire to set forth in writing in
this  Agreement the terms and conditions of their  agreement and  understandings
with respect to the employment of Executive.

                                    AGREEMENT

         NOW, THEREFORE,  in consideration of the mutual promises and agreements
herein  contained  and other good and  valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.   Employment.

       Position and Duties of Executive.  During the Term  (hereafter  defined),
Executive  shall be employed  by the Company and shall serve as Chief  Operating
Officer ("COO") of the Company. During the Term, COO will report directly to the
CEO and shall perform the following duties and be expressly responsible for: (1)
development  and analysis of potential  acquisitions  and/or  divestitures;  (2)
implementation  and  oversight  of  exploration   and/or  development   drilling
activities including, but not limited to engineering and geological matters; (3)
production,  maintenance and operation of Company oil and gas assets  including,
but not limited to,  development and maintenance of reserves  information on all
oil and gas assets;  and (4) other such  duties as may be assigned  from time to
time by the CEO. To the extent necessary,  the Board of Directors of the Company
(the "Board")  shall take any  additional  actions  required to grant  Executive
day-to-day   decisional  authority  as  it  relates  to  drilling,   production,
maintenance and operation of its oil and gas assets.

<PAGE>

       Performance. During the Term, Executive shall faithfully,  diligently and
to the best of his ability perform such duties as are determined by the Board of
the Company from time to time (which duties shall be consistent  with his titles
and positions as set forth above) as limited by the Board,  its  committees  and
internal  controls and procedures and Sarbanes Oxley,  and shall devote his full
business time, energy and best efforts to fulfill his duties.  Executive may not
engage, directly or indirectly,  in any other business,  investment, or activity
that interferes with Executive's performance of Executive's duties hereunder, is
contrary to the interest of the Company or any of its subsidiaries,  or requires
any  significant  portion of  Executive's  business  time.  To the extent not in
conflict  with the  preceding  sentence,  Executive  shall be  permitted  to (i)
continue his current  investing and related business  activities with other than
with Competing Businesses  (hereafter  defined),  (ii) make investments in other
than Competing Businesses, (iii) engage in charitable,  nonprofit, civic, board,
consulting or community  activities for which Executive receives no compensation
or other pecuniary  advantage  unless  otherwise  approved by the Board and (iv)
engage in such other  activities that are approved in advance by the Board.  For
purposes of this Agreement, "Competing Business" means any individual, business,
firm, company, partnership, joint venture, organization, or other entity that is
primarily involved in the business of leasing, acquiring,  exploring, producing,
gathering,  transporting,  storing or  marketing  of  hydrocarbons  and  related
products  and  the  exploration   potential  of  geographical   areas  on  which
hydrocarbon  exploration  prospects are located or otherwise competes with or is
engaged in a similar  busineses  to that of the  Company  during the Term in the
Restricted  Area and subject to section 6. For purposes of this  Agreement,  the
"Restricted  Area" means  anywhere  within a 50 mile  radius of any  location in
which the Company has actual oil and gas  properties  during the Term the United
States.

       Place of  Work.  During  the  Term,  Executive  shall  primarily  perform
services under this Agreement at the Company's  headquarters,  which shall be in
Dallas County, Texas. However,  Executive understands that he may be required to
travel in connection with the performance of his duties.

2. Term.  Subject to earlier  termination  as  hereafter  provided,  Executive's
employment  hereunder  shall be for a term of three (3)  years,  subject  to and
commencing  on  the  Effective  Date  of  the  Purchase  and  Sale   Transaction
contemplated  by  the  PSA  (the  "Asset  Sale").  Following  the  initial  Term
Executive's  employment shall be for additional one (1) year terms unless either
party to this Agreement  notifies the other in writing at least ninety (90) days
prior to the end of the initial Term (hereafter defined) or at least ninety (90)
days prior the end of any one (1) year extension of Executive's employment.  The
"Term" as used in this Agreement  shall refer to the initial three (3) year term
and any one (1) year renewal terms as provided in this  paragraph.  If Executive
remains  employed by the Company  after the  expiration  of the Term,  Executive
shall  become an at-will  employee  and,  except for Sections 6, 7, 8 and 9, the
terms of this Agreement shall not apply to such employment.  Upon termination of
this Agreement Company shall pay to Executive only the wages earned by Executive
through  Executive's  last day of employment  under this  Agreement and any such
other  amounts as provided in Section 5.  Nonrenewal  of the Term as provided in
this paragraph will not affect the Company's or  Executive's  other  obligations
that expressly survive pursuant to the terms of this Agreement.

<PAGE>

3.       Compensation for Employment.

       (a) First Year  Compensation.  In consideration for all services rendered
by Executive under this Agreement during the first year of the Term, the Company
shall  not  pay  Executive  any  cash  compensation  but  shall  provide  annual
compensation in the form of stock options ("Base  Compensation") as follows: the
Company shall issue to Executive  Stock Options  ("Stock  Options")  exercisable
into one million  (1,000,000)  shares of Common Stock of the Company pursuant to
the terms of the 2010 Sun River Energy,  Inc.  Stock Option and Award  Incentive
Plan,  as amended  (the  "Stock  Plan").  The Stock  Options  shall be issued to
Executive on the  Effective  Date and shall be earned and vest 1/36th each month
thereafter  (each a "Vesting  Date") during the Term.  The exercise price of the
Stock  Options  shall  equal the  average  fair  market  value of a share of the
Company's  common stock on the Effective Date of the PSA is between the Parties.
Finally, the Company shall cause Common Stock obtained through the Stock Options
to be registered pursuant to the terms of the Stock Plan on Form S-8.

      (b)Subsequent  Year  Compensation.   In  consideration  for  all  services
rendered by Executive under this Agreement following the first year of the Term,
the Company  shall  begin to pay,  in year Two and Three of the Term,  Executive
cash  compensation in an amount  determined by the Board, in its sole discretion
("Cash  Compensation");  provided  that  such  amount  shall  not be  less  than
Three-Hundred Thousand Dollars ($300,000.00),  starting at year 2 (less required
withholdings)  without Executive's  written consent.  Cash Compensation shall be
earned and payable  periodically  in equal  installments  in accordance with the
Company's normal payroll practices beginning in year Two of the Term,  including
applicable  deductions and  withholdings.  Cash  Compensation will be subject to
annual review pursuant to the Company's normal review policy for other similarly
situated  executives of the Company and any changes in Cash Compensation will be
communicated  in  writing  to  Executive.  Following  the  first  year  of  this
Agreement, the term "Base Compensation" shall consist only of Cash Compensation,
including any annual adjustments pursuant to the terms of this Agreement.

      (c) Bonus Plan. Executive shall be eligible to receive an annual bonus for
each year ending during the Term in cash, as shall be determined by the Board in
its sole discretion ("Bonus"). The Bonus shall be payable either pursuant to the
terms of a bonus  plan  adopted by the  Board,  or in the form of equity  awards
granted in accordance with the terms of the Stock Plan, provided,  however, that
the Bonus payable with respect to the period beginning May 1, 2010 and ending on
April 30, 2013 shall be payable in accordance  with the terms and conditions set
forth in Exhibit C, attached hereto and incorporated herein. At the Board's sole
discretion, the cash bonus may be paid in an equivalent value of common stock as
of date of bonus. Any such payment,  is not subject to any repurchase  agreement
in place at the time of payment.

      (d)Reimbursement of Expenses.  The Company will advance,  pay or reimburse
Executive,  in  accordance  with the regular  policies of the  Company,  for all
reasonable and business  expenses  incurred by Executive in furtherance of or in
connection with performing his obligations  under this Agreement during the Term
and consistent with the Company's annual budget.

<PAGE>

      (e) Other Benefits.  Executive is entitled to participate  during the Term
in any group health insurance plan,  long-term disability insurance plan, equity
or cash  incentive  compensation  plan,  401(k) plan,  and any other  benefit or
welfare  program or policy that is made  available,  from time to time, to other
executives of the Company,  on a basis  consistent with such  participation  and
subject  to the terms of the plan  documents,  as such  plans  may be  modified,
amended, terminated, or replaced from time to time.

      (f) Fringe Benefits. During his employment pursuant to this Agreement, and
except as otherwise  provided in this Agreement,  Executive shall be entitled to
participate  on  substantially  the same  terms and  conditions  in the  Company
sponsored fringe benefits generally  provided to similarly  situated  personnel,
such as vacation and sick pay.

      (g)Withholding.  As a  condition  of the receipt of any payment or benefit
hereunder, the Company shall be entitled to withhold any federal, state or local
taxes, in the reasonable judgment of Company, required by law to be withheld.

4.       Termination.

          (a)  Termination by Executive.  Executive may terminate his employment
under this Agreement at any time for any of the following reasons;  however, the
events in Sections 4(a)(i)-(iv) are only referred to as "Good Reason"):

         (i) without  Executive's  prior  written  consent,  there is a material
reduction in Executive's authority,  duties or responsibilities with the Company
from that set forth in Section 1 except in the event of a merger;

     (ii) the Company fails in a material way to fulfill its  obligations  under
          Section 3;

     (iii)the  Company  does not  fulfill its  obligations  under  Section 11 in
          connection with a Change in Control; or

         (iv) other than due to  Executive's  death or voluntary  resignation by
Executive from the Board.

For  purposes  of the Good Reason  events  specified  in Sections  4(a)(i)-(iv),
Executive  shall only have Good Reason to  terminate  his  employment  if he has
provided to the Company a written notice  describing what Executive  believes is
Good Reason within ninety (90) days of such purported action (or failure to act)
of the  Company  and the  Company  has failed to cure such  circumstance  within
thirty (30) days of receipt of said notice from Executive. If Executive fails to
terminate his employment for Good Reason within sixty (60) days of the Company's
failure  to timely  cure such  circumstance,  then such  circumstance  shall not
constitute "Good Reason" for purposes of this Agreement.

<PAGE>

          (b)  Termination  by the Company.  The Company shall have the right to
terminate Executive's  employment under this Agreement at any time; however, the
following reasons (the events in Sections  5(b)(i)-(vii) only are referred to as
"Cause"):

         (i) the Executive's death;

                  (ii)  the  Executive's   Disability.   For  purposes  of  this
Agreement,  "Disability"  means a  physical  or  mental  infirmity  which in the
judgment of the Board impairs the Employee's  ability to  substantially  perform
his duties pursuant to this Agreement and which infirmity continues for a period
of at least 120 days in any 365 day period or for which  Employee  is  receiving
long-term disability benefits;

          (iii) the  substantial  and continued  willful failure by Executive to
perform his duties hereunder,  or a material breach or threatened breach of this
Agreement by Executive,  in either case which  results,  or could  reasonably be
expected  to result,  in material  harm to the  business  or  reputation  of the
Company,  which failure or breach is not corrected (if correctable) by Executive
within 30 days after  written  notice of such  failure or breach is delivered to
Executive by the Company;

         (iv) a serious breach of trust,  including,  but not limited to, theft,
embezzlement,  self-dealing,  prohibited  disclosure to unauthorized  persons or
entities  of  confidential  or  proprietary  information  of or  relating to the
Company  or the  engaging  by  Employee  in any  prohibited  business  which  is
competitive with the business of the Company and its subsidiaries, affiliates or
associated entities.  Termination under this subsection requires a uniamous vote
of Board with Executive  abstaining and to the extent Donal R. Schmidt, Jr. is a
director, his abstaining;

          (v)  a  violation  of  the  Company's  code  of  business  conduct  or
equivalent code of policy, or Board Policies or restrictions or directions which
violation is not corrected (if  correctable)  by Executive  within 30 days after
written notice of such violation is delivered to Executive by the Company;

          (vi)  the  commission  by  Executive  of any criminal  act  involving
moral  turpitude or a felony which results in  a conviction;

          (vii)  failure to maintain  current SEC  Reporting  as required by SEC
Rules and  Regulations  that is  directly  attributable  to the  actions  of the
Executive.

         (c) Notice of Termination. Any termination of Executive's employment by
the Company or by Executive,  other than  termination as a result of Executive's
death, shall be communicated by written notice of termination to the other party
hereto in accordance  with Section 13, which notice shall  indicate the specific
termination  provision in this  Agreement  relied upon,  the  effective  date of
termination  of Executive's  employment  and set forth in reasonable  detail the
facts  and  circumstances   claimed  to  provide  a  basis  for  termination  of
Executive's employment under the provision so indicated.  If Executive elects to
terminate his employment for Good Reason, Executive must first provide notice of
the existence of a Good Reason event, and the Company shall have the opportunity
to remedy such Good Reason event in accordance with Section 4(a).

<PAGE>

5.       Obligations Upon Termination.

         (a)  The  Company's   Obligations  to  Executive  Upon  Termination  by
Executive  for Good  Reason or Upon  Termination  by the  Company for Other Than
Cause. In the event Executive  terminates his employment with Good Reason or the
Company  terminates  Executive  for other than Cause,  the Company shall have no
further  liability  or  obligation  to  Executive  under  this  Agreement  or in
connection  with  his  employment  hereunder,  except  for (i) any  unpaid  Base
Compensation  accrued  through the date of  termination;  (ii) any  unreimbursed
expenses  properly  incurred prior to the date of termination,  (iii) any awards
previously  granted  pursuant  to the Stock Plan that have fully  vested and, if
applicable, exercisable, on the date of such termination of employment, (iv) any
amounts  or rights  to which  Executive  is  entitled  under  any other  written
agreements with the Company or written Company policy or pursuant to any Company
benefit or welfare plans in effect on the date of  termination,  and (v) in year
two,  one  lump-sum  payment  of  severance  pay equal to two (2) times the Base
Compensation  (at the rate then in effect at the time of such  termination)  and
(vi) beginning in year three and any  subsequent  year in which this contract is
in effect,  one  lump-sum  payment of  severance  pay equal to two (2) times the
annualized  Base  Compensation  Rate (at the rate  then in effect at the time of
such termination) for the remainder of the Term.  Payments under clauses (i) and
(ii) shall be paid to  Executive  by the Company  within ten (10) days after the
date of the termination of Executive's employment.  Payments under clauses (iii)
and (iv) shall be paid to Executive by the Company  pursuant to the terms of the
applicable  agreements  or plans.  Payments  under  clause  (v) shall be paid to
Executive by the Company  within thirty (30) days after the date of  termination
of  Executive's  employment.  Each payment made in accordance  with this Section
6(a) shall be treated as a separate  payment for purposes of Section 409A of the
Code,  to the  extent  Section  409A of the Code  applies to such  payments.  In
addition,  in the event (i) the Company  terminates the  Executive's  employment
under this agreement  other than For Cause or (ii) the Executive  terminates his
employment  under this  Agreement for Good Reason within one year of a Change of
Control,  all of the Stock Options  Executive  shall vest as of the date of such
termination.

        (b)  Termination by Executive  without Good Reason or Termination by the
Company for Cause. In the event that Executive terminates his employment without
Good  Reason  or  the  Company  terminates   Executive  for  Cause,  all  future
compensation  and benefits to which  Executive is otherwise  entitled under this
Agreement  shall  cease  and  terminate  as of the date of  termination  and the
Company shall have no further  liability or  obligation to Executive  under this
Agreement or in connection  with his  employment  hereunder,  except for (i) any
unpaid  Base  Compensation  accrued  through the date of  termination,  (ii) any
unreimbursed  expenses properly  incurred prior to the date of termination,  and
(iii) any  amounts  or rights to which  Executive  is  entitled  under any other
written agreements with the Company or written Company policy or pursuant to any
Company benefit or welfare plans in effect on the date of termination.  Payments
under clauses (i) and (ii) shall be paid to Executive by the Company  within ten
(10) days after the date of termination of Executive's employment.  Payments and
benefits  under  clause  (iii)  shall  be  paid  to  Executive  pursuant  to the
provisions of the applicable agreements or plans.

<PAGE>

        (c) Benefits  after  Termination.  Upon any  termination  of Executive's
employment,  Executive  (and  his  eligible  dependents)  shall be  entitled  to
continuation  of all group medical,  dental and other health  benefits that were
being provided to Executive (and his eligible  dependents)  immediately prior to
his termination of employment in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), and the terms of the Company's
benefit plans,  as such may be amended from time to time. In the event Executive
elects COBRA continuation  coverage for Executive and/or his eligible dependents
and Executive's  terminated his employment under Section I) above or the Company
terminated  his  employment  under  SectiI4(c)  above,  the Company will pay the
entire  cost of the COBRA  premiums  for such  continuation  coverage  until the
earlier of (i) the date twelve  (12) months  after  Executive's  termination  of
employment  or (ii) the date that  Executive or any  qualified  beneficiary  (as
defined in COBRA) ceases to be eligible for COBRA continuation  coverage under a
Company  plan for any  reason  other  than  failure  to pay  premiums;  provided
however, if coverage of Executive (and his eligible dependents) is not permitted
by such plans for any portion of such twelve (12) month period,  then,  for such
period when coverage is not permitted, the Company agrees to reimburse Executive
for the premium costs for individual  medical and dental insurance  coverage for
Executive (and his eligible  dependents)  pursuant to a policy providing similar
benefits as Executive (and his eligible  dependents)  were  receiving  under the
Company's   plans  on  the  date  such   coverage   was  no  longer   permitted.
Notwithstanding  the foregoing,  the Company reserves the right to amend, modify
or terminate its benefit plans at any time in a manner that affects employees of
the Company generally.  To the extent any such benefits are otherwise taxable to
Executive, such benefits shall, for purposes of Section 409A of the Code and the
regulations  and other  guidance  issued  thereunder,  be  provided  as separate
monthly in-kind payments of those benefits, and to the extent those benefits are
subject  to and not  otherwise  excepted  from  Section  409A of the  Code,  the
provision  of in-kind  benefits  during one  calendar  year shall not affect the
in-kind benefits to be provided in any other calendar year;

        (d) Resignation from Board and Officership. Upon the termination of this
Agreement or Executive's  employment for any reason,  if Executive serves on the
Board of the Company or any affiliate of the Company,  or holds a position as an
officer or committee  member of the Company or an officer or committee member of
any affiliate of the Company,  at the time of such termination,  Executive shall
promptly  resign from all such  positions by delivery of written  notice to such
effect, and if he does not provide such written notice,  shall be deemed to have
resigned from all such positions at the time of such termination.

        (e)  Section  409A of the  Code  Compliance.  The  parties  intend  this
Agreement,  and any payments made pursuant to this Article 6, to comply with the
requirements  of Section 409A of the Code,  and shall  interpret  this Agreement
consistently with such intent. To the extent (i) any payments to which Executive
becomes  entitled  under this  Agreement,  or any  agreement or plan  referenced
herein,  in connection  with  Executive's  termination  of  employment  with the
Company constitutes  deferred  compensation subject to Section 409A of the Code,
and (ii) executive is deemed at the time of such termination of employment to be
a "specified  employee"  under  Section  409A of the Code,  then such payment or
payments  shall not be made or commence  until the earlier of (x) the expiration
of the six (6) month period  measured from the date of  Executive's  "separation
from service" (as such term is defined in the Treasury Regulations issued under

<PAGE>

        Section  409A of the  Code)  with  the  Company;  and  (y)  the  date of
Executive's  death  following  such  separation  from service.  Any such delayed
amounts will be paid to Executive in a single lump sum,  with  interest from the
date otherwise payable at the prime rate as published in The Wall Street Journal
on the date of Executive's termination of employment with the Company.

       (f) Change of Control.  For purposes of this Agreement,  the term "Change
of Control"  shall have the same  meaning as in the Stock Plan.  Notwithstanding
the foregoing provisions of a "Change in Control," in the event any compensation
or  benefit  provided  to the  Executive  as a result of a Change in  Control is
subject to Section  409A of the Internal  Revenue Code of 1986,  as amended (the
"Code"),  then, in lieu of the foregoing  definition and to the extent necessary
to comply with the  requirements  of Section 409A of the Code, the definition of
"Change in Control" for purposes of such Award shall be the definition  provided
by Section 409A of the Code.

6.  Corporate  Opportunities.  Except as otherwise  provided in this  Agreement,
during the Term,  if any business  opportunities  related to the business of the
Company are rejected by the Board after proper presentation thereof by Executive
to the Board,  Executive  shall be free to pursue such  opportunity  for his own
account  or to  present  such  opportunity  to  third  parties,  so long as such
opportunity  is on terms and  conditions no more  favorable to him or such third
parties as he  presents  it to than  those  originally  presented  to the Board.
Except as  otherwise  provided  in this  Agreement,  if,  during  the Term,  any
business  opportunities related to the business of the Company are not initially
presented to the Board,  Executive shall not pursue such opportunity for his own
account or present such opportunity to third parties.

7.       Nondisclosure and Non-Interference.

         (a) Confidential Information" means any information,  knowledge or data
of any  nature and in any form  (including  information  that is  electronically
transmitted  or stored on any form of  magnetic  or  electronic  storage  media)
relating  to the past,  current or  prospective  business or  operations  of the
Company  and its  subsidiaries,  that  at the  time or  times  concerned  is not
generally known to persons  engaged in businesses  similar to those conducted or
contemplated by the Company and its subsidiaries  (other than information  known
by such persons through a violation of an obligation of  confidentiality  to the
Company),  whether  produced by the Company and its subsidiaries or any of their
consultants,  agents or independent contractors or by Executive,  and whether or
not marked confidential,  including, without limitation, information relating to
the  Company's or its  subsidiaries'  products  and  services,  business  plans,
business  acquisitions,  processes,  product or service research and development
methods  or  techniques,  training  methods  and other  operational  methods  or
techniques,  quality assurance  procedures or standards,  operating  procedures,
files, plans, specifications, proposals, drawings, charts, graphs, support data,
trade secrets,  supplier  lists,  supplier  information,  purchasing  methods or
practices, distribution and selling activities,  consultants' reports, marketing
and engineering or other technical studies,  maintenance records,  employment or
personnel data,  marketing data,  strategies or techniques,  financial  reports,
budgets,  projections,  cost analyses, price lists and analyses, employee lists,
customer  lists,  customer  source lists,  proprietary  computer  software,  and
internal notes and memoranda relating to any of the foregoing.

<PAGE>

          (b) Nondisclosure of Confidential Information. Executive shall hold in
a fiduciary capacity for the benefit of the Company all Confidential Information
which shall have been obtained by Executive during Executive's employment by the
Company and shall use such Confidential  Information  solely within the scope of
his employment with and for the exclusive benefit of the Company.  At the end of
the employment term,  Executive  agrees (i) not to communicate,  divulge or make
available to any person or entity (other than the Company) any such Confidential
Information,  except upon the prior written  authorization  of the Company or as
may be required  by law or legal  process,  and (ii) to deliver  promptly to the
Company any Confidential Information in his possession, including any duplicates
thereof and any notes or other  records  Executive  has  prepared  with  respect
thereto.  In the event that the provisions of any applicable law or the order of
any court would require  Executive to disclose or otherwise  make  available any
Confidential  Information  then  Executive  shall give the Company  prompt prior
written  notice of such required  disclosure  and an  opportunity to contest the
requirement of such  disclosure or apply for a protective  order with respect to
such Confidential Information by appropriate proceedings.

         (c) Non-Interference. Executive shall not solicit, induce, influence or
attempt to influence any supplier, lessor, licensor, or any other person who has
a business relationship with the Company or its subsidiaries, or who on the date
of termination of Executive's  employment hereunder is engaged in discussions or
negotiations  to enter  into a  business  relationship  with the  Company or its
subsidiaries,  to discontinue or reduce the extent of such relationship with the
Company or its  subsidiaries.  Executive  shall not make contact with any of the
employees of the Company or its subsidiaries with whom he had contact during the
course of his  employment  with the Company for the purpose of  soliciting  such
employee  for  hire,  whether  as an  employee  or  independent  contractor,  or
otherwise  disrupting  such  employee's  relationship  with the  Company  or its
subsidiaries.  Executive further agrees that during the Term and for a period of
one year thereafter,  Executive shall not hire any employee of the Company as an
employee or independent contractor,  whether or not such engagement is solicited
by Executive.

8.       Protection of Information.

          (a) The Company shall disclose to Executive,  or place  Executive in a
position to have access to or develop, trade secrets or confidential information
of the Company;  and/or shall entrust  Executive with business  opportunities of
the Company; and/or shall place Executive in a position to develop business good
will on behalf of the Company.

          (b) Executive  further agrees that during the Term and for a period of
one year  thereafter,  Executive shall not disclose or utilize,  for Executive's
personal  benefit or for the direct or indirect  benefit of any other  person or
entity, or for any other reason, whether for consideration or otherwise,  during
the  Term  or  at  any  time  thereafter,  any  information,   ideas,  concepts,
improvements,  discoveries which are conceived,  made, developed, or acquired by
Executive,  individually  or in  conjunction  with  others,  during  Executive's
employment  by the Company  (whether  during  business  hours or  otherwise  and
whether on the Company's  premises or  otherwise)  which relate to the business,
products, or services of the Company (including, without

<PAGE>

limitation, all such business ideas, prospects, proposals or other opportunities
which are developed by Executive during his employment hereunder,  or originated
by any third  party  and  brought  to the  attention  of  Executive  during  his
employment  hereunder,  together with information  relating thereto  (including,
without limitation,  data, memoranda,  opinions or other written,  electronic or
charted means,  or any other trade secrets or other  confidential or proprietary
information   of  or   concerning   the   Company))   (collectively,   "Business
Information"),  except  those  subject to Section 6.  Moreover,  all  documents,
drawings,  notes,  files,  data,  records,   correspondence,   manuals,  models,
specifications,  computer programs,  E-mail, voice mail,  electronic  databases,
maps,  and all  other  writings  or  materials  of any type  embodying  any such
Business Information created during Executive's  employment are and shall be the
sole and exclusive  property of the Company.  Upon  termination  of  Executive's
employment by the Company, for any reason,  Executive promptly shall deliver all
Business  Information,  and all copies thereof,  to the Company.  As a result of
knowledge  of  confidential  Business  Information  of  third  parties,  such as
customers,  suppliers,  partners,  joint ventures, and the like, of the Company,
Executive also agrees to preserve and protect the  confidentiality of such third
party  Business  Information to the same extent,  and on the same basis,  as the
Company's Business Information.

         (c) Upon termination of this Agreement for any reason,  Executive shall
promptly  return to the Company all of the property of the  Company,  including,
without limitation,  automobiles,  equipment,  computers, fax machines, portable
telephones, printers, software, credit cards, manuals, customer lists, financial
data, letters, notes, notebooks,  reports and copies of any of the above and any
Confidential  Information and Business  Information that is in the possession or
under the control of  Executive,  regardless  of the form in which it is held or
maintained.

9. Injunctive Relief.  Executive  acknowledges that a breach by Executive of any
provision of Section 7 and Section 8 would cause immediate and irreparable  harm
to the  Company  for which an adequate  monetary  remedy does not exist;  hence,
Executive  agrees  that,  in the  event  of a breach  or  threatened  breach  by
Executive  of the  provisions  of  Section  7 and  Section 8 during or after the
employment term, the Company shall be entitled to injunctive relief  restraining
Executive from  violation of any such Section  without the necessity of proof of
actual  damage,  except as required by  non-waivable,  applicable  law.  Nothing
herein  shall be construed as  prohibiting  the Company from  pursuing any other
remedy at law or in equity to which the Company may be entitled under applicable
law in the event of a breach or threatened breach of this Agreement by Executive
including, but not limited to, enforcing any obligations of Executive to Company
under any option, restricted stock or other agreement with the Company, recovery
of costs and expenses such as reasonable  attorney's  fees incurred by reason of
any such breach and actual  damages  sustained by the Company as a result of any
such breach.

10.  Severability.  Should a court determine that any paragraph or sentence,  or
any  portion  of  a  paragraph  or  sentence  of  this  Agreement,  is  invalid,
unenforceable,  or  void,  this  determination  shall  not have  the  effect  of
invalidating or validating the remainder of the paragraph, sentence or any other
provision  of this  Agreement.  If the final  judgment  of a court of  competent
jurisdiction   declares  that  any  term  or  provision  hereof  is  invalid  or
unenforceable, the parties hereto agree that the court making such determination
shall have the power to limit the term or provision, to delete specific words or
phrases, or to replace any invalid or unenforceable term or provision

<PAGE>

with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision,  and
this Agreement shall be enforceable as so modified. In the event such court does
not exercise the power granted to it in the prior  sentence,  the parties hereto
agree to replace such invalid or  unenforceable  term or provision  with a valid
and enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.

11. Successors. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their  respective  heirs and successors,  and the Company
agrees  that in the event of a Change in  Control,  the  Company  shall take all
actions  necessary so that the surviving entity in the Change in Control assumes
this  Agreements,  and the  obligations  and  duties of the  Company  under this
Agreement. Except pursuant to the immediately preceding sentence, the rights and
obligations of the Company  pursuant to this  Agreement may not be assigned,  in
whole or in part,  by the  Company  to any other  person or entity  without  the
express  written  consent of Executive.  This Agreement is personal to Executive
and may not be assigned or delegated by him, and any such  purported  assignment
or delegation shall be null and void.

12.  No  Waiver.  The  failure  of  either  party to  insist  in any one or more
instances upon  performance  of any terms or conditions of this Agreement  shall
not be construed as a waiver of future performance of any such term, covenant or
condition  but the  obligations  of either  party  with  respect  thereto  shall
continue in full force and effect.

13.  Notices.  Any notice given  hereunder  shall be in writing and be delivered
either by  personal  delivery,  by  telecopy  or  similar  facsimile  means,  by
certified or registered mail (postage prepaid and return receipt requested),  or
by express courier or delivery service, addressed to the applicable party hereto
as the following address:

         (a)      To the Company:   Sun River Energy, Inc.
                                    Attn: Vince D'Antonio
                                    305 South Andrews Avenue
                                    Suite 204
                                    Fort Lauderdale, FL 33301
                                    Telecopy No.:     (954) 463-4554

                  With copies to:           *

         (b)      To Executive:             Thimothy S. Wafford
                                            5950 Berkshire Lane, Suite 1650
                                            Dallas, TX 75225
                                            Telecopy No.: 214-739-9192

<PAGE>

                  With copies to:   Haynes and Boone, LLP
                                    2323 Victory Avenue, Suite 700
                                    Dallas, Texas 75219-7673
                                    Attn: W. Bruce Newsome
                                    Telecopy No.: 214-200-0636

Or such  other  address  and  number  as  either  party  shall  have  previously
designated by written  notice to the other party in the manner  hereinafter  set
forth.  Notices  shall be deemed  given when  received,  if sent by  telecopy or
similar  facsimile means and received at or prior to 5:00 p.m. central time on a
business day in Dallas,  TX or the next  business day in Dallas,  TX if received
after 5:00 p.m.  central time on a business day in Dallas,  TX or if received on
any other day (confirmation of such receipt by confirmed facsimile  transmission
being  deemed  receipt of  communications  sent by telecopy  or other  facsimile
means); and when delivered and receipted for if hand-delivered,  sent by express
courier or delivery service, or sent by certified or registered mail.

14.  Entire  Agreement.  There are no oral  representations,  understandings  or
agreements with the Company or any of its officers, directors or representatives
covering the same subject  matter as this  Agreement  except as set forth in the
PSA,  the Stock  Plan,  Rights of First  Refusal  (as  attached  hereto)  or the
agreement  herein to  register  the  Common  Stock or any share  under the Stock
Options.  This Agreement  supersedes all previous employment  agreements between
Executive and the Company and, along with the PSA, the Stock Plan, and Rights of
First  Refusal (as  attached  hereto) and the  agreement  herein to register the
Common Stock or any share under the Stock Options  contains the final,  complete
and exclusive  understanding  and agreement  between the parties with respect to
the subject matter hereof and cannot be amended, modified or supplemented in any
respect  except by subsequent  written  agreement  entered into by both parties;
provided,  however,  that in the  event  the  Company  determines,  in its  sole
discretion,  that an  amendment,  modification  or  supplement  is necessary for
purposes of compliance  with or exemption from the  requirements of Section 409A
of Code (or any regulations or other guidance issued  thereunder),  and to avoid
the  imposition  of  additional  tax  on  Executive,  Executive  agrees  not  to
unreasonably withhold his consent to such amendment,  modification or supplement
or to unreasonably  condition his consent on the renegotiation by the Company of
any other provision of this Agreement. Nothing in this Agreement shall supersede
the terms of the PSA,  the Stock  Plan,  Rights of First  Refusal  (as  attached
hereto) or the agreement  herein to register the Common Stock or any share under
the Stock Options.

15.  Counterparts.  This Agreement may be executed in one or more  counterparts,
each of which will be deemed to be an original copy of this  Agreement,  and all
of which,  when taken  together,  shall be deemed to constitute one and the same
Agreement.  The exchange of copies of this  Agreement and of signature  pages by
facsimile transmission shall constitute effective execution and delivery of this
Agreement  as to the parties and may be used in lieu of the  original  Agreement
for all purposes.  Signatures of the parties  transmitted by facsimile  shall be
deemed to be their original signatures for any purpose whatsoever.

     16.  Captions.  The captions herein are for the convenience of reference of
the parties and are not to be construed as part of the terms of this Agreement.

<PAGE>

17.  Applicable Law This Agreement  shall be governed by and construed under the
internal laws of the State of Texas without  regard to principles of conflict of
laws. Venue of any litigation arising from this Agreement shall be in the United
States District Court for the Northern  District of Texas,  Dallas Division or a
state district court of competent  jurisdiction  in Dallas  County,  Texas.  The
Company and  Executive  consent to personal  jurisdiction  of the United  States
District Court for the Northern  District of Texas,  Dallas  Division or a state
district court of competent jurisdiction in Dallas County, Texas for any dispute
relating  to or arising  out of this  Agreement,  agree  that the United  States
District Court for the Northern  District of Texas,  Dallas  Division or a state
district court of competent jurisdiction in Dallas County, Texas shall be deemed
to be a convenient forum and agree not to assert (by way or motion, as a defense
or otherwise) that such  litigation has been brought in an  inconvenient  forum,
that the venue of such  litigation  is  improper or that this  Agreement  or the
subject matter of this Agreement may not been enforced in or by such court.

18.  Insurance and  Indemnification.  During the Term, the Company shall use its
commercially  reasonable  efforts to maintain  one or more  Director and Officer
("D&O")  insurance  policies,  or riders  thereto,  that provide  separate  (not
jointly covering other officers and directors of the Company) insurance coverage
to Executive, with a policy period from the beginning of the Term and continuing
until the date that is six years after the date Executive's  employment with the
Company  terminates,  insuring  Executive  for  claims  up to  $10,000,000  (the
"Individual Policy"), or provide similar financial arrangements with the consent
of  Executive,  which  consent shall not be  unreasonably  withheld,  delayed or
conditioned.  The  Executive's  indemnification  rights  under the  articles  of
incorporation  and bylaws of the  Company  may not be reduced in any manner from
those rights in effect on the Effective Date.

19. Certain Further  Payments by Executive.  To the extent not prohibited by IRS
rules and regulations as amended:

        (a) Tax Reimbursement  Payment.  In the event that any amount or benefit
paid or distributed  to Executive  pursuant to this  Agreement,  the Plan or the
Option Agreement,  taken together with any amounts or benefits otherwise paid or
distributed  to  Executive  by the Company or any  affiliated  company  that are
treated as parachute  payments  under  Section 280G of the Code (such  payments,
collectively,  the "Covered  Payments"),  are or become  subject to the tax (the
"Excise Tax") imposed under Section 4999 of the Code or any similar tax that may
hereafter be imposed,  the Company shall pay to Executive an  additional  amount
(the  "Tax  Reimbursement  Payment"),  such  that  the net  amount  retained  by
Executive with respect to such Covered  Payments,  after deduction of any Excise
Tax on the Covered  Payments  and any  Federal,  state and local  income tax and
Excise Tax on the Tax Reimbursement Payment provided for by this Section 19, but
before  deduction  for any  Federal,  state or local  income or  employment  tax
withholding  on such Covered  Payments,  shall be equal to one-half (1/2) of the
amount of the Covered  Payments.  The time for payment of the Tax  Reimbursement
Payment is set forth in Section 19(e).

          (b) Assumptions for Calculation.  For purposes of determining  whether
     any of the  Covered  Payments  will be  subject  to the  Excise Tax and the
     amount of such Excise Tax,

<PAGE>

(i) such Covered  Payments  will be treated as "parachute  payments"  within the
meaning of Section 280G of the Code, and all  "parachute  payments" in excess of
the "base  amount" (as defined  under  Section  280G(b)(3) of the Code) shall be
treated as subject to the Excise Tax, unless,  and except to the extent that, in
the good faith judgment of a public  accounting firm appointed by the Company or
tax counsel  selected by such accounting firm (the  "Accountants"),  the Company
has a reasonable  basis to conclude  that such Covered  Payments (in whole or in
part) either do not  constitute  "parachute  payments"  or represent  reasonable
compensation  for personal  services  actually  rendered  (within the meaning of
Section  280G(b)(4)(B)  of the Code) in excess  of the  "base  amount,"  or such
"parachute payments" are otherwise not subject to such Excise Tax; and

(ii) The value of any non-cash benefits or any deferred payment or benefit shall
be determined by the  Accountants  in accordance  with the principles of Section
280G of the Code.

       (c) Assumed Tax Rates.  For purposes of determining the amount of the Tax
Reimbursement Payment, Executive shall be deemed to pay all taxes at the highest
applicable  marginal rate of taxation  with respect to Federal,  state and local
income taxes for the calendar year in which the Tax Reimbursement  Payment is to
be made (without regard to applicable deductions).

       (d)  Subsequent  Adjustment.   In  the  event  that  the  Excise  Tax  is
subsequently  determined  by the  Accountants  or pursuant to any  proceeding or
negotiations  with the Internal Revenue Service to be less than the amount taken
into account  hereunder  in  calculating  the Tax  Reimbursement  Payment  made,
Executive  shall  repay to the  Company,  at the time  that the  amount  of such
reduction in the Excise Tax is finally determined, the portion of such prior Tax
Reimbursement  Payment that would not have been paid if such Excise Tax had been
applied initially  calculating such Tax Reimbursement  Payment, plus interest on
the amount of such  repayment at the rate provided in Section  1274(b)(2)(B)  of
the Code.  Notwithstanding  the  foregoing,  in the event any portion of the Tax
Reimbursement  Payment  to be  refunded  to the  Company  has  been  paid to any
Federal,  state or local tax authority,  repayment thereof shall not be required
until actual  refund or credit of such portion has been made to  Executive,  and
interest  payable to the Company shall not exceed interest  received or credited
to  Executive  by such  tax  authority  for the  period  it held  such  portion.
Executive  and  Company  shall  mutually  agree  upon the course of action to be
pursued (and the method of allocating the expenses  thereof) if Executive's good
faith claim for refund or credit is denied (in whole or in part);  provided that
Executive shall remain  responsible to repay the Company for any such unrefunded
Tax Reimbursement  Payments to the extent Executive  ultimately prevails in such
claim.

      In the event that the Excise Tax is later determined by the Accountants or
pursuant to any proceeding or negotiations  with the Internal Revenue Service to
exceed the amount taken into account hereunder at the time the Tax Reimbursement
Payment is made  (including,  but not  limited  to, by reason of any payment the
existence  or  amount  of  which  cannot  be  determined  at the time of the Tax
Reimbursement  Payment),  the Company shall make an additional Tax Reimbursement
Payment in respect of such excess  (plus any  interest or penalty  payable  with
respect to such  excess)  at the time that the amount of such  excess is finally
determined.

<PAGE>

      (e) Timing of Payments. The Tax Reimbursement Payment (or portion thereof)
provided for in Section 19(a) above shall be paid to Executive on the day of the
payment of the Covered Payments;  provided,  however, that if the amount of such
Tax Reimbursement  Payment (or portion thereof) cannot be finally  determined on
or before the date on which  payment is due, the Company  shall pay to Executive
by such date an amount  estimated  in good  faith by the  Accountants  to be the
minimum amount of such Tax Reimbursement  Payment and shall pay the remainder of
such Tax  Reimbursement  Payment (together with interest at the rate provided in
Section  1274(b)(2)(B)  of the  Code)  as  soon  as the  amount  thereof  can be
determined, but in no event later than forty-five (45) days after payment of the
related  Covered  Payment.  In the event  that the amount of the  estimated  Tax
Reimbursement  Payment exceeds the amount  subsequently  determined to have been
due, subject to the provisions of Section 19(d), such excess shall be payable by
Executive to the Company on the fifth  business day after written  demand by the
Company  for payment  (together  with  interest at the rate  provided in Section
1274(b)(2)(B) of the Code).  Notwithstanding  anything to the contrary contained
herein,  in no event shall any payments be made  pursuant to this Section  19(e)
after the end of  Executive's  taxable year next following  Executive's  taxable
year in  which  Executive  remits  any  related  taxes to the  Internal  Revenue
Service.

20. No Mitigation. Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
and the  amount  of any  payment  provided  for in this  Agreement  shall not be
reduced by any  compensation  earned by Executive as the result of employment by
another employer after the date of termination of Executive's employment.

21.      Attorney Fees and Other Costs.

The  Parties  agree that all  reimbursements  of  attorney  fees and other costs
pursuant to this  Section 18 shall be done in a manner that either  exempts such
payments  from  Section  409A of the Code,  or, in the  event  exemption  is not
available, complies with Section 409A of the Code.

22. Survival. Except as expressly provided herein, the termination of employment
of Executive and the  termination  of the Term shall cause a termination of this
Agreement.

23.  Agreement  Drafted  Equally by the Parties.  This Agreement shall be deemed
drafted equally by both the parties.  Its language shall be construed as a whole
and  according  to its fair  meaning.  Any  presumption  or  principle  that the
language is to be construed against any party shall not apply.

24.  Withholding.  All  amounts  paid under this  Agreement  (including  without
limitation Base Salary or severance pay) shall be paid less all applicable state
and  federal  tax  withholdings  and  any  other  withholdings  required  by any
applicable jurisdiction.

25.  References.  References in this  Agreement,  to the Plan, PSA or the Option
Agreement shall also include any amendments to such plan or agreements.

                                                    * * * * * *

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

                                         Sun River Energy, Inc.
                                         a Colorado corporation

                                         By:          __________________________
                                         Name:        __________________________
                                         Title:       __________________________
                                         Date:        __________________________

                                         --------------------------
                                         Thimothy S. Wafford
                                         Date:    _____________________________
<PAGE>

                                    EXHIBIT A

                   FORM OF PURCHASE AND SALE AGREEMENT ("PSA")

<PAGE>

                                    EXHIBIT B

           TERMS OF RIGHT OF FIRST REFUSAL ("RIGHTS OF FIRST REFUSAL")

1. First Refusal on Sale of Shares. If the Executive or a transferee or assignee
of Executive  (the  "Selling  Shareholder")  proposes to sell all or part of his
shares of common stock, the following provisions shall apply:

                  (a) Notice:  The Selling  Shareholder shall first give written
         notice  (the  "Option  Notice")  to the  Company,  which  notice  shall
         identify the  prospective  purchaser  and shall set forth in reasonable
         detail the terms and conditions  upon which such sale is proposed to be
         made, and shall be accompanied by copies of the bona fide offer and any
         other information furnished to or by the prospective purchaser(s). Such
         notice shall  automatically  grant to the Company an option to purchase
         that  portion of the Shares of the Selling  Shareholder  proposed to be
         assigned or sold upon the same terms and conditions as contained in the
         bona fide offer.

                  (b) Shares Covered by Option: The option granted herein to the
         Company  must be  exercised  by the  Company as to the entire  interest
         being offered (the "Offered  Shares"),  unless the Selling  Shareholder
         consents to a sale or transfer of less than the entire interest.

                  (c) Exercise of Option:  The Company,  at its sole discretion,
         may,  within  thirty (30) days after  receipt of the Option Notice (the
         "Option Period"),  give written notice to the Selling  Shareholder (the
         "Acceptance Notice"), signed by the Company, that the Company elects to
         exercise such option,  evidencing its agreement to purchase the Offered
         Shares.

                  (d) Closing of Sale: Closing on the sale of the Offered Shares
         to the Company shall take place at the  principal  place of business of
         the Company ten (10) days after the  expiration of the Option Period or
         at such other  place and time as agreed to by the  Selling  Shareholder
         and the Company.

                  (e) Failure to Exercise Option: If the option is not exercised
         within  the  Option  Period  as to  the  Offered  Shares,  the  Selling
         Shareholder  may sell or transfer the Offered Shares within thirty (30)
         days thereafter to the prospective purchaser named in the Option Notice
         at a price and on terms no more  favorable than described in the Option
         Notice.

                  (f) Subsequent  Transfers:  The Selling  Shareholder shall not
         otherwise  sell or transfer the Offered  Shares to any person after the
         termination of said sixty (60) day period without again  complying with
         this Section.

                  (g) No Pledges:  The Executive and each transferee or assignee
         of the Executive  further  agrees and  covenants  not to pledge,  lend,
         hypothecate or otherwise grant any interest in the shares of the common
         stock,  without the prior written  consent of the Company,  in its sole
         discretion.  The  Company  shall be  entitled  to redeem  the shares of
         common stock at the purchase  price  thereof in the event of any breach
         of this section.

<PAGE>

Exhibit "C"
Page 2
                                    EXHIBIT C

  [Assuming this is not a Section 162(m) Plan under the Internal Revenue Code]

         DESCRIPTION OF BONUS PLAN FOR 2011, 2012, AND 2013 FISCAL YEARS

For the Company's  fiscal years ending April 30, 2011, April 30, 2012, and April
30, 2013, Executive shall be entitled to receive a bonus upon the achievement of
an  increase in  Billions  of Cubic Feet  Equivalent  ("BCFE") of the Company as
compared to the prior fiscal year as described  below, as approved by the Board,
subject to the terms set forth herein. The BCFE increase,  if any, incurred from
fiscal year to fiscal  year shall be  calculated  based upon the proved  reserve
valuations  reported by Company at the end of each fiscal year  purusuant to the
Company's reporting requirements as a publically-traded company under the United
States  Securities  Laws,  as  currently   administered  by  the  Unites  States
Securities & Exchange Comission; provided, however, that such reserve valuations
shall not  include any  reserves  attributable  to reserves  acquired by Company
pursuant to the PSA.  Any bonus  payable for any fiscal year shall be  pro-rated
based upon the number of days, if less than 365,  that  Executive is employed by
the Company  during such fiscal  year if the  Executive  is not  employed by the
Company  at the end of the  fiscal  year.  Any bonus  payable  pursuant  to this
Exhibit C shall be paid no later  than 2 1/2 months  following  the close of the
fiscal year to which such bonus relates.  Except as otherwise  provided  herein,
Executive  must be  employed  on the last day of the  applicable  fiscal year in
order to be eligible to receive a bonus with respect to such fiscal year.

For each increase in BCFE of the Company from one fiscal year as compared to the
prior fiscal year, the Executive shall received  $62,500 with the maximum annual
payment being $2,500,000.

By way of example,  if Executive  begins  employment  with the Company on May 1,
2010 and for the April 30, 2011 fiscal  year,  the Company  achieves a 15.5 BCFE
net increase over the April 30, 2010 fiscal year end BCFE,  then Executive would
be entitled to the following bonus for the fiscal year end April 30, 2011:

                            15.5 x $62,500 = $968,750

If instead for the April 30, 2011 fiscal  year,  the Company  achieves a 40 BCFE
increase over the April 30, 2010 fiscal year end BCFE,  then Executive  would be
entitled to the following bonus for the fiscal year end April 30, 2011:

                            40 x $62,500 = $2,500,000

If, instead for the April 30, 2011 fiscal year,  the Company  achieves a 55 BCFE
increase over the April 30, 2010 fiscal year end BCFE,  then Executive  would be
entitled to the following bonus for the fiscal year end April 30, 2011:

55 x $62,500 = $3,437,500  which is the maximum of  $2,500,000  so the Executive
would receive the maximum of $2,500,000

<PAGE>

In the  event  Executive  is  terminated  without  Cause  or he  terminates  his
employment  for Good Reason in  accordance  with Section 4(c) of the  Employment
Agreement,  then Executive  shall be entitled to a pro-rata bonus for the fiscal
year of termination,  subject to the Company's achievement of the BCFE goals for
such year, and payable at the time such bonus would have been paid had executive
remained  employed.  For fiscal year ended April 30,  2011,  for the purposes of
calculating this bonus,  Executive will be deemed to have started work on May 1,
2010 even if the actual start date is later than that date. If there is not BCFE
increase  with  respect  to such  fiscal  year,  no bonus  shall be  payable  to
Executive. By way of example, if Executive commences employment with the Company
on June 1, 2010, his employment  will be deemed to have commenced on May 1, 2010
and if Executive  terminates  his employment for Good Reason on January 1, 2011,
and the Company  achieves a 20 BCFE  increase for the April 30, 2011 fiscal year
as compared to the April 30, 2010 fiscal year end BCFE,  then Executive shall be
entitled to the following bonus:

20 x $62,500 x [245 days of actual employment/365 days] = $839,041

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00176-of-00352.parquet"}]]