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Unassociated Document

    
      
        
          	
                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN
      PORTIONS HEREOF

                  DENOTED WITH
      “***”

                	
                  Exhibit 10.1

                

        

      

    

    

    EMPLOYMENT
AGREEMENT

    

    AGREEMENT
made effective as of January 19, 2010 by and between CAPITAL GOLD CORPORATION, a
Delaware corporation with offices at 76 Beaver Street, 14th Floor,
New York, NY 10005 (the “Company”), and JOHN BROWNLIE, an individual residing at
6040 Puma Ridge, Littleton, Colorado 80124 (the “Executive” and together with
the Company, the “Parties”).

    

    WITNESSETH:

    

    WHEREAS,
the Executive has been for a number of years an executive level employee in the
gold mining field; and

    

    WHEREAS, the Company and Executive
are parties to the Engagement Agreement, effective on October 1, 2008, as
amended on January 1, 2009 (the “Engagement Agreement”); and

    

    WHEREAS, the Parties agree that the
Engagement Agreement is hereby terminated;

    

    WHEREAS, the Company desires to hire
Executive as a full-time employee; and

    

    WHEREAS,
the Company and the Executive mutually intend to set forth herein the terms and
conditions of the Executive’s employment with the Company.

    

    NOW,
THEREFORE, the Company and the Executive, each intending to be legally bound,
hereby mutually covenant and agree as follows:

    

    1.            Employment and
Term.

    

    (a)           Employment. Effective
on the Effective Date as hereinafter defined, the Company hereby employs the
Executive as President and Chief Operating Officer and the Executive hereby
accepts such employment with the Company, for the Term set forth in Paragraph
1(b).

    

    (b)           Term. This Agreement
shall be effective on January 19, 2010 (the “Effective Date”).  The
term of the Executive’s employment under this Agreement (the “Term”) shall
commence on the Effective Date and end on January 19, 2013, subject to
consecutive one-year extension(s) unless either the Company or the Executive
provides written notice of termination to the other Party not later than thirty
(30) days prior to the scheduled expiration of the Term as then in
effect.

    
      
         

      

      
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                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    

    2.           Duties.  During
the period of employment as provided in Paragraph 1(b) hereof, the Executive
shall serve as President and Chief Operating Officer of the Company, reporting
to the Board of Directors, and shall perform duties consistent with his position
and such other duties, not inconsistent therewith, as may be assigned from time
to time by the Board of Directors.  At the Effective Date, the duties
of Executive shall include, among other things, serving as the President of
Minera Santa Rita, S.A. de C.V., a subsidiary of the Company incorporated in
Mexico.  The Executive shall devote his entire business time and best
skills and efforts (reasonable sick leave and vacations as described below
excepted) to the performance of his duties under this Agreement. Executive
further agrees that he will, without any additional compensation thereof, serve
in such executive officer capacities with respect to the Company and any present
or future subsidiaries and Affiliated corporations and divisions as may from
time to time be reasonably designated by the Board of Directors of the
Company.

    

    
      	
               
      

            	
              3.

            	
              Base
      Salary.

            

    

    

    (a)           For
services performed by the Executive for the Company pursuant to this Agreement
during the period of employment as provided in Paragraph 1(b), the Company shall
pay the Executive a base salary (“Annual Fee”) which shall initially be at the
rate of Two Hundred Seventy-Five Thousand ($275,000) Dollars per year payable in
equal monthly installments;

    

    (b)           Any
compensation which may be paid to the Executive under any additional
compensation or incentive plan of the Company or which may be otherwise
authorized from time to time by the Board of Directors (or an appropriate
committee thereof) shall be in addition to the base salary to which the
Executive shall be entitled under this Agreement;

    

    (c)           Upon
the execution of this Agreement, Executive shall receive a payment of $375,000
for services rendered to the Company which have assisted the Company in
achieving the following: (i) a significant increase in the Company’s shares
price; (ii) listing of the Company’s stock on the NYSE AMEX; (iii) a term sheet
with Standard Bank Plc with respect to a US$15 million Senior Secured Revolving
Loan and Term Loan Facility; (iv) a reverse split of the company’s common stock;
and (v) the Company having been positioned to become a growth gold mining
company through mergers and acquisitions and new mine construction, such as
Saric; and

    

    (d)           Executive
shall receive an additional *** payment upon consummation of ***.

    

    (e)           Executive
shall receive stock options (the “Options”) to purchase 2,000,000 shares of
common stock of the Company at a price of $0.89 per share for a period of five
years, which shall vest as follows:

    
      
         

      

      
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                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                  DENOTED WITH
  “***”

                

        

           

      

    

    (i)
666,667 on January 19, 2011;

    

    (ii)
666,667 on January 19, 2012

    

    (iii)
666, 666 on January 19, 2013.

    

    4.        
   Other Benefits. In
addition to the base salary to be paid to the Executive pursuant to Paragraph 3
hereof, the Executive shall also be entitled to the following:

    

    (a)           Bonus; Participation in
Plans.

    

    (i)              Executive
shall be eligible for any annual incentive bonus opportunity offered by the
Company to executive officers of the Company at Executive’s
level.  the amount of this bonus, as well as the criteria necessary to
earn a bonus, may be changed at any time by the Company and shall be within the
sole discretion of the Company. All bonuses paid pursuant to this Agreement will
be subject to applicable withholdings and deductions, if
applicable.  If applicable, the bonus shall be paid no earlier than
fifteen (15) days and no later than ninety (90) days after the Company’s fiscal
year end for which the bonus is earned.  In the event of any conflict
between this Agreement and any incentive bonus plan adopted by the Company for
its officers and employees, this Agreement shall control.  The amount
of this bonus, as well as the criteria necessary to earn a bonus, may be changed
at any time by the Company and shall be within the sole discretion of the
Company.

    

    A.                In
the event Executive’s employment terminates for Cause pursuant to Section 6(c)
hereof, prior to the last day of the fiscal year for which the bonus applies,
Executive shall not be entitled to any unpaid bonus for such fiscal year by
reason of such bonus not being earned, vested due or owing.  Executive
hereby forfeits and waives any such unpaid bonus.

    

    B.                In
the event Executive’s employment terminates without Cause or for Good Reason,
pursuant to Section 6(c) below, prior to the last day of the fiscal year for
which the bonus applies, Executive will be entitled to a bonus on a pro rated
for the period form the beginning of that fiscal year to the date of termination
and such bonus shall be payable no later than Sixty (60) days following such
termination.

    

    (ii)       
   The Executive shall also participate in the various benefit
plans, which shall be created by the Company and in force by the end of the
calendar year ending December 31, 2010, including any qualified pension, 401(k),
profit sharing and other retirement plans, non-qualified retirement and deferred
compensation plans, disability, medical, group life insurance, supplemental life
insurance coverage, business travel insurance, sick leave, and other similar
retirement and welfare benefit plans, programs and arrangements.  The
foregoing does not in any way limit the Company’s right to amend or terminate
any benefit plan at any time in its discretion.

    
      
         

      

      
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                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                  DENOTED WITH
  “***”

                

        

      

    (b)           Vacation.  The
Executive shall be entitled to vacation of four (4) weeks for each full year of
employment which shall be taken by Executive upon prior notice to the Board of
Directors of the Company in accordance with the Company’s policies applicable to
senior executives.  The Executive will also be entitled to paid time
off for all holidays recognized by the Company and for sick days and personal
days in accordance with the Company’s policies.

    

    (c)           Expense
Reimbursement.  The Company shall pay or reimburse the
Executive, upon a proper accounting, for reasonable business expenses and
disbursements incurred by him in the course of the performance of his duties
under this Agreement in accordance with the normal policy of the Company for
senior executives.

    

    (d)           Technology
Equipment.  The Company shall provide to Executive a Company
cell phone, and, if appropriate, a Blackberry, laptop computer and such other
equipment required to properly conduct his responsibilities.  Upon the
termination of Executive’s employment with the Company for any reason, Executive
will return the cell phone and all such other equipment to the
Company.

    

    (e)           Vehicle
Use.  Without limiting the generality of the foregoing, the
Company shall provide Executive with vehicles located on site the Company’s
property in Sonora, Mexico for use by Executive in connection with the Company’s
business.  The Company shall also reimburse Executive for the expense
of gasoline, parking and tolls incurred while on Company business in accordance
with the Company’s expense reimbursement policies.  Executive may not
utilize any vehicle owned by the Company for personal use unrelated to
Executive’s duties under the Agreement.

    

    5.           Covenants of the
Employee.  In order to induce the Company to enter into this
Agreement, the Executive hereby agrees as follows:

    

    (a)            Termination
of Engagement Agreement.  Executive hereby agrees that the Engagement
Agreement shall be terminated on the date hereof.

    
      
         

      

      
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                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                  DENOTED WITH
  “***”

                

  

      

    

    (b)       Confidentiality. The
Executive acknowledges that by virtue of his employment hereunder he will have
access to Confidential Information (as defined below) of the Company and that
the communication of such Confidential Information to third parties could
irreparably injure the business of the Company. Accordingly, the Executive
agrees that he will treat and safeguard as confidential and secret all
Confidential Information received by him at any time and that without the prior
written consent of the Company, except as required by law, he will not disclose
or reveal any of the Confidential Information to any third party whatsoever or
use the same in any manner except as required in the ordinary course of
performing duties hereunder.  For purposes of the Agreement,
“Confidential Information” shall include, but not be limited to, the whole or
any portion or phase of (i) any confidential, or proprietary or trade secret,
technical, business, marketing or financial information, whether pertaining to
(1) the Company or its Affiliates, (2) its or their suppliers, or (3) any third
party which the Company or its Affiliates is under an obligation to keep
confidential including, but not limited to, strategies, analysis, concepts,
ideas, or plans; operating techniques; demographic and trade area information;
prospective site locations know-how; improvements; discoveries, developments;
designs, techniques, procedures; methods; machinery, devices; drawings;
specifications; forecasts; new products; research data, reports, or records;
marketing or business development plans, strategies, analysis, concepts or
ideas; contracts; general financial information about or proprietary to the
Company, including, but not limited to, unpublished financial statements,
budgets, projections, licenses, and costs; pricing; personnel information; and
any and all other trade secrets, trade dress, or proprietary information, and
all concepts or ideas in or reasonably related to the Company’s business, all of
which the Executive expressly acknowledges and agrees shall be confidential and
proprietary information belonging to the Company, and includes information of
that type acquired by the Company which Executive had knowledge of prior to
accepting employment with the Company by virtue of his prior relationship with
the Company pursuant to the Engagement Agreement.  Upon termination of
his employment with the Company, the Executive shall return to the Company all
documents, photographs, recorded or memory devices, papers and other property
relating to the Company, containing Confidential Information, together with any
copies thereof.

    

    (c)           Records. All papers,
books and records of every kind and description relating to the business and
affairs of the Company, or any of its Affiliates, whether or not prepared by the
Executive, other than personal notes prepared by or at the direction of the
Executive, shall be the sole and exclusive property of the Company, and the
Executive shall surrender them to the Company at any time upon request by the
Board of Directors of the Company.  As used herein, the term
“Affiliate” means any party that controls, is controlled by or is under common
control with another party as evidenced by the ownership of fifty percent (50%)
or more of the other party’s voting equity or other ability to control the
policies of the other party.

    

    (d)        Covenants against
Competition.  In consideration of the Company’s agreement to
employ the Executive and enter into this Agreement, the Executive agrees that
during the period of Executive’s employment with the Company and terminating
Thirty (30) days after the Executive’s Date of Termination as defined below (the
“Non-Competition Period”), Executive shall not, directly or indirectly, either
alone or in association with others, without the prior written approval of the
Chairman of the Board of Directors:

    
      
         

      

      
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                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                  DENOTED WITH
  “***”

                

        

         

      

    

    (i)  Engage
in a “Competing Business’’ in the “Territory”, as those terms are defined below,
whether as a sole proprietor, partner, corporate officer, employee, director,
shareholder, consultant, agent, independent contractor, trustee, or in any other
manner by which Executive holds any beneficial interest in a Competing Business,
derives any income from any interest in a Competing Business, or provides any
service or assistance to a Competing Business. “Competing Business” shall mean
any business that mines or produces minerals which is competitive with the
business of the Company or any of its Affiliates, as conducted or under
development at any time during the term of engagement.  “Territory”
shall mean anywhere in the state of Sonora, Mexico.  The provisions of
this Section 5(c)(i) will not restrict Executive from owning less than five
percent of the outstanding stock of a publicly-traded corporation engaged in a
Competing Business;

    

    (ii)  Acquire,
lease or otherwise obtain or control any beneficial, direct or indirect interest
in mineral rights, or other rights or lands necessary to develop, any mineral
property in which the Company or any of its Affiliates at the time of
termination has a beneficial interest or is actively seeking to acquire, or that
is within a distance of five (5) kilometers from any point on the outer
perimeter of any such property in which the Company or any of its Affiliates has
a beneficial interest or that it is seeking to acquire;

    

    (iii)  Conduct
any exploration or production activities or otherwise work on or in respect of
any mineral property within a distance of five (5) kilometers from any point on
the outer perimeter of any mineral property in which the Company or any of its
affiliates then has a beneficial interest or is actively seeking to acquire
(Paragraph 5(c)(ii)-(iii) collectively, the “Business”);

    

    (iv)  (a) Contact
or solicit, or direct or assist others to contact or solicit, for the purpose of
promoting any person’s or entity’s attempt to compete with the Company or any of
its Affiliates, in any business carried on by the Company or any of its
Affiliates during the period in which Executive was employed by the Company, any
suppliers, independent contractors, vendors, or other business associates of the
Company or any of its Affiliates that were existing or identified prospective
suppliers, independent contractors, vendors, or business associates during such
period, or (b) otherwise interfere in any way in the relationships between
the Company or any of its Affiliates and their suppliers, independent
contractors, vendors, and business associates;

    

    (v)  in
any manner whatsoever, request, solicit, encourage or assist any employee,
officer or director of the Company to terminate their relationship with the
Company or any of its Affiliates, or join with any of them after the termination
by any of them of any such relationship in any direct or indirect capacity in
the Business or in any activities competitive with the Business, or attempt to
do any of the foregoing.

    

    (e)           Disparaging
Statements.  At all times during and after Executive’s
employment, Executive shall not either verbally, in writing, electronically or
otherwise (i) make any derogatory or disparaging statements about the Company,
any of its Affiliates, any of their respective officers, directors,
shareholders, employees and agents, or any of the Company’s current or past
customers and employees, or (ii) make any public statement or perform or do any
other act prejudicial or injurious to the reputation or goodwill of the Company
or any of its Affiliates or otherwise interfere with the business of the Company
or any of its Affiliates.

    
      
         

      

      
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                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                  DENOTED WITH
  “***”

                

        

      

    (f)           Enforcement.  The
Executive agrees and warrants that the covenants contained herein are
reasonable, that valid consideration has been and will be received therefor and
that the agreements set forth herein are the result of arms-length negotiations
between the parties hereto. The Executive recognizes that the provisions of this
Paragraph 5 are vitally important to the continuing welfare of the Company, and
its Affiliates, and that any violation of this Paragraph 5 could result in
irreparable harm to the Company and its Affiliates for which money damages would
constitute a totally inadequate remedy.  Accordingly, in the event of
any such violation by the Executive, the Company and its Affiliates, in addition
to any other remedies they may have, shall have the right to institute and
maintain a proceeding to compel specific performance thereof or to obtain an
injunction or other equitable relief restraining any action by the Executive in
violation of this Paragraph 5 without posting any bond therefor, and Executive
will not claim as a defense thereto that the Company has an adequate remedy at
law.  If any of the restrictions or activities contained in this
Paragraph 5 shall
for any reason be held by a court of competent jurisdiction to be excessively
broad as to duration, geographical scope, activity or subject, such restrictions
shall be construed so as thereafter to be limited or reduced to be enforceable
to the extent compatible with the applicable law; it being understood that by
the execution of this Agreement the parties hereto regard such restrictions as
reasonable and compatible with their respective rights.  Executive
acknowledges that injunctive relief may be granted immediately upon the
commencement of any such action without notice to Executive and in addition
Company may recover monetary damages.  [In the event a court requires
posting of a bond, the Parties agree to a maximum $5,000
bond.  Executive further acknowledges that his duties under this
Paragraph 5, shall survive termination of this Agreement for a period of one (1)
year from such termination, unless otherwise provided in this
Agreement.  The Parties further agree that the provisions of Paragraph
5 are separate from and independent of the remainder of this Agreement and that
Paragraph 5 is specifically enforceable by the Company notwithstanding any claim
made by Executive against the Company.

    

    6.            Termination.

    

    (a)           Unless
earlier terminated in accordance with the following provisions of this Paragraph
6, the Company shall continue to employ the Executive and the Executive shall
remain employed by the Company during the entire Term as set forth in Paragraph
1(b). Paragraph 7 hereof sets forth certain obligations of the Company in the
event that the Executive’s employment hereunder is terminated. Certain
capitalized terms used in this Paragraph 6 and for Paragraph 7 hereof are
defined in Paragraph 6(d) below.

    
      
         

      

      
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                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    

     (b)           Death or
Disability.  Except to the extent otherwise expressly stated
herein, including without limitation, as provided in Paragraph 7(a) with respect
to certain post-Date of Termination payment obligations of the Company, this
Agreement shall terminate immediately as of the Date of Termination in the event
of the Executive’s death or in the event that the Executive becomes
disabled.  “Disability” shall mean the inability of Executive
effectively to substantially provide the services hereunder by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months.  At any time and from time
to time, upon reasonable request therefor by the Company, the Executive shall
submit to reasonable medical examination(s) for the purpose of determining the
existence, nature and extent of any such disability. The Company shall promptly
give the Executive written notice at the address provided in Paragraph 10 of any
such determination of the Executive’s disability and of the decision of the
Company to terminate the Executive’s employment by reason thereof. In the event
of disability, until the Date of Termination the base salary payable to the
Executive under Paragraph 3 hereof shall be reduced dollar-for-dollar by the
amount of disability benefits, if any, paid to the Executive in accordance with
any disability policy or program of the Company.

    

     (c)           Notification of Discharge
for Cause or Resignation.  In accordance with the procedures
hereinafter set forth, the Company may discharge the Executive from his
employment hereunder for Cause and the Executive may resign from his employment
hereunder for Good Reason or otherwise.  Any discharge of the
Executive by the Company for Cause or resignation by the Executive for Good
Reason shall be communicated by a Notice of Termination to the Executive (in the
case of discharge) or the Company (in the case of resignation) given in
accordance with Paragraph 10 of this Agreement.  For purposes of this
Agreement, a “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive’s employment under the provision so
indicated and (iii) if the Date of Termination is to be other than the date of
receipt of such notice, specifies the termination date (which date shall in all
events be within ten (10) days after the giving of such notice).  No
purported termination of the Executive’s employment for Cause shall be effective
without a Notice of Termination.  The failure by Executive to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason shall not waive any right of the Executive hereunder or
preclude the Executive from asserting such fact or circumstances in enforcing
the Executive’s rights hereunder.  Executive may resign without Good
Reason upon not less than sixty (60) days prior written notice of
termination.

    

    (d)           Definitions.  For
purposes of this Paragraph 6 and for Paragraph 7 hereof, the following
capitalized terms shall have the meanings set forth below:

    

    (i)           “Accrued Obligations”
shall mean any fees and any reasonable and necessary business expenses incurred
by Executive in connection with his services (less any applicable withholdings
and deductions), all due and payable to him through the date of the termination
of this Agreement.

    
      
         

      

      
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                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    (ii)           “Cause” shall mean (a)
the Executive’s intentional theft, unauthorized appropriation or embezzlement of
money or property of the Company; the Executive’s intentional perpetration,
participation in or attempted perpetration of fraud on the Company or its
subsidiaries or Affiliates; (b) the Executive’s intentional and material failure
to perform any of his duties under this Agreement, after written notice,
delivered in accordance with Paragraph 10 hereof, specifically setting forth the
failure(s) and providing thirty (30) days to cure such failure. Notwithstanding
the foregoing, after the Company in good faith has sent two (2) such notices in
the aggregate during the Term of this Agreement, the Company will no longer be
required to send notice and, upon the subsequent occurrence of any of the
omissions or commissions described in this Paragraph 6(d)(ii) the Company then
may discharge Executive for “Cause”; (c) the Executive’s conviction of any crime
that either results in imprisonment or involves embezzlement, dishonesty, or
activities injurious to the Company or its reputation; or Executive is convicted
of a felony; (d) the Executive’s use of illegal drugs or the excessive use of
alcohol which materially interferes with the performance of his obligations
under this Agreement, and continues after written warning; or (e) the
Executive’s commission of any willful or intentional act which materially
injures the reputation, business or any business relationship of the Company or
its employees.

    

    (iii)           “Date of Termination”
shall mean (A) in the event of a discharge of the Executive by the Company for
Cause or a resignation by the Executive for Good Reason, the date the Executive
(in the case of discharge) or the Company (in the case of resignation) receives
a Notice of Termination, or any later date specified in such Notice of
Termination, as the case may be, (B) in the event of a discharge of the
Executive without Cause or a resignation by the Executive without Good Reason,
the date the Executive (in the case of discharge) or the Company (in the case of
resignation) receives notice of such termination of employment, (C) in the event
of the Executive’s death, the date of the Executive’s death, and (D) in the
event of termination of the Executive’s employment by reason of disability
pursuant to Paragraph 6(a), the date the Executive receives written notice of
such termination.

    

    (iv)           “Good Reason” shall
mean any of the following; (A) any failure by the Company to comply with any
material provision of this Agreement which is not remedied by the Company or the
Company failing to diligently commence to cure within thirty (30) days after
receipt of written notice thereof specifically setting forth the failure given
by the Executive in accordance with Paragraph 10; (B) any purported termination
by the Company of the Executive’s employment otherwise than as expressly
permitted by this Agreement; or (C) a dispute in good faith by Executive of the
existence of a Good Reason.

    
      
         

      

      
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                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    

    7.         Obligations of the Company
and Executive Upon Termination.

    

    (a)       Discharge for Cause,
Resignation without Good Reason, Death or Disability.  In the
event of a discharge of the Executive for Cause or resignation by the Executive
without Good Reason, or in the event this Agreement terminates pursuant to
Paragraph 6(a) by reason of the death or disability of the Executive, other than
a death or disability occurring whilst Executive is performing its duties for
the Company pursuant hereto:

    

    (i)           the
Company shall pay all Accrued Obligations to the Executive, or to his heirs or
estate in the event of the Executive’s death, in a lump sum in cash within
thirty (30) days after the Date of Termination; and

    

    (ii)        
 the Executive, or his beneficiary, heirs or estate in the event of the
Executive’s death, shall be entitled to receive all benefits accrued by him as
of the Date of Termination under the Qualified Plans (as defined under the
Employee Retirement Income Security Act of 1974, as amended) and all other
qualified and nonqualified retirement, pension, profit sharing and similar plans
of the Company in such manner and at such time as are provided under the terms
of such plans and arrangements; and

    

    (iii)         all
other obligations of the Company hereunder shall cease forthwith.

    

    (b)       Discharge without Cause,
Resignation for Good Reason or Death or Disability occurring whilst performing
services for the Company.  Except as provided in Paragraph
7(c) hereof, if the Executive is discharged other than for Cause, the Executive
is terminated from death or disability occurring whilst performing services for
the Company, or the Executive resigns with Good Reason:

    

    (i)       the
Company shall pay to the Executive or his beneficiary, heirs or estate a cash
termination payment equal to the greater of (x) Executive’s Annual Fee in effect
upon the date of termination; or (y) so long as the current term is greater than
one year, the balance of Annual Fees remaining in the then current term of the
Agreement, payable in equal monthly  installments beginning in the
month following Executive’s termination.  Such termination payments
shall cease immediately in the event Executive violates any provision of
Paragraph 5 herein.  In addition, the Company shall pay Executive or
his beneficiary, heirs or estate any Accrued Obligations to the date of
termination and payable in a lump sum, less any applicable holdings and
deductions, as soon as administratively practicable (but in no event later than
Sixty (60) days) following Executive’s termination;

    

    (ii)  the
Executive or his beneficiary, heirs or estate shall be entitled to receive all
benefits accrued by him as of the Date of Termination under all qualified and
nonqualified retirement, pension, profit sharing and similar plans of the
Company in such manner and at such time as are provided under the terms of such
plans;

    
      
         

      

      
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                  CONFIDENTIAL TREATMENT
      REQUESTED

                  WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                  DENOTED WITH
  “***”

                

        

      

    (iii)           all
other obligations of the Company hereunder shall cease forthwith.

    

    (iv)           Notwithstanding
anything to the contrary contained in this Paragraph 7(b):

    

    (A)           If
Executive would not have a separation from service within the meaning of Section
409A(a)(2)(A)(i) (“Separation From Service”) of the Internal Revenue Code of
1986, as amended (the “Code”), and as a result of such termination of engagement
would receive any payment that, absent the application of this Paragraph 7(d),
would be subject to additional tax imposed pursuant to Section 409A(a) of the
Code, then such payment shall instead be payable on the date that is the
earliest of (1) Executive’s Separation From Service, (2) the date Executive
becomes disabled (within the meaning of Section 409A(a)(2)(C) of the Code),
(3) Executive’s death, or (4) such other date as will not result in
such payment being subject to such additional tax; and if

    

    (B)           Executive
is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the
Code and would receive any payment sooner than six months after Executive’s
Separation From Service that, absent the application of this Paragraph 7(d)(B),
would be subject to additional tax imposed pursuant to Section 409A(a) of the
Code as a result of such status as a specified employee, then such payment shall
instead be payable on the date that is the earliest of (1) six months after
Executive’s Separation From Service, (2) Executive’s death, or
(3) such other date as will not result in such payment being subject to
such additional tax.

    

    (C)           It
is the intention of the parties that payments or benefits payable under this
Agreement not be subject to the additional tax imposed pursuant to Section 409A
of the Code.  To the extent such potential payments or benefits could
become subject to such Section, the Parties shall cooperate to amend this
Agreement with the goal of giving Executive the economic benefits described
herein in a manner that does not result in such tax being imposed.

    

    (D)           In
the event that a payment or benefit payable under this Paragraph 7(b) is subject
to the additional tax imposed by Section 409A of the Code, and Executive has not
been uncooperative in any attempts of the Company to amend this Agreement to
avoid such additional tax, Company shall (at Executive’s option) pay directly,
or reimburse Executive for such additional tax and any interest and penalty
related thereto (the “409A Amounts”) within 10 days of Executive’s submission to
Company of the taxing authority’s determination of amounts due (which
determination must be submitted by Executive to the Company within thirty (30)
days of receipt by Executive), and in the case of Executive’s payment, evidence
of such payment.  At the same time as Company’s payment or
reimbursement, Company shall pay Executive a gross-up amount to cover income,
excise, and other applicable taxes on the 409A Amounts and on the gross-up
amount (before this further gross-up).  For purposes of calculating
the gross-up amounts for taxes, Executive shall be deemed to be taxed at the
highest marginal rate under all applicable local, state, federal, and foreign
tax laws for which the payment is made.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    
      
        	
                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    (c)           Termination Upon a Change of
Control.  Executive shall be entitled to the rights set forth
in the Agreement Regarding Change in Control annexed hereto as Annex
I.

    

    (d)           Return of Property.
In each event the Executive shall immediately return to the Company any vehicle
made available by the Company and any other property of the Company in the
Executive’s possession.

    

    8.           Indemnification. The
Company shall pay the cost of defending the Executive to the fullest extent
permitted by applicable law in connection with any claim, action, suit,
investigation or proceeding arising out of or relating to performance by the
Executive of services for, or action of the Executive as an officer or employee
of the Company, or of any other person or enterprise at the request of the
Company.  The Company shall also pay all judgments, awards, settlement
amounts and fines associated with the foregoing.  Legal cost and
expenses incurred in defending a claim, action, suit or investigation or
criminal proceeding shall be paid by the Company in a timely manner in advance
of the final disposition thereof upon the receipt by the Company of an
undertaking by or on behalf of the Executive to repay said amount unless it
shall ultimately be determined that the Executive is entitled to be indemnified
by the Company for such legal fees and related costs; provided, however, that
this arrangement shall not apply to (i) a non-derivative action commenced by the
Company against the Executive or (ii) any matter attributable to actions taken
by Executive in bad faith or for purposes other than the best interest of the
Company.  The foregoing shall be in addition to any indemnification
rights the Executive may have by law, charter, by-law or otherwise. Company
shall have the right to select counsel to defend the Executive, subject to
Executive’s approval, which approval shall not be unreasonably
withheld.  If the Company assumes responsibility for the defense of an
action brought against the Executive, the Executive: (i) may not agree to any
settlement without the Company’s prior written approval and (ii) will fully
cooperate with the Company’s efforts in defense of the matter.

    

    9.           Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the heirs and
representatives of the Executive and the successors and assigns of the
Company.

    

    10.         Notices. All notices,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered by hand or mailed within
the continental United States by first class certified mail, return receipt
requested, postage prepaid, or by nationally recognized courier, addressed as
follows:

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    
      
        	
                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    
 

    
      	
               
      

            	
              (a)

            	
              if
      to the Company, to:

            

    

    Capital
Gold Corporation

    76 Beaver
Street, 14th
Floor

    New York,
NY 10005

    Tel. No.
(212) 344-5158

    Fax. No.
(212) 344-4537

    Attention:
Chairman of the Board of Directors

    

    With a
copy which shall not constitute notice to:

    

    Ellenoff
Grossman & Schole, LLP

    150 East
42nd
Street, 11th
Floor

    New York,
NY 10017

    Tel. No.
(212) 370-1300

    Fax. No.
(212) 370-7889

    Attention:
Barry I. Grossman

    

    
      	
               
      

            	
              (b)

            	
              if
      to the Executive, to:

            

    

    
      John
Brownlie

    

    6040 Puma
ridge

    Littleton,
CO 80124

    Tel. No.
(303) 862-8688

    Email:
bluesky6040@aol.com

    

    Addresses
may be changed by written notice sent to the other party at the last recorded
address of that party.

    

    11.     
 Assignment.  This
Agreement may be assigned by the Company to any Affiliate engaged in the
Business or to a purchaser of all or substantially all of the assets of the
Company.  No payment to be made hereunder shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
other charge.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    
      
        	
                CONFIDENTIAL TREATMENT
      REQUESTED

                WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

                DENOTED WITH
  “***”

              

      

    

    
 

    12.       Arbitration.  Except
for any proceeding seeking equitable remedies in respect hereof, any dispute,
controversy, question, claim or alleged breach arising out of, or relating to,
this Agreement shall be resolved by arbitration as set forth herein below. Any
such controversy, question, claim or alleged dispute shall be submitted to
arbitration upon written notice of either party to the other, which notice
shall, in reasonable detail, set forth the controversy, question, claim or
alleged breach.  Such party may then commence an arbitration with
respect thereto pursuant to the rules of the American Arbitration Association
(“AAA”) to be held in New York City, New York before an arbitrator to be
selected by the AAA.  The decision(s) of the arbitrator shall be final
and binding and may not be appealed to any court of competent jurisdiction, or
otherwise, except upon claim of fraud or corruption as by law provided however,
that implementation of such decision(s) shall in no way be delayed or otherwise
impaired pending the outcome of any such appeal. Judgment upon the award
rendered in such arbitration may be entered by any court having jurisdiction
thereof. [The non-prevailing party does hereby covenant and agree to promptly
pay, and the arbitrator shall be obliged to award to the prevailing party, one
hundred (100%) percent of all reasonable legal fees and reasonable costs
incurred by the prevailing party.]  The parties agree that attorneys
that represented a respective party as to this Agreement may represent such
party in any subsequent arbitration or legal proceeding authorized
hereunder.

    

    13.           Execution in
Counterparts. This Agreement may be executed in several counterparts each
of which shall be deemed an original by when taken together shall constitute one
and the same instrument, and each of which will be deemed an original, but all
of which together will constitute one and the same instrument.  This
Agreement may be delivered by the Parties by facsimile or other electronic
transmission.

    

    14.           Governing Law; Choice of
Forum.  This Agreement shall be governed in all respects and
for all purposes by the internal laws of the State of Virginia without the
effect of the principles of conflicts of law.   The federal or
state courts situated in the City and County of New York shall have exclusive
jurisdiction in any action or proceeding arising out of or relating to this
Agreement, whether to compel arbitration, to seek injunctive or equitable relief
or to enforce any order or award obtained in arbitration.  Each of the
Parties hereby agrees to accept service of process by registered mail and to
otherwise consent to the jurisdiction of such courts.

    

    15.           Severability. If any
provision of this Agreement shall be adjudged by any court of competent
jurisdiction to be invalid or unenforceable for any reason, such judgment shall
not affect, impair or invalidate the remainder of this Agreement, which shall
remain in full force and effect and the parties will act in good faith to seek
to amend this Agreement so as to render the invalid or unenforceable provisions
valid and enforceable while retaining the original intent and meaning of such
provision to the maximum extent possible.

    

    16.            Prior
Understandings. This Agreement embodies
the entire understanding of the parties hereof, and supersedes all other oral or
written agreements or understandings between them regarding the subject matter
hereof. No change, alteration or modification hereof may be made except by
writing, signed by each of the Parties. The headings in this Agreement are for
convenience and reference only and shall not be construed as part of this
Agreement or to limit or otherwise affect the meaning hereof.

    

    17.           Waivers.  No
waiver of any provision of this Agreement will be effective unless in writing
and signed by the party to be charged therewith.  No single waiver
shall constitute a subsequent waiver of the same or any other provision
hereof.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    

     

    18.          Interpretation.  This
Agreement has been subject to negotiation by the Parties with the assistance of
counsel and shall not be interpreted by or for either of them by reason of
authorship.  All Paragraph headings used in this Agreement are for
convenience of reference only and shall have no legal effect in the
interpretation of this Agreement.

    

    19.          Amendment.   No
amendment or modification of the terms of this Agreement shall be binding upon
the Parties hereto unless reduced to writing and signed by Executive and the
Company.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    

    

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

    

    
      
        
          	
                  CAPITAL
      GOLD CORPORATION

                
	 
      
	
                  By:

                	
                  /s/ Gifford Dieterle

                
	
                  Name:
      Gifford Dieterle

                
	
                  Title:
      Chairman of the Board of Directors

                
	 
      
	
                  EXECUTIVE

                
	 
      
	
                  /s/    John
      Brownlie

                
	
                  John
      Brownlie

                
	 
      

        

      

    

    [Signature
Page to Employment Agreement]

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    ANNEX
I

    

    AGREEMENT
REGARDING CHANGE IN CONTROL

    

    THIS
AGREEMENT (“Change in Control Agreement”) is made and entered into as of the
January 19, 2010 (the “Effective Date”) by and between Capital Gold Corporation
(the “Company”) and John Brownlie (the “Executive”).  Terms not
expressly defined herein shall have the meaning set forth in the Employment
Agreement, effective January 19, 2010 (“Employment Agreement”).

    

    WITNESSETH
THAT:

    

    WHEREAS, the Company considers it
essential to the best interests of its stockholders to foster the continuous
engagement of key management personnel, and the Board of Directors of the
Company (the “Board”) recognizes that, as is the case with many publicly held
corporations, a change in control might occur and that such possibility, and the
uncertainty and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company
and its stockholders; and

    

    WHEREAS, the Board has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company’s management, including the
Executive, to their engagement without distraction in the face of potentially
disturbing circumstances arising from the possibility of a change in control of
the Company;

    

    NOW, THEREFORE, to induce the Executive
to remain engaged by the Company and in consideration of the premises and mutual
covenants set forth herein, IT IS HEREBY AGREED by and between the parties as
follows:

    

    
      	
               
      

            	
              1.

            	
              Agreement
      Term.

            

    

    

    (a)           This
Agreement shall terminate upon the date which the Employment Agreement
terminates.

    

    (b)           If
the Employment Agreement is terminated during the Term, but following the
occurrence of a Change in Control, (a) by the Company for any reason other than
for Cause or for Disability; (b) by the Executive for Good Reason; or (c) by the
Executive for any reason after thirty (30) days following a Change in Control,
then Executive shall be entitled to such Compensation as set forth in Section 2
herein below.

    

    The term
“Good Reason” shall mean the occurrence of any of the following circumstances
without the Executive’s express written consent:

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    (A) a significant adverse change in the
nature, scope or status of the Executive’s position, authorities or services
from those in effect immediately prior to the Change in Control, including,
without limitation, if the Executive was, immediately prior to the Change in
Control, an executive officer of a public company, the Executive ceasing to be
an executive officer of a public company;

    

    (B) the failure by the Company to pay
the Executive any portion of the Executive’s current compensation, or to pay the
Executive any portion of any installment of deferred compensation under any
deferred compensation program of the Company, within seven (7) days of the date
such compensation is due;

    

    (C) a reduction in the Executive’s
annual base compensation (or a material change in the frequency of payment) as
in effect immediately prior to the Change in Control as the same may be
increased from time to time;

    

    (D)          the
failure by the Company to award the Executive an annual bonus in any year which
is at least equal to the annual bonus awarded to the Executive for the year
immediately preceding the year of the Change in Control;

    

    (E)           the
failure by the Company to award the Executive equity-based incentive
compensation (such as stock options, shares of restricted stock, or other
equity-based compensation) on a periodic basis consistent with the Company’s
practices with respect to timing, value and terms prior to the Change in
Control;

    

    (F)           the
failure of the Company to award the Executive agreed upon incentive compensation
of any nature based on attained milestones when such milestones are
attained.

    

    
      	
               
      

            	
              (G)

            	
              the
      failure of the Company to obtain a satisfactory agreement from any
      successor to the Company to assume and agree to perform this Agreement as
      contemplated by Section 12.

            

    

    

    For
purposes of any determination regarding the existence of Good Reason, any good
faith determination by the Executive that Good Reason exists shall be
conclusive.

    

    (c)           If
the Employment Agreement is terminated as a result of a Potential Change in
Control (as defined in Section 7 below) during the Term, other than for reasons
of Disability or Cause, then Executive shall be entitled to such Compensation as
set forth in Section 2 herein below; which shall be payable within 20 business
days of such termination.

    

    2.           Compensation.  If
the Executive is entitled to Compensation pursuant to Section 1(b) above,
Executive shall receive the following:

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    (a)           Upon
the earlier to occur of: (i) the Change in Control; or (ii) the termination of
Executive’s employment, Executive shall receive a lump sum payment in cash equal
to the sum of:

       

    (i)        the
greater of an amount equal to three (3) times Executive’s base salary in effect
on the date: (i) of the Change in Control; or (ii) the date immediately prior to
the date of termination; and

    

    (ii)       an
amount equal to three (3) times Executive’s bonus award and all other
compensation for the calendar year immediately preceding the date of the Change
in Control.

    

    (b)           The
amounts payable pursuant to this Section 2, shall be inclusive of the amounts,
if any, to which Executive would otherwise be entitled to by law and shall be in
addition to (and not inclusive of) any amounts payable under any written
agreement(s) directly between Executive and the Company or any of its
subsidiaries.

    

    (c)           All
unvested Company options shall immediately become vested, and any exercise must
occur no later than twelve months after the date of termination.

    

    (d)           The
Company shall provide Executive with and, at the Executive’s option, directly
pay for or reimburse the Executive for outplacement services and tax and
financial counseling suitable to Executive’s position, from providers selected
by Executive for services through the end of the second taxable year of
Executive after the taxable year of Executive’s separation from service (within
the meaning of Section 409A(a)(2)(A)(i) of the Code) with the Company, or, if
earlier, the date on which Executive becomes employed by another
employer.  In the event Executive has paid for any such services, the
Company shall reimburse Executive for such payments within three (3) days of
submission to the Company of a copy of the provider’s invoice for services and
evidence of payment.  Any request for reimbursement for such expenses
shall be submitted no later than 30 days before the end of the third taxable
from the date the separation from service occurred.

    

    
      	
               
      

            	
              3.

            	
              Mitigation.

            

    

    

    Executive
shall not be required to mitigate the amount of any payment provided for in this
Change in Control Agreement by seeking other engagement or
otherwise.  The Company shall not be entitled to set off against the
amounts payable to Executive under this Change in Control Agreement any amounts
owed to the Company by Executive, any amounts earned by Executive in other
engagements after Executive’s termination of the Employment Agreement, or any
amounts which might have been earned by Executive in other engagements had the
Executive sought such other engagements.

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    

     

    
      	
               
      

            	
              4.

            	
              Make-Whole
      Payments.

            

    

    

    (a)           If
any payment or benefit to which Executive (or any person on account of the
Executive) is entitled, whether under this Change in Control Agreement or
otherwise, in connection with a Change in Control or the Executive’s termination
of employment (a “Payment”) constitutes a “parachute payment” within the meaning
of section 280G of the Code, and as a result thereof the Executive is subject to
a tax under section 4999 of the Code, or any successor thereto, (an “Excise
Tax”), the Company shall pay to Executive an additional amount (the “Make-Whole
Amount”) which is intended to make Executive whole for such Excise
Tax.  The Make-Whole Amount shall be equal to (i) the amount of the
Excise Tax, plus (ii) the aggregate amount of any interest, penalties, fines or
additions to any tax which are imposed in connection with the imposition of such
Excise Tax, plus (iii) all income, excise and other applicable taxes imposed on
the Executive under the laws of any Federal, state or local government or taxing
authority by reason of the payments required under clauses (i) and (ii) and this
clause (iii).

    

    (b)           For
purposes of determining the Make-Whole Amount, Executive shall be deemed to be
taxed at the highest marginal rate under all applicable local, state, federal
and foreign income tax laws for the year in which the Make-Whole Amount is
paid.  The Make-Whole Amount payable with respect to an Excise Tax
shall be paid by the Company coincident with the Payment with respect to which
such Excise Tax relates.

    

    (c)           All
calculations under this Section 4 shall be made initially by the Company and the
Company shall provide prompt written notice thereof to the Executive to enable
the Executive to timely file all applicable tax returns.  Upon request
of the Executive, the Company shall provide the Executive with sufficient tax
and compensation data to enable the Executive or the Executive’s tax advisor to
independently make the calculations described in subparagraph (b) above and the
Company shall, at the Executive’s option, pay the Executive’s advisor directly
or reimburse the Executive for reasonable fees and expenses incurred for any
such verification.  Any payment or reimbursement shall be made within
three (3) days of submission of the service provider’s invoice to the Company,
and in the case of reimbursement, evidence of payment.  Executive
shall submit a copy of the service provider’s invoice for such services to the
Company within 60 days of its receipt by the Executive.

    

    (d)           If
the Executive gives written notice to the Company of any objection to the
results of the Company’s calculations within 60 days of the Executive’s receipt
of written notice thereof, the dispute shall be referred for determination to
independent tax counsel selected by the Company and reasonably acceptable to
Executive (“Tax Counsel”).  The Company shall pay all fees and
expenses of such Tax Counsel.  Pending such determination by Tax
Counsel, the Company shall pay Executive the Make-Whole Amount as determined by
it in good faith.  The Company shall pay the Executive any additional
amount determined by Tax Counsel to be due under this Section 4 (together with
interest thereon at a rate equal to 120% of the Federal short-term rate
determined under section 1274(d) of the Code) within ten (10) days after such
determination.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    (e)           The
determination by Tax Counsel shall be conclusive and binding upon all Parties
unless the Internal Revenue Service, a court of competent jurisdiction, or such
other duly empowered governmental body or agency (a “Tax Authority”) determines
that the Executive owes a greater or lesser amount of Excise Tax with respect to
any Payment than the amount determined by Tax Counsel.

    

    (f)           If
a Taxing Authority makes a claim against Executive which, if successful, would
require the Company to make a payment under this Section 4, Executive agrees to
contest the claim with counsel reasonably satisfactory to the Company, on
request of the Company subject to the following conditions:

    

    (i) Executive shall notify the Company
of any such claim within ten (10) days of becoming aware thereof.  In
the event that the Company desires the claim to be contested, it shall promptly
(but in no event more than 30 days after the notice from Executive or such
shorter time as the Taxing Authority may specify for responding to such claim)
request Executive to contest the claim.  Executive shall not make any
payment of any tax which is the subject of the claim before Executive has given
the notice or during the 30 day period thereafter unless Executive receives
written instructions from the Company to make such payment together with an
advance of funds sufficient to make the requested payment plus any amounts
payable under this Section 4 determined as if such advance were an Excise Tax,
in which case the Executive will act promptly in accordance with such
instructions.

    

    (ii) If the Company so requests,
Executive will contest the claim by either paying the tax claimed and suing for
a refund in the appropriate court or contesting the claim in the United States
Tax Court or other appropriate court, as directed by the Company; provided, however, that any
request by the Company for Executive to pay the tax shall be accompanied by an
advance from the Company to Executive of funds sufficient to make the requested
payment plus any amounts payable under this Section 4 determined as if such
advance were an Excise Tax.  If directed by the Company in writing
Executive will take all action necessary to compromise or settle the claim, but
in no event will Executive compromise or settle the claim or cease to contest
the claim without the written consent of the Company; provided, however, that
Executive may take any such action if the Executive waives in writing the
Executive’s right to a payment under this Section 4 for any amounts payable in
connection with such claim.  Executive agrees to cooperate in good
faith with the Company in contesting the claim and to comply with any reasonable
request from the Company concerning the contest of the claim, including the
pursuit of administrative remedies, the appropriate forum for any judicial
proceedings, and the legal basis for contesting the claim.  Upon
request of the Company, Executive shall take appropriate appeals of any judgment
or decision that would require the Company make a payment under this Section
4.  Provided that Executive is in compliance with the provisions this
section, the Company shall be liable for and indemnify Executive against any
loss in connection with, and all costs and expenses, including attorneys’ fees,
which may be incurred as a result of, contesting the claim, and shall provide to
Executive within 30 days after each written request therefor by Executive cash
advances or reimbursement for all such costs and expenses actually incurred or
reasonably expected to be incurred by Executive as a result of contesting the
claim.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    (g)           Should
a Tax Authority finally determine that an additional Excise Tax is owed, then
the Company shall pay an additional Make-Whole Amount to Executive in a manner
consistent with this Section 4 with respect to any additional Excise Tax and any
assessed interest, fines, or penalties.  If any Excise Tax as
calculated by the Company or Tax Counsel, as the case may be, is finally
determined by a Tax Authority to exceed the amount required to be paid under
applicable law, then Executive shall repay such excess to the Company within 30
days of such determination; provided that such repayment shall be reduced by the
amount of any taxes paid by Executive on such excess which is not offset by the
tax benefit attributable to the repayment.

    

    
      	
               
      

            	
              5.

            	
              Change in
      Control.

            

    

    

    (a)           For
purpose of this Change in Control Agreement, (except as set forth in Section
5(b) of this Agreement and as otherwise consented or agreed to by Executive
prior to such event) a “Change in Control” shall be deemed to have occurred on
the earliest of the following dates:

    

    (i)           the
date any Person (as defined below) is or becomes the Beneficial Owner (as
defined below), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (x) of paragraph (c) below;
or

    

    (ii)           the
date on which the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s stockholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    (iii)           the
date on which there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation or
other entity, other than (x) a merger or consolidation (A) immediately following
which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of the Company, the
entity surviving such merger or consolidation or, if the Company or the entity
surviving such merger or consolidation is then a subsidiary, the ultimate parent
thereof and (B) which results in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
50% of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (y) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company’s
then outstanding securities; or

    

    (iv)           the
date on which the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company, in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any subsidiary of the Company, in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

    

    (b) ***

    

    (c)
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

    

    For
purposes of this Agreement: “Affiliate” shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial Owner” shall
have the meaning set forth in Rule 13d-3 under the Exchange Act; “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time;
and “Person” shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    6.           Potential Change in
Control.

    

    (a)          A
“Potential Change in Control” shall exist during any period in which the
circumstances described in paragraphs (a), (b), (c) or (d), of this Section 6
exist (provided, however, that a Potential Change in Control shall cease to
exist not later than the occurrence of a Change in Control):

    

    (i)           The
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control, provided that a Potential Change in Control
described in this paragraph (i) shall cease to exist upon the expiration or
other termination of all such agreements;

    

    (ii)  
       Any Person (without regard to the
exclusions set forth in subsections (i) through (iv) of such definition)
publicly announces an intention to take or to consider taking actions the
consummation of which would constitute a Change in Control; provided that a
Potential Change in Control described in this paragraph (ii) shall cease to
exist upon the withdrawal of such intention, or upon a determination by the
Board that there is no reasonable chance that such actions would be
consummated;

    

    (iii)         Any
Person becomes the Beneficial Owner, directly or indirectly, of securities of
the Company representing 20% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company’s then
outstanding securities; or

    

    (iv)         The
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control exists; provided that a Potential Change in Control
described in this paragraph (d) shall cease to exist upon a determination by the
Board that the reasons that gave rise to the resolution providing for the
existence of a Potential Change in Control have expired or no longer
exist.

    

    7.           Nonalienation. The
interests of Executive under this Agreement are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of the Executive or the Executive’s
beneficiary.

    

    8.           Amendment.  This
Agreement may be amended or canceled only by mutual agreement of the parties in
writing without the consent of any other person.  So long as the
Executive lives, no person, other than the parties hereto, shall have any rights
under or interest in this Agreement or the subject matter hereof.

    

    9.           Applicable
Law.  The provisions of this Agreement shall be construed in
accordance with the laws of the State of New York, without regard to the
conflict of law provisions of any state.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    10.           Severability.  The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable
provision were omitted (but only to the extent that such provision cannot be
appropriately reformed or modified).

    

    11.           Waiver of
Breach.  No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time.  The failure of any party hereto to take any
action by reason of such breach will not deprive such party of the right to take
action at any time while such breach continues.

    

    12.           Successor, assumption of
contract. This Agreement shall be binding upon and inure to the benefit
of the Company and any successor of the Company.  The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no succession had taken place.  This Agreement is
personal to Executive and may not be assigned by Executive without the written
consent of the Company.  However, to the extent that rights or
benefits under this Agreement otherwise survive Executive’s death, the
Executive’s heirs and estate shall succeed to such rights and benefits pursuant
to Executive’s will or the laws of descent and distribution; provided that
Executive shall have the right at any time and from time to time, by notice
delivered to the Company, to designate or to change the beneficiary or
beneficiaries with respect to such benefits.

    

    13.           Notices.  Notices
and all other communications provided for in this Agreement shall be in writing
and shall be delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid (provided that international mail
shall be sent via overnight or two-day delivery), or sent by facsimile or
prepaid overnight courier to the parties at the addresses set forth
below.  Such notices, demands, claims and other communications shall
be deemed given:

    

    (a)           in
the case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery;

    

    (b)           in
the case of certified or registered U.S. mail, five days after deposit in the
U.S.  mail; or

    

    (c)           in
the case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    provided,
however, that in no event shall any such communications be deemed to be given
later than the date they are actually received.  Communications that
are to be delivered by the U.S.  mail or by overnight service or
two-day delivery service are to be delivered to the addresses set forth
below:

    

    to the
Company:

    

    Capital Gold Corporation

    76 Beaver Street

    14th Floor

    New York, NY 10005

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

 

    with a
copy (which shall not constitute notice) to:

    

               Chief
Financial Officer

               Capital
Gold Corporation

    76 Beaver
Street

    14th
Floor

    New York,
NY 10005

    

    or to the
Executive:

    

    John Brownlie

    6040 Puma
Ridge

    Littleton,
Colorado 80124

    

    Each
party, by written notice furnished to the other party, may modify the applicable
delivery address, except that notice of change of address shall be effective
only upon receipt.

    

    14.           Legal and Enforcement
Costs.  The provisions of this Section 14 shall apply if it
becomes necessary or desirable for the Executive to retain legal counsel or
incur other costs and expenses in connection with enforcing any and all rights
under this Agreement or any other compensation plan maintained by the
Company:

    

    (a)           The
Executive shall be entitled to recover from the Company reasonable attorneys’
fees, costs and expenses incurred in connection with such enforcement or
defense.

    

    (b)           Payments
required under this Section 14 shall be made by the Company to the Executive (or
directly to the Executive’s attorney) promptly following submission to the
Company of appropriate documentation evidencing the incurrence of such
attorneys’ fees, costs, and expenses.

    

    (c)           The
Executive shall be entitled to select legal counsel; provided, however, that
such right of selection shall not affect the requirement that any costs and
expenses reimbursable under this Section 14 be reasonable.

    

    (d)           The
Executive’s rights to payments under this Section 14 shall not be affected by
the final outcome of any dispute with the Company.

    

    15.           Survival of
Agreement.  Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive’s engagement with the
Company.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
      	
              CONFIDENTIAL TREATMENT
      REQUESTED

              WITH RESPECT TO CERTAIN PORTIONS
      HEREOF

              DENOTED WITH
  “***”

            

    16.           Entire
Agreement.  Except as otherwise provided herein, this Agreement
constitutes the entire agreement between the parties concerning the subject
matter hereof and supersedes all prior or contemporaneous agreements, between
the parties relating to the subject matter hereof; provided, however, that
nothing in this Change in Control Agreement shall be construed to limit any
policy or agreement that is otherwise applicable relating to confidentiality,
rights to inventions, copyrightable material, business and/or technical
information, trade secrets, solicitation of employees, interference with
relationships with other businesses, competition, and other similar policies or
agreement for the protection of the business and operations of the Company and
the subsidiaries.

    

    17.           Counterparts.  This
Agreement may be executed in several counterparts each of which shall be deemed
an original by when taken together shall constitute one and the same instrument,
and each of which will be deemed an original, but all of which together will
constitute one and the same instrument.  This Agreement may be
delivered by the Parties by facsimile or other electronic
transmission.

    

    18.          
Interpretation.  This
Agreement has been subject to negotiation by the Parties with the assistance of
counsel and shall not be interpreted by or for either of them by reason of
authorship.  All Paragraph headings used in this Agreement are for
convenience of reference only and shall have no legal effect in the
interpretation of this Agreement.

    

    IN
WITNESS THEREOF, the parties hereto have executed and delivered this Agreement
as of the day and year first written above.

    

    
      
        	 
      	
                /s/ John Brownlie

              
	 
      	
                John
      Brownlie

              
	 
      	
                CAPITAL
      GOLD CORPORATION

              
	 
      	 
      
	
                By:

              	
                Gifford
    A.  Dieterle

              
	 
      	
                Gifford
      A.  Dieterle,
President

              

      

    

    

    [Signature
Page to Agreement Regarding Change of Control]

    
      
         

      

      
        28AFTERSOFT
GROUP, INC.

      Second
Floor, 9 Lower Bridge Street

      Chester,
UK CH1 1RS

       

      January
20, 2010

       

      Via Electronic
Mail

      

      Mr. Ian
Warwick

      The
Dovecotes, Plas Devon Court

      Rossett
Road, Holt LL13 9SY

      United
Kingdom

      

      
        	
              	
                Re:

              	
                Separation
      Agreement

              

      

      

      Dear Mr.
Warwick:

      

      This
agreement (the “Separation Agreement”) is to confirm that Aftersoft Group, Inc.
(the “Company”) has elected to terminate your employment with the Company
without cause pursuant to Section 4.3(b) of your Employment Agreement dated as
of December 1, 2008 (the “Employment Agreement”) on the following terms and
conditions.  Accordingly, you and the Company agree as follows.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Employment Agreement.

      

      1.           Termination. The
effective date of termination of the Employment Agreement, and your effective
date of termination as Chief Executive Officer and a director of the Company is,
January 31, 2010 (the “Effective Date”). From the date of this Separation
Agreement through the Effective Date, you agree to continue to perform your
duties as set forth in the Employment Agreement in full.  Effective at
the close of business on the Effective Date, you have no further authority to
bind the Company as President, Chief Executive Officer, or a
director.  You and the Company acknowledge and agree that as of the
date hereof, all provisions of the Employment Agreement are hereby terminated in
their entirety.  We have agreed that you will have the ability to
resign your positions without prejudice to any rights in your Employment
Agreement.

      

      2.           Severance
Payment.

      

      a.           Subject
to Section 2(b), commencing February 1, 2010, and in accordance with Section
4.8(a)(i) of the Employment Agreement, the Company will pay you the aggregate
sum of $300,000 in six (6) equal monthly installments of $50,000 per month
(each, an “Installment”), on the first of each of the succeeding six (6) months,
which sum is comprised of that portion of your Base Salary that was not
previously paid to you from the last payment date through the Effective Date,
and an amount equal 12-months salary at the level of your Base Salary currently
in effect, subject to normal withholdings and deductions.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      

      b.          In
accordance with Section 4.8(a)(iv) of the Employment Agreement, all performance
share units previously granted to you under the Employment Agreement that would
vest in the course of any fiscal year shall vest on a pro rata
basis.

      

      c.          
All severance payments under this Severance Agreement will be made in British
Pounds Sterling.

      

      d.          All
unused but accrued vacation will be paid with the first termination payment
pursuant to this Separation Agreement.

      

      e.           As
of the Effective Date, and except as may otherwise be agreed in writing between
you and the Company, you will no longer be eligible for any additional
compensation, including without limitation salary, bonuses, or
benefits.

      

      3.           Refinancing Fee. The
Company agrees to pay you a one-time sum of $75,000 (the “Refinancing Fee”) in
the event of a refinancing of the Company’s debt currently held by ComVest
Capital LLC; provided, however, that no such Refinancing Fee shall be due if
such refinancing of the ComVest debt is effected by a shareholder that, as of
the date of this Agreement, owns more than five percent (5%) of the Company’s
equity or an independent member of the Company’s Board of
Directors.  Payment of the Refinancing Fee shall be made upon the
consummation of such refinancing transaction.  In the event that a
portion of such refinancing of the ComVest debt is effected by a shareholder
that, as of the date of this Agreement, owns more than five percent (5%) of the
Company’s equity or an independent member of the Company’s Board of Directors,
you will be entitled to a portion of such Refinancing Fee.  (By way of
example, if 25% of the refinancing of the ComVest debt is provided by an
insider, then you would be entitled to a Refinancing Fee of
$56,250.)

      

      You will
be entitled to convert the Refinancing Fee earned into equity at a rate of $1.10
of equity for each $1.00 of earned Refinancing Fee.  (By way of
example, in the event you were entitled to a Refinancing Fee of $56,250, you
could elect to convert such Refinancing Fee into $61,875 of
Equity.)  The number of shares to be issued shall be based on the
closing price of the Company’s common stock on the date that the Company
receives notice of such conversion.  Any fractional shares shall be
rounded up to the nearest whole share.  A form of notice is attached
hereto as Exhibit
A.  Such notice of the election to convert must be made no
later than five (5) business days after the Company has given you notice that
you are entitled to receive all or a portion of the Financing
Fee.  Failure to give notice within five (5) business days will result
in your forfeiture of this option.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      4.           Mutual Release. In
exchange for the benefits contained in this Separation Agreement, you and the
Company hereby release and discharge the other, together with each and every of
your and the Company’s predecessors, successors (by merger or otherwise),
parents, subsidiaries, affiliates, divisions, directors, officers, employees and
agents, as applicable, whether present or former, from any and all claims,
actions, causes of action, rights, benefits, compensation, or damages, including
costs and attorneys’ fees, of whatever nature, whether known or unknown,
suspected or unsuspected, matured or unmatured, now existing or arising in the
future from any act, omission, event, occurrence, or non-occurrence prior to the
Effective Date, arising out of or in any way related to your employment with the
Company.

      

      5.           Indemnification. The
Company agrees to indemnify you to the fullest extent permitted by the Company’s
Bylaws and that certain indemnification agreement dated as of the date hereof,
substantially in the form of Exhibit B attached
hereto, which includes independent representation where appropriate. Nothing in
this Separation Agreement shall modify, or be interpreted to modify, the
application or applicability of any law, document, or authority relating to
indemnification.

      

      6.           Non-Disparagement. You
agree that you will not make any disparaging or untruthful remarks about or
concerning the Company, its affiliates, officers, directors, employees or
agents, whether acting in their individual or representative capacity, or
otherwise take any action that could reasonably be anticipated to cause damage
to the reputation, goodwill or business of the Company, or otherwise make
remarks that may negatively reflect upon the Company. The Company agrees that it
will not make any disparaging or untruthful remarks concerning you and shall use
reasonable efforts to cause its officers, directors, employees and agents, to
not make any disparaging or untruthful remarks concerning you, or otherwise take
any action that could reasonably be anticipated to cause damage to your
reputation, goodwill or business, or otherwise make remarks that may negatively
reflect upon you.  Nothing in this Paragraph shall in any way limit
your ability or the ability of the Company or its officers, directors, employees
or agents to respond to or cooperate with any government inquiry or
investigation or to give truthful testimony as required by law.

      

      You or
your counsel will have the ability to provide reasonable comments on the draft
press release announcing your separation from the business and which is attached
as Exhibit C to
this Separation Agreement.  The Company will use good faith in
determining whether or not to incorporate any such comments reasonably made by
your or your counsel.  You or your counsel will also have the ability
to review the Current Report on Form 8-K to be filed by the Company; provided, however, that the
Company reserves the right whether to accept any suggestions or comments
provided to the Form 8-K that it believes are not accurate or would otherwise
result in the Company’s filing a report that contains misstatement or an
omission of material fact.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      7.           Confidentially. In
accordance with Section 6.1 of the Employment Agreement, in consideration of
your former employment and your receipt of the salary and other benefits
associated with your employment, and in consideration of the payments and other
benefits received under this Separation Agreement, and in acknowledgment that
(a) the Company is engaged in the automotive software business, (b) maintains
secret and confidential information, (c) during the course of your employment by
the Company such secret or confidential information may have become known to
you, and (d) full protection of the Company’s business makes it essential that
no employee or former employee appropriate for his or her own use, or disclose
such secret or confidential information, you agree that for a period of two (2)
years following the Effective Date, you will hold in strict confidence and shall
not, directly or indirectly, disclose or reveal to any person, or use for your
own personal benefit or for the benefit of anyone else, any trade secrets,
confidential dealings, or other confidential or proprietary information of any
kind, nature, or description (whether or not acquired, learned, obtained, or
developed by you alone or in conjunction with others) belonging to or concerning
the Company or any of its subsidiaries, except (i) with the prior written
consent of the Company duly authorized by its Board, (ii) in the course of the
proper performance of your duties hereunder, (iii) for information (x) that
becomes generally available to the public other than as a result of unauthorized
disclosure by you or your affiliates or (y) that becomes available to you on a
non-confidential basis from a source other than the Company or its subsidiaries
who is not bound by a duty of confidentiality, or other contractual, legal, or
fiduciary obligation, to the Company, or (iv) as required by applicable law or
legal process.

      

      8.           Non-Competition. In
accordance with Section 6.2 of the Employment Agreement, for so long as you
receive any Severance Benefit or Severance Amount, or receive any Severance
Payment provided under this Separation Agreement, you agree that you shall not
be engaged as an officer or executive of, or in any way be associated in a
management or ownership capacity with any corporation, company, partnership or
other enterprise or venture which conducts a business which is in direct
competition with the business of the Company; provided, however, that you may
own not more than two percent (2%) of the outstanding securities, or equivalent
equity interests, of any class of any corporation, company, partnership, or
either enterprise that is in direct competition with the business of the
Company, which securities are listed on a national securities exchange or traded
in the over-the-counter market.  For purposes of this Separation
Agreement, a lump sum payment equivalent made to you shall be judged in relation
to your most recent annual base salary to determine whether you are continuing
to receive a Severance Benefit or Severance Amount and shall be measured from
the date such payment is received.  It is expressly agreed that the
remedy at law for breach of this covenant is inadequate and that injunctive
relief shall be available to prevent the breach thereof.

      

      9.           Non-Solicitation. In
accordance with Section 6.3 of the Employment Agreement, you agree that you will
not, directly or indirectly, within one (1) year of the Effective Date, in any
manner, encourage, persuade, or induce any other employee of the Company to
terminate his or her employment, or any person or entity engaged by the Company
to represent it to terminate that relationship without the express written
approval of the Company; provided, however, that in the event an employee with
whom you had a preexisting relationship prior to your employment with the
Company individually elects to resign as a consequence of your having left the
Company’s employ, this non-solicitation provision shall not prohibit their
subsequent association.  It is expressly agreed that the remedy at law
for breach of this covenant is inadequate and that injunctive relief shall be
available to prevent the breach thereof.

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      10.         Confidential Nature of this
Separation Agreement. You and the Company each agree that the
consideration provided to you under this Separation Agreement is confidential
and that neither shall disclose said consideration to persons outside the
Company, except that you may show this Separation Agreement to your spouse,
attorneys and tax consultants, who agree to be bound by these provisions; provided, however, that nothing herein
shall prohibit or restrict the Company or you (or respective attorneys) from
making disclosures related to this Separation Agreement as required by law, from
responding to any inquiry, or providing testimony, about the fact or terms of
this Separation Agreement or the consideration provided to you, or the facts and
circumstances underlying this Separation Agreement, before the United States
Securities and Exchange Commission or any other federal or state regulatory or
law enforcement agency or as required by law, or prohibit or restrict the
Company or you from disclosing the terms of this Separation Agreement in any
litigation brought to enforce any obligations created by this Separation
Agreement.

      

      11.         Return of Company
Property. You agree that as of the Effective Date, you will have
returned to the Company all of the Company’s property, including all physical
property (personal digital assistants, computer disks, access cards, etc.) as
well as any and all documents, data, plans, or other information, whether on
paper or in electronic form.

      

      12.         Communications. You
agree to cooperate with the Company and its officers, directors, employees or
agents to coordinate appropriate internal and external communications concerning
your separation pursuant to this Separation Agreement, and to designate
individuals to whom any questions shall be directed.  You will have
final approval on all such communications.

      

      13.         Equitable
Remedies. The provisions of this Separation Agreement, if breached,
could cause the parties to this Separation Agreement to suffer irreparable harm
for which damages would be an inadequate remedy. Therefore, upon any such breach
or threat thereof, either party to this Separation Agreement shall be entitled
to injunctions and other appropriate equitable relief in addition to whatever
remedies such party may have at law.

      

      14.         Benefit. This
Agreement shall inure to the benefit of and be binding upon each of the parties
and to those individuals and entities released herein, and their respective
successors.

      

      15.         Governing
Law. This Agreement shall be governed by, and construed in
accordance with the laws of the State of Delaware without resort to any
principle of conflict of laws that would require application of the laws of any
other jurisdiction, except as may apply to you pursuant to applicable employment
or related laws of the United Kingdom.

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

      16.         Severability. If
any of the provisions of this Separation Agreement is held to be invalid or
unenforceable, the remaining provisions will nevertheless continue to be valid
and enforceable to the fullest extent permitted by law.

      

      17.         Entire
Agreement. This Separation Agreement represents and contains the
entire understanding between the parties in connection with its subject matter,
and supersedes any prior written or oral agreements or understandings. No
modification or waiver of any provision of this Separation Agreement shall be
valid unless in writing and signed by you and an authorized representative of
the Company.

      

      18.         Counterparts. This
Separation Agreement may be executed in counterparts, and all parties need not
execute the same counterpart; however, no party shall be bound by this
Separation Agreement until a counterpart hereof has been executed by you and the
Company. Facsimiles or other electronic transmission (e.g., pdf) shall be effective
as originals.

      

      [Remainder
of page intentionally left blank.]

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

      Please
evidence your agreement to each of the provisions of this Separation Agreement
by executing a counterpart hereof where indicated and returning to Gerald M.
Czarnecki, Chairman, c/o O2Media, Inc., 2001 Sample Road, Suite 101,
Pompano Beach, Florida 33064.

      .

      Very
truly yours,

      

      AFTERSOFT
GROUP, INC.

      

      
        
          
            
              
                
                  	
                          By: 

                        	 
      	 
      
	 
      	
                          Name: 

                        	 
      
	 
      	
                          Title:

                        	 
      

                

              

            

          

        

      

      

      Accepted
as of the date first above written:

      

      
        
          
            
              	
                       

                    
	
                      Ian
      Warwick

                    

            

          

        

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      Exhibit
A

      

      Form
of Notice of Conversion of Refinancing Fee

      

      [Date]

      

      Via Electronic Mail and
Facsimile

      

      Chief
Financial Officer

      Aftersoft
Group, Inc.

      

      Dear Sir
or Madam:

      

      Reference
is made to Section 3 of that certain Separation Agreement dated as of January
[__], 2010 (the “Agreement”) between Ian Warwick and Aftersoft Group Inc. (the
“Company”).  Section 3 of the Agreement provides that I may elect to
convert the Financing Fee, as defined in the Agreement, to equity.  On
[date],
I was provided with notice that I was entitled to a Financing Fee of $[amount].  I
hereby elect to convert such Financing Fee as provided in the
Agreement.  Kindly have the certificate for such shares issued in the
name of [insert
name].

      

      Very
truly yours,

      

      Company
Acknowledgement:

      

      On [insert
date], we received notice of your intent to convert the Financing Fee of
$[amount]
into equity at a rate of $1.10 of equity for each $1.00 of Financing
Fee.  The closing price of the Company’s common stock on [insert
date] was [insert
closing price].  A certificate for [insert
number of shares] shall be issued in the name of [insert
name] per your prior instructions.

      

      
        
          
            
              
                
                  	
                          By:

                        	 
      
	 
      	 
      
	
                          Its:

                        	
                          Chief Financial
  Officer

                        

                

              

            

          

        

      

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

      Exhibit
B

      

      INDEMNITY
AGREEMENT

       

      This
INDEMNITY AGREEMENT (the “Agreement”) is dated as of January 20, 2010, and is
made by and between Aftersoft Group, Inc., a Delaware corporation (the
“Company”), and Ian Warwick, an officer and director of the Company (the
“Indemnitee”).

       

      RECITALS

       

      A.           WHEREAS
the Indemnitee has been employed by the Company and/or its affiliates since
[_____], 2006; and

       

      B.           WHEREAS
the Indemnitee and the Company have determined that it is in their mutual best
interests to terminate the Indemnitee’s employment effective January 31, 2010;
and

       

      C.           WHEREAS,
the Board of Directors of the Company (the “Board”) has agreed, as part of the
Indemnitee’s separation from the Company, to provide Indemnitee with
indemnification for all acts by the Indemnity to the maximum permissible
liability for Expenses, losses, liabilities and damages in connection with
claims against the Indemnitee relating to his service in such capacity as
Chairman of the Board, a director, and an officer of the Company;
and

       

      D.           WHEREAS
Section 145 of the General Corporation Law of Delaware, under which the Company
is organized (the “Law”), empowers the Company to indemnify by agreement its
officers, directors, employees and agents, and persons who serve, at the request
of the Company, as directors, officers, employees or agents of other
corporations or enterprises, and expressly provides that the indemnification
provided by the Law is not exclusive; further the provisions of the Certificate
of Incorporation of the Company, as amended (the “Certificate of Incorporation”)
specifically state that the rights to indemnification and payment of expenses
described therein are not exclusive, and thereby contemplate that contracts with
respect to indemnification and payment of Expenses by the Company and similar
obligations of the Company may be entered into by and between the Company and
persons entitled to such rights described in the Certificate of Incorporation;
and

       

      NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:

       

      1.            Definitions.

       

      1.1.        Agent.  For
the purposes of this Agreement, “Agent” of the Company means any person who is
or at any time was a director or officer of the Company or a subsidiary of the
Company; or is or at any time was serving at the request of, for the convenience
of, or to represent the interest of the Company or a subsidiary of the Company
as a director or officer of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise or an affiliate of the
Company; or was a director or officer of another enterprise or affiliate of the
Company at the request of, for the convenience of, or to represent the interests
of such predecessor corporation. The term “enterprise” includes any employee
benefit plan of the Company, its subsidiaries, affiliates and predecessor
corporations.

      
        
           

        

        
          B-1

          
            

          

        

        
           

        

      

       

      1.2.        Change
in Control.  “Change in Control” means a change in control of the
Company occurring after January 31, 2010, of a nature that would be required to
be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the “Act”), whether or not the Company is
then subject to such reporting requirement; provided, however, that,
without limitation, such a Change in Control shall be deemed to have occurred if
after June 1, 2010, (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Act) other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 15% or more of the
combined voting power of the Company’s then outstanding securities without the
prior approval of at least two-thirds of the members of the board of directors
of the Company in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the Company is a
party to a merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the board
of directors of the Company then in office, as a consequence of which members of
the board of directors in office immediately prior to such transaction or event
constitute less than a majority of the board of directors thereafter; or (iii)
during any period of two consecutive years, other than as a result of an event
described in clause (ii) of this subsection (c), individuals who at the
beginning of such period constituted the board of directors of the Company
(including for this purpose any new director whose election or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a majority
of the board of directors.

       

      1.3.        Company.  As
used herein the term “Company” includes all successors and assigns to the
Company, including, without limitation, any corporation or other entity that is
a successor to the Company by virtue of a Change in Control.

       

      1.4.        Controlled.
“Controlled” means subject to the power to exercise a controlling influence over
the management or policies of a corporation, partnership, joint venture, trust
or other entity.

      
        
           

        

        
          B-2

          
            

          

        

        
           

        

      

      1.5.        Expenses.
For purposes of this Agreement, “Expenses” includes all direct and indirect
costs of any type or nature whatsoever (including, without limitation,
attorneys’ fees and related disbursements and retainers, costs of travel, other
out-of-pocket costs such as fees and disbursements of expert witnesses, private
investigators and professional advisors, court costs, transcript costs, fees of
experts, duplicating, printing, and binding costs, telephone and fax
transmission charges, postage, delivery services, secretarial services and other
disbursements and expenses and reasonable compensation for time spent by the
Indemnitee for which he is not otherwise compensated by the Company or any third
party) actually and reasonably incurred by the Indemnitee in connection with the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification or advancement of expenses under this Agreement,
Section 145 of the Law or otherwise.

       

      1.6.        Proceeding.
For the purposes of this Agreement, a “Proceeding” means any threatened,
pending, or completed action, suit, arbitration, alternate dispute resolution
process, investigation, administrative hearing, appeal, inquiry or other
proceeding, whether civil, criminal, administrative, investigative or any other
type whatsoever, whether formal or informal, including a proceeding initiated by
Indemnitee pursuant to Section 9 of this Agreement to enforce Indemnitee’s
rights hereunder.

       

      1.7.        Subsidiary.
For purposes of this Agreement, “Subsidiary” means any corporation, partnership,
limited liability company, trust, joint venture, or other entity of which more
than fifty percent (50%) of the outstanding voting securities is owned directly
or indirectly by the Company, by the Company and one or more of its subsidiaries
or by one or more of the Company’s subsidiaries.

       

      2.           Directors’ and Officers’
Insurance. The Company shall, to the extent that the Board determines it
to be economically reasonable, maintain a policy of directors’ and officers’
liability insurance (“D&O Insurance”), on such terms and conditions as may
be approved by the Board.

       

      3.           Mandatory
Indemnification. Subject to Section 9 below, the Company shall indemnify
and hold the Indemnitee harmless to the fullest extent permitted by the Law.
Without limiting the generality of the foregoing, the Company shall indemnify
and hold harmless the Indemnitee as follows:

       

      3.1.        Third
Party Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in
the right of the Company) by reason of the fact that he is or at any time was an
agent of the Company, or by reason of anything done or not done by him in any
such capacity, against any and all claims, expenses and liabilities of any type
whatsoever (including, but not limited to, attorneys’ fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal of such proceeding if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; and/or

      
        
           

        

        
          B-3

          
            

          

        

        
           

        

      

      3.2.        Derivative
Actions. If the Indemnitee is a person who was or is a party or is threatened to
be made a party to any proceeding by or in the right of the Company to procure a
judgment in its favor by reason of the fact that he is or at any time was an
agent of the Company, or by reason of anything done or not done by him in any
such capacity, against any and all claims, expenses and liabilities, including
without limitation attorneys’ fees, amounts paid in settlement of any such
proceeding and all expenses actually and reasonably incurred by him in
connection with the investigation, defense, settlement, or appeal of such
proceeding if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Company; except that no
indemnification under this subsection shall be made in respect of any claim,
issue or matter as to which such person shall have been finally adjudged, in a
judgment not subject to appeal, to be liable to the Company by a court of
competent jurisdiction due to willful misconduct of a culpable nature in the
performance of his duty to the Company, unless and only to the extent that the
Court of Chancery in Delaware or the court in which such proceeding was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such amounts which the Court of Chancery or
such other court shall deem proper; and/or

       

      3.3.        Exception
for Amounts Covered by Insurance. Notwithstanding the foregoing, the Company
shall not be obligated to indemnify the Indemnitee for expenses or liabilities
of any type whatsoever (including, but not limited to, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) to the extent such
have been paid directly to the Indemnitee by D&O Insurance.

       

      4.           Partial Indemnification and
Contribution.

       

      4.1.        Partial
Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any
expenses or liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) incurred by him in the investigation, defense, settlement, or appeal
of a proceeding but is not entitled, however, to indemnification for all of the
total amount thereof, then the Company shall nevertheless indemnify the
Indemnitee for such total amount except as to the portion thereof to which the
Indemnitee is not entitled to indemnification.

       

      4.2.        Contribution.
If the Indemnitee is not entitled to the indemnification provided in Section 4
for any reason other than the statutory limitations set forth in the Law, then
in respect of any threatened, pending or completed proceeding in which the
Company is jointly liable with the Indemnitee (or would be if joined in such
proceeding), the Company shall contribute to the amount of Expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by the Indemnitee in such proportion as
is appropriate to reflect (i) the relative benefits received by the Company on
the one hand and the Indemnitee on the other hand from the transaction from
which such proceeding arose and (ii) the relative fault of the Company on the
one hand and of the Indemnitee on the other hand in connection with the events
which resulted in such Expenses, judgments, fines or settlement amounts, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Indemnitee on the other hand shall be
determined by reference to, among other things, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such Expenses, judgments, fines or settlement
amounts. The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 5 were determined by pro rata allocation
or any other method of allocation, which does not take account of the foregoing
equitable considerations.

      
        
           

        

        
          B-4

          
            

          

        

        
           

        

      

       

      5.            Mandatory Advancement of
Expenses.

       

      5.1.        Advancement.
Subject to Section 9 below, the Company shall advance all expenses incurred by
the Indemnitee in connection with the investigation, participation, defense,
settlement or appeal of any proceeding to which the Indemnitee is a party or is
threatened to be made a party by reason of the fact that the Indemnitee is or at
any time was an agent of the Company or by reason of anything done or not done
by him in any such capacity. The Indemnitee hereby undertakes promptly to repay
such amounts advanced only if, and to the extent that, it shall ultimately be
determined that the Indemnitee is not entitled to be indemnified by the Company
under the provisions of this Agreement, the Certificate of Incorporation, or
Bylaws of the Company, the Law or otherwise. The advances to be made hereunder
shall be paid by the Company to the Indemnitee within thirty (30) days following
delivery of a written request therefor by the Indemnitee to the
Company.

       

      5.2.        Exception.
Notwithstanding the foregoing provisions of this Section 6, the Company shall
not be obligated to advance any expenses to the Indemnitee arising from a
lawsuit filed directly by the Company against the Indemnitee if an absolute
majority of the members of the Board reasonably determines in good faith, within
thirty (30) days of the Indemnitee’s request to be advanced expenses, that the
facts known to them at the time such determination is made demonstrate clearly
and convincingly that the Indemnitee acted in bad faith. If such a determination
is made, the Indemnitee may have such decision reviewed by another forum, in the
manner set forth in Sections 8.3, 8.4 and 8.5 hereof, with all references
therein to “indemnification” being deemed to refer to “advancement of expenses,”
and the burden of proof shall be on the Company to demonstrate clearly and
convincingly that, based on the facts known at the time, the Indemnitee acted in
bad faith. The Company may not avail itself of this Section 6.2 as to a given
lawsuit if, at any time after the occurrence of the activities or omissions that
are the primary focus of the lawsuit, the Company has undergone a change in
control. For this purpose, a change in control shall mean a given person or
group of affiliated persons or groups increasing their beneficial ownership
interest in the Company by at least fifteen (15) percentage points without
advance Board approval.

       

      6.            Notice and Other
Indemnification Procedures.

       

      6.1.        Promptly
after receipt by the Indemnitee of notice of the commencement of or the threat
of commencement of any proceeding, the Indemnitee shall, if the Indemnitee
believes that indemnification with respect thereto may be sought from the
Company under this Agreement, notify the Company of the commencement or threat
of commencement thereof.

      
        
           

        

        
          B-5

          
            

          

        

        
           

        

      

       

      6.2.        If,
at the time of the receipt of a notice of the commencement of a proceeding
pursuant to Section 7.1 hereof, the Company has D&O Insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such proceeding in accordance with the terms of such D&O Insurance
policies.

       

      6.3.        In
the event the Company shall be obligated to advance the expenses for any
proceeding against the Indemnitee, the Company, if appropriate, shall be
entitled to assume the defense of such proceeding, with counsel approved by the
Indemnitee (which approval shall not be unreasonably withheld), upon the
delivery to the Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
the Indemnitee with respect to the same proceeding, provided that: (a) the
Indemnitee shall have the right to employ his own counsel in any such proceeding
at the Indemnitee’s expense; (b) the Indemnitee shall have the right to employ
his own counsel in connection with any such proceeding, at the expense of the
Company, if such counsel serves in a review, observer, advice, and counseling
capacity and does not otherwise materially control or participate in the defense
of such proceeding; or (c) if (i) the employment of counsel by the Indemnitee
has been previously authorized by the Company, (ii) the Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of any such defense or (iii) the
Company shall not, in fact, have employed counsel to assume the defense of such
proceeding, then the fees and expenses of the Indemnitee’s counsel shall be at
the expense of the Company.

       

      7.            Determination of Right to
Indemnification.

       

      7.1.        To
the extent the Indemnitee has been successful on the merits or otherwise in
defense of any proceeding referred to in Section 4.1 or 4.2 of this Agreement or
in the defense of any claim, issue or matter described therein, the Company
shall indemnify the Indemnitee against expenses actually and reasonably incurred
by him in connection with the investigation, defense or appeal of such
proceeding, or such claim, issue or matter, as the case may be, including
without limitation Indemnitee’s attorneys’ fees.

       

      7.2.        In
the event that Section 8.1 is inapplicable, or does not apply to the entire
proceeding, the Company shall nonetheless indemnify the Indemnitee unless the
Company shall prove by clear and convincing evidence to a forum listed in
Section 8.3 below that the Indemnitee has not met the applicable standard of
conduct required to entitle the Indemnitee to such indemnification.

       

      7.3.        The
Indemnitee shall be entitled to select the forum in which the validity of the
Company’s claim under Section 8.2 hereof that the Indemnitee is not entitled to
indemnification will be heard from among the following:

      
        
           

        

        
          B-6

          
            

          

        

        
           

        

      

       

      (a)            a
quorum of the Board consisting of directors who are not parties to the
proceeding for which indemnification is being sought;

       

      (b)            the
stockholders of the Company, provided however that the Indemnitee can select a
forum consisting of the stockholders of the Company only with the approval of
the Company;

       

      (c)            legal
counsel mutually agreed upon by the Indemnitee and the Board, which counsel
shall make such determination in a written opinion;

       

      (d)            a
panel of three arbitrators, one of whom is selected by the Company, another of
whom is selected by the Indemnitee and  the last of whom is selected
by the first two arbitrators so selected; or

       

      (e)            the
Court of Chancery of Delaware or other court having jurisdiction of subject
matter and the parties.

       

      7.4.        As
soon as practicable, and in no event later than thirty (30) days after the forum
has been selected pursuant to Section 8.3 above, the Company shall, at its own
expense, submit to the selected forum its claim that the Indemnitee is not
entitled to indemnification, and the Company shall act in the utmost good faith
to assure the Indemnitee a complete opportunity to defend against such
claim.

       

      7.5.        If
the forum selected in accordance with Section 8.3 hereof is not a court, then
after the final decision of such forum is rendered, the Company or the
Indemnitee shall have the right to apply to the Court of Chancery of Delaware,
the court in which the proceeding giving rise to the Indemnitee’s claim for
indemnification is or was pending or any other court having jurisdiction of
subject matter and the parties, for the purpose of appealing the decision of
such forum, provided that such right is executed within sixty (60) days after
the final decision of such forum is rendered. If the forum selected in
accordance with Section 8.3 hereof is a court, then the rights of the Company or
the Indemnitee to appeal any decision of such court shall be governed by the
applicable laws and rules governing appeals of the decision of such
court.

       

      7.6.        Notwithstanding
any other provision in this Agreement to the contrary, the Company shall
indemnify the Indemnitee against all Expenses incurred by the Indemnitee in
connection with any hearing or proceeding under this Section 8 involving the
Indemnitee and against all Expenses incurred by the Indemnitee in connection
with any other proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this
Agreement unless a court of competent jurisdiction finds that each of the
material claims and/or defenses of the Indemnitee in any such proceeding was
frivolous or not made in good faith.

       

      8.            Exceptions. Any other
provision herein to the contrary notwithstanding, the Company shall not be
obligated pursuant to the terms of this Agreement:

      
        
           

        

        
          B-7

          
            

          

        

        
           

        

      

       

      8.1.        Claims
Initiated by Indemnitee. To indemnify or advance expenses to the Indemnitee with
respect to proceedings or claims initiated or brought voluntarily by the
Indemnitee and not by way of defense, except with respect to proceedings
specifically authorized by the Board or brought to establish or enforce a right
to indemnification and/or advancement of Expenses arising under this Agreement,
the charter documents of the Company or any Subsidiary or any statute or law or
otherwise, but such indemnification or advancement of Expenses may be provided
by the Company in specific cases if the Board finds it to be appropriate;
or

       

      8.2.        Unauthorized
Settlements. To indemnify the Indemnitee hereunder for any amounts paid in
settlement of a proceeding unless the Company consents in advance in writing to
such settlement, which consent shall not be unreasonably withheld;
or

       

      8.3.        Securities
Law Actions. To indemnify the Indemnitee on account of any suit in which
judgment is rendered against the Indemnitee for an accounting of profits made
from the purchase or sale by the Indemnitee of securities of the Company
pursuant to the provisions of Section l6(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law; or

       

      8.4.        Unlawful
Indemnification. To indemnify the Indemnitee if a final decision by a court
having jurisdiction in the matter, in a judgment not subject to appeal, shall
determine that such indemnification is not lawful. In this respect, the Company
and the Indemnitee have been advised that the Securities and Exchange Commission
takes the position that indemnification for liabilities arising under the
federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication.

       

      9.            Non-Exclusivity.

       

      THE
PROVISIONS FOR INDEMNIFICATION AND ADVANCEMENT OF EXPENSES SET FORTH IN THIS
AGREEMENT SHALL NOT BE DEEMED EXCLUSIVE OF ANY OTHER RIGHTS WHICH THE INDEMNITEE
MAY HAVE UNDER ANY PROVISION OF LAW, THE COMPANY’S CERTIFICATE OF INCORPORATION
OR BYLAWS, THE VOTE OF THE COMPANY’S STOCKHOLDERS OR DISINTERESTED DIRECTORS,
OTHER AGREEMENTS OR OTHERWISE, BOTH AS TO ACTION IN THE INDEMNITEE’S OFFICIAL
CAPACITY AND TO ACTION IN ANOTHER CAPACITY WHILE OCCUPYING HIS POSITION AS AN
AGENT OF THE COMPANY, AND THE INDEMNITEE’S RIGHTS HEREUNDER SHALL CONTINUE AFTER
THE INDEMNITEE HAS CEASED ACTING AS AN AGENT OF THE COMPANY AND SHALL INURE TO
THE BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF THE
INDEMNITEE.

      
        
           

        

        
          B-8

          
            

          

        

        
           

        

      

      10.         Burden of Proof. In
making a determination with respect to entitlement to indemnification hereunder,
the person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement, and the Company
shall have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary to
that presumption.

       

      11.         Duration of
Agreement.

       

      This
Agreement shall continue until and terminate upon the later of: (a) 10 years
after the date that the Indemnitee shall have ceased to serve as a director
and/or officer of the Company or director, officer, employee or agent of any
other corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise which the Indemnitee served at the request of the Company; or
(b) one year after the final, nonappealable termination of any Proceeding then
pending in respect of which the Indemnitee is granted rights of indemnification
or advancement of Expenses hereunder and of any proceeding commenced by the
Indemnitee pursuant to Section 10 of this Agreement relating
thereto.

      

      12.    
     General
Provisions.

       

      12.1.      Interpretation
of Agreement. It is understood that the parties hereto intend this Agreement to
be interpreted and enforced so as to provide indemnification and advancement of
expenses to the Indemnitee to the fullest extent now or hereafter permitted by
law, except as expressly limited herein.

       

      12.2.      Severability.
If any provision or provisions of this Agreement shall be held to be invalid,
illegal, or unenforceable for any reason whatsoever, then:

       

      (a)        the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal, or
unenforceable that are not themselves invalid, illegal, or unenforceable) shall
not in any way be affected or impaired thereby; and

       

      (b)        to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraphs of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable and to give effect to Section 13.1 hereof.

       

      12.3.      Modification
and Waiver. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver.

      
        
           

        

        
          B-9

          
            

          

        

        
           

        

      

      12.4.      Subrogation.
In the event of full payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary or desirable to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

       

      12.5.      Counterparts.
This Agreement may be executed in one or more counterparts and via facsimile,
each of which shall constitute an original, but all of which when taken together
shall constitute a single agreement.

       

      12.6.      Successors
and Assigns. The terms of this Agreement shall bind, and shall inure to the
benefit of, the successors and assigns of the parties hereto.

       

      12.7.      Notice.
All notices, requests, demands and other communications under this Agreement
shall be in writing and shall be deemed duly given: (a) if delivered by hand and
signed for by the party addressee; or (b) if mailed by certified or registered
mail, with postage prepaid, on the third business day after the mailing date.
Addresses for notices to either party are as shown on the signature page of this
Agreement or as subsequently modified by written notice.

       

      12.8.      Gender.
The masculine, feminine or neuter pronouns used herein shall be interpreted
without regard to gender, and the use of the singular or plural shall be deemed
to include the other whenever the context so requires.

       

      12.9.      Governing
Law. This Agreement shall be governed exclusively by and construed according to
the laws of the State of Delaware, as applied to contracts between Delaware
residents entered into and to be performed entirely within
Delaware.

       

      If the
General Corporation Law of the State of Delaware (the “Delaware Law”) or any
other applicable law is amended after the date hereof to permit the Company to
indemnify Indemnitee for Expenses or liabilities, or to indemnify Indemnitee
with respect to any action or Proceeding, not contemplated by this Agreement,
then this Agreement (without any further action be either party hereto) shall
automatically be deemed to be amended to require that the Company indemnify
Indemnitee to the fullest extent permitted by the Delaware Law.

       

      12.10.    Consent
to Jurisdiction. The Company and the Indemnitee each hereby irrevocably consent
to the jurisdiction of the courts of the State of Delaware for all purposes in
connection with any action or proceeding, which arises out of or relates to this
Agreement.

       

      12.11.    Attorneys’
Fees. In the event Indemnitee is required to bring any action to enforce rights
under this Agreement (including, without limitation, the payment or
reimbursement of expenses of any proceeding described in Section 4), the
Indemnitee shall be entitled to all reasonable fees and expenses in bringing and
pursuing such action, unless a court of competent jurisdiction finds each of the
material claims of the Indemnitee in any such action was frivolous and not made
in good faith.

       

      [Balance
of the Page Intentionally Left Blank]

      
        
           

        

        
          B-10

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement effective
as of the date first written above.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              AFTERSOFT
      GROUP, INC.

                                            	 	
                                              INDEMNITEE

                                            
	 
      	 
      	 	 
      	 
      
	
                                              By:

                                            	 
      	 	
                                              By:

                                            	 
      
	
                                              Name:

                                            	 
      	 	
                                              Name:
      Ian Warwick

                                            
	
                                              Title:

                                            	 
      	 	
                                              Title: 
       Chief Executive Officer and Director

                                            
	 
      	 
      	 	 
      	 
      
	
                                              Date:
      January 20, 2010

                                            	 	
                                              Date:
      January 20, 2010

                                            
	 
      	 
      	 	 
      	 
      
	
                                              Address:

                                            	 	
                                              Address:

                                            

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
           

        

        
          B-11

          
            

          

        

        
           

        

      

      

      Exhibit
C

      

      Draft
Press Release

      

      Aftersoft
Group, Inc. Business Realignment

      

      NEW YORK—(PRNewswire)—January
XX, 2010 — Aftersoft Group, Inc. (OTCBB: ASFG), a major supplier of
Business and ERP supply chain management solutions to automotive parts and tire,
distributors, jobbers, retailers, and installers announced today that it has
completed a realignment of its business units.

      

      The
realignment results in the company’s US division, Aftersoft Network, N.A.,
reporting into Mike Jamieson, General Manager of MAM, Inc.  As part of
the realignment, Aftersoft announced that its CEO Ian Warwick and COO Simon
Chadwick, had resigned from the company, effective January 31,
2010.

      

      Commented
Gerry Czarnecki, Chairman of the Board: “The progress made in the US over the
past several years enables us to take the action we are announcing
today.  Now that the US organization is beginning to show a profit, we
are able to consolidate the operation of the US and UK businesses under a single
management team and further consolidate our activities as a means toward further
profit improvement.”  Continued Czarnecki: “I thank Ian Warwick and
Simon Chadwick for their tireless efforts in getting these businesses where they
are today.  Without their efforts these past several years, this might
not have become a reality.”

      
        
           

        

        
          C-1

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