As compensation for the services to be rendered by Employee for the Company under this Agreement, the Company shall pay Employee during the Employment Period an annual salary of $225,000.00 (“Base Pay”), which amount may be adjusted upward by the Management of the Company, in its sole discretion, from time to time. Such annual salary shall be earned and payable periodically in equal installments in accordance with the Company’s normal payroll practices, including applicable deductions and withholdings. Base Pay will be subject to annual review pursuant to the Company’s normal review policy for other similarly situated Employees of the Company and any changes in Base Pay will be communicated in writing to Employee.

With respect to stock options, the Company shall issue to Employee Stock Options (“Stock Options”) exercisable into Three Hundred Thousand (300,000) shares of Common Stock of the Company pursuant to the terms of the Sun River Energy, Inc. 2010 Stock Incentive Plan (the “Stock Plan”). The Stock Options shall be cashless and shall be issued to Employee on the Effective Date and shall vest 1/36 each month thereafter (each a “Vesting Date”) so long as Employee is employed by the Company. The exercise price of the Stock Options shall equal the average fair market value of a share of the Company’s common stock on January 12, 2011, the date that Employee began serving as General Counsel to the Company. Further, all 300,000 shares of Common Stock under the Stock Plan shall vest in either of the following events: (i) Employee’s employment with the Company is terminated by the Company for any reason other than Cause; or (ii) a Change in Control (as that term is defined in the Stock Plan) occurs during the Term. Finally, the Company shall cause common stock obtained through the Stock Options to be registered pursuant to the terms of the Stock Plan on Form S-8.

At the sole discretion of the Management of the Company, the Employee may earn additional stock options and cash bonuses. These additional benefits will be subject to all applicable deductions and withholdings at the discretion of the Management of the Company.

Further, in consideration for the compensation in paragraphs (a) and (b) commencing on the Effective Date, the Company shall not be obligated to pay for any legal fees invoiced by the Law Offices of James E. Pennington for the months of January or February, 2011; however, the Company shall be required to pay for any expenses invoiced during the aforementioned period.

During the Employment Period, Employee shall be entitled to three (3) weeks of paid vacation during each twelve-month period commencing on the calendar year beginning January 1, 2011. These three (3) weeks shall vest equally over a 12 month period. Employee shall also be entitled to all paid holidays given by the Company to its employees. Employee agrees to utilize his vacation at such time or times as are:

(i) consistent with the proper performance of his duties and responsibilities under this Agreement, and

(ii) mutually convenient for the Company and Employee.

During the Employment Period, Employee shall be entitled to participate in all employee group health insurance plans, or other welfare benefit plans, programs, and arrangements provided by the Company from time to time to its employees generally, subject to and on a basis consistent with the terms, conditions, and overall administration (including eligibility and vesting requirements) of such plans, programs, and arrangements. Such plans may include health, dental, retirement or other such programs which may be to the benefit of the Company’s employees.

Employee’s employment hereunder shall terminate automatically upon his death.

If the Company determines in good faith that the Disability (as defined herein) of Employee has occurred during the Employment Period, the Company may notify Employee of the Company’s intention to terminate Employee’s employment hereunder for Disability. In such event, Employee’s employment hereunder shall terminate effective on the fifth day following the date such notice of termination is given to Employee. For purposes of this Agreement, the “Disability” of Employee shall be deemed to have occurred if Employee shall have been unable to perform his essential duties hereunder for a period consisting of 90 continuous days within any given period of 365 consecutive days, (excluding any leaves of absence approved by the Board and the number of days of accrued vacation of Employee) as a result of his physical or mental incapacity; provided that, if Employee has a physical or mental impairment that substantially limits one or more major life activities, as defined under the Americans with Disabilities Act, the Company may extend the 90-day period to reasonably accommodate Employee’s impairment.

The Company may terminate Employee’s employment hereunder at any time for Cause. For purposes of this Agreement, “Cause” shall mean any of the following:

the breach by Employee of his duties as an employee of the Company, which breach is materially detrimental to the Company, monetarily or otherwise,

the failure of Employee to comply in any material respect with any written or oral direction of the Board which reasonably relates to the performance of his duties that he is physically able to perform and which would not require him to perform an illegal act or breach any agreement to which the Company is a party,

the failure of Employee to substantially perform his duties as an employee after demand for substantial performance is delivered by the Company to Employee that specifically identifies the manner in which the Company believes that Employee has not substantially performed his duties,

the commission by Employee of any criminal act that constitutes a felony or involves fraud, dishonesty, or moral turpitude,

Employee’s failure to render the services to the Company as contemplated under this Agreement as a result of alcohol or drug use,

the taking by Employee of any action, knowing or with reckless disregard that it is adverse in a material respect to the interests of the Company, or its assets,

the willful, material violation by Employee of any employer policies of the Company or its Affiliates, and

the material breach by Employee of any of his material covenants and agreements contained in this Agreement.

With respect to clauses (i), (ii), (iii), and (viii), Cause shall only exist if Employee fails to cure such matter within ten (10) days after receiving written notice from the Company.

The Company may terminate Employee’s employment hereunder at any time without Cause upon thirty (30) days notice to Employee.

Employee may terminate his employment hereunder at any time for Good Reason or without Good Reason upon thirty (30) days advance notice to the Company. For purposes of this Agreement, “Good Reason” means:

the Company’s failure to timely pay any compensation due to Employee under this Agreement, including failure to provide any stock or stock options due under Section 3;

a reduction in Employee’s compensation without Employee’s written consent;

the Company’s failure to timely provide resources necessary for the Employee to perform his duties under this agreement, other than (i) a purely monetary failure with respect to an amount less than $5,000, (ii) a failure within Executive’s control or (iii) an isolated, insubstantial or inadvertent failure that is not taken in bad faith;

any action by the Company, except as required by law or applicable government regulations, which is specific to the Executive that adversely affects Executive’s ability to perform his duties, or participation in bonus or incentive plans or the Other Benefits; or

the occurrence of a “Change in Control” as that term is defined in the Company’s 2010 Stock Incentive Plan. Notwithstanding the foregoing, in the event any compensation or benefit provided to the Employee as a result of a Change in Control is subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Change in Control” for purposes of such Award shall be the definition provided by Section 409A of the Code.

In the event of the termination of Employee’s employment hereunder (for any reason other than the death of Employee), Employee agrees that if at such time he is a manager or officer of the Company or any of its subsidiaries, he will promptly deliver to the Company his written resignation from all such positions, such resignation to be effective as of the date of termination.

If Employee’s employment hereunder is terminated pursuant to Sections 8(a), 8(b) or 8(c), or if Employee terminates his employment without Good Reason, the Company shall pay to Employee, or his estate, trust or similar Person if applicable, on the sixth (6th) day following the Termination Date or the next regularly scheduled pay day of the Company following the Termination Date, (i) any accrued but unpaid Base Salary provided for in Section 3 hereof for services rendered through the Termination Date, (ii) any accrued but unpaid expenses required to be reimbursed under Section 4, (iii) any vacation accrued to the Termination Date, and (iv) any accrued vested Stock Options provided for in Section 3 hereof through the Termination Date. Additionally, Employee may exercise any such options within 90 days of Termination Date.

If Employee’s employment hereunder is terminated by the Company for any reason (other than for death or Disability or pursuant to Section 8(c)) or by Employee for Good Reason, the Company shall pay to Employee:

on the sixth (6^th) day following the Termination Date or the next regularly scheduled pay day of the Company following the Termination Date, respectively,

any accrued but unpaid Base Salary provided for in Section 3 hereof for services rendered through the Termination Date,

any accrued but unpaid expenses required to be reimbursed under Section 4, and

any vacation accrued to the Termination Date, and

severance pay in an amount equal to Employee’s Base Salary pursuant to Section 3 for a period beginning on the Termination Date and ending one (1) year from the Termination Date or if the Termination Date occurs in the third (3^rd ) year of this Agreement then Employee shall receive his pro- rata Base Salary until the third (3^rd ) anniversary of the date of this Agreement. Payments shall be payable in equal monthly installments beginning on the last day of the first month following the Termination Date; provided, however, that none of the benefits payable under Section 9(b)(ii) will be payable unless, and the obligation to pay any severance pursuant to Section 9(b)(ii) shall not accrue until, the Employee has signed and delivered an executed general release, which has become irrevocable, satisfactory to the Company in its reasonable discretion, releasing the Company and its Affiliates and their respective officers, directors, managers, members, partners and employees from any and all claims or potential claims arising from or related to the Employee’s employment or termination of employment, and

all 300,000 shares of common stock under the Stock Option.

all reasonable, documented out-of-pocket expenses incurred by Employee in rendering such assistance subject to the Company’s reasonable policies regarding the reimbursement of expenses and

reasonable compensation for Employee’s time in rendering such assistance if such assistance occurs after the Employment Period.