Exhibit 10.1

__________

 

 

 

 

 

EXECUTIVE SERVICES CONSULTING AGREEMENT

 

 

 

 

 

Between

:

 

STRATEGIC AMERICAN OIL CORPORATION

 

 

And

:

 

JEREMY GLENN DRIVER

 

 

 

 

Strategic American Oil Corporation

Suite 2015, 600 Leopard Street, Corpus Christi, Texas, U.S.A., 78473

__________

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EXECUTIVE SERVICES CONSULTING AGREEMENT

                       THIS EXECUTIVE SERVICES CONSULTING AGREEMENT is made and
dated for reference effective as at December 1, 2009, as fully executed on this
1st day of December, 2009.

 

BETWEEN

:

STRATEGIC AMERICAN OIL CORPORATION

, a company
incorporated under the laws of the State of Nevada, U.S.A., and
having an executive office and an address for notice and delivery
located at Suite 2015, 600 Leopard Street, Corpus Christi, Texas,
U.S.A., 78473

(the "Company");

OF THE FIRST PART

AND

:

JEREMY GLENN DRIVER

, businessperson, having an address
for notice and delivery located at 3807 Lakeridge Canyon Drive,
Sugar Land, Texas, U.S.A., 77498

(the "Executive");

OF THE SECOND PART

(the Company and the Executive being hereinafter singularly also
referred to as a "Party" and collectively referred to as the
"Parties" as the context so requires).

 

WHEREAS

:

A.                    The Company is a reporting company incorporated under the
laws of the State of Nevada, U.S.A., and has its common shares listed for
trading on the FINRA Over-The-Counter Bulletin Board;

B.                    The Executive has experience in and specializes in
providing reporting and non-reporting companies with valuable corporate
development and operational services;

C.                    The Company is involved in the principal business of
acquiring, exploring and developing various oil and gas resource properties of
merit (collectively, the "Business"); and, as a consequence thereof, the Company
is hereby desirous of retaining the Executive as the President and Chief
Executive Officer of and as a consultant to the Company, and the Executive is
hereby desirous of accepting such positions, in order to provide such related
services to the Company (collectively, the "General Services"); and

D.

                   Since the introduction of the Parties there have been various
discussions, negotiations, understandings and agreements between them relating
to the terms and conditions of the General Services and, correspondingly, that
it is their intention by the terms and conditions of this "Executive Services
Consulting Agreement" (the "Agreement") to hereby replace, in their entirety,
all such prior discussions, negotiations, understandings and agreements with
respect to the General Services to be provided hereunder, all in accordance with
the terms and conditions of this Agreement;

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                       NOW THEREFORE THIS AGREEMENT WITNESSETH that, in
consideration of the mutual covenants and provisos herein contained, THE PARTIES
HERETO AGREE AS FOLLOWS:

 

Article 1
DEFINITIONS AND INTERPRETATION

1.1                 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires, the
following words and phrases shall have the following meanings:

(a)       "Agreement" means this Executive Services Consulting Agreement as from
time to time supplemented or amended by one or more agreements entered into
pursuant to the applicable provisions hereof, together with any Schedules
attached hereto;

(b)       "Arbitration Rules" means the Rules of the American Arbitration
Association, as amended from time to time, as set forth in Article "9"
hereinbelow;

(c)       "Board of Directors" means the Board of Directors of the Company as
duly constituted from time to time;

(d)       "Bonus" has the meaning ascribed to it in section "4.4" hereinbelow;

(e)       "Business" has the meaning ascribed to it in recital "C." hereinabove.

(f)       "business day" means any day during which U.S. Chartered Banks are
open for business in the City of Corpus Christi, Texas, U.S.A.;

(g)       "Company" means Strategic American Oil Corporation, a company
incorporated under the laws of the State of Nevada, U.S.A., or any successor
company, however formed, whether as a result of merger, amalgamation or other
action;

(h)       "Company's Non-Renewal Notice" has the meaning ascribed to in section
"3.2" hereinbelow;

(i)       "Effective Date" has the meaning ascribed to in section "3.1"
hereinbelow;

(j)       "Effective Termination Date" has the meaning ascribed to it in each of
sections "3.3", "3.4", "3.5", "3.6" and "5.3" hereinbelow;

(k)

       "Exchange Act", "Form S-8 Registration Statement", "SEC", "Registration
Statement" and "Securities Act" have the meanings ascribed to them in section
"4.8" hereinbelow;

(l)       "Executive" means Jeremy Glenn Driver;

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(m)       "Expenses" has the meaning ascribed to it in section "4.5"
hereinbelow;

(n)       "Fee" has the meaning ascribed to it in section "4.1" hereinbelow;

(o)       "General Services" has the meaning ascribed to it in section "2.1"
hereinbelow;

(p)       "Indemnified Party" has the meaning ascribed to it in section "7.1"
hereinbelow;

(q)       "Indemnitor" has the meaning ascribed to it in section "7.3"
hereinbelow;

(r)       "Initial Term" has the meaning ascribed to it in section "3.1"
hereinbelow;

(s)       "Notice of Termination" has the meaning ascribed to it in each of
sections "3.3", "3.4", "3.5". "3.6" and "5.3" hereinbelow;

(t)

       "Option" has the meaning ascribed to it in section "4.7" hereinbelow;

(u)

       "Option Plan" has the meaning ascribed to it in section "4.7"
hereinbelow;

(v)

       "Option Share" has the meaning ascribed to it in section "4.7"
hereinbelow;

(w)       "Parties" or "Party" means, individually and collectively, the
Company, and/or the Executive hereto, as the context so requires, together with
each of their respective successors and permitted assigns as the context so
requires;

(x)       "Property" has the meaning ascribed to it in section "5.4"
hereinbelow;

(y)       "Regulatory Approval" means the acceptance for filing, if required, of
the transactions contemplated by this Agreement by the Regulatory Authorities;

(z)       "Regulatory Authorities" and "Regulatory Authority" means, either
singularly or collectively as the context so requires, such regulatory agencies
who have jurisdiction over the affairs of either of the Company and/or the
Executive and including, without limitation, and where applicable, the United
States Securities and Exchange Commission, the FINRA Over-The-Counter Bulletin
Board and all regulatory authorities from whom any such authorization, approval
or other action is required to be obtained or to be made in connection with the
transactions contemplated by this Agreement;

(aa)     "subsidiary" means any company or companies of which more than 50% of
the outstanding shares carrying votes at all times (provided that the ownership
of such shares confers the right at all times to elect at least a majority of
the directors of such company or companies) are for the time being owned by or
held for that company and/or any other company in like relation to that company
and includes any company in like relation to the subsidiary; and

(ab)     "Vacation" has the meaning ascribed to it in section "4.6" hereinbelow.

1.2                 Interpretation. For the purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

(a)       the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, section or other subdivision of this Agreement;

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(b)

       any reference to an entity shall include and shall be deemed to be a
reference to any entity that is a permitted successor to such entity; and

(c)

       words in the singular include the plural and words in the masculine
gender include the feminine and neuter genders, and vice versa.

1.3

                 Entire agreement. This Agreement constitutes the entire
agreement to date between the Parties hereto and supersedes every previous
agreement, communication, expectation, negotiation, representation or
understanding, whether oral or written, express or implied, statutory or
otherwise, between the Parties hereto with respect to the subject matter of this
Agreement.

 

Article 2
GENERAL SERVICES AND DUTIES OF THE EXECUTIVE

2.1                 General Services. During the Initial Term and during the
continuance of this Agreement the Company hereby agrees to continue to retain
the Executive as a consultant to the Company, and the Executive hereby agrees to
be subject to the direction and supervision of, and to have the authority as is
delegated to the Executive by, the Board of Directors consistent with such
position, and the Executive also agrees to accept such position in order to
provide such related corporate development and operational services as the Board
of Directors shall, from time to time, reasonably assign to the Executive and as
may be necessary for the ongoing maintenance and development of the Company's
various Business interests during the Initial Term and during the continuance of
this Agreement (collectively, the "General Services"); it being expressly
acknowledged and agreed by the Parties hereto that the Executive shall initially
commit and provide to the Company the General Services on a reasonably full-time
basis during the Initial Term and during the continuance of this Agreement for
which the Company, as more particularly set forth hereinbelow, hereby agrees to
pay and provide to the order and direction of the Executive each of the proposed
compensation amounts as set forth in Article "4" hereinbelow.

2.2                 Additional duties respecting the General Services. Without
in any manner limiting the generality of the General Services to be provided as
set forth in section "2.1" hereinabove, it is hereby also acknowledged and
agreed that Executive will, during the Initial Term and during the continuance
of this Agreement, devote substantially all of the Executive's consulting time
to the General Services of the Executive as may be determined and required by
the Board of Directors of the Company for the performance of said General
Services faithfully, diligently, to the best of the Executive's abilities and in
the best interests of the Company and, furthermore, that the Executive's
employment time will be prioritized at all times for the Company in that regard.

2.3                 Adherence to rules and policies of the Company. The
Executive hereby acknowledges and agrees to abide by the reasonable rules,
regulations, instructions, personnel practices and policies of the Company and
any changes therein which may be adopted from time to time by the same as such
rules, regulations, instructions, personnel practices and policies may be
reasonably applied to the Executive as a consultant to the Company.

 

Article 3
INITIAL TERM, RENEWAL AND TERMINATION

3.1                 Effectiveness and Initial Term of the Agreement. The initial
term of this Agreement (the "Initial Term") is for a period of one year
commencing on December 1, 2009 (the "Effective Date"), however, is subject, at
all times, to the Company's prior receipt, if required, of Regulatory Approval
from each of the Regulatory Authorities to the terms and conditions of and the
transactions contemplated by this Agreement within 30 calendar days of the due
and complete execution of this Agreement by both Parties hereto; failing said
Regulatory Approval, if required, this Agreement will be deemed null and void ab
initio.

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3.2                 Renewal by the Company after the Initial Term. Subject at
all times to sections "3.3", "3.4", "3.5" and "5.3" hereinbelow, this Agreement
shall renew automatically if not specifically terminated in accordance with the
following provisions. The Company agrees to notify the Executive in writing at
least 30 calendar days prior to the end of the Initial Term of its intent not to
renew this Agreement (the "Company's Non-Renewal Notice"). Should the Company
fail to provide a Company's Non-Renewal Notice this Agreement shall
automatically renew on a one-month to one-month term renewal basis after the
Initial Term until otherwise specifically renewed in writing by each of the
Parties hereto for the next one-month term of renewal or, otherwise, terminated
upon delivery by the Company of a corresponding and follow-up 30 calendar day
Company's Non-Renewal Notice in connection with and within 30 calendar days
prior to the end of any such one-month term renewal period. Any such renewal on
a one-month basis shall be on the same terms and conditions contained herein
unless modified and agreed to in writing by the Parties in advance.

3.3                 Termination without cause by the Executive. Notwithstanding
any other provision of this Agreement, this Agreement may be terminated by the
Executive at any time after the Effective Date and during the Initial Term and
during the continuance of this Agreement upon the Executive's delivery to the
Company of prior written notice of its intention to do so (the "Notice of
Termination" herein) at least 30 calendar days prior to the effective date of
any such termination (the end of such 30-day period from such Notice of
Termination being the "Effective Termination Date" herein). In any such event
the Executive's ongoing obligation to provide the General Services will continue
only until the Effective Termination Date and the Company's ongoing obligation
to provide and to pay to the Executive all of the amounts otherwise payable to
the Executive under Article "4" hereinbelow will continue only until the
Effective Termination Date.

3.4                 Termination without cause by the Company. Notwithstanding
any other provision of this Agreement, this Agreement may be terminated by the
Company at any time after the Effective Date and during the Initial Term and
during the continuance of this Agreement upon the Company's delivery to the
Executive of prior written notice of its intention to do so (the "Notice of
Termination" herein) at least 30 calendar days prior to the effective date of
any such termination (the end of such 30-day period from such Notice of
Termination being the "Effective Termination Date" herein). In any such event
the Executive's ongoing obligation to provide the General Services will continue
only until the Effective Termination Date, however, the Company shall continue
to be obligated to provide and to pay to the Executive all of the amounts
otherwise payable to the Executive under Article "4" hereinbelow until the end
of the entire Initial Term under this Agreement; such ongoing compensation
representing the Executive's clear and unequivocal severance for the early
termination by the Company without cause of this Agreement prior to the
completion of the Initial Term.

3.5                 Termination for cause by any Party. Notwithstanding any
other provision of this Agreement, this Agreement may be terminated by any Party
hereto at any time upon written notice to the other Party of such Party's
intention to do so (the "Notice of Termination" herein) at least ten calendar
days prior to the effective date of any such termination (the end of such
ten-day period from such Notice of Termination being the "Effective Termination
Date" herein), and damages sought, if:

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(a)       the other Party fails to cure a material breach of any provision of
this Agreement within ten calendar days from its receipt of written notice from
said Party (unless such material breach cannot be reasonably cured within said
ten calendar days and the other Party is actively pursuing to cure said material
breach);

(b)       the other Party is willfully non-compliant in the performance of its
respective duties under this Agreement within ten calendar days from its receipt
of written notice from said Party (unless such willful non-compliance cannot be
reasonably corrected within said ten calendar days and the other Party is
actively pursuing to cure said willful non-compliance);

(c)       the other Party commits fraud or serious neglect or misconduct in the
discharge of its respective duties hereunder or under the law; or

(d)       the other Party becomes adjudged bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy, and where
any such involuntary petition is not dismissed within ten calendar days.

                       In any such event the Executive's ongoing obligation to
provide the General Services will continue only until the Effective Termination
Date and the Company shall continue to pay to the Executive all of the amounts
otherwise payable to the Executive under Article "4" hereinbelow until the
Effective Termination Date.

3.6                 Disability or death and Advance. Notwithstanding any other
provision of this Agreement, this Agreement may be terminated at any time by any
Party ten calendar days after the death or disability of the Executive, as a
without fault termination (the resulting effective date of any such termination
being herein also the "Effective Termination Date"). For the purposes of this
Agreement the term "disability" shall mean the Executive shall have been unable
to provide the General Services contemplated under this Agreement for a period
of 90 calendar days, whether or not consecutive, during any 360 calendar day
period, due to a physical or mental disability. A determination of disability
shall be made by a physician satisfactory to both the Executive and the Company;
provided that if the Executive and the Company do not agree on a physician, the
Executive and the Company shall each select a physician and these two together
shall select a third physician whose determination as to disability shall be
binding on all Parties. In the event that the Executive's employment is
terminated by death or because of disability pursuant to this Agreement, the
Company shall pay to the estate of the Executive or to the Executive, as the
case may be, all amounts to which the Executive would otherwise be entitled
under Article "4" hereinbelow until the Effective Termination Date.

3.7                 Effect of Termination. Terms of this Agreement relating to
accounting, payments, confidentiality, accountability for damages or claims and
all other matters reasonably extending beyond the terms of this Agreement and to
the benefit of the Parties hereto or for the protection of the Business
interests of the Company shall survive the termination of this Agreement, and
any matter of interpretation thereto shall be given a wide latitude in this
regard. In addition, and without limiting the foregoing, each of sections "3.3",
"3.4", "3.5", "3.6" and "5.3" hereinabove shall survive the termination of this
Agreement.

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Article 4
COMPENSATION OF THE EXECUTIVE

4.1                 Fee. It is hereby acknowledged and agreed that the Executive
shall render the General Services as defined hereinabove during the Initial Term
and during the continuance of this Agreement and shall thus be compensated from
the Effective Date of this Agreement to the termination of the same by way of
the payment by the Company to the Executive, or to the further order or
direction of the Executive as the Executive may determine, in the Executive's
sole and absolute discretion, and advise the Company of prior to such payment,
of the gross monthly fee of U.S. $8,333.33 (the "Fee"); with the total aggregate
yearly Fee being U.S. $100,000,00. All such Fees will be due and payable by the
Company to the Executive, or to the further order or direction of the Executive
as the Executive may determine, in the Executive's sole and absolute discretion,
and advise the Company of prior to any such Fee payment, bi-monthly and on or
about the fifteenth and thirtieth day of each month of the then monthly period
of service during the continuance of this Agreement.

4.2                 Payment of Fee and status as a non-taxable consultant. It is
hereby also acknowledged and agreed that the Executive will be classified as a
non-taxable consultant of the Company for all purposes, such that all
compensation which is provided by the Company to the Executive under this
Agreement, or otherwise, will be calculated on the foregoing and gross Fee basis
and otherwise for which no statutory taxes will first be deducted by the
Company.

4.3

                 Signing bonus. It is hereby acknowledged and agreed that, as an
inducement to the Consultant to enter into and consummate this Agreement, upon
the Effective Date of this Agreement the Company will pay to the Consultant, or
to the further order or direction of the Consultant as the Consultant may
determine, in the Consultant's sole and absolute discretion, and advise the
Company of prior to such payment, a one-time signing bonus of U.S. $20,000.

4.4                 Bonus payments. It is hereby also acknowledged and agreed
that the Board of Directors shall, in good faith, consider the payment of
reasonable industry standard annual bonuses (each being a "Bonus") based upon
the performance of the Company and upon the achievement by the Executive and/or
the Company of reasonable management objectives to be reasonably established by
the Board of Directors (after reviewing proposals with respect thereto defined
by the Executive and delivered to the Board of Directors by the Executive at
least 30 calendar days before the beginning of the relevant year of the Company
(or within 90 calendar days following the commencement of the Company's first
calendar year commencing on the Effective Date)). These management objectives
shall consist of both financial and subjective goals and shall be specified in
writing by the Board of Directors, and a copy shall be given to the Executive
prior to the commencement of the applicable year. The payment of any such Bonus
shall be payable no later than within 120 calendar days of the ensuing year
after any calendar year commencing on the Effective Date. Any dispute respecting
either the effectiveness or the magnitude of any Bonus hereunder shall be
determined by arbitration in accordance with Article "9" hereinbelow.

4.5                 Reimbursement of Expenses. It is hereby acknowledged and
agreed that the Executive shall also be reimbursed for all pre-approved, direct
and reasonable expenses actually and properly incurred by the Executive for the
benefit of the Company (collectively, the "Expenses"); and which Expenses, it is
hereby acknowledged and agreed, shall be payable by the Company to the order,
direction and account of the Executive as the Executive may designate in
writing, from time to time, in the Executive's sole and absolute discretion, as
soon as conveniently possible after the prior delivery by the Executive to the
Company of written substantiation on account of each such reimbursable Expense.

4.6                 Paid Vacation. It is hereby also acknowledged and agreed
that, during the continuance of this Agreement, the Executive shall be entitled
to three weeks paid vacation (collectively, the "Vacation") during each and
every year during the continuance of this Agreement. In this regard it is
further understood hereby that the Executive's entitlement to any such paid
Vacation during any year (including the initial year) during the continuance of
this Agreement will be subject, at all times, to the Executive's entitlement to
only a pro rata portion of any such paid Vacation time during any year
(including the initial year) and to the effective date upon which this Agreement
is terminated prior to the end of any such year for any reason.

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4.7                 Options. Subject to the following and the provisions of
section "4.8" hereinbelow, it is hereby acknowledged and agreed that the
Executive will be granted, or will have already been granted, subject to the
rules and policies of the Regulatory Authorities and applicable securities
legislation, the terms and conditions of the Company's existing stock incentive
plans (collectively, the "Option Plan") and the final determination of the Board
of Directors, acting reasonably, an incentive stock option or options (each
being an "Option") for the collective purchase of up to an aggregate of not less
than 2,500,000 common shares of the Company (each an "Option Share"), at an
exercise price of U.S. $0.20 per Option Share, and vesting as to one-quarter of
the Option Shares (that being as to 625,000 Option Shares) on the date of grant
and on each day which is six months thereafter in succession for each remaining
one-quarter of the Option Shares being exercisable under the within Option (that
being vesting over a period of 18 months), and for an entire period of up to
three years commencing on the date of grant, all in accordance with the terms
and conditions of the Company's Option Plan; and such further number of Options
to acquire an equivalent number of Option Shares of the Company as the Board of
Directors may determine, in its sole and absolute discretion; and which Option
or Options will be exercisable for such periods and at such exercise price or
prices per Option Share as the Board of Directors may also determine, in its
sole and absolute discretion, from time to time after the Effective Date hereof.

                       It is hereby acknowledged that the Options granted under
this Agreement were negotiated as between the Parties hereto in the context of
the stage of development of the Company existing as at the Effective Date of
this Agreement. Correspondingly, it is hereby acknowledged and agreed that the
number of Options granted by the Company to the Executive hereunder shall be
reviewed and renegotiated at the request of either Party on a reasonably
consistent basis during the continuance of this Agreement. Any dispute
respecting either the effectiveness or magnitude of the final number and terms
hereunder shall be determined by arbitration in accordance with Article "9"
hereinbelow.

4.8                 Options subject to the following provisions. In this regard,
and subject also to the following, it is hereby acknowledged and agreed that the
exercise of any such Options shall be subject, at all times, to such vesting and
resale provisions as may then be contained in the Company's Option Plan and as
may be finally determined by the Board of Directors, acting reasonably.
Notwithstanding the foregoing, however, it is hereby also acknowledged and
agreed that, in the event that this Agreement is terminated in accordance with
either of sections "3.2", "3.3" "3.4", "3.5", "3.6" and "5.3" herein, such
portion of the within and remaining and then vested Options which shall have
then not been exercised on the determined Effective Termination Date shall,
notwithstanding the remaining exercise period of the Option(s), then be
exercisable by the Executive for a period of only 90 calendar days following
such Effective Termination Date or otherwise. In this regard, and in accordance
with the terms and conditions of each final form of Option agreement, the
Parties hereby also acknowledge and agree that:

(a)       Registration of Option Shares under the Options: the Company will use
its reasonably commercial efforts to file with the United States Securities and
Exchange Commission (the "SEC") a registration statement on Form S-8 (the "Form
S-8 Registration Statement") within 90 calendar days after the Effective Date
hereof covering the issuance of all Option Shares of the Company underlying the
then issued Options, and such Form S-8 Registration Statement shall comply with
all requirements of the United States Securities Act of 1933, as amended (the
"Securities Act"). In this regard the Company shall use its best efforts to
ensure that the Form S-8 Registration Statement remains effective as long as
such Options are outstanding, and the Executive fully understands and
acknowledges that these Option Shares will be issued in reliance upon the
exemption afforded under the Form S-8 Registration Statement which is available
only if the Executive acquires such Option Shares for investment and not with a
view to distribution. The Executive is familiar with the phrase "acquired for
investment and not with a view to distribution" as it relates to the Securities
Act and the special meaning given to such term in various releases of the SEC;

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(b)

       Section 16 compliance: the Company shall ensure that all grants of
Options are made to ensure compliance with all applicable provisions of the
exemption afforded under Rule 16b-3 promulgated under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"). Without limiting the
foregoing, the Company shall have an independent committee of the Board of
Directors approve each grant of Options to the Executive and, if required, by
the applicable Regulatory Authorities and the shareholders of the Company. The
Company shall file, on behalf of the Executive, all reports required to filed
with the SEC pursuant to the requirements of Section 16(a) under the Exchange
Act and applicable rules and regulations;

(c)

       Disposition of any Option Shares: the Executive further acknowledges and
understands that, without in anyway limiting the acknowledgements and
understandings as set forth hereinabove, the Executive agrees that the Executive
shall in no event make any disposition of all or any portion of the Option
Shares which the Executive may acquire hereunder unless and until:

(i)       there is then in effect a "Registration Statement" under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said Registration Statement; or

(ii)      (A) the Executive shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, (B) the Executive shall
have furnished the Company with an opinion of the Executive's own counsel to the
effect that such disposition will not require registration of any such Option
Shares under the Securities Act and (C) such opinion of the Executive's counsel
shall have been concurred in by counsel for the Company and the Company shall
have advised the Executive of such concurrence; and

(d)       Payment for any Option Shares: it is hereby further acknowledged and
agreed that, during the continuance of this Agreement, the Executive shall be
entitled to exercise any Option granted hereunder and pay for the same by way of
the prior agreement of the Executive, in the Executive's sole and absolute
discretion, and with the prior knowledge of the Company, to settle any
indebtedness which may be due and owing by the Company under this Agreement in
payment for the exercise price of any Option Shares acquired thereunder. In this
regard, and subject to further discussion as between the Company and the
Executive, together with the prior approval of the Board of Directors and the
establishment by the Company of a new Option Plan predicated upon the same, it
is envisioned that, when the Company is in a position to afford the same, the
Company may adopt certain additional "cashless exercise" provisions respecting
the granting and exercise of incentive stock options during the continuance of
this Agreement.

4.9                 Benefits. It is hereby acknowledged and agreed that, during
the continuance of this Agreement, the Consultant shall be provided with a
monthly stipend of U.S. $450.00 which the Consultant may then utilize, in the
Consultant's sole and absolute discretion, in order to secure and pay for such
medical services and life insurance plans as the Consultant may so determine
outside of the Company's current medical services and life insurance benefits
programs. In addition, it is hereby also acknowledged and agreed that, during
the continuance of this Agreement, the Consultant shall be entitled to
participate fully in each of the Company's respective medical services plans and
management and employee benefits program(s) (collectively, the "Benefits") at
the Company's expense for any and all such Benefits from time to time.

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Article 5
ADDITIONAL OBLIGATIONS OF THE EXECUTIVE

5.1                 Reporting. At such time or times as may be required by the
Board of Directors, acting reasonably, the Executive will provide the Board of
Directors with such information concerning the results of the Executive's
General Services and activities hereunder for the previous month as the Board of
Directors may reasonably require.

5.2                 Opinions, reports and advice of the Executive. The Executive
acknowledges and agrees that all written and oral opinions, reports, advice and
materials provided by the Executive to the Company in connection with the
Executive's engagement hereunder are intended solely for the Company's benefit
and for the Company's uses only, and that any such written and oral opinions,
reports, advice and information are the exclusive property of the Company. In
this regard the Executive covenants and agrees that the Company may utilize any
such opinion, report, advice and materials for any other purpose whatsoever and,
furthermore, may reproduce, disseminate, quote from and refer to, in whole or in
part, at any time and in any manner, any such opinion, report, advice and
materials in the Company's sole and absolute discretion. The Executive further
covenants and agrees that no public references to the Executive or disclosure of
the Executive's role in respect of the Company may be made by the Executive
without the prior written consent of the Board of Directors in each specific
instance and, furthermore, that any such written opinions, reports, advice or
materials shall, unless otherwise required by the Board of Directors, be
provided by the Executive to the Company in a form and with such substance as
would be acceptable for filing with and approval by any Regulatory Authority
having jurisdiction over the affairs of the Company from time to time.

5.3                 Executive's business conduct. The Executive warrants that
the Executive shall conduct the business and other activities in a manner which
is lawful and reputable and which brings good repute to the Company, the
Company's business interests and the Executive. In particular, and in this
regard, the Executive specifically warrants to provide the General Services in a
sound and professional manner such that the same meets superior standards of
performance quality within the standards of the industry or as set by the
specifications of the Company. In the event that the Board of Directors has a
reasonable concern that the business as conducted by the Executive is being
conducted in a way contrary to law or is reasonably likely to bring disrepute to
the business interests or to the Company's or the Executive's reputation, the
Company may require that the Executive make such alterations in the Executive's
business conduct or structure, whether of management or Board representation or
employee or sub-licensee representation, as the Board of Directors may
reasonably require, in its sole and absolute discretion, failing which the
Company, in its sole and absolute discretion, may terminate this Agreement upon
prior written notice to the Executive to do so (the "Notice of Termination"
herein) at least 30 calendar days prior to the effective date of any such
termination (the end of such 30-day period from such Notice of Termination being
the "Effective Termination Date" herein). In any such event the Executive's
ongoing obligation to provide the General Services will continue only until the
Effective Termination Date and the Company shall continue to pay to the
Executive all of the amounts otherwise payable to the Executive under Article
"4" hereinabove until the Effective Termination Date. In the event of any debate
or dispute as to the reasonableness of the Board of Directors' request or
requirements, the judgment of the Board of Directors shall be deemed correct
until such time as the matter has been determined by arbitration in accordance
with Article "9" hereinbelow.

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5.4                 Right of ownership to the business and related Property. The
Executive hereby acknowledges and agrees that any and all Company Business
interests, together with any products or improvements derived therefrom and any
trade marks or trade names used in connection with the same (collectively, the
"Property"), are wholly owned and controlled by the Company. Correspondingly,
neither this Agreement, nor the operation of the business contemplated by this
Agreement, confers or shall be deemed to confer upon the Executive any interest
whatsoever in and to any of the Property. In this regard the Executive hereby
further covenants and agrees not to, during or after the Initial Term and the
continuance of this Agreement, contest the title to any of the Property
interests, in any way dispute or impugn the validity of the Property interests
or take any action to the detriment of the Company's interests therein. The
Executive acknowledges that, by reason of the unique nature of the Property
interests, and by reason of the Executive's knowledge of and association with
the Property interests during the Initial Term and during the continuance of
this Agreement, the aforesaid covenant, both during the Initial Term of this
Agreement and thereafter, is reasonable and commensurate for the protection of
the legitimate business interests of the Company. As a final note, the Executive
hereby further covenants and agrees to immediately notify the Company of any
infringement of or challenge to the any of the Property interests as soon as the
Executive becomes aware of the infringement or challenge.

                       In addition, and for even greater certainty, the
Executive hereby assigns to the Company the entire right, title and interest
throughout the world in and to all work performed, writings, formulas, designs,
models, drawings, photographs, design inventions, and other inventions, made,
conceived, or reduced to practice or authored by the Executive or the
Executive's employees, either solely or jointly with others, during the
performance of this Agreement, or which are made, conceived, or reduced to
practice, or authored with the use of information or materials of the Company
either received or used by the Executive during the performance of this
Agreement or any extension or renewal thereof. The Executive shall promptly
disclose to the Company all works, writings, formulas, designs, models,
photographs, drawings, design inventions and other inventions made, conceived or
reduced to practice, or authored by the Executive or the Executive's employees
as set forth above. The Executive shall sign, execute and acknowledge, or cause
to be signed, executed and acknowledged without cost to Company or its nominees,
patent, trademark or copyright protection throughout the world upon all such
works, writings, formulas, designs, models, drawings, photographs, design
inventions and other inventions; title to which the Company acquires in
accordance with the provisions of this section. The Executive has acquired or
shall acquire from each of the Executive's employees, if any, the necessary
rights to all such works, writings, formulas, designs, models, drawings,
photographs, design inventions and other inventions made by such employees
within the scope of their employment by the Executive in performing the General
Services under this Agreement. The Executive shall obtain the cooperation of
each such employee to secure to the Company or its nominees the rights to such
works, writings, formulas, designs, models, drawings, photographs, design
inventions and other inventions as the Company may acquire in accordance with
the provisions of this section. The work performed and the information produced
under this Agreement are works made for hire as defined in 17 U.S.C. Section
101.

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Article 6
ADDITIONAL OBLIGATIONS OF THE PARTIES

6.1                 No conflict, no competition and non-circumvention. During
the continuance of this Agreement neither Party hereto shall engage in any
business or activity which reasonably may detract from or conflict with that
Party's respective duties and obligations to the other Party as set forth in
this Agreement without the prior written consent of the other Party hereto. In
addition, during the continuance of this Agreement, and for a period of at least
one year following the termination of this Agreement in accordance with either
of sections "3.2", "3.3", "3.4", "3.5", "3.6" or "5.3" hereunder, the Executive
shall not engage in any in oil and gas exploration or development business or
activity whatsoever in the United States which reasonably may be determined by
the Board of Directors, in its sole and absolute discretion, to compete with any
portion of the Company's various Business interests as contemplated hereby
without the prior written consent of the Company. Furthermore, each of the
Parties hereby acknowledges and agrees, for a period of at least one year
following the termination of this Agreement in accordance with either of
sections "3.2", "3.3", "3.4", "3.5", "3.6" or "5.3" hereunder, not to initiate
any contact or communication directly with either of the other Party or any of
its respective subsidiaries, as the case may be, together with each of the other
Party's respective directors, officers, representatives, agents or employees,
without the prior written consent of the other Party hereto and, notwithstanding
the generality of the foregoing, further acknowledges and agrees, even with the
prior written consent of the other Party to such contact or communication, to
limit such contact or communication to discussions outside the scope of any
confidential information (as hereinafter determined). For the purposes of the
foregoing the Parties hereby recognize and agree that a breach a Party of any of
the covenants herein contained would result in irreparable harm and significant
damage to the other Party that would not be adequately compensated for by
monetary award. Accordingly, each of the Parties agrees that, in the event of
any such breach, in addition to being entitled as a matter of right to apply to
a Court of competent equitable jurisdiction for relief by way of restraining
order, injunction, decree or otherwise as may be appropriate to ensure
compliance with the provisions hereof, a Party will also be liable to the other
Party hereto, as liquidated damages, for an amount equal to the amount received
and earned by that Party as a result of and with respect to any such breach. The
Parties hereby acknowledge and agree that if any of the aforesaid restrictions,
activities, obligations or periods are considered by a Court of competent
jurisdiction as being unreasonable, the Parties agree that said Court shall have
authority to limit such restrictions, activities or periods as the Court deems
proper in the circumstances. In addition, the Parties further acknowledge and
agree that all restrictions or obligations in this Agreement are necessary and
fundamental to the protection of their respective business interests and are
reasonable and valid, and all defenses to the strict enforcement thereof by the
Parties are hereby waived.

6.2                 Confidentiality. Each Party will not, except as authorized
or required by its respective duties and obligations hereunder, reveal or
divulge to any person, company or entity any information concerning the
respective organization, business, finances, transactions or other affairs of
the other Party hereto, or of any of the other Party's respective subsidiaries,
which may come to the Party's knowledge during the continuance of this
Agreement, and each Party will keep in complete secrecy all confidential
information entrusted to the Party and will not use or attempt to use any such
information in any manner which may injure or cause loss either directly or
indirectly to the other Party's respective business interests. This restriction
will continue to apply after the termination of this Agreement without limit in
point of time but will cease to apply to information or knowledge which may come
into the public domain.

6.3                 Compliance with applicable laws. Each Party will comply with
all U.S., Canadian and foreign laws, whether federal, provincial or state,
applicable to its respective duties and obligations hereunder and, in addition,
hereby represents and warrants that any information which the Party may provide
to any person or company hereunder will, to the best of the Party's knowledge,
information and belief, be accurate and complete in all material respects and
not misleading, and will not omit to state any fact or information which would
be material to such person or company.

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Article 7
INDEMNIFICATION AND LEGAL PROCEEDINGS

7.1                 Indemnification. The Parties hereto hereby each agree to
indemnify and save harmless the other Party hereto and including, where
applicable, their respective subsidiaries and affiliates and each of their
respective directors, officers, consultants and agents (each such party being an
"Indemnified Party") harmless from and against any and all losses, claims,
actions, suits, proceedings, damages, liabilities or expenses of whatever nature
or kind and including, without limitation, any investigation expenses incurred
by any Indemnified Party, to which an Indemnified Party may become subject by
reason of the terms and conditions of this Agreement.

7.2                 No indemnification. This indemnity will not apply in respect
of an Indemnified Party in the event and to the extent that a Court of competent
jurisdiction in a final judgment shall determine that the Indemnified Party was
grossly negligent or guilty of willful misconduct.

7.3                 Notice of claim. In case any action is brought against an
Indemnified Party in respect of which indemnity may be sought against either of
the Parties hereto (the "Indemnitor" herein), the Indemnified Party will give
both Parties hereto prompt written notice of any such action of which the
Indemnified Party has knowledge and Indemnitor will undertake the investigation
and defense thereof on behalf of the Indemnified Party, including the prompt
employment of counsel acceptable to the Indemnified Party affected and the
Indemnitor and the payment of all expenses. Failure by the Indemnified Party to
so notify shall not relieve the Indemnitor of such Indemnitor's obligation of
indemnification hereunder unless (and only to the extent that) such failure
results in a forfeiture by the Indemnitor of substantive rights or defenses.

7.4                 Settlement. No admission of liability and no settlement of
any action shall be made without the consent of each of the Parties hereto and
the consent of the Indemnified Party affected, such consent not to be
unreasonable withheld.

7.5                 Legal proceedings. Notwithstanding that the Indemnitor will
undertake the investigation and defense of any action, an Indemnified Party will
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel will be at the
expense of the Indemnified Party unless:

(a)       such counsel has been authorized by the Indemnitor;

(b)       the Indemnitor has not assumed the defense of the action within a
reasonable period of time after receiving notice of the action;

(c)       the named parties to any such action include that any Party hereto and
the Indemnified Party shall have been advised by counsel that there may be a
conflict of interest between any Party hereto and the Indemnified Party; or

(d)       there are one or more legal defenses available to the Indemnified
Party which are different from or in addition to those available to any Party
hereto.

7.6                 Contribution. If for any reason other than the gross
negligence or bad faith of the Indemnified Party being the primary cause of the
loss claim, damage, liability, cost or expense, the foregoing indemnification is
unavailable to the Indemnified Party or insufficient to hold them harmless, the
Indemnitor shall contribute to the amount paid or payable by the Indemnified
Party as a result of any and all such losses, claim, damages or liabilities in
such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnitor on the one hand and the Indemnified Party on the
other, but also the relative fault of the Indemnitor and the Indemnified Party
and other equitable considerations which may be relevant. Notwithstanding the
foregoing, the Indemnitor shall in any event contribute to the amount paid or
payable by the Indemnified Party, as a result of the loss, claim, damage,
liability, cost or expense (other than a loss, claim, damage, liability, cost or
expenses, the primary cause of which is the gross negligence or bad faith of the
Indemnified Party), any excess of such amount over the amount of the fees
actually received by the Indemnified Party hereunder.

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Article 8
FORCE MAJEURE

8.1                 Events. If either Party hereto is at any time either during
this Agreement or thereafter prevented or delayed in complying with any
provisions of this Agreement by reason of strikes, walk-outs, labour shortages,
power shortages, fires, wars, acts of God, earthquakes, storms, floods,
explosions, accidents, protests or demonstrations by environmental lobbyists or
native rights groups, delays in transportation, breakdown of machinery,
inability to obtain necessary materials in the open market, unavailability of
equipment, governmental regulations restricting normal operations, shipping
delays or any other reason or reasons beyond the control of that Party, then the
time limited for the performance by that Party of its respective obligations
hereunder shall be extended by a period of time equal in length to the period of
each such prevention or delay.

8.2                 Notice. A Party shall within three calendar days give notice
to the other Party of each event of force majeure under section "8.1"
hereinabove, and upon cessation of such event shall furnish the other Party with
notice of that event together with particulars of the number of days by which
the obligations of that Party hereunder have been extended by virtue of such
event of force majeure and all preceding events of force majeure.

 

Article 9
ARBITRATION

9.1                 Matters for arbitration. Except for matters of indemnity or
in the case of urgency to prevent material harm to a substantive right or asset,
the Parties agree that all questions or matters in dispute with respect to this
Agreement shall be submitted to arbitration pursuant to the terms hereof. This
provision shall not prejudice a Party from seeking a Court order or assistance
to garnish or secure sums or to seek summary remedy for such matters as counsel
may consider amenable to summary proceedings.

9.2                 Notice. It shall be a condition precedent to the right of
any Party to submit any matter to arbitration pursuant to the provisions hereof
that any Party intending to refer any matter to arbitration shall have given not
less than five business days' prior written notice of its intention to do so to
the other Parties together with particulars of the matter in dispute. On the
expiration of such five business days the Party who gave such notice may proceed
to refer the dispute to arbitration as provided for in section "9.3"
hereinbelow.

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9.3                 Appointments. The Party desiring arbitration shall appoint
one arbitrator, and shall notify the other Parties of such appointment, and the
other Parties shall, within five business days after receiving such notice,
appoint an arbitrator, and the two arbitrators so named, before proceeding to
act, shall, within five business days of the appointment of the last appointed
arbitrator, unanimously agree on the appointment of a third arbitrator, to act
with them and be chairperson of the arbitration herein provided for. If the
other Parties shall fail to appoint an arbitrator within five business days
after receiving notice of the appointment of the first arbitrator, and if the
two arbitrators appointed by the Parties shall be unable to agree on the
appointment of the chairperson, the chairperson shall be appointed in accordance
with the Arbitration Rules. Except as specifically otherwise provided in this
section, the arbitration herein provided for shall be conducted in accordance
with such Arbitration Rules. The chairperson, or in the case where only one
arbitrator is appointed, the single arbitrator, shall fix a time and place for
the purpose of hearing the evidence and representations of the Parties, and the
chairperson shall preside over the arbitration and determine all questions of
procedure not provided for by the Arbitration Rules or this section. After
hearing any evidence and representations that the Parties may submit, the single
arbitrator, or the arbitrators, as the case may be, shall make an award and
reduce the same to writing, and deliver one copy thereof to each of the Parties.
The expense of the arbitration shall be paid as specified in the award.

9.4                 Award. The Parties agree that the award of a majority of the
arbitrators, or in the case of a single arbitrator, of such arbitrator, shall be
final and binding upon each of them.

 

Article 10
GENERAL PROVISIONS

10.1               No assignment. This Agreement may not be assigned by any
Party hereto except with the prior written consent of the other Parties.

10.2               Notice. Each notice, demand or other communication required
or permitted to be given under this Agreement shall be in writing and shall be
sent by prepaid registered mail deposited in a recognized post office and
addressed to the Party entitled to receive the same, or delivered to such Party,
at the address for such Party specified on the front page of this Agreement. The
date of receipt of such notice, demand or other communication shall be the date
of delivery thereof if delivered, or, if given by registered mail as aforesaid,
shall be deemed conclusively to be the third business day after the same shall
have been so mailed, except in the case of interruption of postal services for
any reason whatsoever, in which case the date of receipt shall be the date on
which the notice, demand or other communication is actually received by the
addressee. Any Party may at any time and from time to time notify the other
Parties in writing of a change of address and the new address to which notice
shall be given to it thereafter until further change.

10.3               Time of the essence. Time will be of the essence of this
Agreement.

10.4               Enurement. This Agreement will enure to the benefit of and
will be binding upon the Parties hereto and their respective heirs, executors,
administrators and assigns.

10.5               Currency. Unless otherwise stipulated, all payments required
to be made pursuant to the provisions of this Agreement and all money amount
references contained herein are in lawful currency of the United States.

10.6               Further assurances. The Parties will from time to time after
the execution of this Agreement make, do, execute or cause or permit to be made,
done or executed, all such further and other acts, deeds, things, devices and
assurances in law whatsoever as may be required to carry out the true intention
and to give full force and effect to this Agreement.

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10.7               Representation and costs. It is hereby acknowledged by each
of the Parties hereto that Lang Michener LLP, Lawyers - Patent & Trade Mark
Agents, acts solely for the Company, and, correspondingly, that the Executive
has been required by each of Lang Michener LLP and the Company to obtain
independent legal advice with respect to its review and execution of this
Agreement. In addition, it is hereby further acknowledged and agreed by the
Parties hereto that Lang Michener LLP, and certain or all of its principal
owners or associates, from time to time, may have both an economic or
shareholding interest in and to Company and/or a fiduciary duty to the same
arising from either a directorship, officership or similar relationship arising
out of the request of the Company for certain of such persons to act in a
similar capacity while acting for the Company as counsel. Correspondingly, and
even where, as a result of this Agreement, the consent of each Party hereto to
the role and capacity of Lang Michener LLP, and its principal owners and
associates, as the case may be, is deemed to have been received, where any
conflict or perceived conflict may arise, or be seen to arise, as a result of
any such capacity or representation, each Party hereto acknowledges and agrees
to, once more, obtain independent legal advice in respect of any such conflict
or perceived conflict and, consequent thereon, Lang Michener LLP, together with
any such principal owners or associates, as the case may be, shall be at liberty
at any time to resign any such position if it or any Party hereto is in any way
affected or uncomfortable with any such capacity or representation. Each Party
to this Agreement will also bear and pay its own costs, legal and otherwise, in
connection with its respective preparation, review and execution of this
Agreement and, in particular, that the costs involved in the preparation of this
Agreement, and all documentation necessarily incidental thereto, by Lang
Michener LLP, shall be at the cost of the Company.

10.8               Applicable law. The situs of this Agreement is Corpus
Christi, Texas, U.S.A., and for all purposes this Agreement will be governed
exclusively by and construed and enforced in accordance with the laws and Courts
prevailing in the State of Texas, U.S.A..

10.9               Severability and construction. Each Article, section,
paragraph, term and provision of this Agreement, and any portion thereof, shall
be considered severable, and if, for any reason, any portion of this Agreement
is determined to be invalid, contrary to or in conflict with any applicable
present or future law, rule or regulation in a final unappealable ruling issued
by any court, agency or tribunal with valid jurisdiction in a proceeding to
which any Party hereto is a party, that ruling shall not impair the operation
of, or have any other effect upon, such other portions of this Agreement as may
remain otherwise intelligible (all of which shall remain binding on the Parties
and continue to be given full force and effect as of the date upon which the
ruling becomes final).

10.10             Captions. The captions, section numbers and Article numbers
appearing in this Agreement are inserted for convenience of reference only and
shall in no way define, limit, construe or describe the scope or intent of this
Agreement nor in any way affect this Agreement.

10.11             Counterparts. This Agreement may be signed by the Parties
hereto in as many counterparts as may be necessary, and via facsimile if
necessary, each of which so signed being deemed to be an original and such
counterparts together constituting one and the same instrument and,
notwithstanding the date of execution, being deemed to bear the Effective Date
as set forth on the front page of this Agreement.

10.12             No partnership or agency. The Parties have not created a
partnership and nothing contained in this Agreement shall in any manner
whatsoever constitute any Party the partner, agent or legal representative of
the other Parties, nor create any fiduciary relationship between them for any
purpose whatsoever.

10.13             Consents and waivers. No consent or waiver expressed or
implied by either Party in respect of any breach or default by the other in the
performance by such other of its obligations hereunder shall:

(a)       be valid unless it is in writing and stated to be a consent or waiver
pursuant to this section;

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(b)       be relied upon as a consent to or waiver of any other breach or
default of the same or any other obligation;

(c)       constitute a general waiver under this Agreement; or

(d)       eliminate or modify the need for a specific consent or waiver pursuant
to this section in any other or subsequent instance.

 

                       IN WITNESS WHEREOF the Parties hereto have hereunto set
their respective hands and seals as at the Effective Date as hereinabove
determined.

The COMMON SEAL of
STRATEGIC AMERICAN
OIL CORPORATION,
the Company herein, was hereunto affixed
in the presence of:

/s/ Johnathan Lindsay
Authorized Signatory

)
)
)
)
)
)
)
)
)

(C/S)

     

SIGNED, SEALED and DELIVERED by
JEREMY GLENN DRIVER,
the Executive herein, in the presence of:

__________________________________
Witness Signature

__________________________________
Witness Address

__________________________________
Witness Name and Occupation

)
)
)
)
)
)
)
)
)
)
)
)
)

/s/ Jeremy Glenn Driver                
JEREMY GLENN DRIVER

 

__________