__________

 

 

EXECUTIVE SERVICES AGREEMENT

 

 

 

Between

:

 

MAINLAND RESOURCES, INC.

And

:

 

NICHOLAS W. ATENCIO

 

 

 

Mainland Resources, Inc.

21 Waterway Avenue, Suite 300, The Woodlands, Texas, U.S.A., 77070

__________

--------------------------------------------------------------------------------

EXECUTIVE SERVICES AGREEMENT

     THIS EXECUTIVE SERVICES AGREEMENT

is made and dated for reference effective as fully executed on August 23, 2010.

BETWEEN

:

MAINLAND RESOURCES, INC.

, 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 21
Waterway Avenue, Suite 300, The Woodlands, Texas, U.S.A., 77070

(the

"Company");

OF THE FIRST PART

AND

:

NICHOLAS W. ATENCIO

, businessperson, having an address for notice and delivery located at 13406
Copeland Oaks Boulevard, Cypress, Texas, U.S.A., 77429

(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 market under the trading symbol "MNLU";

B.     The Executive has experience in and specializes in providing reporting
and non-reporting companies with valuable management and operational services
and, in particular, has professional expertise, extensive experience and
specialized knowledge within the oil and gas industry in providing consulting
advice on exploration and operational processes and strategies, management,
financial strategy, corporate trading platform, potential acquisitions, project
finance strategy and other development aspects involved in the areas of the
"Business" (as hereinafter defined) carried out and to be carried out by the
Company and desires to provide professional consulting services to the Company
and to act in the capacity of Chief Executive Officer of the Company;

C.     The Company is involved in the principal business of acquiring, exploring
and developing various resource properties of merit and, in particular, resource
properties which constitute oil and gas exploration and development prospects
(collectively, the "Business"); and, as a consequence thereof, the Company is
hereby desirous of continuing to retain the Executive as a consultant to the
Company and to appoint the Executive as the Chief Executive Officer of

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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");

D.     In accordance with the terms and conditions of each of a certain and
underlying

"Master Consulting Agreement", dated for reference effective as at August 6,
2010, as entered into between the Parties hereto (the "Underlying Agreement"); a
copy of which Underlying Agreement being attached hereto as Schedule "A" and
forming a material part hereof; the Parties thereby formalized the appointment
of the Executive as a consultant to the Company together with the provision for
certain related management and operational services to be provided by the
Executive to the Company in accordance with the terms and conditions of the
Underlying Agreement;

E.     Since the entering into of the Underlying Agreement, and as a consequence
of the Executive

's increasing and valuable role within the Company, the Parties hereby
acknowledge and agree that 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 Agreement" (the "Agreement") to
hereby replace, in their entirety, the Underlying Agreement together with all
such prior discussions, negotiations, understandings and agreements with respect
to the General Services; and

F.     The Parties hereto have agreed to enter into this Agreement which
replaces, in its entirety, the Underlying Agreement, together with all such
prior discussions, negotiations, understandings and agreements, and,
furthermore, which necessarily clarifies their respective duties and obligations
with respect to the within General Services to be provided hereunder, all in
accordance with the terms and conditions of this Agreement;

     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, INTERPRETATION, SCHEDULE AND ENTIRE AGREEMENT

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)     

"Advance" has the meaning ascribed to it in section "3.6" hereinbelow;

(b)     

"Agreement" means this Executive Services 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;

(c)

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

(d)     

"Benefits" has the meaning ascribed to it in section "4.9 hereinbelow;

(e)     

"Benefits Extension" has the meaning ascribed to it in section "3.2"
hereinbelow;

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-3-

(f)     

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

(g)     

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

(h)     

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

(i)     

"business day" means any day during which United States Canadian Chartered Banks
are open for business in the City of The Woodlands, State of Texas, U.S.A.;

(j)     

"Chairman" means the Chairman of the Board of Directors of the Company as duly
appointed from time to time;

(k)     

"Change of Control" means, in relation to section "3.5" hereinbelow, the
occurrence of any of the following events:

(i)     the acquisition, whether direct or indirect, of voting shares of the
Company in excess of 51% of the issued and outstanding voting shares of the
Company by a person or group of persons acting in concert, other than through an
employee share purchase plan or employee share ownership plan and other than by
persons who are, or who are controlled by, the existing shareholders of the
Company;

(ii)     any change or changes in the composition of the Board of Directors of
the Company from the Effective Date such that less than a majority of the
current Board of Directors continues to consist of directors who are continuing
directors (each a "Continuing Director"). In this regard Continuing Director
means an individual who is a member of the Board of Directors as of the
Effective Date, or who becomes a member of the Board of Directors subsequent to
the Effective Date with the approval of a majority of the Directors who were
Continuing Directors as of the Effective Date;

(iii)     a merger of the voting shares of the Company where the voting shares
of the resulting merged company are owned or controlled by shareholders of whom
more than 51% are not the same as the shareholders of the Company immediately
prior to the merger; or

(iv)     a sale by the Company of substantially all of the assets of the Company
to an entity that is not controlled by either the shareholders of the Company or
by the Company;

(l)     

"Company" means Mainland Resources, Inc., 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;

(m)     

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

(n)     

"East Holly Closing Date", "Exercise Date", "Exercise Period" and "Listing Date"
have the meanings ascribed to them in section "4.7" hereinbelow;

(o)     

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

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(p)     

"Effective Termination Date" has the meaning ascribed to it in each of sections
"3.2" "3.3", "3.4", "3.5", "3.6", "3.7" and "5.3" hereinbelow;

(q)     

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

(r)     

"Executive" means Nicholas W. Atencio;

(s)     

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

(t)     

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

(u)     

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

(v)     

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

(w)     

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

(x)     

"Just Cause" means any act, omission, behavior, conduct or circumstance of the
Executive that constitutes just cause for dismissal of the Executive at common
law;

(y)     

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

(z)     

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

(aa)     

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

(ab)     

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

(ac)     

"Options Extension" has the meaning ascribed to it in section "3.2" hereinbelow;

(ad)     

"OTCBB" means the FINRA Over-The Counter Bulletin Board market, or any successor
stock exchange, however formed, whether as a result of merger, amalgamation or
other action;

(ae)     

"Outstanding Expense Reimbursements" has the meaning ascribed to it in section
"3.2" hereinbelow;

(af)     

"Outstanding Vacation Pay" has the meaning ascribed to it in section "3.2"
hereinbelow;

(ag)     

"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;

(ah)     

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

(ai)     

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

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(aj)     

"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 OTCBB (and FINRA) 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;

(ak)     

"Renewal Period" has the meaning ascribed to it in section "3.2" hereinbelow;

(al)     

"Severance Package" has the meaning ascribed to it in each of sections "3.2",
"3.3", "3.5" and "3.7" hereinbelow;

(am)     

"Six-months Severance Fee" has the meaning ascribed to it in section "3.3"
hereinbelow;

(an)     

"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;

(ao)     

"Underlying Agreement" has the meaning ascribed to it in recital "D."
hereinabove; and a copy of which Underlying Agreement being attached hereto as
Schedule "A" and forming a material part hereof; and

(ap)     

"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;

(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     Schedule. For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the following shall
represent the Schedule which is attached to this Agreement and which forms a
material part hereof:

Schedule

Description of Schedule

Schedule

"A":

Underlying Agreement.

1.4     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

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-6-

implied, statutory or otherwise, between the Parties hereto with respect to the
subject matter of this Agreement and including, without limitation, the
Underlying Agreement which is hereby confirmed as superseded, in its entirety,
by the terms and conditions 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 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 management 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.

        In this regard it is hereby acknowledged and agreed that the Executive
shall be entitled to communicate with and shall rely upon the immediate advice,
direction and instructions of the Chairman of the Board of Directors of the
Company (the "Chairman"), or upon the advice or instructions of such other
director or officer of the Company as the Chairman shall, from time to time,
designate in times of the Chairman's absence, in order to initiate, coordinate
and implement the General Services as contemplated herein subject, at all times,
to the final direction and supervision of the Board of Directors.

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 a reasonably full-time portion of the Executive's consulting
time to the General Services of the Executive as may be determined and required
by the Board of Directors 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 consulting 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 and, if applicable, as the Chief
Executive Officer of 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 two years commencing on
August 23, 2010

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-7-

(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.

3.2     Renewal by the Company after the Initial Term and Severance Package if
not renewed. Subject at all times to sections "3.3", "3.4", "3.5", "3.6", "3.7"
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 month to 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 (in each such
instance a "Renewal Period" hereunder). Any such Renewal Period 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.

        Should the Company, however, provide a Company's Non-Renewal Notice
either during the Initial Term or during any Renewal Period hereunder and within
30 calendar days prior to the end of such Initial Term or Renewal Period as the
case may be (the end of such 30-day period from such Company's Non-Renewal
Notice being the "Effective Termination Date" herein), the Executive's ongoing
obligation to provide the General Services will continue until the Effective
Termination Date and, subject to the following severance package (the "Severance
Package" herein) obligation of the Company, the Company's 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 Effective
Termination Date. In this regard, and in addition to all of the amounts
otherwise due and payable to the Executive under Article "4" hereinbelow until
the Effective Termination Date, the Company shall also pay and provide to the
Executive the following amounts in the following manner, however, subject, at
all times, to the Executive's ongoing compliance with the Executive's
obligations under Article "5" hereinbelow, such ongoing compensation
representing the Executive's clear and unequivocal Severance Package for the
non-renewal of this Agreement upon the completion of the Initial Term or any
Renewal Period of this Agreement:

(a)     

an additional severance cash payment equating to an aggregate of one month of
the then monthly "Fee" (as hereinafter defined) for each full year, and any
portion thereof, of the Initial Term and any Renewal Period during which this
Agreement was in force and effect and during which General Services were
rendered hereunder, payable by the Company to the Executive on the Effective
Termination Date; and payable within 14 calendar days of the Effective
Termination Date;

(b)     

any "Expense" (as hereinafter defined) payment reimbursements which would then
be due and owing by the Company to the Executive to the date of the Effective
Termination Date and, subject to the Executive's prior compliance with the
provisions of section "4.5" hereinbelow, payable within 14 calendar days of the
Effective Termination Date (the "Outstanding Expense Reimbursements");

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(c)     

any pro rata and unused "Vacation" (as hereinafter defined) pay which would then
be due and owing by the Company to the Executive to the date of the Effective
Termination Date and payable within 14 calendar days of the Effective
Termination Date (the "Outstanding Vacation Pay");

(d)     subject to the provisions of sections

"4.7" and "4.8" hereinbelow, confirmation that all of the Executive's then
issued and outstanding and vested "Options" (as hereinafter defined) in and to
the Company as at the Effective Termination Date are exercisable for a period of
90 calendar days from the Effective Termination Date (the "Options Extension");
and

(e)     

confirmation that all of the Executive's then "Benefits" (as hereinafter
defined) coverage would be extended to the Executive for a period ending 90
calendar days from the Effective Termination Date (the "Benefits Extension").

3.3     Termination without Just Cause by the Company and Severance Package.
Notwithstanding any other provision of this Agreement, this Agreement may be
terminated by the Company without Just Cause 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 until the Effective Termination Date and, subject
to the following severance package (the "Severance Package" herein) obligation
of the Company, the Company's 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 Effective Termination Date. In this regard,
and in addition to all of the amounts otherwise due and payable to the Executive
under Article "4" hereinbelow until the Effective Termination Date, the Company
shall also pay and provide to the Executive the following amounts in the
following manner, however, subject, at all times, to the Executive's ongoing
compliance with the Executive's obligations under Article "5" hereinbelow, such
ongoing compensation representing the Executive's clear and unequivocal
Severance Package for the early termination by the Company without Just Cause
under this Agreement prior to the completion of the Initial Term or any Renewal
Period of this Agreement:

(a)     

an additional severance cash payment equating to an aggregate of six months of
the then monthly "Fee" (as hereinafter defined) payable by the Company to the
Executive on the Effective Termination Date; and payable within 14 calendar days
of the Effective Termination Date (the "Six-months Severance Fee");

(b)     

subject to the Executive's prior compliance with the provisions of section "4.5"
hereinbelow, all Outstanding Expense Reimbursements payable within 14 calendar
days of the Effective Termination Date;

(c)     all Outstanding Vacation Pay

payable within 14 calendar days of the Effective Termination Date;

(d)     subject to the provisions of sections

"4.7" and "4.8" hereinbelow, the Options Extension commencing on the Effective
Termination Date; and

(e)     the Benefits Extension commencing on

the Effective Termination Date.

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3.4     Termination 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 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.

3.5     Termination by the Executive for any Change of Control and Severance
Package. 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 60 calendar days prior to
the effective date of any such termination (the end of such 60-day period from
such Notice of Termination being the "Effective Termination Date" herein) if the
Executive determines that the occurrence of any event or series of events
constitute a Change of Control of the Company. In this regard, and in order to
be entitled to provide any such Notice of Termination under this section, the
Executive shall be required to make a determination that any such Change of
Control has occurred within 30 calendar days of its occurrence; failing which
the Executive will have been deemed to have accepted such Change of Control
without exception and without the right of termination and "Severance Package"
(as hereinafter defined) as otherwise provided for in this section.

        Upon receipt of such Notice of Termination the Company shall have until
30 calendar days prior to the Effective Termination Date to respond to the
Executive respecting the Company's determination of whether or not a Change of
Control has occurred. Any dispute as amongst the Parties respecting any such
Change of Control determination shall be determined by arbitration in accordance
with Article "9" hereinbelow.

        Subject to the foregoing and, in particular, the Executive's prior and
valid exercise of its right of Notice of Termination for a determined Change of
Control, in any such event the Executive's ongoing obligation to provide the
General Services will continue until the Effective Termination Date and, subject
to the following severance package (the "Severance Package" herein) obligation
of the Company, the Company's 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 Effective Termination Date. In this regard,
and in addition to all of the amounts otherwise due and payable to the Executive
under Article "4" hereinbelow until the Effective Termination Date, should it
either be agreed by the Parties or determined by arbitration in accordance with
Article "9" hereinbelow that a Change of Control has in fact occurred, the
Company shall also pay and provide to the Executive the following amounts in the
following manner, however, subject, at all times, to the Executive's ongoing
compliance with the Executive's obligations under Article "5" hereinbelow, such
ongoing compensation representing the Executive's clear and unequivocal
Severance Package for the early termination by the Company for a Change of
Control under this Agreement prior to the completion of the Initial Term or any
Renewal Period of this Agreement:

(a)     a Six-months Severance Fee

payable within 14 calendar days of the Effective Termination Date;

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(b)     

subject to the Executive's prior compliance with the provisions of section "4.5"
hereinbelow, all Outstanding Expense Reimbursements payable within 14 calendar
days of the Effective Termination Date;

(c)     all Outstanding Vacation Pay

payable within 14 calendar days of the Effective Termination Date;

(d)     subject to the provisions of sections

"4.7" and "4.8" hereinbelow, the Options Extension commencing on the Effective
Termination Date; and

(e)     the Benefits Extension commencing on

the Effective Termination Date.

3.6     Termination for cause or Just Cause by any Party and Advance.
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 14 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), and damages sought, if:

(a)     the other Party fails to cure a material breach of any provision of this
Agreement within 21 calendar days from its receipt of written notice from said
Party (unless such material breach cannot be reasonably cured within said 21
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 21 calendar days from its receipt
of written notice from said Party (unless such willful non-compliance cannot be
reasonably corrected within said 21 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 21 calendar days.

        In any such event the Executive's ongoing obligation to provide the
General Services will continue 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. In this regard, and in the event that the Company terminates
this Agreement at any time for Just Cause by providing 30 calendar days' prior
written Notice of Termination to the Executive with respect to either of
paragraphs "(a)" or "(b)" only hereinabove, the Company shall pay to the
Executive all of the amounts otherwise due or payable to the Executive by the
Company pursuant to Article "4" hereinbelow until the Effective Termination Date
(collectively, the "Advance"); and which Advance may then be utilized by the
Executive to either cure or correct any material breach or willful
non-compliance consequent thereon; failing which the Company may then offset or
claim any such Advance as against any other amounts which may then be due and
owing by the Company to the Executive under the terms and conditions of this
Agreement. In addition, and should it then be either agreed by the Company or
determined by arbitration in accordance with Article "9" hereinbelow that the
Executive had, in fact, appropriately terminated this Agreement for cause, the
Company shall then be obligated to provide and pay to the Executive all of the
amounts which comprise the Severance Package in the manner as set forth in
section "3.3" hereinabove.

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3.7     Termination for disability or death and Severance Package.

Notwithstanding any other provision of this Agreement, this Agreement will be
deemed terminated at any time after the Effective Date and during the Initial
Term and during the continuance of this Agreement on the 30th calendar day
following either the death or disability of the Executive as a without fault
termination (the resulting effective date of any such termination being the
"Effective Termination Date" herein). For the purposes of this Agreement the
term "disability" shall mean that the Executive shall have been unable to
provide the General Services contemplated under this Agreement for a period of
30 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.

        S

ubject to the following severance package (the "Severance Package" herein)
obligation of the Company, in the event that the Executive's employment is
terminated by the Executive's death or because of disability pursuant to this
Agreement, the Company shall pay to the estate of the Executive all amounts to
which the Executive would otherwise be entitled under Article "4" hereinbelow
until the Effective Termination Date. In this regard, and in addition to all of
the amounts otherwise due and payable to the estate of the Executive under
Article "4" hereinbelow until the Effective Termination Date, the Company shall
also pay and provide to the estate of the Executive the following amounts in the
following manner, such ongoing compensation representing the Executive's clear
and unequivocal Severance Package for the untimely and early termination of this
Agreement prior to the completion of the Initial Term or any Renewal Period by
reason of the Executive's death or disability:

(a)     

an additional severance cash payment equating to an aggregate of three months of
the then monthly "Fee" (as hereinafter defined) payable by the Company to the
estate of the Executive on the Effective Termination Date; and payable within 14
calendar days of the Effective Termination Date;

(b)     

subject to the Executive's prior compliance with the provisions of section "4.5"
hereinbelow, all Outstanding Expense Reimbursements payable within 14 calendar
days of the Effective Termination Date;

(c)     all Outstanding Vacation Pay

payable within 14 calendar days of the Effective Termination Date; and

(d)     subject to the provisions of sections

"4.7" and "4.8" hereinbelow, the Options Extension commencing on the Effective
Termination Date.

3.8     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 "3.2", "3.3",
"3.4", "3.5", "3.6", "3.7" and "5.3" herein 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. $25,000.00 (the "Fee"). 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     Increase in the Fee. It is hereby acknowledged that the proposed Fee
payments

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 Fee shall be reviewed and renegotiated at the request of either Party
on a reasonably consistent basis during the continuance of this Agreement and,
in the event that the Parties cannot agree, then the Fee shall be increased on
an annual basis by the greater of (i) 10% and (ii) the percentage which is the
average percentage of all increases to management salaries and fees within the
Company during the previous 12-month period. Any dispute respecting either the
effectiveness or magnitude of the final Fee hereunder shall be determined by
arbitration in accordance with Article "9" hereinbelow.

4.4     Bonus payments. It is hereby also acknowledged 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 in the Executive's capacity as the
Chief Executive Officer of the Company, 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

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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"), to be taken at a time or
times which are approved by the President of the Company (such approval not to
be unreasonably withheld); provided, however, taking into account the
operational requirements of the Company and the need for the timely performance
of the Executive's General Services; and provided, further, that such weeks
shall not be taken consecutively. 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 whatsoever. Unused Vacation may not be carried
over after the completion of each calendar year during the continuance of this
Agreement, and any unused Vacation will be paid out in cash by the Company to
the Executive within 14 calendar days of the end of any such calendar year.

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 3,500,000 common
shares of the Company (each an "Option Share") in the following manner:

(a)     

an initial Option to acquire up to an aggregate of 1,500,000 Option Shares will
be granted to the Executive by the Company on the Effective Date hereof and will
be fully vested and immediately exercisable at an exercise price of U.S. $0.47
per Option Share and, subject to the terms of the Company's Option Plan, will be
exercisable for a period of ten years (the maximum period allowable under the
Option Plan) from the Effective Date hereof (the "Exercise Period");

(b)     

an additional Option to acquire up to an aggregate of an additional 750,000
Option Shares will also be granted to the Executive by the Company on the
Effective Date hereof, however, will only become vested and exercisable by the
Executive during the Exercise Period upon the successful completion by the
Company of equity and/or debt financings of not less than an aggregate of U.S.
$5,000,000.00 subsequent to the Effective Date (the date on which that occurs
being the "Exercise Date" herein) and, subject to the terms of the Option Plan,
will then be exercisable at an exercise price then equal to the 15 previous day
weighted average closing share price of the Company's common shares on either of
the OTCBB or such other stock exchange or over-the-counter market on which the
Company's common shares then trade prior to the Exercise Date; it being
acknowledged and agreed that said Exercise Date must occur within the Exercise
Period failing which this additional Option will be terminated and of no further
force and effect;

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(c)     

a further Option to acquire up to an aggregate of a further 750,000 Option
Shares will also be granted to the Executive by the Company on the Effective
Date hereof, however, will only become vested and exercisable by the Executive
during the Exercise Period upon the successful closing by the Company of an
agreement with any third party investing equity partner which allows for the
initiation of drilling on the Cotton Valley/Hosston formations in East Holly
Field, located in Louisiana, in which the Company currently holds a 100% working
interest (collectively, the "East Holly Closing Date" herein), and, subject to
the terms of the Option Plan, will then be exercisable at an exercise price then
equal to the 15 previous day weighted average closing share price of the
Company's common shares on either of the OTCBB or such other stock exchange or
over-the-counter market on which the Company's common shares then trade prior to
the East Holly Closing Date; it being acknowledged and agreed that said East
Holly Closing Date must occur within the Exercise Period failing which this
further Option will be terminated and of no further force and effect; and

(d)     

a further and final Option to acquire up to an aggregate of a further and final
500,000 Option Shares will also be granted to the Executive by the Company on
the Effective Date hereof, however, will only become vested and exercisable by
the Executive during the Exercise Period upon the Company having completed a
listing and having its common shares listed for trading on either of the NYSE
Amex Equities or the NASDAQ Stock Exchange (the "Listing Date") and, subject to
the terms of the Option Plan, will then be exercisable at an exercise price then
equal to the 15 previous day weighted average closing share price of the
Company's common shares on either of the OTCBB or such other stock exchange or
over-the-counter market on which the Company's common shares then trade prior to
the Listing Date; it being acknowledged and agreed that said Listing Date must
occur within the Exercise Period failing which this further and final Option
will be terminated and of no further force and effect.

        The Options granted hereunder will be evidenced by a separate and
standard vesting stock option agreement to be provided by the Company to the
Executive promptly after the Effective Date of this Agreement and which stock
option agreement will be drafted in accordance with the Company's Option Plan.

        It is hereby acknowledged that the initial 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 and, in the event that the Parties
cannot agree, then the number of Options shall be increased on an annual basis
by the percentage which is the average percentage of all increases to management
stock options within the Company during the previous 12-month period; and in
each case on similar and reasonable exercise terms and conditions. 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" and "3.7" herein only, such portion of the within and
remaining 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

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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 and vested 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;

(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

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(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 Executive 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.

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

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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. 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.

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

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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.

Article 6
ADDITIONAL OBLIGATIONS OF THE PARTIES

6.1     No conflict, no competition and non-circumvention. During the
continuance of this Agreement the Executive shall now engage in any business or
activity which reasonably may detract from or conflict with the Executive's
respective duties and obligations to the Company as set forth in this Agreement
without the prior written consent of the Company. In addition, during the
continuance of this Agreement, and for a period of at least six months 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 not shall engage in
any 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 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 six months 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.

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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.

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, Executives 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     Claim of indemnification. The Parties hereto agree to waive any right
they might have of first requiring the Indemnified Party to proceed against or
enforce any other right, power, remedy, security or claim payment from any other
person before claiming this indemnity.

7.4     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 Indemnified Party will give both Parties hereto prompt written
notice of any such action of which the Indemnified Party has knowledge and the
relevant Party 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 relevant Party and the payment of all
expenses. Failure by the Indemnified Party to so notify shall not relieve the
relevant Party of such relevant Party

's obligation of indemnification hereunder unless (and only to the extent that)
such failure results in a forfeiture by the relevant Party of substantive rights
or defenses.

7.5     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.

7.6     Legal proceedings. Notwithstanding that the relevant Party 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 relevant Party;

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

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(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.

7.7     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 relevant
Party 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 relevant Party on the one hand and the Indemnified Party on the other,
but also the relative fault of relevant Party and the Indemnified Party and
other equitable considerations which may be relevant. Notwithstanding the
foregoing, the relevant Party 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.

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.

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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.

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 in
the City of The Woodlands, State of Texas, U.S.A., 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.

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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.

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 Austin, 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
Austin, Texas, U.S.A., and the federal laws of the United States applicable
thereto.

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

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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;

(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
MAINLAND RESOURCES, INC.,
the Company herein, was hereunto affixed

in the presence of:

/s/ William D. Thomas__________
Authorized Signatory

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(C/S)

SIGNED, SEALED and DELIVERED by
NICHOLAS W. ATENCIO,
the Executive herein, in the presence of:

___________________________________

_______________________________________

__________________________________________
Witness Address

__________________________________________
Witness Name and Occupation

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/s/ Nicholas W. Atencio___
NICHOLAS W. ATENCIO

_______

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Schedule A

     This is Schedule

"A" to that certain Executive Services Agreement, dated for reference effective
on August 23, 2010, as entered into between Mainland Resources, Inc. and
Nicholas W. Atencio.

Underlying Agreement

Refer to the materials attached hereto.