AGREEMENT

THIS AGREEMENT made effective as of the 16th day of June, 2008.

BETWEEN:

SOUTHERN STAR ENERGY INC., of 307 – 1178 Hamilton Street, Vancouver, B.C.,
Canada V6B 2S2

(the “Corporation”)

AND:

DOUGLAS M. HARWELL, of 616 Memorial Heights Drive, Apt. 17303, Houston, TX 77007

(the “Executive”)

WHEREAS:

 

A.

The Corporation is engaged in the business of oil and gas exploration;

 

B.

The Corporation requires the services of an Operations Manager and wishes to
engage the Executive as an employee;

 

C.

The Executive has agreed to accept the position of Operations Manager of the
Corporation on the terms and conditions of this Agreement

NOW THEREFORE in consideration of the premises, the mutual covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the parties hereby covenant and agree as follows:

A.            DEFINITIONS. For the purposes of this Agreement, the following
terms shall have the following meanings:

1.1.

“Base Salary” means US $160,000 per year.

1.2.

“Board” means Board of Directors of the Corporation.

1.3.

“Change of Control Event” means the occurrence of any one of the events set out
in paragraphs 1.3.1 to 1.3.3 below:

 

1.3.1.

the acquisition, other than from the Corporation, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of beneficial ownership of 30% or more of either the then outstanding shares of
common stock of the Corporation or the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote generally in
the election of directors,

 

1.3.2.

the approval by the stockholders of the Corporation of a reorganization, merger
or consolidation of the Corporation in which the individuals and entities who
were the respective beneficial owners of the common stock and voting securities
of the Corporation immediately prior to such reorganization, merger or
consolidation do not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than

 

 

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50% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or

 

1.3.3.

a liquidation or dissolution of the Corporation or of the sale or other
disposition of all or substantially all of the assets of the Corporation.

In the case of the occurrence of any of the events set forth in this Section
1.3, a Change of Control Event shall be deemed to occur immediately prior to the
occurrence of any such events. An event shall not constitute a Change of Control
Event if its sole purpose is to change the jurisdiction of the Corporation’s
organization or to create a holding Corporation, partnership or trust that will
be owned in substantially the same proportions by the persons who held the
Corporation’s securities immediately before such event. Additionally, a Change
of Control Event will not be deemed to have occurred, with respect to the
Executive, if the Executive is part of a purchasing group that consummates the
Change of Control Event.

1.4.

“Common shares” or “common stock” means the common shares, without par value of
the Corporation.

1.5.

“Confidential Information” means information, whether or not originated by the
Executive, that relates to the business or affairs of the Corporation, its
affiliates, clients or suppliers and is confidential or proprietary to, about or
created by the Executive, its affiliates, clients, or suppliers. Confidential
Information includes, but is not limited to, the following types of confidential
information and other proprietary information of a similar nature (whether or
not reduced to writing or designated or marked as confidential):

 

1.5.1.

work product resulting from or related to work or projects performed for or to
be performed for the Corporation or its affiliates, including but not limited
to, the methods, processes, procedures, analysis, techniques and audits used in
connection therewith;

 

1.5.2.

computer software of any type or form and in any stage of actual or anticipated
development, including but not limited to, programs and program modules,
routines and subroutines, procedures, algorithms, design concepts, design
specifications (design notes, annotations, documentation, flowcharts, coding
sheets, and the like), source code, object code and load modules, programming,
program patches and system designs;

 

1.5.3.

internal Corporation personnel and financial information, vendor names and other
vendor information, purchasing and internal cost information, internal services
and operational manuals, and the manner and method of conducting the
Corporation’s business;

 

1.5.4.

marketing and development plans, price and cost data, price and fee amounts,
pricing and billing policies, quoting procedures, marketing techniques and
methods of obtaining business, forecasts and forecast assumptions and volumes,
current and prospective client lists, and future plans and potential strategies
of the Corporation that have been or are being discussed; and

 

1.5.5.

all information that becomes known to the Executive as a result of his
employment or engagement as a consultant with the Corporation that the
Executive, acting reasonably, believes is confidential information or that the
Corporation takes measures to protect.

Confidential Information does not include:

 

1.5.6.

the general skills and experience gained during the Executive’s employment or
engagement with the Corporation that the Executive could reasonably have been
expected to acquire in similar employment or engagements with other companies;

 

1.5.7.

information publicly known without breach of this Agreement or similar
agreements; or

 

 

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1.5.8.

information, the disclosure of which is required to be made by any law,
regulation or governmental authority (to the extent of the requirement),
provided that before disclosure is made, notice of the requirement is provided
to the Corporation, and to the extent of the requirements (to the extend
reasonable possible in the circumstances), the Corporation is afforded an
opportunity to dispute the requirement.

1.6.

“Directors” means the Directors of the Corporation, and “Director” means any one
of them;

1.7.

“Disability Termination” means a termination by the Corporation due to a Total
Permanent Disability.

1.8.

“Employment Effective Date” means June 16, 2008.

1.9.

“Employment Services” means those services described in paragraph 2.1 herein.

1.10.

“Employment Termination Date” means the date of termination of the Executive’s
employment with the Corporation and is the earliest of:

 

1.10.1.

the effective date of any resignation by the Executive; or

 

1.10.2.

the effective date of any termination by the Corporation of the Executive,
whether with or without Just Cause.

1.11.

“Escrow Agreement” means the agreement appended hereto as Schedule “A”.

1.12.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

1.13.

“Executive’s Stock Options” means those options to purchase two hundred fifty
thousand (250,000) Common Shares granted under the Stock Option Plan as
described at paragraph 2.6.2 herein and the Stock Option Agreement.

1.14.

“Just Cause” includes, but is not limited to:

 

1.14.1.

the Executive’s failure to properly discharge his lawful duties, or any material
breach or non-observance by the Executive of any material provision of this
Agreement;

 

1.14.2.

the Executive’s conviction for any crime respecting the property of the
Corporation, or the Executive’s personal honesty;

 

1.14.3.

any breach by the Executive of his obligations under the Corporation’s code of
conduct or any policies or procedures adopted by the Corporation from time to
time, and disseminated to employees in accordance with the Corporation’s normal
practice, provided that such conduct would amount to just cause as a matter of
common law;

 

1.14.4.

any breach by the Executive of the fiduciary duties normally owed by an
Operations Manager of a Corporation including the duty to avoid conflicts of
interest, and to act honestly and in good faith with a view to the best
interests of the Corporation; or

 

1.14.5.

any other material breach of this Agreement by the Executive.

1.15.

“Material Acquisition” means the acquisition of any property of at least US $3
million net to the Corporation.

1.16.

“Stock Option Agreement” means the agreement appended hereto as Schedule “B”.

1.17.

“Stock Option Plan” means the 2007 Stock Option Plan adopted by the Corporation.

 

 

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1.18.

“Total Permanent Disability” means the inability of the Executive substantially
to perform his duties under this Agreement for a continuous period of more than
four (4) months. Such disability shall be determined by the Executive’s
attending physician, acting reasonably, and if the Corporation disagrees with
the determination of such physician, the Corporation shall have the sole right
to employ a physician of its choosing to examine the Executive and make an
independent determination of whether the Executive is, in fact, totally and
permanently disabled.

B.

Terms and Conditions OF EMPLOYMENT

2.1

Employment.

 

2.1.1.

The Corporation agrees to employ the Executive from the Employment Effective
Date until the Employment Termination Date, as the Operations Manager of the
Corporation.

 

2.1.2.

The Executive agrees to perform such duties and responsibilities as may be
reasonably required of an Operations Manager of a publicly-traded corporation of
a similar size and gross revenues.

 

2.1.3.

The Executive shall report to the President and shall have such authority as the
President may from time to time delegate to the Executive.

 

2.1.4.

The Executive shall always act in accordance with any reasonable decision of and
obey and carry out all lawful and reasonable orders given to him by the
President.

2.2.

Location. The Executive’s employment will be based in Houston, Texas. The
Executive understands that he will be required to travel regularly in order to
fulfil his duties as the Operations Manager of the Corporation.

2.3.

Faithful Service. The Executive will diligently and faithfully devote his best
efforts on behalf of and to advance the Corporation’s interests.

2.4.

Time and Energy. Unless prevented by ill health, or physical or mental
disability or impairment, the Executive shall, during the term of employment,
devote his full working time, care and attention to the business of the
Corporation in order to properly discharge his duties hereunder and will not,
without the prior written consent of the Corporation, engage in any other
business, profession or occupation.

2.5.

Fiduciary Role. The Executive acknowledges that the Operations Manager is a
fiduciary of the Corporation and he agrees to serve the Corporation in a manner
which is consistent with the fiduciary duties owed by an executive to the
Corporation. Without limiting the generality of the foregoing, the Executive
shall observe the highest standards of loyalty, good faith, and avoidance of
conflicts of duty and self-interest.

2.6.

Compensation. During the term of employment under this Agreement, and any
extension thereof, the Corporation shall pay and provide the Executive
compensation on terms described below:

 

2.6.1.

Cash Compensation.

 

2.6.1.1.

As compensation for his services to the Corporation, the Executive shall receive
the Base Salary, as amended in accordance with paragraph 2.6.1.2 herein.

 

2.6.1.2.

During the term of employment under this Agreement, the Board shall review the
Base Salary annually in light of the Executive’s performance and to ensure that
such amounts are competitive with amounts paid to similarly situated Executives
of companies comparable to the Corporation and shall increase such amounts as
the Board may approve.

 

 

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2.6.1.3.

The Base Salary shall be payable in semi-monthly instalments, subject to all tax
withholding, statutory and other deductions.

 

2.6.2.

Stock Options.

 

2.6.2.1.

Upon completion of the probationary period set out at paragraph 2.7.1 herein and
subject to compliance with all applicable laws and the rules of any quotation
system or stock exchange, then applicable, the Corporation will grant to the
Executive the Executive Stock Options, exercisable at a price of $1.00 per share
for a term of five (5) years from the Employment Effective Date.

 

2.6.2.2.

The Executive Stock Options will vest in equal annual instalments over a
three-year period with the first one-third (1/3) of the Executive Stock Options
vesting on the Date which is one (1) year after the date of grant of the
Executive Stock Options.

 

2.6.2.3.

Notwithstanding paragraph 2.6.2.2 of this Agreement, all of the Executive Stock
Options will vest upon the occurrence of a Change in Control Event.

 

2.6.2.4.

The terms of the Executive Stock Options are documented in the Stock Option
Agreement.

 

2.6.2.5.

The terms of the Executive Stock Options are subject to the Provisions of the
Stock Option Plan, as may be amended from time to time, and any inconsistencies
among this Agreement, the Stock Option Agreement and the Stock Option Plan,
shall be governed by the provisions of the Stock Option Plan.

 

2.6.3.

Incentive Bonuses. The Corporation shall pay the Executive the Incentive Bonuses
in accordance with the following terms:

 

2.6.3.1.

During the first year of employment, a maximum of two bonus payments of US
$20,000 each, less any applicable statutory deductions, upon the successful
closing of a Material Acquisition or the completion of a new well on a prospect
outside the current Sentell Field project; and

 

2.6.3.2.

At the first anniversary of the Employment Effective Date, a bonus of up to US
$40,000, less any applicable statutory deductions, to awarded solely at the
discretion of the Board.

 

2.6.4.

Employee Benefits.

 

2.6.4.1.

The Executive shall, to the extent eligible, be entitled to participate in all
of the Corporation’s benefit, welfare and retirement plans and programs,
provided by the Corporation to its senior officers in accordance with the terms
thereof as they may be in effect from time to time.

 

2.6.4.2.

Without limiting the generality of paragraph 2.6.4.1, the Corporation will
reimburse the Executive for the COBRA fees paid by the Executive on the health
insurance policy, under which the Executive and his immediate family members are
beneficiaries, presently maintained by the Executive and as listed in Schedule
“C” hereto.

 

2.6.5.

Business and Entertainment Expenses. Upon submission of appropriate
documentation in accordance with its policies in effect from time to time, the
Corporation shall pay or reimburse the Executive for all reasonable business
expenses which the Executive actually, necessarily and properly incurs in the
performance of his normal employment duties under

 

 

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this Agreement, including, but not limited to, expenses related to travel,
accommodation and communication in performing his employment duties.

 

2.6.6.

Vacation. The Executive shall be entitled to paid time off in accordance with
the standard written policies of the Corporation with respect to its senior
officers, but in no event, not less than 15 days per calendar year not
including, and in addition to, weekends and statutory holidays. For partial
years of employment, the Executive shall be entitled to a pro-rated number of
vacation days.

2.7.

Probation and Termination of Employment.

 

2.7.1.

Probation. There will be a ninety (90) day probationary period of assessment
during which the Corporation or the Executive may terminate this Agreement
without notice or other compensation, except for salary and other benefits owing
to the effective date of termination.

 

2.7.2.

Death or Disability.

 

2.7.2.1.

Subject to the obligations of the Corporation to comply with its obligations, if
any, under applicable human rights or similar legislation to accommodate the
Executive’s Total Permanent Disability, the Corporation may terminate the
Executive’s employment in the event of a Total Permanent Disability.

 

2.7.2.2.

The Executive’s employment shall automatically terminate on the Executive’s
death.

 

2.7.2.3.

In the event the Executive’s employment with the Corporation terminates during
the Term by reason of the Executive’s death or as a result of a Disability
Termination, then upon and immediately effective on the Date of Termination:

 

(a)

the Executive’s Stock Options and any other stock options granted to the
Executive which have not vested shall vest immediately and be immediately
exercisable subject to the terms of the applicable Stock Option Agreement; and

 

(c)

the Corporation shall promptly pay and provide the Corporation (or in the event
of the Executive’s death, the Executive’s estate):

 

(i)

any unpaid Base Salary through the Employment Termination Date, and

 

(ii)

reimbursement for any unreimbursed expenses incurred through to the Employment
Termination Date.

 

2.7.3.

Termination for Just Cause.

 

2.7.3.1.

The Corporation may terminate the Executive’s employment for Just Cause by
giving the Executive written notice of termination.

 

2.7.3.2.

In the event that the Executive’s employment with the Corporation is terminated
by the Corporation for Just Cause, the Executive shall not be entitled to:

 

(a)

any additional payments or benefits hereunder, other than for amounts due and
owing up to the Employment Termination Date; or

 

(b)

exercise any unexercised Stock Options, whether released or not.

 

 

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2.7.4.

Termination Other than for Just Cause.

 

2.7.4.1.

The Corporation may terminate the Executive’s employment at any time after the
Employment Effective Date for other than Just Cause.

 

2.7.4.2.

If the Executive’s employment with the Corporation is terminated by the
Corporation other than for Just Cause, and subject to paragraph 2.7.5., the
Corporation delivers notice of termination to the Executive, then the
Corporation shall pay the Executive a lump sum amount equal to three (3) months
of the Base Salary and,

 

(a)

in the event the Corporation is continuing to reimburse the Executive for his
COBRA fees, pay the Executive a lump sum equal to the fees for three (3) months;
or

 

(b)

if the Corporation is providing benefits pursuant to paragraph 2.6.4, at the
Corporation’s sole discretion:

 

(i)

continue to provide the Executive with the benefits provided under paragraph
2.6.4 for three (3) months from the date of termination of the Executive’s
employment; or

 

(ii)

paying the Executive a lump sum equal to the cost of providing the Executive
such benefits for three (3) months.

 

2.7.4.3.

If the Executive’s employment with the Corporation is terminated by the
Corporation other than for Just Cause:

 

(a)

the Executive may exercise any vested Executive Stock Options in accordance with
the terms of the Stock Option Agreement; and

 

(b)

any unvested Executive Stock Options shall terminate immediately upon
termination of employment.

 

2.7.4.4.

The notice and payment in lieu provisions set out at paragraphs 2.7.4 herein are
inclusive of and not in addition to any notice or payment in lieu of notice to
which the Executive may be entitled under the state or federal law. In no case
shall the Executive receive less notice or payment in lieu of notice that that
to which the Executive is entitled under the state or federal law. If the
Executive is entitled to a greater period of notice or payment in lieu of notice
pursuant to the federal or state law, such notice or payment shall constitute
the Executive’s full entitlement to notice or severance under this Agreement.

 

2.7.5.

Termination on Change of Control.

 

2.7.5.1.

The Executive may immediately terminate his employment with the Corporation at
any time within 60 days after a Change of Control Event if, after the Change of
Control Event there is any material change, reduction or diminution (except
temporarily during any period of physical or mental incapacity or Disability of
the Executive) in the Executive’s titles, status or positions, authority, duties
or responsibilities with the Corporation.

 

2.7.5.2.

If the Executive’s Employment with the Corporation is voluntarily terminated in
accordance with paragraph 2.7.5.1 or terminated without good cause within three
(3) months of a Change in Control Event, then the Corporation shall pay the
Executive an amount equal to 50% the sum of the Base Salary, which amount is
payable within 30 days of the Date of Termination.

 

 

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2.7.5.3.

In the event of a Change in Control Event, the Executive Stock Options and any
other equity awards which have not been released shall be released immediately
and be immediately exercisable subject to the terms of the Stock Option
Agreement, the Stock Option Plan or any other agreement governing such other
equity awards.

 

2.7.6.

Termination by Executive

The Executive may terminate his employment at any time without good reason by
providing two (2) week’s written notice to the Corporation. In the event that
the Executive’s employment with the Corporation is terminated during the term of
this Agreement by the Executive without good reason, the Executive shall not be
entitled to any additional payments or benefits hereunder, other than any
amounts due and owing as of the termination date.

 

2.7.7.

Resignation of Positions.

The Executive agrees that after termination of his employment with the
Corporation for any reason he will tender his resignation from any position he
may hold as an officer, director, trustee, member employee or agent of the
Corporation or as an officer, director, trustee, member, employee or agent of
any of its affiliated or associated companies if so requested by the Board.

 

2.7.8.

Fair and Reasonable Provisions

The Corporation and Executive acknowledge and agree that the provisions of
Section 2.7 of this Agreement regarding further payments of the Base Salary, and
the release of the Executive Stock Options and other option or equity grants,
constitute fair and reasonable provisions for the consequences of such
termination, do not constitute a penalty, and such payments and benefits shall
not be limited or reduced by amounts the Executive might earn or be able to earn
from any other employment or ventures during the remainder of the agreed term of
this Agreement.

2.8.

General Provisions regarding Employment Services

 

2.8.1.

Indemnification. Except in the case of gross negligence or wilful misconduct,
the Corporation hereby covenants and agrees that, if the Executive is made a
party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative of any nature
whatsoever (a “Proceeding”) by reason of, or as a result of, the fact that he is
or was a Director, officer or employee of the Corporation or is or was serving
at the request of the Corporation as a trustee, director, officer, member,
employee or agent of another Corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans, the
Executive shall be indemnified and held harmless by the Corporation to the
fullest extent legally permitted or authorized by the Corporation’s constating
documents or, if greater, by applicable federal, state or provincial
legislation, against all costs, expenses, liability and losses of any nature
whatsoever (including, without limitation, attorney’s fees, judgments, fines,
interest, taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in connection therewith
(collectively the “Indemnification Amounts”), and such indemnification shall
continue as to the Executive even if he has ceased to be a Director, officer,
member, employee or agent of the Corporation and shall enure to the benefit of
the Executive the Indemnification Amounts incurred, or reasonably estimated to
be incurred, by him immediately upon receipt by the Corporation of a written
request for such advance.

 

2.8.2.

Liability Insurance. The Corporation shall use its best efforts to obtain third
party liability insurance for the Executive (including directors and officers
liability insurance in amount to be determined in conjunction with the
Corporation’s insurance broker) for insuring the

 

 

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Executive for any claims arising from the negligent acts or omissions of the
Executive or the Corporation during the period the Executive was employed by the
Corporation.

 

2.8.3.

Beneficiaries. The Executive shall be entitled, to the extent permitted under
any applicable law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive’s
death by giving the Corporation written notice thereof. In the event of the
Executive’s death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.

D.

GENERAL PROVISIONS REGARDING EMPLOYMENT SERVICES

3.1

Assignability.

 

3.1.1.

This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective successors, heirs (in the case of the Executive) and
permitted assigns. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than:

 

3.1.1.1.

his rights to compensation and benefits, in whole or in part, which may be
transferred by the Executive to

 

(a)

a corporation owned or controlled by the Executive or members of the Executive’s
family,

 

(b)

a trust, the beneficiaries of which are the Executive or members of the
Executive’s family, or

 

(c)

a charity, a foundation or trust established for charitable purposes, or which
may be transferred by the Executive’s will or the operation of law; or

 

3.1.1.2.

to a corporation through which the Executive shall provide the services required
of him hereunder.

 

3.1.2.

In the event that the Corporation amalgamates with another Corporation or
changes its name, this Agreement will continue in full force and effect between
the Executive and the newly amalgamated or named Corporation.

3.2.

Authorization. The Corporation represents and warrants that it is fully
authorized and empowered to enter into this Agreement and perform its
obligations hereunder, and that performance of this Agreement will not violate
any agreement between the Corporation and any other person, firm or organization
nor breach any provisions of its constating documents or governing legislation.

3.3.

Obligations to the Corporation

 

3.3.1.

No Conflicting Obligations

 

3.3.1.1.

The Executive warrants to the Corporation that

 

(a)

the performance of his duties as an employee of the Corporation will not breach
any agreement or other obligation to keep confidential the proprietary
information of any other party; and

 

 

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10

 

 

 

(b)

he is not bound by any agreement with obligation to any other party that
conflicts with his obligations as a consultant or as an employee of the
Corporation or that may affect the Corporation’s interest in the Developments.

 

3.3.1.2.

The Executive will not, in the performance of the Executive’s duties as an
employee of the Corporation:

 

(a)

improperly bring to the Corporation or use any trade secrets, confidential
information or other proprietary information of any other party; or

 

(b)

knowingly infringe the intellectual property rights of any other party.

 

3.3.2.

Non-Solicitation. The Executive agrees that, for a one (1) year period following
the Employment Termination Date, for any reason whatsoever, he shall not,
without the consent of the Board by resolution, engage in any solicitation of
clients, customers or any individuals or firms with respect to which the
Corporation had dealings (and whether or not any contractual arrangements have
been concluded as between the Corporation and any such individuals or firms)
which might benefit any competitor of the Corporation.

 

3.3.3.

Confidential Information.

 

3.3.3.1.

All Confidential Information, whether it is developed by the Executive or by
others employed or engaged by or associated with the Corporation or its
affiliates or clients, is the exclusive and confidential property of the
Corporation or its affiliates or clients, as the case may be, and will at all
times be regarded, treated and protected as such, as provided in this Agreement.

 

3.3.3.2.

As a consequence of the acquisition of Confidential Information, the Executive
will occupy a position of trust and confidence with respect to the affairs and
business of the Corporation and its affiliates and clients. In view of the
foregoing, it is reasonable and necessary for the Executive to make the
following covenants regarding the Executive’s conduct during and subsequent to
the Executive’s employment by the Corporation:

 

(a)

At all times during and subsequent to the Executive employment with the
Corporation, the Executive will not disclose Confidential Information to any
person (other than as necessary in carrying out the Executive’s duties on behalf
of the Corporation) without first obtaining the Corporation’s consent, and the
Executive will take all reasonable precautions to prevent inadvertent disclosure
of any Confidential Information. This prohibition includes, but is not limited
to, disclosing or confirming the fact that any similarity exists between the
Confidential Information and any other information.

 

(b)

At all times during and subsequent to the Executive’s employment with the
Corporation, the Executive will not use, copy, transfer or destroy and
Confidential Information (other than as necessary in carrying out the
Executive’s duties on behalf of the Corporation) without first obtaining the
Corporation’s consent and the Executive will take all reasonable precautions to
prevent inadvertent use, copying, transfer or destruction of any Confidential
Information. This prohibition includes, but is not limited to, licensing or
otherwise exploiting, directly or indirectly, any products or services that
embody or are derived from Confidential Information or exercising judgment or
performing analysis based upon knowledge of Confidential Information.

 

 

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(c)

Within two (2) business days after the termination of the Executive’s employment
for any reason, the Executive will promptly deliver to the Corporation all
property of or belonging to or administered by the Corporation including without
limitation all Confidential Information that is embodied in any form, whether in
hard copy or on electronic media, and that is within the Executive’s possession
or under the Executive’s control.

 

3.3.3.3.

Consent to Enforcement. The Executive confirms that all restrictions in Section
3.3, are reasonable and valid and any defences to the strict enforcement thereof
by the Corporation are waived by the Executive. Without limiting the generality
of the foregoing, the Executive hereby consents to an injunction being granted
by a court of competent jurisdiction in the event that the Executive is in
breach of any of the provisions stipulated in Section 3.3. The Executive hereby
expressly acknowledges and agrees that injunctive relief is an appropriate and
fair remedy in the event of a breach of any of the said provisions.

 

3.3.3.4.

The Executive’s obligations under each of Section 3.3 are to remain in effect in
accordance with each of their terms and will exist and continue in full force
and effect despite any breach or repudiation, or alleged breach or repudiation,
or termination of this Agreement or the Executive’s wrongful dismissal by the
Corporation.

3.4.

Entire Agreement. This Agreement contains the entire understanding and agreement
between the parties concerning the subject matter hereof and supersedes all
prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, between the parties with respect thereto.

3.5.

Amendment or Waiver.

 

3.5.1.

Save and except for any increases to the salary, benefits, options or other
compensation payable to the Executive or changes to matters dealt with or
referred to in the Schedules, no provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Corporation.

 

3.5.2.

No waiver by either party hereto of any breach by the other party hereto of any
condition or provision contained in this Agreement to be performed by such other
party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Corporation, as the case
may be.

3.6.

Compliance with Policies and Laws. The Executive agrees to abide by all the
Corporation’s policies and procedures, including without limitation, the
Corporation’s code of conduct. The Executive also agrees to abide by all laws
applicable to the Corporation, in each jurisdiction that it does business,
including without limitation securities and regulations governing publicly
traded companies.

3.7.

Governing Law and Venue. This Agreement has been executed and delivered in the
State of Texas and its interpretation, validity and performance shall be
exclusively construed and enforced in accordance with the laws of such State.

3.8.

Notices. Any notice required or permitted to be given under this Agreement shall
be in writing, sent by registered or certified mail, postage prepaid, or
personally delivered to the following addresses:

 

 

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

12

 

 

 

(a)

in the case of the Corporation:

SOUTHERN STAR ENERGY INC.

307 – 1178 Hamilton Street

Vancouver, BC V6B 2S2

 

(b)

in the case of the Executive:

DOUGLAS M. HARWELL

616 Memorial Hieghts Drive, Apt. 17303

Houston, TX 77007

or to such other address as parties hereto may specify, in writing, from time to
time. Notices shall be effective upon actual receipt.

3.9.

Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

3.10.

Currency. Unless otherwise specified herein, all references to dollar or dollars
are references to United States dollars.

3.11.

Further Assurances. Each of the Executive and the Corporation will do, execute
and deliver, or will cause to be done, executed and delivered, all such further
acts, documents and things as the Executive or the Corporation may require for
the purposes of giving effect to this Agreement.

3.12.

Counterparts/Facsimile Execution. This Agreement may be executed in several
parts in the same form and such parts as so executed shall together constitute
one original document, and such parts, if more than one, shall be read together
and construed as if all the signing parties had executed one copy of the said
Agreement.

INTENDING TO BE LEGALLY BOUND, the parties have executed this Agreement as of
the date first above written above.

SOUTHERN STAR ENERGY INC.

 

Per:

/s/ William David Gibbs

 

Authorized Signatory

 

 

 

 

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

13

 

 

 

EXECUTED by DOUGLAS M. HARWELL in the presence of:

/s/ Rae Lynn Wertz
Signature
Rae Lynn Wertz
Print Name
110 Cypress Station Drive
Address
Houston, TX 77090

Manager of Administration
Occupation

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

/s/ Douglas Harwell
DOUGLAS M. HARWELL

 

 

 

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

14

 

 

Schedule “A”

Escrow Agreement

 

 

 

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

15

 

 

Schedule “B”

Stock Option Agreement

 

NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION AGREEMENT (THE "AGREEMENT")
RELATES HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, NONE MAY BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE
ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

STOCK OPTION AND SUBSCRIPTION AGREEMENT

For U.S. Persons

This AGREEMENT is entered into as of the 16th day of June, 2008 (the "Date of
Grant").

BETWEEN:

SOUTHERN STAR ENERGY INC., with an office at Suite 152, 110 Cypress Station
Drive, Houston, TX 77090 (the "Company")

AND:

DOUGLAS M. HARWELL, a person with a residential address at 616 Memorial Heights
Drive, Apt. 17303, Houston, TX 77007 (the "Optionee")

WHEREAS:

A.                          The Company's board of directors (the "Board") has
approved a Stock Option Plan (the "Plan"), whereby the Board is authorized to
grant stock options to purchase common shares of the Company pursuant to the
Plan to the directors, officers, employees, management company employees and
consultants of the Company;

B.                          The Optionee provides services to the Company as an
operations manager of the Company (the “Services”); and

C.                          The Company seeks to grant stock options to purchase
a total of TWO HUNDRED AND FIFTY THOUSAND (250,000) shares of Common Stock to
the Optionee as an incentive for the provision of the Services.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants
and agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency whereof is hereby acknowledged, the parties hereto
agree as follows:

1.1                         In this Agreement, the following terms shall have
the following meanings:

 

(a)

"Common Stock" means the shares of common stock of the Company;

 

(b)

"Exercise Payment" means the amount of money equal to the Exercise Price
multiplied by the number of Optioned Shares specified in the Notice of Exercise;

 

(c)

"Exercise Price" means $1.00;

 

 

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

16

 

 

 

(d)

"Expiry Date" means June 16, 2013;

 

(e)

"Notice of Exercise" means a notice in writing addressed to the Company at its
address first recited (or such other address of the Company as may from time to
time be notified to the Optionee in writing), substantially in the form attached
as Appendix "A" hereto, which notice shall specify therein the number of
Optioned Shares in respect of which the Options are being exercised;

 

(f)

"Options" means the irrevocable right and option to purchase, from time to time,
all, or any part of the Optioned Shares granted to the Optionee by the Company
pursuant to Section 1.2 of this Agreement;

 

(g)

"Optioned Shares" means the shares of Common Stock, subject to the Options;

 

(h)

"Securities" means, collectively, the Options and the Optioned Shares;

 

(i)

"Shareholders" means holders of record of the shares of Common Stock;

 

(j)

"U.S. Person" shall have the meaning ascribed thereto in Regulation S under the
1933 Act, and for the purpose of this Agreement includes any person in the
United States; and

 

(k)

"Vested Options" means the Options that have vested in accordance with Section
1.3 of this Agreement.

1.2                         The Company hereby grants to the Optionee, on the
terms and conditions set out in this Agreement and in the Plan, Options to
purchase a total of TWO HUNDRED AND FIFTY THOUSAND (250,000) Optioned Shares at
the Exercise Price.

1.3                         The TWO HUNDRED AND FIFTY THOUSAND (250,000) Options
shall vest in accordance with the following schedule:

 

(a)

EIGHTY THREE THOUSAND THREE HUNDRED THIRTY FOUR (83,334) Options shall vest on
the first anniversary of the Date of Grant;

 

(b)

EIGHTY THREE THOUSAND THREE HUNDRED THIRTY THREE (83,333) Options shall vest on
the second anniversary of the Date of Grant; and

 

(c)

EIGHTY THREE THOUSAND THREE HUNDRED THIRTY THREE (83,333) Options shall vest on
the third anniversary of the Date of Grant.

1.4                         Notwithstanding any provisions of the Plan, the
Agreement dated June 16, 2008 between the Optionee and the Company (the
"Employment Agreement") or this Agreement, Vested Options may only be exercised
if the Optionee is an employee at the time of the exercise of any such Options.

1.5                         The Options shall, at 5:00 p.m. (Vancouver time) on
the Expiry Date, expire and be of no further force or effect whatsoever.

1.6                         Vested Options shall terminate, to the extent not
previously exercised, in accordance with Section 5(g) of the Plan. Unless the
Company undergoes a Change of Control, as defined in the Employment Agreement,
each unvested Option granted pursuant hereto shall terminate immediately upon
termination of or resignation from the Optionee's employment or contractual
relationship with the Company for any reason whatsoever. Upon a Change of
Control, each unvested Option will immediately vest in accordance with the
Employment Agreement.

1.7                         Subject to the provisions of this Agreement and the
Plan and subject to compliance with any applicable securities laws, the Options
shall be exercisable, in full or in part, at any time after vesting, until

 

 

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

17

 

termination; provided, however, that if the Optionee is subject to the reporting
and liability provisions of Section 16 of the Securities Exchange Act of 1934
with respect to the shares of Common Stock, the Optionee shall be precluded from
selling, transferring or otherwise disposing of any shares of Common Stock
underlying any Options during the six (6) months immediately following the grant
of that Option. If less than all of the shares included in the vested portion of
any Options are purchased, the remainder may be purchased at any subsequent time
prior to the Expiry Date. Only whole shares may be issued pursuant to the
exercise of any Options, and to the extent that any Options covers less than one
(1) share, it is unexercisable.

Each exercise of the Options shall be by means of delivery of a Notice of
Exercise (which may be in the form attached hereto as Appendix A) to the
President of the Company at its principal executive office, specifying the
number of shares of Common Stock to be purchased and accompanied by payment in
cash by certified check or cashier's check in the amount of the full exercise
price for the shares of Common Stock to be purchased. In addition to payment in
cash by certified check or cashier's check, an Optionee or transferee of the
Options may pay for all or any portion of the aggregate exercise price by
complying with one or more of the following alternatives:

 

(a)

by delivering a properly executed Notice of Exercise together with irrevocable
instructions to a broker promptly to sell or margin a sufficient portion of the
shares of Common Stock and deliver directly to the Company the amount of sale or
margin loan proceeds to pay the exercise price; or

 

(b)

by complying with any other payment mechanism approved by the Board at the time
of exercise.

It is a condition precedent to the issuance of Optioned Shares that the Optionee
execute and/or deliver to the Company all documents and withholding taxes
required in accordance with applicable laws.

1.8                         Nothing in this Agreement shall obligate the
Optionee to purchase any Optioned Shares except those Optioned Shares in respect
of which the Optionee shall have exercised the Options in the manner provided in
this Agreement.

1.9                         Reference is made to the Plan and the Employment
Agreement for particulars of the rights and obligations of the Optionee and the
Company in respect of:

 

(a)

the terms and conditions on which the Options are granted; and

 

(b)

a consolidation or subdivision of the Company's share capital or an amalgamation
or merger;

all to the same effect as if the provisions of the Plan were set out in this
Agreement and to all of which the Optionee assents.

1.10                       The terms of the Options are subject to the
provisions of the Plan, as the same may from time to time be amended, and any
inconsistencies among this Agreement, the Employment Agreement and the Plan, as
the same may be from time to time amended, shall be governed by the provisions
of the Plan.

2.

Documents Required from Optionee

2.1                         The Optionee must complete, sign and return an
executed copy of this Agreement to the Company.

2.2                         The Optionee shall complete, sign and return to the
Company as soon as possible, on request by the Company, any documents,
questionnaires, notices and undertakings as may be required by regulatory
authorities, and applicable law.

3.

Acknowledgements of the Optionee

3.1                         The Optionee acknowledges and agrees that:

 

 

 

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

18

 

 

 

(a)

the Optionee is an executive officer of the Company;

 

(b)

the Securities have not been registered under the 1933 Act or under any state
securities or "blue sky" laws of any state of the United States, and are being
offered only in a transaction not involving any public offering within the
meaning of the 1933 Act, and, unless so registered, may not be offered or sold
in the United States or to U.S. Persons (as defined herein), except pursuant to
an effective registration statement under the 1933 Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the 1933 Act, and in each case only in accordance with
applicable state securities laws;

 

(c)

the Company will refuse to register any transfer of the Securities not made in
accordance with the provisions of Regulation S, pursuant to an effective
registration statement under the 1933 Act or pursuant to an available exemption
from, or in a transaction not subject to, the registration requirements of the
1933 Act;

 

(d)

the decision to execute this Agreement and acquire the Securities hereunder has
not been based upon any oral or written representation as to fact or otherwise
made by or on behalf of the Company and such decision is based solely upon a
review of publicly available information regarding the Company available on the
website of the United States Securities and Exchange Commission (the "SEC")
available at www.sec.gov (the "Company Information");

 

(e)

the Company is entitled to rely on the representations and warranties and the
statements and answers of the Optionee contained in this Agreement, and the
Optionee will hold harmless the Company from any loss or damage it may suffer as
a result of the Optionee's failure to correctly complete this Agreement;

 

(f)

the Optionee has been advised to consult its own legal, tax and other advisors
with respect to the merits and risks regarding the exercise of the Options and
the issuance of the Optioned Shares and with respect to applicable resale
restrictions and it is solely responsible (and the Company is in any way
responsible) for compliance with applicable resale restrictions;

 

(g)

the Securities are not listed on any stock exchange or automated dealer
quotation system and no representation has been made to the Optionee that any of
the Securities will become listed on any stock exchange or automated dealer
quotation system, except that currently certain market makers make market in the
shares of Common Stock on the OTC Bulletin Board;

 

(h)

neither the SEC nor any other securities commission or similar regulatory
authority has reviewed or passed on the merits of the Securities;

 

(i)

no documents in connection with this Agreement have been reviewed by the SEC or
any state securities administrators;

 

(j)

there is no government or other insurance covering any of the Securities; and

 

(k)

this Agreement is not enforceable by the Optionee unless it has been accepted by
the Company.

4.

Representations, Warranties and Covenants of the Optionee

4.1                         The Optionee hereby represents and warrants to and
covenants with the Company (which representations, warranties and covenants
shall survive the closing) that:

 

(a)

the Optionee is an executive officer of the Company;

 

(b)

the Optionee is a U.S. Person;

 

 

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

19

 

 

 

(c)

the Optionee has received and carefully read this Agreement;

 

(d)

the Optionee has the legal capacity and competence to enter into and execute
this Agreement and to take all actions required pursuant hereto and, if the
Optionee is a corporation, it is duly incorporated and validly subsisting under
the laws of its jurisdiction of incorporation and all necessary approvals by its
directors, shareholders and others have been obtained to authorize execution and
performance of this Agreement on behalf of the Optionee;

 

(e)

the Optionee (i) has adequate net worth and means of providing for its current
financial needs and possible personal contingencies, (ii) has no need for
liquidity in this investment, and (iii) is able to bear the economic risks of an
investment in the Securities for an indefinite period of time, and can afford
the complete loss of such investment;

 

(f)

all information contained in this Agreement is complete and accurate and may be
relied upon by the Company;

 

(g)

the Optionee has the requisite knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
investment in the Securities and the Company, and the Optionee is providing
evidence of such knowledge and experience in these matters through the
information requested in this Agreement;

 

(h)

the Optionee understands and agrees that the Company and others will rely upon
the truth and accuracy of the acknowledgements, representations, warranties,
covenants and agreements contained in this Agreement and agrees that if any of
such acknowledgements, representations and agreements are no longer accurate or
have been breached, the Optionee shall promptly notify the Company;

 

(i)

the Optionee is aware that an investment in the Company is speculative and
involves certain risks, including the possible loss of the investment;

 

(j)

the entering into of this Agreement and the transactions contemplated hereby do
not result in the violation of any of the terms and provisions of any law
applicable to, or, if applicable, the constating documents of, the Optionee, or
of any agreement, written or oral, to which the Optionee may be a party or by
which the Optionee is or may be bound;

 

(k)

the Optionee has duly executed and delivered this Agreement and it constitutes a
valid and binding agreement of the Optionee enforceable against the Optionee;

 

(l)

the Optionee has the requisite knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of the
investment in the Securities and the Company, and the Optionee is providing
evidence of such knowledge and experience in these matters through the
information requested in this Agreement;

 

(m)

the Optionee understands and agrees that the Company and others will rely upon
the truth and accuracy of the acknowledgements, representations and agreements
contained in this Agreement, and agrees that if any of such acknowledgements,
representations and agreements are no longer accurate or have been breached, the
Optionee shall promptly notify the Company;

 

(n)

the Optionee is purchasing the Securities for its own account for investment
purposes only and not for the account of any other person and not for
distribution, assignment or resale to others, and no other person has a direct
or indirect beneficial interest is such Securities, and the Optionee has not
subdivided his interest in the Securities with any other person;

 

 

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

20

 

 

 

(o)

the Optionee is not an underwriter of, or dealer in, the shares of Common Stock,
nor is the Optionee participating, pursuant to a contractual agreement or
otherwise, in the distribution of the Securities;

 

(p)

the Optionee has made an independent examination and investigation of an
investment in the Securities and the Company and has depended on the advice of
its legal and financial advisors and agrees that the Company will not be
responsible in anyway whatsoever for the Optionee's decision to acquire the
Securities;

 

(q)

if the Optionee is acquiring the Securities as a fiduciary or agent for one or
more investor accounts, the Optionee has sole investment discretion with respect
to each such account, and the Optionee has full power to make the foregoing
acknowledgements, representations and agreements on behalf of such account;

 

(r)

the Optionee is not aware of any advertisement of any of the Securities and is
not acquiring the Securities as a result of any form of general solicitation or
general advertising including advertisements, articles, notices or other
communications published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising;

 

(s)

no person has made to the Optionee any written or oral representations:

 

(i)

that any person will resell or repurchase any of the Securities,

 

(ii)

that any person will refund the purchase price of any of the Securities,

 

(iii)

as to the future price or value of any of the Securities, or

 

(iv)

that any of the Securities will be listed and posted for trading on any stock
exchange or automated dealer quotation system or that application has been made
to list and post any of the Securities of the Company on any stock exchange or
automated dealer quotation system, except that currently certain market makers
make market in the shares of Common Stock on the OTC Bulletin Board; and

 

(t)

In this Agreement, the term "U.S. Person" shall have the meaning ascribed
thereto in Regulation S promulgated under the 1933 Act and for the purpose of
this Agreement includes any person in the United States.

5.

Acknowledgement and Waiver

5.1                         The Optionee has acknowledged that the decision to
enter into this Agreement was solely made on the basis of publicly available
information contained in the Company Information. The Optionee hereby waives, to
the fullest extent permitted by law, any rights of withdrawal, rescission or
compensation for damages to which the Optionee might be entitled in connection
with the distribution of any of the Securities.

6.

Legending of Subject Securities

6.1                         The Optionee hereby acknowledges that that upon the
issuance thereof, and until such time as the same is no longer required under
the applicable securities laws and regulations, the certificates representing
any of the Securities will bear a legend in substantially the following form:

"NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY U.S. STATE
SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD

 

 

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

21

 

EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS."

The Optionee hereby acknowledges and agrees to the Company making a notation on
its records or giving instructions to the registrar and transfer agent of the
Company in order to implement the restrictions on transfer set forth and
described in this Agreement.

7.

Costs

7.1                         The Optionee acknowledges and agrees that all costs
and expenses incurred by the Optionee (including any fees and disbursements of
any special counsel retained by the Optionee) relating to the acquisition of the
Securities shall be borne by the Optionee.

8.

Governing Law

8.1           This Agreement is exclusively governed by the laws of the State of
Texas and the federal laws of the United States applicable therein. The Optionee
irrevocably and exclusively attorns to the jurisdiction of the courts of the
State of Texas.

9.

Survival

9.1                         This Agreement, including without limitation the
representations, warranties and covenants contained herein, shall survive and
continue in full force and effect and be binding upon the parties hereto
notwithstanding the exercise of the Options and the corresponding acquisition of
the shares underlying the Options by the Optionee pursuant hereto.

10.

Assignment

10.1                         This Agreement is not transferable or assignable.

11.

Counterparts and Electronic Means

11.                         This Agreement may be executed in several
counterparts, each of which will be deemed to be an original and all of which
will together constitute one and the same instrument. Delivery of an executed
copy of this Agreement by facsimile transmission or other means of electronic
communication capable of producing a printed copy will be deemed to be execution
and delivery of this Agreement as of the date first above written.

12.

Currency

12.1                         Unless explicitly stated otherwise, all funds in
this Agreement are stated in United States dollars.

13.

Severability

13.1                       The invalidity or unenforceability of any particular
provision of this Agreement shall not affect or limit the validity or
enforceability of the remaining provisions of this Agreement.

14.

Entire Agreement

14.1                       Except as expressly provided in this Agreement and in
the agreements, instruments and other documents contemplated or provided for
herein, this Agreement is the only agreement between the Optionee and the
Company with respect to the Options, and this Agreement supersedes all prior and
contemporaneous oral and

 

 

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

22

 

written statements and representations and contains the entire agreement between
the parties with respect to the Securities.

15.

Effectiveness

15.1                       This Agreement shall be deemed to be effective
following the delivery by the Optionee to the Company of two fully executed
copies of this Agreement.

IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as of
the date first above written.

SOUTHERN STAR ENERGY INC.

 

 

By:

                                                                         

 

Authorized Signatory

 

WITNESSED BY:

                                          
                                             
Name
                                          
                                             
Address
                                          
                                             

                                          
                                             
Occupation

)
)
)
)
)
)
)
)
)
)

                                          
                                             
DOUGLAS M. HARWELL

 

 

 

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

 

 

APPENDIX A

TO:

Southern Star Energy Inc.

152 – 110 Cypress Station Drive

Houston, Texas 77090

Notice of Exercise

This Notice of Exercise shall constitute proper notice pursuant to Section 1.7
of the Stock Option and Subscription Agreement dated as of June 16, 2008 (the
"Agreement"), between the Company and the undersigned. The undersigned hereby
elects to exercise Optionee's option to purchase____________________ shares of
the common stock of the Company at a price of $1.00 per share, for aggregate
consideration of $____________, on the terms and conditions set forth in the
Agreement. Such aggregate consideration, in the form specified in Section 1.7 of
the Agreement, accompanies this notice.

The Optionee hereby directs the Company to issue, register and deliver the
certificates representing the shares as follows:

Registration Information:

 

Delivery Instructions:

 

 

 

Name to appear on certificates

 

Name

 

 

 

Address

 

Address

 

 

 

 

 

 

 

 

 

 

 

Telephone Number

DATED at ____________________________________, the _______ day of______________,
_______.

 

                                          
                                             

 

(Name of Optionee – Please type or print)

 

                                          
                                             

 

(Signature and, if applicable, Office)

 

                                          
                                             

 

(Address of Optionee)

 

                                          
                                             

 

(City, State, and Zip Code of Optionee)

 

 

                                          
                                             

 

(Fax Number)

 

 

 

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- 2 -

 

 

Schedule “C”

Executive’s Health Insurance Plan

Provider

Subscriber #

Group Number

United Health Care (Health)

843309628

218770

MetLife Dental (Dental)

 

5021438

 

 

 

CW1927646.1