Unassociated Document


    EXECUTIVE
CONSULTING AGREEMENT

     

    This
Agreement dated and made effective as of the 1st day of
June, 2009.

     

    BETWEEN:

     

    GUILDHALL MINERALS LTD., a
company incorporated pursuant to the laws of the Province of British Columbia
and having offices in Calgary, Alberta (the “Corporation”)

     

    - and
-

     

    1271632 ALBERTA LTD., a
company incorporated pursuant to the laws of the Province of Alberta and having
offices in Calgary, Alberta (the “Consultant”)

     

    WHEREAS the Corporation wishes
to retain the services of the Consultant, in the capacity of Manager of Geology
of the Corporation, to assist in the furtherance of its Business;

     

    AND WHEREAS the Corporation
and the Consultant have agreed that their relationship will be governed by the
terms and conditions of this Executive Consulting Agreement;

     

    NOW THEREFORE THIS AGREEMENT
WITNESSETH that in consideration of the provision of services by the
Consultant to the Corporation, and for other good and valuable consideration,
the receipt and sufficiency of which is acknowledged by the parties hereto, the
parties hereto agree as follows:

     

    ARTICLE
I

    DEFINITIONS
AND INTERPRETATION

     

    
      	
              1.1

            	
              In
      this Executive Consulting Agreement, including the recitals hereto, the
      following terms shall have the following
  meanings:

            


    

     

    
      	
               
      

            	
              (a)

            	
              “Act”
      means the British Columbia Business Corporations
      Act, as amended;

            


    

     

    
      	
               
      

            	
              (b)

            	
              “Affiliated”
      has the meaning set out in the Act, and an “Affiliate” means one of two or
      more Affiliated bodies corporate;

            


    

     

    
      	
               
      

            	
              (c)

            	
              “Agreement”
      means this Executive Consulting Agreement, as from time to time
      supplemented or amended by one or more agreements entered into pursuant to
      the applicable provisions hereof;

            


    

     

    
      	
               
      

            	
              (d)

            	
              “Board
      of Directors” means the board of directors of the
    Corporation;

            


    

     

    
      	
               
      

            	
              (e)

            	
              “Business”
      means searching for and developing natural gas prospects from the Edmonton
      Sands Group of formations in central Alberta, typically in the area
      between Townships 35-45 and Ranges 2-6 W5M, excluding Sections 28, 30, 31,
      33 and 34 Township 40 Range 4 W5M and Section 4 of Township 41 Range 4
      W5M;

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (f)

            	
              “Cause”
      means any reason which would entitle the Corporation to terminate this
      agreement without notice or payment in lieu of notice at common law, or
      under the provisions of any other applicable law or regulation and
      includes, without limiting the generality of the
  foregoing:

            


    

     

    
      	
               
      

            	
              (i)

            	
              fraud,
      misappropriation of the Corporation’s property or funds, embezzlement,
      malfeasance, misfeasance or nonfeasance in office which is willfully or
      grossly negligent on the part of the
Consultant;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      breach by the Consultant of any of his covenants or obligations under this
      Agreement, including any non-competition, non-solicitation or
      confidentiality covenants with the
Corporation;

            


    

     

    
      	
               
      

            	
              (g)

            	
              “Change
      of Control” means the occurrence of any of the
  following:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      purchase or acquisition of any Shares or Convertible Securities by a
      Holder, other than pursuant to an issuance of shares from treasury, which
      results in the Holder beneficially owning, or exercising control or
      direction over, Shares or Convertible Securities such that, assuming the
      conversion of Convertible Securities beneficially owned or over which
      control or direction is exercised by the Holder, the Holder would
      beneficially own or exercise control or direction over Shares (together
      with such Holder’s then owned Shares and Convertible Securities, if any)
      carrying the right to cast more than 51% of the votes attaching to all
      Shares;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      amalgamation, consolidation or merger of the Corporation with any other
      corporation pursuant to which the shareholders of the Corporation
      immediately prior to such transaction do not own shares of the successor
      or continuing corporation which would entitle them to cast a majority of
      the votes attaching to shares in the capital of the successor or
      continuing corporation which might be cast to elect directors of that
      corporation;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              the
      sale, lease or transfer by the Corporation of all or substantially all of
      the assets of the Corporation to any Person other than a Related
      Corporation;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              approval
      by the shareholders of the Corporation of the liquidation, dissolution or
      winding-up of the Corporation; or

            


    

     

    
      	
               
      

            	
              (v)

            	
              a
      situation in which the majority of the Board of Directors, following a
      meeting, or series of meetings within a 180 day period, of the
      shareholders of the Corporation involving a contest for, or an item of
      business relating to, the election of directors, are not management
      nominees to the Board of Directors.

            


    

     

    
      
         


      

      
        2

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (h)

            	
              “Compensation”
      means any amounts the Consultant is entitled to receive pursuant to
      Article IV.

            


    

     

    
      	
               
      

            	
              (i)

            	
              “Compensation
      Committee” means the committee of the Board of Directors appointed from
      time to time to consider and determine executive compensation issues or,
      in the absence of such a committee, means the Board of
      Directors;

            


    

     

    
      	
               
      

            	
              (j)

            	
              “Confidential
      Information” means any information of a confidential nature which relates
      to the Business of the Corporation or any Related Corporation, including
      trade secrets, technical information, patents, marketing strategies, sales
      and pricing policies, financial information, business, marketing or
      technical plans, programs, methods, techniques, concepts, formulas,
      documentation, intellectual property, software, industrial designs,
      products, technical studies and data, strategic studies, engineering
      information, client and supplier lists, shareholder data and personnel
      information.  Notwithstanding the foregoing, Confidential
      Information shall not include any information
  which:

            


    

     

    
      	
               
      

            	
              (i)

            	
              was
      in the possession of or known to the Consultant, without any obligation to
      keep it confidential, before it was disclosed to the Consultant by the
      Corporation;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              is
      or becomes public knowledge through no fault of the
      Consultant;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              is
      independently developed by the Consultant outside the scope of his duties
      to the Corporation;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              is
      disclosed by the Corporation to another Person without any restriction on
      its use or disclosure; or

            


    

     

    
      	
               
      

            	
              (v)

            	
              is,
      or becomes lawfully available to the Consultant from a source other than
      the Corporation.

            


    

     

    
      	
               
      

            	
              (k)

            	
              “Convertible
      Securities” means any securities convertible or exchangeable into Shares
      or carrying the right or obligation to acquire Shares, other than purchase
      warrants;

            


    

     

    
      	
               
      

            	
              (l)

            	
              “Corporate
      Property” includes any and all proprietary technology, financial, and
      operating information, all works of expression and any copyrights in such
      works, patentable inventions, discoveries or trade secrets, and any
      materials, tools, equipment, devices, records, files, data, tapes,
      computer programs, computer disks, software, communications, letters,
      proposals, memoranda, lists, drawings, blueprints, correspondence,
      specifications or any other documents or property belonging to the
      Corporation or any Related
Corporations;

            


    

     

    
      	
               
      

            	
              (m)

            	
              “Effective
      Date” means the date as set forth on page one of this
      Agreement;

            


    

     

    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (n)

            	
              “Holder”
      means any Person or group of Persons acting jointly or in concert, or
      associated or Affiliated with any such Person, group of Persons or any of
      such Persons acting jointly or in
concert;

            


    

     

    
      	
               
      

            	
              (o)

            	
              “Notes”
      means the demand promissory notes dated June 1, 2009 relating to the
      purchase of the Pooled Shares;

            


    

     

    
      	
               
      

            	
              (p)

            	
              “Notice”
      means any Notice given by one Party to the other Party in accordance with
      Article XI;

            


    

     

    
      	
               
      

            	
              (q)

            	
              “Party”
      means one or other of the Consultant and the Corporation, and “Parties”
      means both the Consultant and the
Corporation;

            


    

     

    
      	
               
      

            	
              (r)

            	
              “Person”
      includes an individual, partnership, association, body corporate, trustee,
      executor, administrator or legal representative, and “Persons” means a
      group of more than one Person;

            


    

     

    
      	
               
      

            	
              (s)

            	
              “Pledge
      Agreements” means the share pledge agreements dated for reference June 1,
      2009 securing the obligations under the
Notes;

            


    

     

    
      	
               
      

            	
              (t)

            	
              “Pooled
      Shares” means the Shares subject to the Pooling Agreement dated June 1,
      2009 among the Consultant, the Corporation and certain other shareholders
      of the Corporation;

            


    

     

    
      	
               
      

            	
              (u)

            	
              “Related
      Corporation” means any subsidiary corporation or partnership, division,
      affiliate, predecessor or successor of the
  Corporation;

            


    

     

    
      	
               
      

            	
              (v)

            	
              “Saleable
      Shares” has the meaning as defined in the Pooling Agreement dated June 1,
      2009 among the Consultant, the Corporation and certain other shareholders
      of the Corporation;

            


    

     

    
      	
               
      

            	
              (w)

            	
              “Severance
      Period” shall be the number of weeks remaining in the Term of this
      Agreement;

            


    

     

    
      	
               
      

            	
              (x)

            	
              “Shares”
      means the common shares of the Corporation as constituted on the date
      first above written;

            


    

     

    
      	
               
      

            	
              (y)

            	
              “Term”
      means the period during which this Agreement remains in force pursuant to
      Article II; and

            


    

     

    
      	
               
      

            	
              (z)

            	
              “Termination
      Date” means the last day actively worked by the Consultant for the
      Corporation.

            


    

     

    
      	
              1.2

            	
              The
      headings in this Agreement are inserted for convenience and ease of
      reference only, and shall not affect the construction or interpretation of
      this Agreement.

            


    

     

    
      	
              1.3

            	
              All
      words in this Agreement importing the singular number include the plural,
      and vice versa.  All words importing gender include the
      masculine, feminine and neuter
genders.

            


    

     

    
      
         


      

      
        4

        
          

        

      

      
         


      

    

     

    
      	
              1.4

            	
              All
      monetary amounts are in Canadian
dollars.

            


    

     

    
      	
              1.5

            	
              The
      word “including”, when following any general statement or term, is not to
      be construed as limiting the general statement or term to the specific
      items or matters set forth or to similar items or matters, but rather as
      permitting the general statement or term to refer to all other items or
      matters that could reasonably fall within its broadest possible
      scope.

            


    

     

    
      	
              1.6

            	
              A
      reference to a statute includes all regulations made thereunder, all
      amendments to the statute or regulations in force from time to time, and
      any statute or regulation that supplements or supersedes such statute or
      regulations.

            


    

     

    
      	
              1.7

            	
              A
      reference to an entity includes any successor to that
    entity.

            


    

     

    
      	
              1.8

            	
              A
      reference to “approval”, “authorization” or “consent’ means written
      approval, authorization or consent.

            


    

     

    
      	
              1.9

            	
              A
      reference to an Article is to an Article of this Agreement and the
      reference to a Section followed by a number or some combination of numbers
      and letters refers to the section, paragraph, subparagraph, clause or
      subclause of this Agreement so
designated.

            


    

     

    ARTICLE
II

    TERM
OF AGREEMENT

     

    
      	
              2.1

            	
              The
      Term of this Agreement with the Corporation shall be for one (1) year from
      the Effective Date, to be extended for further one (1) year terms by
      agreement of the parties prior to expiry of each
  term.

            


    

     

    ARTICLE
III

    DUTIES
OF CONSULTANT

     

    
      	
              3.1

            	
              The
      Consultant shall, during the Term:

            


    

     

    
      	
               
      

            	
              (a)

            	
              perform
      the duties and responsibilities of the Manager of Geology of the
      Corporation, including all those duties and responsibilities customarily
      performed by a person holding the same or an equivalent position in
      corporations of a similar size to the Corporation in a similar Business to
      that of the Corporation in Canada, as well as such other related duties
      and responsibilities as may be assigned to the Consultant by the President
      from time to time, provided that such other related duties and
      responsibilities are consistent with the Consultant’s duties as the
      Manager of Geology of the
Corporation;

            


    

     

    
      	
               
      

            	
              (b)

            	
              accept
      such other office or offices which be may be elected or appointed by the
      President in addition to that of Manager of Geology, provided that
      performance of the duties and responsibilities associated with such office
      or offices shall be consistent with the duties provided for in paragraph
      3.1(a).

            


    

     

    
      
         


      

      
        5

        
          

        

      

      
         


      

    

     

    
      	
              3.2

            	
              Independent
      Contractor

            


    

     

    
      	
               
      

            	
              (a)

            	
              It
      is understood and agreed that the Consultant will provide services to the
      Corporation as an independent contractor, on a contract basis, and that
      nothing in this Agreement shall be construed to create a relationship of
      employer and employee between the Corporation and the
      Consultant.  The Consultant acknowledges that it and any of the
      Dedicated Personnel will not be employees of the Corporation and
      accordingly will not be eligible to participate in any employee benefit
      plans of the Corporation including, without limitation, life insurance,
      health care, disability income and dental plans.  The Consultant
      acknowledges that it nor any of the Dedicated Personnel will represent
      themselves to be, an employee of the
  Corporation.

            


    

     

    
      	
               
      

            	
              (b)

            	
              Except
      as provided for in this Agreement, the Corporation shall not control,
      supervise, direct or schedule the activities of the
      Consultant.  The Consultant shall be solely responsible for the
      performance of the Services and shall have the exclusive direction and
      control, including the method, manner and scheduling of the
      same.

            


    

     

    
      	
               
      

            	
              (c)

            	
              It
      is acknowledged that the work product of the Consultant hereunder is the
      sole property of the Corporation and the Consultant hereby assigns to the
      Corporation any proprietary interest and waives all moral rights he may be
      deemed to have in the work product of the Consultant relating to or
      resulting from the performance of the Services hereunder.  The
      Consultant will, under no circumstances, use, copy, modify or disclose any
      such work product without the prior written consent of the
      Corporation.

            


    

     

    
      	
              3.3

            	
              The
      Consultant shall be free to determine the hours of the day during which he
      will perform the Services; provided, however, that the Consultant agrees,
      to the extent possible, to endeavour to make itself available to the
      directors and employees of the Corporation during their regularly
      scheduled hours or at specific times as requested by the
      Corporation.  The Consultant acknowledges that the Services are
      to be completed on a timely basis and agrees that he shall schedule the
      performance of the Services in order to complete the Services on or prior
      to such dates as may be specified by the Corporation from time to
      time.

            


    

     

    
      	
              3.4

            	
              The
      Consultant shall be based in Calgary, Alberta,
  Canada.

            


    

     

    ARTICLE
IV

    COMPENSATION

     

    
      	
              4.1

            	
              The
      Corporation shall pay the Consultant during the Term of this Agreement for
      the Services provided hereunder (the “Consulting Fee”), a fee of $149,000
      per annum, payable in arrears in 12 equal installments, subject to review
      by the board of directors.

            


    

     

    
      	
              4.2

            	
              The
      Consultant shall invoice the Corporation for Services provided on a
      monthly basis.  The Consultant shall indicate on each invoice
      his GST registration number and the amount of GST
  charged.

            


    

     

    
      
         


      

      
        6

        
          

        

      

      
         


      

    

     

    
      	
              4.3

            	
              Invoices
      received by the Corporation from the Consultant hereunder shall, unless
      disputed in good faith by the Corporation, be paid within thirty (30) days
      of receipt thereof.  In the event the Corporation does not agree
      with the invoice received from the Consultant, the parties shall use their
      best efforts to negotiate a resolution in good faith.  In the
      event that a resolution cannot be negotiated in good faith, either party
      may refer the matter to arbitration in Calgary, Alberta under the
      provisions of the Arbitration Act (Alberta).  The parties shall
      select a single arbitrator mutually acceptable to them to act as the
      arbitrator.  If the parties hereto are unable to agree on a
      single arbitrator then, upon written demand of any one party and within
      twenty-one (21) days of such demand, the arbitrator shall be appointed by
      the Court of Queen’s Bench of Alberta.  The arbitrator so chosen
      shall proceed immediately to hear and determine the question or questions
      in dispute.  The compensation and expenses of the arbitrator
      shall be paid equally by the parties hereto.  The decision of
      the arbitrator shall be drawn up in writing and signed by the arbitrator
      and shall be final and binding upon the parties hereto as to any question
      or questions so submitted to arbitration and the parties shall be bound by
      such decision and perform the terms and conditions
  thereof.

            


    

     

    
      	
              4.4

            	
              Except
      as specified below, all expenses incurred by the Consultant in connection
      with the performance of the Services shall be the sole responsibility of
      the Consultant and the Consultant shall be solely responsible for the
      payment thereof The Consultant agrees and acknowledges that the
      Corporation is not responsible in any manner whatsoever for the costs,
      expenses or third party accounts incurred by the
      Consultant.  Notwithstanding the above, the Corporation agrees
      to reimburse the Consultant for, or to pay directly, all third party costs
      incurred by the Consultant with the prior written authorization or
      approval of the Corporation.  Such costs will be paid or
      reimbursed by the Corporation within thirty (30) days of written receipt
      of payment thereof.

            


    

     

    
      	
              4.5

            	
              The
      Consultant shall be responsible for all taxes payable as a result of the
      provision of the Services or which arise out of this
      Agreement.

            


    

     

    
      	
              4.6

            	
              If
      the Corporation should ever be required by any governmental authority at
      any time to pay, on the Consultant’s behalf, any assessments such as
      income tax, employment insurance premiums, Canada Pension Plan
      contributions, Provincial Health Care contributions, or Workers’
      Compensation contributions, the Consultant will, forthwith upon notice,
      reimburse the Corporation for such payment, together with interest and any
      penalties applicable to such assessments.  The Consultant’s
      obligations under this subsection 4.6 will survive the termination of this
      Agreement and remain in effect until the expiry of the period during which
      a notice of assessment or reassessment in respect of the taxes under
      dispute may be issued and any further periods during which such assessment
      or reassessment may be applied.

            


    

     

    
      	
              4.7

            	
              The
      Consultant shall maintain full and accurate records showing all Services
      performed, fees charged and disbursements incurred under this
      Agreement.  Such records of account shall be maintained for a
      period of not less than three (3) years following the termination of this
      Agreement.

            


    

     

    
      
         


      

      
        7

        
          

        

      

      
         


      

    

     

    
      	
              4.8

            	
              At
      any time during the term of this Agreement and for three (3) years
      thereafter, the Corporation and its authorized representatives shall have
      the right, at all reasonable times during normal business hours, to audit
      any of the Consultant’s documents, computer data or disks, file, voice
      mail or other information relating to or bearing upon the correctness of
      any invoice presented by the Consultant to the Corporation for
      payment.

            


    

     

    
      	
              4.9

            	
              The
      Corporation will promptly notify the Consultant of any exceptions
      disclosed by such audit and the Consultant hereby agrees that he will
      promptly reimburse the Corporation for any amount of overpayment reflected
      by such audit.

            


    

     

    
      	
              4.10

            	
              The
      Corporation may also grant the Consultant annual or incentive bonuses in
      an amount and on such terms and conditions as the Compensation Committee
      in its sole discretion may determine from time to time, based upon such
      factors as the Compensation Committee in its sole discretion determines
      are relevant, which factors may include the Consultant’s performance under
      the terms of this Agreement and the performance of the
      Corporation.

            


    

     

    
      	
              4.11

            	
              Upon
      termination of this Agreement for any reason, the Consultant shall be
      entitled to receive any Compensation earned up to the Termination Date, in
      addition to any other severance or termination payments which are payable
      under the terms of this Agreement.

            


    

     

    ARTICLE
V

    TERMINATION
BY CORPORATION

     

    
      	
              5.1

            	
              The
      Corporation shall be entitled to terminate this Agreement at any time, for
      any reason, upon written Notice to the Consultant, in which
      case:

            


    

     

    
      	
               
      

            	
              (a)

            	
              subject
      to Section 6.3, the Corporation shall pay the Consultant the following
      amounts in full and final settlement of any claims by the Consultant
      against the Corporation or any Related Corporation, arising out of, or in
      any way connected to, this Agreement with the Corporation or any Related
      Corporation, or the termination of such Agreement, whether at common law
      or under the provision of any statute or regulation, or pursuant to any
      agreement between the Parties:

            


    

     

    
      	
               
      

            	
              (i)

            	
              Remaining
      compensation calculated for the Severance Period calculated based upon an
      average number of months remaining in the Term multiplied by the monthly
      Consulting Fee.  The minimum compensation to be 6 months pay and
      the maximum compensation not to exceed 12 months of
  pay;

            


    

     

    
      	
               
      

            	
              (b)

            	
              the
      Consultant’s right to receive the payment under this Section 5.1 shall not
      be subject to any duty to mitigate, nor affected by any actual mitigation
      by the Consultant;

            


    

     

    
      	
               
      

            	
              (c)

            	
              payment
      under this Section 5.1 shall be subject to the prior execution by the
      Consultant of a Settlement Agreement and Release, on terms acceptable to
      the Corporation acting reasonably;

            


    

     

    
      
         


      

      
        8

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (d)

            	
              one
      hundred percent (100%) of the unvested portion of all stock options held
      by the Consultant as of the Termination Date shall be deemed vested and
      the Consultant shall be entitled to exercise such stock options for a
      period of six (6) months following the Termination Date;
    and

            


    

     

    
      	
               
      

            	
              (e)

            	
              one
      hundred percent (100%) of the Pooled Shares as of the Termination Date
      shall become Saleable Shares.

            


    

     

    
      	
              5.2

            	
              Notwithstanding
      the terms of section 5.1 above, if the Consultant is terminated by the
      Corporation for Cause, the Consultant shall be terminated immediately and
      the Corporation shall only be required to pay the Consultant any
      Compensation earned up to the Termination Date.  One hundred
      percent (100%) of the unvested portion of all stock options held by the
      Consultant as of the Termination Date shall be cancelled as of the
      Termination Date and all of the Pooled Shares that have not become
      Saleable Shares as of the Termination Date shall be tendered to the
      Corporation forthwith to be returned to treasury, subject to the terms of
      the Notes and the Pledge
Agreements.

            


    

     

    ARTICLE
VI

    TERMINATION
BY CONSULTANT

     

    
      	
              6.1

            	
              The
      Consultant may terminate this Agreement and his employment with the
      Corporation by providing 30 days’ prior Notice to the
      Corporation.  Upon receipt of such Notice of termination by the
      Consultant:

            


    

     

    
      	
               
      

            	
              (a)

            	
              the
      Corporation shall be required to pay the Consultant any Compensation
      earned up to the Termination Date, and may either require the Consultant
      to continue to perform his duties until the Termination Date, or dismiss
      the Consultant at any time after receipt of the Notice, providing
      Compensation for the Notice Period equal to one month multiplied by the
      monthly Consulting Fee; and

            


    

     

    
      	
               
      

            	
              (b)

            	
              all
      of the Pooled Shares that have not become Saleable Shares as of the
      Termination Date shall be tendered to the Corporation forthwith to be
      returned to treasury.

            


    

     

    
      	
              6.2

            	
              Subject
      to the conditions set out in Section 6.4, the Consultant may terminate
      this agreement with the Corporation within 60 days following the
      occurrence of a Change of Control of the Corporation and receive the
      payment set out in section 6.3.

            


    

     

    
      	
              6.3

            	
              In
      the event that the Consultant’s agreement with the Corporation is
      terminated in strict accordance with Section 6.2, the Corporation shall
      pay the Consultant the following amounts in full and final settlement of
      any claims by the Consultant against the Corporation or any Related
      Corporation, arising out of or in any way connected to the Consultant’s
      agreement with the Corporation or any Related Corporation, or the
      termination of such agreement, whether at common law or under the
      provision of any statute or regulation, or pursuant to the terms of any
      agreement between the Parties:

            


    

     

    
      	
               
      

            	
              (a)

            	
              compensation
      calculated for the Severance Period calculated based upon an average
      number of months remaining in the Term multiplied by the monthly
      Consulting Fee.  The minimum compensation to be 6 months pay and
      the maximum compensation not to exceed 12 months of
  pay;

            


    

     

    
      
         


      

      
        9

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (b)

            	
              all
      of the Pooled Shares shall become Saleable Shares;
  and

            


    

     

    
      	
               
      

            	
              (c)

            	
              one
      hundred percent (100%) of the unvested portion of all stock options held
      by the Consultant as of the Termination Date shall be deemed vested and
      the Consultant shall be entitled to exercise such stock options for a
      period of six (6) months following the Termination
  Date.

            


    

     

    
      	
              6.4

            	
              Payment
      under Section 6.3 shall be subject to the following
      conditions:

            


    

     

    
      	
               
      

            	
              (a)

            	
              the
      prior execution by the Consultant of a Settlement Agreement and Release on
      terms acceptable to the Corporation acting
  reasonably;

            


    

     

    
      	
               
      

            	
              (b)

            	
              the
      Consultant’s full co-operation and assistance, in connection with any
      Change of Control, to transfer the Consultant’s duties and
      responsibilities to a replacement at the request of the Corporation and
      for a period requested by the Corporation not to exceed 30 days, and the
      tendering by the Consultant of his resignation from any position he may
      hold as an officer or a director of the Corporation and any Related
      Corporations, at such time as the Corporation may
  request;

            


    

     

    
      	
               
      

            	
              (c)

            	
              the
      Consultant’s right to receive the payment under Section 6.2 shall not be
      subject to any duty to mitigate, nor affected by any actual mitigation by
      the Consultant; and

            


    

     

    
      	
               
      

            	
              (d)

            	
              payment
      under Section 6.2 shall be in place of, and not in addition to, any other
      statutory and common law severance or termination payment in lieu of
      reasonable notice which may be made to the Consultant pursuant to any
      other term or provision of this
Agreement.

            


    

     

    ARTICLE
VII

    TERMINATION
UPON DEATH

     

    
      	
              7.1

            	
              This
      Agreement shall automatically terminate upon the death of the
      Consultant.

            


    

     

    ARTICLE
VIII

    PROPERTY
RIGHTS

     

    
      	
              8.1

            	
              The
      Consultant acknowledges and confirms that the Corporation shall be
      entitled to own and control all proprietary technology, and financial,
      operating, and training ideas, processes, and materials, including works
      of expression and all copyrights in such works, that are developed,
      created, or conceived by the Consultant during the course of this
      Agreement (collectively referred to as “Contract Developments”), to the
      extent that such Contract Developments relate to the Corporation’s current
      or potential Business or if such Contract Developments were in any part
      undertaken in connection with this Agreement or with Corporation supplied
      software or equipment or on the premises of the Corporation or its
      customers or contractors.  Accordingly, the Consultant hereby
      agrees to disclose, deliver, and assign all such patentable inventions,
      discoveries, and improvements, trade secrets, and all works subject to
      copyright, and further agrees to execute all documents, patent
      applications, and arrangements necessary to further document such
      ownership and/or assignment and to take whatever other steps may be needed
      to give the Corporation the full benefit of
  them.

            


    

     

    
      
         


      

      
        10

        
          

        

      

      
         


      

    

     

    
      	
              8.2

            	
              The
      Consultant agrees that all copyrightable materials generated or developed
      under this Agreement, including computer programs and documentation, shall
      be considered works made for hire under the copyright laws of Canada and
      the United States and shall, upon creation, be owned exclusively by the
      Corporation.  To the extent that any such materials, under
      applicable law, may not be considered works made for hire, the Consultant
      hereby assigns to the Corporation the ownership of all copyrights in such
      materials, without the necessity of any further consideration, and the
      Corporation shall be entitled to register and hold in its own name all
      copyrights in respect of such
materials.

            


    

     

    ARTICLE
IX

    CONFIDENTIAL
INFORMATION, NON-SOLICITATION AND NON-COMPETITION

     

    
      	
              9.1

            	
              The
      Consultant acknowledges and agrees that in performing the duties and
      responsibilities pursuant to this Agreement, he will occupy a position of
      high fiduciary trust and confidence with the Corporation, pursuant to
      which he will develop and acquire wide experience and knowledge with
      respect to all aspects of the Business carried on by the Corporation and
      its Related Corporations, and the manner in which such Business is
      conducted.  It is the express intent and agreement of the
      Consultant and the Corporation that such knowledge and experience shall be
      used solely and exclusively in furtherance of the Business interests of
      the Corporation and its Related Corporations, and not in any manner
      detrimental to them.  The Consultant therefore agrees that, so
      long as this Agreement is in force, he shall not engage in any practice or
      business that competes with the Business of the Corporation or its Related
      Corporations without informing the Board of Directors of the
      Corporation.

            


    

     

    
      	
              9.2

            	
              The
      Consultant further acknowledges and agrees that in performing the duties
      and responsibilities pursuant to this Agreement, he will become
      knowledgeable with respect to a wide variety of Confidential Information
      which is the exclusive property of the Corporation, the disclosure of
      which would cause irreparable harm to the Corporation.  The
      Consultant therefore agrees that during the Term and following the
      termination of this Agreement for any reason, he shall treat
      confidentially all Confidential Information belonging to the Corporation,
      and shall not disclose the Confidential Information to any unauthorized
      persons, except with the express consent of the Board of Directors, or
      otherwise as required by law.

            


    

     

    
      	
              9.3

            	
              The
      Consultant further acknowledges and agrees that pursuant to the terms of
      this Agreement, that to the extent he acquires Corporate Property of the
      Corporation, it shall remain the exclusive property of the
      Corporation.  Upon termination of this Consultant Consulting
      Agreement for any reason, the Consultant shall return to the Corporation
      all Corporate Property, together with any copies or reproductions thereof;
      which may have come into the Consultant’s possession during the course of
      or pursuant to this Agreement, and shall delete or destroy all computer
      files on his personal computer which may contain any Confidential
      Information belonging to the
Corporation.

            


    

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    

     

    ARTICLE
X

    INDEMNIFICATION

     

    
      	
              10.1

            	
              Subject
      to the requirements of the Act, the Corporation shall indemnify and save
      harmless the Consultant from and against any personal liability which he
      incurs as a direct result of performing his duties on behalf of the
      Corporation, with the exception of any liability which the Corporation is
      prohibited by law from assuming.  Concurrently with the
      execution of this Agreement, the Corporation shall enter into an indemnity
      agreement between the Consultant and the Corporation in substantially the
      same form as attached as Schedule A
hereto.

            


    

     

    ARTICLE
XI

    NOTICES

     

    
      	
              11.1

            	
              Any
      Notice required to be given hereunder may be provided by personal
      delivery, by registered mail or by facsimile to the Parties hereto at the
      following addresses:

            


    

     

    
      To the
Corporation:

       

    

    
      c/o
TingleMerrett LLP

    

    1250, 639
– 5th Street, S.W.

    Calgary,
Alberta T2P 0M9

    
      Fax:
(403) 571-8008

    

     

    
      	
            	
              Attention:

            	
              Scott
      Reeves, Corporate Secretary

            


    

     

    
      To the
Consultant:

    

     

    
      1271632
Alberta Ltd.

    

    
      158
Sceptre Close NW

    

    
      Calgary,
AB T3L 1Y2

    

    
      Fax:
(403) 208-2199

    

     

    
      	
            	
              Attention:

            	
              Hugh
      Loney, President

            


    

     

    Any
Notice, direction or other instrument shall, if delivered, be deemed to have
been given and received on the business day on which it was so delivered, and if
not a business day, then on the business day next following the day of delivery,
and, if mailed, shall be deemed to have been given and received on the fifth day
following the day on which it was so mailed, and, if sent by facsimile
transmission, shall be deemed to have been given and received on the next
business day following the day it was sent.

     

    
      	
              11.2

            	
              Either
      Party may change its address for Notice in the aforesaid
      manner.

            


    

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    

     

    ARTICLE
XII

    GENERAL

     

    
      	
              12.1

            	
              Time
      shall be of the essence in this
Agreement,

            


    

     

    
      	
              12.2

            	
              This
      Agreement shall be construed and enforced in accordance with the laws of
      the Province of Alberta, and the Parties hereby attorn to the
      non-exclusive jurisdiction of Alberta Courts.  Should provisions
      in this Agreement fail to comply with the applicable legislation, the
      Agreement shall be interpreted in accordance with those statutory
      requirements.

            


    

     

    
      	
              12.3

            	
              This
      Agreement and any other agreements expressly incorporated by reference
      herein, constitute the entire agreement between the Parties with respect
      to the subject matter hereof, and supersede and replace any and all prior
      agreements, undertakings, representations or negotiations pertaining to
      the subject matter of this Agreement.  The Parties agree that
      they have not relied upon any verbal statements, representations,
      warranties or undertakings in order to enter into this
      Agreement.  In the event of a conflict between this Agreement
      and any other agreement expressly incorporated by reference herein, the
      terms of this Agreement shall
prevail.

            


    

     

    
      	
              12.4

            	
              This
      Agreement may not be amended or modified in any way except by written
      instrument signed by the Parties
hereto.

            


    

     

    
      	
              12.5

            	
              This
      Agreement shall enure to the benefit of and be binding upon the Parties
      hereto, together with their personal representatives, successors and
      permitted assigns.

            


    

     

    
      	
              12.6

            	
              This
      Agreement may not be assigned by either Party without the prior consent of
      the other Party.

            


    

     

    
      	
              12.7

            	
              The
      waiver by either Party of any breach of the provisions of this Agreement
      shall not operate or be construed as a waiver by that Party of any other
      breach of the same or any other provision of this
    Agreement.

            


    

     

    
      	
              12.8

            	
              The
      Parties agree to execute and deliver such further and other documents, and
      perform or cause to be performed such further and other acts and things as
      may be necessary or desirable in order to give full force and effect to
      this Agreement.

            


    

     

    
      	
              12.9

            	
              The
      Consultant agrees that following the termination of this Agreement with
      the Corporation for any reason, the Consultant shall tender his
      resignation from any position he may hold as an officer or director of the
      Corporation or any Related
Corporation.

            


    

     

    
      	
              12.10

            	
              Should
      any provision in this Agreement be found to be invalid, illegal or
      unenforceable, the validity, legality or enforceability of the remaining
      provisions of the Agreement shall not be affected or impaired thereby in
      any way.

            


    

     

    IN WITNESS WHEREOF the Parties hereto acknowledge
and agree that they have read and understand the terms of this Agreement, and
that they have had an opportunity to seek

     

    
      
         


      

      
        13