exhibit_10-2.htm


    
      
        

      

    

    Exhibit
      10.2

     

    AGREEMENT
      FOR SERVICES

     

     

    This
      Agreement is between Fellows Energy Ltd. (FLWE.OB) (the
      "Company") and Brooke E. Horspool, CPA (Mr. Horspool). The Agreement is
      effective on the last date written below.

     

    Objectives
      of the Engagement

     

    Mr. Horspool
      is to serve as an officer of the Company in the role of Chief Financial Officer
      (CFO) on a consultant basis. His responsibilities will initially include the
      following:

     

    
      	
              1.

            	
              Review
                accounting records and work with the Company’s controller to prepare
                consolidated financial statements for quarterly 10-Q and annual 10-K
                reporting.

            
	
              2.

            	
              Ensure
                that the Company is in compliance with all applicable SEC reporting
                requirements.

            
	
              3.

            	
              Work
                with the Company’s Attorney and the Company’s Auditors to provide all
                financial information and commentary necessary for disclosure as
                required
                for public reporting.

            
	
              4.

            	
              Review
                all bank records and reconciliations to verify records are property
                recorded.

            	
               

            
	
              5.

            	
              Develop
                policies, processes, and procedures to ensure the Company is compliant
                with all applicable laws and regulations regarding Sarbanes-Oxley
                compliance.

            
	
              6.

            	
              Maintain
                availability (both in person, and via telephone or email), to consult
                with
                executives of the Company and/or supervisory staff, regarding any
                financial related issues or questions. These may be in the areas
                of
                accounting records, stock ownership, benefits, compensation, governmental
                compliance, policies/procedures, or any other financially related
                activity.

            


    

     

    Other
      services may include, as determined by our mutual agreement:

     

    
      	
              7.

            	
              Representing
                the Company in discussions or meetings with governmental agencies
                (e.g.
                taxing authorities or SEC reporting agencies).

            
	
              8.

            	
              Provide
                expertise in the area of public and private offerings.

            	
               

            
	
              9.

            	
              Other
                services as mutually agreed upon by Mr. Horspool and the
                Company.

            	
               

            
	
               

            	
               

            	
               

            	
               

            


    

     

    Services
      will be provided by Mr. Horspool and may be provided via regularly
      scheduled on-site presence and telephone and email communications.

     

    Term

     

    This
      assignment will commence on November 1, 2007 with no specified termination
      date.
      Either Mr. Horspool or the Company may terminate this agreement with thirty
      (30)
      days written notice to the other party. In the event of termination, Mr.
      Horspool will be compensated for services rendered through the date the
      termination becomes effective.

     

    Fees

     

    Fees
      will
      be billable at $1000.00 per month and will be payable upon receipt as
      billed on a monthly basis. Other out-of-pocket costs, such as travel expenses
      into or outside of the Denver area and long-distance charges, shall be billed
      separately. Any billings during a quarterly period will not exceed a total
      of 50
      hours unless expressly agreed to as between the parties.

     

    Stock
      Options

     

    As
      part
      of the compensation for services, the Company will grant to Mr. Horspool options
      (the “Options”) to acquire up to a total of 300,000 shares of the common stock
      of the FLWE. The Options will be awarded upon the increase of the
      authorized shares of common stock of the Company.  The shares shall be
      granted under the Company’s 2003 Stock Option Plan. The Option exercise price
      will be the closing sale price at the close of business on the last trading
      day
      of the month of increase in authorized shares of common stock of the
      Company.

     

    The
      Options for a given quarter will fully vest six months from the date of
      grant.  If the services of Mr. Horspool are terminated, then all Options
      shall expire pursuant to the 2003 Stock Option Plan. All grants of options
      will
      be governed by the form of stock option agreement attached to the 2003 Stock
      Option Plan.

     

    Registration
      of Options

     

    Mr.
      Horspool agrees and acknowledges that none of the Options or the shares acquired
      on exercise of the Options have been registered under the Securities Act of
      1933
      or under any state securities or "blue sky" laws of any state of the United
      States, and, unless so registered, may not be offered or sold in the United
      States or, directly or indirectly, to U.S. Persons (as that term is defined
      in
      Regulation S under the Securities Act of 1933), except in accordance with the
      provisions of Regulation S, pursuant to an effective registration statement
      under the Securities Act of 1933, or pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the Securities
      Act
      of 1933 and in each case only in accordance with applicable state and provincial
      securities laws. However, the parties acknowledge that the
      Company shall use its commercially reasonable best efforts to register the
      shares which may be acquired on exercise of the Options.

     

    Warranties
      and Indemnification

     

    Mr.
      Horspool represents and warrants that:

     

    
      	
              1.

            	
              He
                will perform services in a good and reasonable manner consistent
                with like
                services being provided by others in the industry; and

            
	
              2.

            	
              Any
                work product he provides to the Company (a) will be his own work
                or the
                work of others employed or engaged by him or by the Company; or (b)
                will
                be obtained or prepared by him (or others employed or engaged by
                him)
                based upon publicly available information, including information
                available
                from sources such as www.sec.gov; or (c) work based upon non-public
                sources.

            


    

     

    Should
      Mr. Horspool provide a work product to the Company based upon non-public
      sources, he will inform senior management of the Company of the nature of the
      work, its source, and any information he has regarding intellectual property
      rights of third parties related to the work. The Company may specify the manner
      in which any such work product based upon non-public sources is used by Mr.
      Horspool or that it not be used.

     

    The
      Company acknowledge that certain accounting and financial functions require
      the
      exercise of professional judgment and that unintentional errors in judgment
      or
      mistakes may occur. The Company and Mr. Horspool further agree that Mr. Horspool
      will exercise his professional judgment in accordance with standards of due
      care
      customarily applied in performing services comparable to those he is to perform
      under this Agreement. The Company agrees:

     

    
      	
              1.

            	
              to
                indemnify and hold harmless Mr. Horspool in accordance with the
                Indemnification Agreement attached as Exhibit 1 to this Agreement;
                and

            
	
              2.

            	
              that
                Mr. Horspool shall not be liable to the Company for any unintentional
                error or mistakes caused by Mr. Horspool during the term of this
                Agreement.

            


    

     

    Company’s
      Confidential Information

     

    Mr.
      Horspool acknowledges and agrees that:

     

    
      	
              (a)

            	
              proprietary,
                financial and confidential information and materials relating to
                the
                Company has been, and will in the future be, disclosed to Mr.
                Horspool, excluding information respecting the Company which has
                been
                publicly disclosed or in the future is publicly disclosed through
                activity
                of others, or is publicly disclosed through the activity of Mr. Horspool
                which is properly in the normal course of his work for the Company
                (the
                “Company’s Confidential Information”);

            
	
              (b)

            	
              the
                Company’s Confidential Information is the exclusive property of the
                Company and that all right, title and interest in and to the Company’s
                Confidential Information shall remain the property of Company and
                shall be
                held in confidence by Mr. Horspool; and

            
	
              (c)

            	
              the Company’s
                Confidential Information derives its value from not being generally
                known
                to the public or by other persons who can obtain economic value or
                other
                advantage from its disclosure and use, and is subject to efforts
                by the
                Company to maintain its
                confidentiality.

            


    

     

     

    Confidentiality
      Covenants

     

    Mr.
      Horspool covenants and agrees that:

     

    
      	
              (a)

            	
              he
                shall not directly or indirectly acquire any proprietary interest
                in, or
                otherwise deal with or use, the Company’s Confidential Information except
                as reasonably required for carrying out his
                responsibilities;

            
	
              (b)

            	
              he
                shall use his best efforts to keep confidential and protect the Company’s
                Confidential Information and the interests of the Company in the
                Company’s
                Confidential Information and shall exercise the degree of care that
                the
                owner of such information would reasonably be expected to employ
                for his
                own benefit with respect to his own proprietary and confidential
                information; and

            


    

     

    
      	
              (c)

            	
              he
                shall not directly or indirectly disclose, allow access to, or transfer
                the Company’s Confidential Information to third parties without the prior
                written consent of the Company.

            


    

     

    Covenants
      Survive

     

    The
      covenants and agreements regarding the Company’s Confidential
      Information:

     

    
      	
              (a)

            	
              are
                in addition to and not in derogation from any of the obligations
                of Mr.
                Horspool to the Company; and

            
	
              (b)

            	
              shall
                survive the termination of this Agreement.

            	
               

            


    

     

    Non-Employee
      Status

     

    The
      parties intend that an independent contract relationship be created by this
      Agreement. The Company is interested only in the results to be achieved,
      and the conduct and control of the services to be performed will lie solely
      with
      Mr. Horspool. Neither Mr. Horspool nor his agents or employees are to be
      considered agents or employees of the Company for any purpose. It is further
      understood that the Company does not agree to use Mr. Horspool’s services
      exclusively and that Mr. Horspool is free to provide like services to other
      companies, subject to confidentiality provisions contained in the
      Confidentiality Agreement referred to above.

     

    Governing
      Law

     

    This
      Agreement and all matters arising hereunder shall be governed by, construed
      and
      enforced in accordance with the laws of the State of Colorado and the federal
      laws of the United States applicable therein and all disputes arising under
      this
      Agreement shall be referred to the Courts of the State of Colorado.

     

    Entire
      Agreement

     

    This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter hereof and shall supersede all previous expectations,
      understandings, communications, representations and agreements whether verbal
      or
      written between the parties with respect to the subject matter
      hereof.

     

    Further
      Assurances

     

    Each
      of
      the parties hereto hereby covenants and agrees to execute such further and
      other
      documents and instruments and do such further and other things as may be
      necessary or desirable to implement and carry out the intent of this
      Agreement.

     

    Assignment

     

    None
      of
      the parties may assign or transfer their respective rights under this Agreement
      without the prior written consent of the other party hereto.

     

     

    Amendments

     

    No
      amendment to this Agreement shall be valid unless it is evidenced by a written
      agreement executed by all of the parties hereto.

     

    Counterparts

     

    This
      Agreement may be executed in several counterparts each of which when executed
      by
      any party hereto shall be deemed to be an original and such counterparts shall
      together constitute one and the same instrument.

     

     

    By:
      /s/ Brooke E. Horspool

     

    Brooke E.
      Horspool, CPA

     

    November
      5, 2007

     

     

    Fellows
      Energy Ltd.

     

    By: /s/
      George S. Young

     

    President
      and CEO 

     

    November
      5, 2007

     

     

    EXHIBIT
      1

     

    INDEMNITY
      AGREEMENT

     

     

    THIS
      AGREEMENT dated for reference the __30th__ day of __October___,
      2007.

     

    BETWEEN:

     

    BROOKE
      E. HORSPOOL, of 35827 Anderson Street Beaumont, CA 92223

     

    (the
      "Indemnitee")

     

    AND:

     

    FELLOWS
      ENERGY LTD., a Nevada corporation having a business address at 370
      Interlocken Blvd. Suite 400, Broomfield, CO 80021

     

    (the
      “Company”)

     

    WITNESSES
      THAT WHEREAS:

     

    
      	
              A.

            	
              It
                is essential to the Company to retain and attract as directors, officers,
                employees and consultants the most capable persons
                available;

            
	
              B.

            	
              The
                Indemnitee is the Chief Financial Officer of the Company;

            	
               

            
	
              C.

            	
              Both
                the Company and the Indemnitee recognize the increased risk of litigation
                and claims being asserted against directors, officers, employees
                and
                consultants of public companies and their subsidiaries in today's
                environment; and

            
	
              D.

            	
              In
                recognition of the Indemnitee's need for substantial protection against
                personal liability and in order to enhance the Indemnitee's continued
                service to the Company in an effective manner, the Company wishes
                to
                provide for the indemnification of the Indemnitee to the fullest
                extent
                permitted by law on the terms and conditions set forth in this
                Agreement.

            


    

     

    NOW
      THEREFORE in consideration of the premises, the respective covenants of
      the parties herein and other good and valuable consideration (the receipt and
      sufficiency of which is hereby acknowledged), the parties hereto covenant and
      agree as follows:

     

    
      	
              1.

            	
              INTERPRETATION

            


    

     

    1.1
      Definitions. For the purposes of this Agreement, the
      following terms shall have the following meanings, respectively:

     

    
      	
              (a)

            	
              "Board"
                means the board of directors of the
                Company;

            


    

     

    
      
        	
                (b)

              	
                
                  "Claim"
                    or "Claims" has the meaning ascribed to such term in Subsection
                    2.1(a)
                    hereof;

                

              


      

    

     

    
      	
              (c)

            	
              "Change
                in Control" shall be deemed to have occurred
                if:

            


    

     

    (i) any
      "person" (as such term is used in Sections 13(d) and 14(d) of the Securities
      Exchange Act of 1934, as amended), other than a trustee or other fiduciary
      holding securities under an employee benefit plan of the Company or a
      corporation owned, directly or indirectly, by the Company, or the shareholders
      of the Company in substantially the same proportions as their ownership of
      securities of the Company, becomes the "beneficial owner" (as defined in Rule
      13d-3 under said Act), directly or indirectly, of securities of the Company
      representing 25% or more of the total voting power represented by the Company's
      then outstanding Voting Securities or has sole and/or shared voting or
      dispositive power over securities of the Company representing 25% or more of
      the
      total voting power represented by the Company's then outstanding Voting
      Securities;

     

    (ii) during
      any period of two consecutive years, individuals who at the beginning of such
      period constitute the Board and any new director of the Company whose election
      by the Board or nomination for election by the Company's shareholders was
      approved by a vote of at least two-thirds of the directors of the Company then
      still in office who either were directors of the Company at the beginning of
      such period or whose election or nomination for election was previously so
      approved, cease for any reason to constitute a majority thereof; or

     

    (iii) the
      shareholders of the Company approve a merger or consolidation of the Company
      with any other corporation, other than a merger or consolidation which would
      result in the Voting Securities of the Company outstanding immediately prior
      thereto continuing to represent (either by remaining outstanding or by being
      converted into Voting Securities of the surviving entity) at least 50.1% of
      the
      total voting power represented by the Voting Securities of the Company or such
      surviving entity outstanding immediately after such merger or consolidation,
      or
      the shareholders of the Company approve a plan of liquidation of the Company
      or
      an agreement for the sale or disposition by the Company of (in one transaction
      or a series of transactions) all or substantially all of the Company's
      assets;

     

    (d) "Independent
      Legal Counsel" means an attorney or firm of attorneys, selected in accordance
      with the provisions of Section 6.1 hereof, who shall not have otherwise
      performed services for the Company or the Indemnitee within the last two years
      (other than with respect to matters concerning the rights of the Indemnitee
      under this Agreement, or of other directors, officers, employees or consultants
      of the Company under similar indemnity agreements);

     

    (e) "Potential
      Change in Control" shall be deemed to have occurred if the Board adopts a
      resolution declaring or stating that, for purposes of this Agreement or any
      indemnity agreement, a potential Change in Control has occurred;

     

    (f) "Reviewing
      Party" means any appropriate person or body consisting of a member or members
      of
      the Board or any other person or body appointed by the Board who is not a party
      to the particular Claim for which the Indemnitee is seeking indemnification;
      and

     

    (g) "Voting
      Securities" means any securities of the Company which vote generally in the
      election of directors of the Company.

     

    1.2
      Effective Date. Notwithstanding the date of its
      execution and delivery, this Agreement shall be conclusively deemed to commence
      on, and be effective as of, the day upon which the Indemnitee first became
      or
      becomes a director, officer, employee or consultant of the Company or any of
      the
      Company's subsidiaries and shall survive and remain in full force and effect
      after the Indemnitee ceases to be a director, officer, employee or consultant
      of
      the Company or any of the Company's subsidiaries and after the termination
      of
      the Indemnitee's employment and/or contractual arrangements with the Company
      or
      any of the Company's subsidiaries.

     

    
      	
              2.

            	
              INDEMNITY

            


    

     

    2.1
      Indemnification. Subject to Section 3.1, the Company
      shall indemnify and save harmless the Indemnitee to the fullest extent permitted
      by law against and from:

     

    (a) any
      and all charges and claims of every nature and kind whatsoever which may be
      brought, made or advanced by any person, firm, corporation or government, or
      by
      any governmental department, body, commission, board, bureau, agency or
      instrumentality against the Indemnitee, and any and all threatened, pending
      or
      completed actions, suits or proceedings, or any inquires or investigations,
      whether instituted by the Company or any other person, that the Indemnitee
      in
      good faith believes might lead to the institution of any such action, suit
      or
      proceeding, whether civil, criminal, administrative, investigative or other,
      against the Indemnitee, including any and all actions, suits, proceedings,
      inquiries or investigations in which the Indemnitee was, is, becomes or is
      threatened to be made a party to or witness or other participant in (a "Claim",
      or collectively, the "Claims"), by reason of (or arising in part out of) the
      Indemnitee being a director, officer, trustee, employee, consultant or agent
      of
      the Company, any of the Company's subsidiaries, or any company, partnership,
      joint venture, trust or other enterprise related to or affiliated with the
      Company or which the Indemnitee was serving at the request of the Company as
      a
      director, officer, trustee, employee, consultant or agent (the "Related
      Companies"), or that arise out of or are in any way connected with the
      management, operation, activities, affairs or existence of the Company or any
      of
      its Related Companies (an "Indemnifiable Event"); and

     

    (b) any
      and all costs, damages, expenses (including legal fees and disbursements on
      a
      full indemnity basis), judgements, fines, liabilities, penalties (statutory
      and
      otherwise), losses and amounts paid in settlement (including all interest,
      assessments and other charges paid or payable in connection with or in respect
      of such costs, damages, expenses, judgements, fines, liabilities, penalties,
      losses or amounts paid in settlement) (the "Costs") which the Indemnitee may
      sustain, reasonably incur or be liable for by reason of (or arising in part
      out
      of) an Indemnifiable Event in relation to the Company or its Related Companies
      or any of their respective affairs;

     

    if
      the
      Indemnitee has acted honestly and in good faith with a view to the best
      interests of the Company and, in the case of a criminal or administrative
      proceeding that is enforced by a monetary penalty, the Indemnitee has reasonable
      grounds for believing that their conduct was lawful.

     

    2.2
      Expense Advances. Subject to Section 3.1, the Company
      shall advance to the Indemnitee the Costs reasonably estimated to be sustained,
      incurred or suffered by him, in connection with the indemnification set forth
      in
      Section 2.1 hereof within two business days of receipt by the Company of a
      written request for such advance (an "Expense Advance"). The Indemnitee hereby
      undertakes to repay such amounts advanced only if, and to the extent that,
      it
      shall ultimately be determined by a court of competent jurisdiction, which
      determination is not subject to any subsequent appeals, that the Indemnitee
      is
      not entitled to be indemnified by the Company.

     

    2.3
      Indemnification of Expenses of Successful Party.
      Notwithstanding any other provision of this Agreement, to the extent that the
      Indemnitee has been successful on the merits or otherwise in the defence of
      any
      Claim or in the defence of any charge, issue or matter therein, including the
      dismissal of a Claim, the Company shall indemnify the Indemnitee against any
      and
      all Costs actually and reasonably sustained or incurred by him in connection
      with the investigation, defence or appeal of such Claim.

     

    2.4
      Indemnification for Expense of a Witness.
      Notwithstanding any other provision of this Agreement, the Company will
      indemnify the Indemnitee if and whenever he is a witness or participant, or
      is
      threatened to be made a witness or participant, to any action, suit, proceeding,
      hearing, inquiry or investigation to which the Indemnitee is not a party, by
      reason of the fact that he is or was a director, officer, trustee, employee,
      consultant or agent of the Company or any of its Related Companies or by reason
      of anything done or not done by him in such capacity, against any and all Costs
      actually and reasonably sustained or incurred by the Indemnitee or on the
      Indemnitee's behalf in connection therewith.

     

    2.5
      Indemnification for Expenses in Obtaining Indemnity. The
      Company shall indemnify the Indemnitee against any and all Costs, and, if
      requested by the Indemnitee, shall subject to Section 3.1 hereof (within two
      business days of such request) advance such Costs to the Indemnitee, which
      are
      sustained, incurred or suffered by the Indemnitee in connection with any action,
      suit or proceeding brought by the Indemnitee for: (i) indemnification, or an
      advance thereof, by the Company under this Agreement, any other agreement or
      the
      Articles and Bylaws of the Company, as amended; or (ii) recovery under any
      directors' and officers' liability insurance policies maintained by the Company,
      regardless of whether the Indemnitee ultimately is determined to be entitled
      to
      such indemnification or insurance recovery, as the case may be.

     

    2.6
      Partial Indemnity. If the Indemnitee is entitled under
      any provisions of this Agreement to indemnification by the Company for some
      or a
      portion of the Costs sustained, incurred or suffered by him but not, however,
      for all of the total amounts thereof, the Company shall nevertheless indemnify
      the Indemnitee for the portion thereof to which Indemnitee is
      entitled.

     

    
      	
              3.

            	
              INDEMNITY
                EXCEPTIONS

            


    

     

    3.1
      Exceptions to Indemnification. Notwithstanding the
      provisions of Sections 2.1, 2.2 and 2.5 hereof, the Company shall not be
      obligated to indemnify or save harmless the Indemnitee against and from any
      Claim or Costs or make an Expense Advance:

     

    (a) if,
      in respect thereof, a court of competent jurisdiction determines, which
      determination is not subject to any subsequent appeals, that the Indemnitee
      failed to act honestly and in good faith with a view to the best interests
      of
      the Company;

     

    (b) rising
      out of any criminal or administrative conviction of the Indemnitee if the
      Indemnitee pleaded guilty or was found guilty by a court of competent
      jurisdiction, which finding is not subject to any subsequent appeals by the
      Indemnitee, other than in the case of a criminal or administrative proceeding
      that is enforceable by a monetary penalty in respect of which the Indemnitee
      had
      reasonable grounds for believing that his conduct was lawful;

     

    (c) in
      connection with any liability under Section 16(b) of the Securities Exchange
      Act of 1934, as amended, or

     

    (d) if,
      in respect thereof, the Expense Advance, or any other advance to the Indemnitee
      under this Agreement is prohibited by any applicable corporate or securities
      laws.

     

    
      	
              4.

            	
              BURDEN
                OF PROOF AND PRESUMPTIONS

            


    

     

    4.1
      Burden of Proof. In connection with any determination by
      the Company as to whether the Indemnitee is entitled to be indemnified
      hereunder, the burden of proof shall be on the Company to establish that the
      Indemnitee is not so entitled.

     

     

    4.2
      No Presumptions. For purposes of this Agreement, the
      termination of any Claim, by judgement, order, settlement (whether with or
      without court approval) or conviction, or upon a plea of nolo
      contendere, or its equivalent, shall not create a presumption that the
      Indemnitee did not meet any particular standard of conduct or have any
      particular belief or that a court had determined that indemnification is not
      permitted by applicable law.

     

    
      	
              5.

            	
              CONTRIBUTION

            


    

     

    5.1
      Contribution. If the indemnification provided in this
      Agreement is unavailable and may not be paid to the Indemnitee for any reason,
      then in respect of any Claim in which the Company is jointly liable with the
      Indemnitee (or would be if joined in such Claim), the Company shall contribute
      to the amount of Costs actually and reasonably sustained or incurred and paid
      or
      payable by the Indemnitee in such proportion as is appropriate to reflect (i)
      the relative benefits received by the Company and all officers, directors,
      trustees, employees or consultants of the Company and any of its Related
      Companies, other than the Indemnitee, who are jointly liable with the Indemnitee
      (or would be if joined in such Claim) on the one hand, and the Indemnitee,
      on
      the other hand, from the transaction from which such Claim arose, and (ii)
      the
      relative fault of the Company and all officers, directors, employees or
      consultants of the Company and any of its Related Companies, other than the
      Indemnitee, who are jointly liable with the Indemnitee (or would be if joined
      in
      such Claim), on the one hand, and of the Indemnitee, on the other, in connection
      with the events which resulted in such Costs, as well as any other relevant
      equitable considerations. The relative fault referred to above shall be
      determined by reference to, among other things, the parties' relative intent,
      knowledge, access to information and opportunity to correct or prevent the
      circumstances resulting in such Costs.

     

    
      	
              6.

            	
              CHANGE
                IN CONTROL

            


    

     

    6.1
      Change in Control. The Company agrees that if there is a
      Change in Control of the Company (other than a Change in Control which has
      been
      approved by a majority of the directors of the Company who were directors of
      the
      Company immediately prior to such Change in Control) then with respect to all
      matters thereafter arising concerning the rights of the Indemnitee to indemnity
      payments and Expense Advances under this Agreement, any other agreement or
      the
      Articles and Bylaws of the Company, as amended, now or hereafter in effect
      relating to Claims for Indemnifiable Events, the Company shall seek legal advice
      only from Independent Legal Counsel selected by the Indemnitee and approved
      by
      the Company (which approval shall not be unreasonably withheld). Such
      Independent Legal Counsel shall render its written opinion to the Company and
      the Indemnitee as to whether and to what extent the Indemnitee would be
      permitted to be indemnified under applicable law. The Company agrees to pay
      the
      reasonable fees of the Independent Legal Counsel referred to above and to
      indemnify fully such Independent Legal Counsel against any and all Costs, claims
      and charges arising out of or relating to this Agreement or its engagement
      pursuant hereto.

     

    6.2
      Establishment of Trust. In the event of a Potential
      Change in Control, the Company shall, upon written request by the Indemnitee,
      create a trust for the benefit of the Indemnitee and from time to time upon
      written request of the Indemnitee shall fund such trust in an amount sufficient
      to satisfy any and all Costs reasonably anticipated at the time of such request
      to be sustained or reasonably incurred in connection with investigating,
      preparing for and defending any Claim, and the Costs sustained or reasonably
      incurred by the Indemnitee from time to time, or reasonably anticipated to
      be
      sustained or reasonably incurred by the Indemnitee in connection with any Claim.
      The amount or amounts to be deposited in the trust pursuant to the foregoing
      funding obligation shall be determined by the Reviewing Party acting in good
      faith and in any case in which the Independent Legal Counsel referred to in
      Section 6.1 hereof is involved, upon receiving the advice of Independent Legal
      Counsel The terms of the trust shall provide that upon a Change in Control
      (i)
      the trust shall not be revoked or the principal thereof invaded, without the
      written consent of the Indemnitee, (ii) the trustee of such trust shall advance
      to the Indemnitee, within two business days of a request by the Indemnitee,
      the
      Costs sustained or reasonably incurred, or reasonably anticipated to be
      sustained or reasonably incurred, by the Indemnitee in connection with any
      Claim
      (and the Indemnitee hereby agrees to reimburse the trust under the circumstances
      under which the Indemnitee would be required to reimburse the Company under
      Section 2.2 hereof), (iii) such trust shall continue to be funded by the Company
      in accordance with the funding obligation set forth above, (iv) the trustee
      of
      such trust shall promptly pay to the Indemnitee all amounts for which the
      Indemnitee shall be entitled to indemnification pursuant to this Agreement
      or
      otherwise, and (v) all unexpended funds in such trust shall revert to the
      Company upon a final determination by the Reviewing Party acting in good faith,
      and with the written consent of the Indemnitee, or a court of competent
      jurisdiction, as the case may be, that the Indemnitee has been fully indemnified
      under the terms of this Agreement. The trustee of the trust established
      hereunder shall be chosen by the Indemnitee and the Company. Nothing in this
      Section 6.2 shall relieve the Company of any of its obligations under this
      Agreement.

     

    
      	
              7.

            	
              RESIGNATION

            


    

     

    7.1
      Resignation. Nothing in this Agreement shall prevent the
      Indemnitee from resigning as a director, officer or employee, and/or terminating
      any contractual arrangements as a consultant, of the Company or any of its
      Related Companies at any time.

     

    
      	
              8.

            	
              DEFENCE

            


    

     

    8.1
      Notice to Company. Upon the Indemnitee becoming aware of
      any pending or threatened Claim, written notice shall be given by or on behalf
      of the Indemnitee to the Company as soon as is reasonably
      practicable.

     

    8.2
      Investigation by Company. The Company shall conduct such
      investigation of each Claim as is reasonably necessary in the circumstances,
      and
      shall pay all costs of such investigation. The Company shall, upon the written
      request of the Indemnitee, provide the Indemnitee with the results of such
      investigation along with copies of all documents, reports and working papers
      (including, without limitation, legal opinions and memorandum) prepared by
      or
      for and received by the Company in connection therewith.

     

    8.3
      Defence by Company. Subject to the provisions of this
      Section 8, the Company shall, upon the written request of the Indemnitee,
      defend, on behalf of the Indemnitee, any Claim, even if the Claim is groundless,
      false or fraudulent.

     

    8.4
      Appointment of Defence Counsel. The Company shall
      consult with and accept the reasonable choice of the Indemnitee concerning
      the
      appointment of any defence counsel to be engaged by the Company in fulfillment
      of its obligations to defend a Claim pursuant to Section 8.3 and thereafter
      the
      Company shall appoint such counsel.

     

    8.5
      Settlement by Company. With respect to a Claim for which
      the Company is obliged to indemnify the Indemnitee hereunder, the Company may
      conduct negotiations towards the settlement of such Claim and, with the written
      consent of the Indemnitee (which the Indemnitee agrees not to unreasonably
      withhold), the Company may make such settlement as it deems expedient, provided
      however that the Indemnitee shall not be required, as part of any proposed
      settlement of such Claim, to admit liability or agree to indemnify the Company
      in respect of, or make contribution to, any compensation or other payment for
      which provision is made under the settlement. The Company shall pay any
      compensation or other payment for which provision is made by such
      settlement.

     

    
      	
              9.

            	
              GENERAL

            


    

     

    9.1
      Gender; Plural. In this Agreement wherever the singular
      or masculine is used it will be construed as if the plural or feminine or
      neuter, as the case may be, had been used where the context otherwise requires,
      and a reference to a section by number is a reference to the section so numbered
      in this Agreement.

     

    9.2
      Notices. All notices and other communications required
      to be given by a party hereunder shall be in writing and shall be deemed to
      have
      been duly given: (a) upon delivery, if delivered by hand; (b) one (1) business
      day after the business day of deposit with an overnight courier, if delivered
      by
      overnight courier, freight prepaid; (c) five (5) days after deposit with the
      applicable postal service, if delivered by first class mail postage prepaid;
      or
      (d) one (1) day after the business day of delivery by facsimile transmission,
      if
      delivered by facsimile transmission and a facsimile transmission confirmation
      is
      obtained in respect thereof, with a copy by first class mail postage prepaid,
      to
      the other party at the other party's address specified above or to the last
      known facsimile number of such party, as applicable, or at such other address
      or
      to such other facsimile number as the other party may have last specified in
      writing to the party intending to convey the notice or other
      communication.

     

    9.3 Time. 
      Time shall be of the essence of this Agreement.

     

    9.4
      Headings. The headings in this Agreement are inserted
      for case of reference only and shall have no effect on the construction or
      interpretation of this Agreement.

     

    9.5
      Governing Law. This Agreement shall be construed,
      interpreted, governed by and enforced in accordance with the laws of the State
      of Colorado, applicable to contracts made and to be performed in the State
      of
      Colorado, without giving effect to the principles of conflicts of laws. Each
      of
      the parties hereby irrevocably attorns to the non-exclusive jurisdiction of
      the
      courts of the State of Colorado, with respect to any matters arising out of
      this
      Agreement.

     

    9.6
      Entire Agreement. This Agreement contains the entire
      agreement between the parties relating to the subject matter hereof and there
      are no agreements, representations or warranties, express or implied, which
      are
      collateral hereto.

     

     

    9.7
      Non-exclusivity. The rights of the Indemnitee hereunder
      shall be in addition to any rights the Indemnitee may have under the Articles
      and Bylaws of the Company, including any amendments thereto or restatements
      thereof, the BCBCA, as amended, or otherwise. To the extent that any change
      in
      the BCBCA (whether by statute or judicial decision) permits greater
      indemnification by agreement than would be afforded currently under the
      Company's Articles and Bylaws, as amended, and this Agreement, it is the intent
      of the parties hereto that the Indemnitee shall enjoy by this Agreement the
      benefits so afforded by such change.

     

    9.8
      Amendments. This Agreement may only be amended by a
      written agreement signed by both of the parties hereto.

     

    9.9
      Waivers. No waiver of any of the provisions of this
      Agreement shall be deemed or shall constitute a waiver of any other provisions
      hereof (whether or not similar) nor shall such waiver constitute a continuing
      waiver.

     

    9.10
      Further Assurances. Each of the parties agrees to
      promptly do all such further acts, and promptly execute and deliver all such
      further documents, as may be necessary or advisable for the purpose of giving
      effect to or carrying out the intent of this Agreement.

     

    9.11
      Successors and Assigns. This Agreement shall enure to
      the benefit of and be binding upon the parties hereto and their respective
      successors, including any direct or indirect successor by purchase, merger,
      consolidation or otherwise to all or substantially all of the business and/or
      assets of the Company, assigns, spouses, heirs, executors and personal and
      legal
      representatives. This Agreement shall continue in effect regardless of whether
      the Indemnitee continues to serve as a director, officer, employee or consultant
      of the Company, any of its Related Companies or of any other enterprise at
      the
      Company's request.

     

    9.12
      Severability. The provisions of this Agreement shall be
      severable in the event that any of the provisions hereof (including any
      provision within a single section, paragraph or sentence) are held by a court
      of
      competent jurisdiction to be invalid, void or otherwise unenforceable in any
      respect, and the validity and enforceability of any such provision in every
      other respect and of the remaining provisions hereof shall not be in any way
      impaired and shall remain enforceable to fullest extent permitted by
      law.

     

    9.13
      Counterparts. This Agreement may be executed in any
      number of counterparts with the same effect as if all parties had signed the
      same document. All counterparts will constitute one and the same agreement.
      This
      Agreement may be executed and transmitted by facsimile transmission and if
      so
      executed and transmitted this Agreement will be for all purposes as effective
      as
      if the parties had delivered an executed original Agreement.

     

    IN
      WITNESS WHEREOF the parties hereto have executed this Agreement, in the
      case of a corporate party by its duly authorized officer or officers, as of
      the
      date first written above.

     

     

    BROOKE
      E. HORSPOOL, CPA

     

    By:
      /s/Brooke E. Horspool

     

     

    FELLOWS
      ENERGY LTD.

     

    By:
      /s/George S. Young

    President
      and CEO