Document:

Filed by Bowne Pure Compliance

Exhibit 10.01

	 	 	 
	 

	 	April 23, 2008

Mr. Geert-Jan Nieboer

DSM Food Specialties

P.O. Box 1, 2600 MA Delft

The Netherlands

RE: Amendment to Payment Terms regarding Guarantee Remainder

Dear Geert-Jan,

Martek Biosciences Corporation (“Martek”) and DSM Food Specialties B.V. (“DSM”) (collectively
referred to as the “Parties”) wish to enter into this letter agreement (the “Letter Agreement”) to
address any and all remaining commitments regarding the Guaranteed Amount and the Guarantee
Remainder under Section 3.3A of the ARA Alliance, Purchase, and Production Agreement between the
Parties dated April 19, 2004, as amended by the Parties as of December 31, 2005 (the “First
Amendment”) and January 1, 2007 (the “Second Amendment”) (as amended, the “Agreement”).
Capitalized terms used herein shall have the meaning set forth in the Agreement unless otherwise
provided herein.

In Section 3.3A of the Agreement (added in the First Amendment), the Parties agreed on provisions
regarding the recovery of the Guaranteed Amount in connection with an expansion of DSM’s Capua and
Belvidere production facilities as further described in the First Amendment. Pursuant to Section
3.3A of the Agreement, if the total aggregate amount of DSM Mark Up paid to DSM during the
Recoupment Period (January 1, 2006 through December 31, 2008) and pursuant to Section 3.3A(b)(v) of
the Agreement did not meet or exceed the Guaranteed Amount, Martek agreed to pay the balance of
such Guaranteed Amount (the “Guarantee Remainder”) to DSM on or before January 30, 2009. Martek
is entitled to credit such payment against any and all DSM Mark Up amounts that become due to DSM
pursuant to invoices received for ARA Products after December 31, 2008. As of January 31, 2008,
the Parties estimate that, pursuant to Section 3.3A of the Agreement, the Guarantee Remainder has
been reduced to approximately $24.4 million, and will be reduced to approximately $22.5 million as
of December 31, 2008.

Under this Letter Agreement, the Parties agree that, in lieu of the payment of any Guarantee
Remainder to DSM by Martek on or before January 30, 2009 as provided in the Agreement, the Parties
agree to the following payment arrangement: (i) Martek will pay $300,000 to DSM on November 30,
2008, and (ii) Martek will place purchase orders for a minimum of * Units of ARA from DSM for the
period January 1, 2009 – September 30, 2009. Martek will have no obligation to make any other
payments to DSM under the Agreement with regard to the Guarantee Remainder.

The Parties acknowledge and agree that the obligation of Martek to pay DSM the amounts as set forth
in this Letter Agreement shall be deemed sufficient to meet Martek’s obligation to guarantee DSM’s
investment in the Planned Expansion pursuant to Section 3.3(c)(iii) of the Agreement.

 

	 	 	 
	*	 	The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 

 

Notwithstanding any other provision of the Agreement or this Letter Agreement, the Parties agree
that, given Martek’s express obligation to (a) make the payment on November 30, 2008 and minimum
purchases in 2009 as specified above, and (b) make the minimum purchases for 2008 as specified in
Section 6.1(n)(ii) of the Agreement (as added in the Second Amendment), no payment shall be due to
DSM pursuant to Section 6.18(c) upon termination or expiration of the Agreement.

Except as expressly modified herein, all terms and conditions set forth in the Agreement shall
remain in full force and effect and the Agreement as so modified is hereby ratified and confirmed
in all respects.

If DSM agrees to the terms and conditions as set forth herein, please signify this by signing both
copies of this Letter Agreement where indicated below and please return both copies of the letter
to Martek for execution by Martek. We will then return one fully executed copy to you for your
files.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	Martek Biosciences Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steve Dubin	 	 
	 

	 	Title:
	 	 

Chief Executive Officer
	 	 
	 

	 	Date:
	 	May 21, 2008	 	 

	 	 	 	 	 
	Agreed to and acknowledged by	 	 
	DSM Food Specialties B.V.	 	 
	 
	 	 	 	 
	Name:

	 	/s/ G.J. Nieboer	 	 
	Title:

	 	 

Managing Director
	 	 
	Date:

	 	May 6, 2008	 	 
	 
	 	 	 	 
	Name:

	 	/s/ A. R. Wessels	 	 
	Title:

	 	 

Managing Director
	 	 
	Date:

	 	May 8, 2008	 	 

 

	 	 	 
	*	 	The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.Filed by Bowne Pure Compliance

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of the 15th day of July, 2008.

BETWEEN:

OILSANDS QUEST INC., a body corporate incorporated under the laws of
the State of Colorado (hereinafter called the “Corporation”)

- and -

JAMEY FITZGIBBON, an individual resident in Calgary, Alberta
(hereinafter called the “Executive”)

WHEREAS the Corporation wishes to employ the Executive as the President and Chief Operating Officer
of the Corporation pursuant to the terms of this Agreement;

AND WHEREAS the Executive wishes to accept employment with the Corporation as the President and
Chief Operating Officer of the Corporation pursuant to the terms of this Agreement;

NOW THEREFORE in consideration of the employment of the Executive by the Corporation, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

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

	 	(a)	 	“Act” means the Business Corporations Act (Alberta), 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 Employment Agreement;

	 
	 	(d)	 	“Base Salary” means the amount paid to the Executive annually by the
Corporation pursuant to Article 5.1;

	 
	 	(e)	 	“Board of Directors” means the board of directors of the Corporation;

	 
	 	(f)	 	“Business” means the business of the Corporation;

 

 

 

	 	(g)	 	“Cause” means any reason which would entitle the Corporation to terminate the
Executive’s employment 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 Executive;

	 
	 	(ii)	 	the willful allowance by the Executive of his duty to the
Corporation and his personal interests to come in conflict in a material way in
relation to any transaction or matter that is of a substantial nature; or

	 
	 	(iii)	 	the material breach by the Executive of any of his covenants
or obligations under this Agreement including, without limitation, any
non-competition, non-solicitation or confidentiality covenants with the
Corporation;

	 	(h)	 	“Change of Control” means the occurrence of any of the following:

	 	(i)	 	the acquisition, by whatever means, by a person (or two or more
persons who in such acquisition have acted jointly or in concert or intend to
exercise jointly or in concert any voting rights attaching to the securities
acquired), directly or indirectly, of the beneficial ownership of such number
of voting securities or rights to voting securities of the Corporation, which
together with such person’s then owned voting securities and rights to voting
securities, if any, represent (assuming the full exercise of such rights to
voting securities) more than 30% of the combined voting power of the
Corporation’s then outstanding voting securities and such person’s previously
owned rights to voting securities; or

	 
	 	(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 voting securities
of the successor or continuing corporation which would entitle them to cast
more than 30% 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; or

	 
	 	(iii)	 	the election at a meeting of the Corporation’s shareholders,
as directors of the Corporation, of a number of persons, who were not included
in the slate for election as directors proposed to the Corporation’s
shareholders by the Corporation’s prior Board of Directors, and who would
represent a majority of the Board of Directors, or the appointment as directors
of the Corporation, of a number of persons which would represent a majority of
the Board of Directors, nominated by any holder of voting shares of the
Corporation or by any group of holders of voting shares of the Corporation
acting jointly or in concert and not approved by the Corporation’s prior Board
of Directors;

	 	(i)	 	“Company Property” includes any and all proprietary technology, financial,
operating and training information, all works of expression and any copyrights in such
works, current or potential business contacts and contract development information,
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;

 

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	 	(j)	 	“Confidential Information” means any information of a confidential nature which
relates to the Business of the Corporation or any Related Corporation, including,
without limiting the generality of the foregoing, trade secrets, technical information,
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,
geophysical studies and data, strategic studies, engineering information, customer 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 Executive prior to
joining the Corporation or any Related Corporation, without any obligation to
keep it confidential, before it was disclosed to the Executive by the
Corporation; or

	 
	 	(ii)	 	is or becomes public knowledge through no fault of the
Executive; or

	 
	 	(iii)	 	is independently developed by the Executive outside the scope
of his employment with the Corporation; or

	 
	 	(iv)	 	is disclosed by the Corporation or any Related Corporation, to
another Person without any restriction on its use or disclosure; or

	 
	 	(v)	 	is or becomes lawfully available to the Executive from a source
other than the Corporation;

	 	(k)	 	“Effective Date” means September 16, 2008, unless otherwise noted herein or
agreed to by the Parties;

	 
	 	(l)	 	“Intellectual Property” means:

	 	(i)	 	all material subject to copyright claims,

	 
	 	(ii)	 	all know-how, trade secrets, improvements, discoveries and
inventions, whether or not patentable, and

	 
	 	(iii)	 	all patent applications and patents,

	 	 	 	in any case, made, conceived, developed or first reduced to practice by the
Executive in the course of the Executive’s employment with the Corporation (whether
during regular office hours or otherwise and whether at the Corporations’ work
premises or otherwise), and any continuation thereof made during the term
of the Executive’s employment with the Corporation or after termination thereof,
together with all supporting evidence thereof, including, without limitation, notes,
sketches, drawings, diagrams, models and data pertaining thereto.

 

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	 	(m)	 	“Monthly Base Salary” means the annual Base Salary paid to the Executive,
divided by 12;

	 
	 	(n)	 	“Notice” means any notice given by one Party to the other Party in accordance
with the provisions hereof;

	 
	 	(o)	 	“Notice Period” shall be 16 months plus one month for each completed year of
employment by the Executive, up to a maximum aggregate of 24 months;

	 
	 	(p)	 	“Party” means one or other of the Executive and the Corporation, and “Parties”
means the Executive and the Corporation;

	 
	 	(q)	 	“Permanent Disability” means a mental or physical disability whereby the
Executive:

	 	(i)	 	is unable, due to illness, disease, mental or physical
disability or similar cause, to fulfill his obligations as an officer of the
Corporation for any consecutive 6 month period, or for any period of 12 or more
months (whether consecutive or not) in any consecutive 24 month period; or

	 
	 	(ii)	 	is declared by a Court of competent jurisdiction to be mentally
incompetent or incapable of managing his affairs;

	 	(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)	 	“Related Corporation” means any subsidiary, parent company, division,
affiliate, predecessor or successor of the Corporation;

	 
	 	(t)	 	“Term” means the period during which this Agreement remains in force pursuant
to Article III;

	 
	 	(u)	 	“Termination Date” means the last day actively worked by the Executive for the
Corporation; and

 

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	 	(v)	 	“Triggering Events” means any one or more of the following:

	 	(i)	 	a material change (other than those which are clearly
consistent with a promotion) in the services, position or duties of the
Executive with the Corporation, responsibilities (including, without
limitation, the office to which the Executive reports and the personnel which
report to the Executive), title or office, which includes any removal of the
Executive from or any failure to re-elect or re-appoint the Executive to any
such positions or offices, without the prior consent of the Executive;

	 
	 	(ii)	 	the assignment by the Corporation to the Executive of any
duties which are inconsistent with the Executive’s position, duties and
responsibilities within the Corporation, without the prior consent of the
Executive;

	 
	 	(iii)	 	any failure by the Corporation to continue in effect any
material benefit, bonus, profit sharing, incentive, remuneration or
compensation plan, stock ownership, stock option or stock purchase plan,
pension plan or retirement plan in which the Executive is participating or
entitled to participate or the Corporation taking any action or failing to take
any action that would adversely affect the Executive’s participation in or
reduce his rights or benefits under or pursuant to any such plan, without in
any of the foregoing events providing alternative rights or benefits of
reasonably equivalent or greater value, or the Corporation failing to increase
or improve such rights or benefits on a basis consistent with practices in
effect with respect to the other senior executives of the Corporation;

	 
	 	(iv)	 	the Corporation relocating the Executive to any place other
than Calgary, Alberta without the consent of the Executive, except for required
travel on the Corporation’s business to an extent substantially consistent with
the Executive’s current duties and obligations;

	 
	 	(v)	 	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;

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

	 
	 	(vii)	 	any breach by the Corporation of any provision of this
Agreement which is not rectified in all material respects within a reasonable
period of time after notice of such breach has been provided by the Executive
to the Corporation; or

	 
	 	(viii)	 	the failure by the Corporation to obtain, in a form satisfactory to the
Executive, an effective assumption of his obligations under this Agreement by
any successor to 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.

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.

 

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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

EMPLOYMENT OF EXECUTIVE 

2.1 The Corporation agrees to employ the Executive as the President and Chief Operating Officer of
the Corporation and the Executive agrees to accept such employment in accordance with the terms and
conditions of this Agreement.

2.2 The Parties agree that the relationship between the Corporation and the Executive is that of
employer and employee.

ARTICLE III

TERM OF AGREEMENT

3.1 The Term of this Agreement shall be for an indefinite period commencing on the Effective Date,
unless earlier terminated by the Corporation or the Executive pursuant to the terms and conditions
of this Agreement.

ARTICLE IV

DUTIES OF EXECUTIVE

4.1 The Executive shall, during the Term:

	 	(a)	 	perform the duties and responsibilities of the President and Chief Operating
Officer as described in Schedule “A”, including all those duties and responsibilities
customarily performed by a person holding the same or an equivalent position, or
performing duties similar to those to be performed by the Executive, in corporations of
a similar size to the Corporation, in a similar Business to that of the Corporation in
Canada and publicly traded on a recognized senior stock exchange (recognizing the fluid
nature of management of the Corporation and the reallocation of responsibilities
amongst executives from time
to time), as well as such other related duties and responsibilities as may be
assigned to the Executive by the Chief Executive Officer of the Corporation from
time to time, provided that such other related duties and responsibilities are
consistent with the Executive’s duties as the President and Chief Operating Officer;

	 
	 	(b)	 	accept such other office or offices to which he may be elected or appointed by
the Board of Directors of the Corporation in addition to that of the President and
Chief Operating Officer, provided that performance of the duties and responsibilities
associated with such office or offices shall be consistent with the duties provided for
in Article 4.1(a);

 

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	 	(c)	 	devote the majority of his working time, attention, efforts and skill to the
performance of his duties and responsibilities as set out herein, and truly and
faithfully serve the best interests of the Corporation at all times. In particular,
and without limiting the generality of the foregoing, the Executive shall not engage in
any personal activities or any employment, consulting work, trade or other business
activity on his own account or on behalf of any other Person, or as a material investor
or shareholder of any other business or Person that competes, conflicts or interferes
with the Business or the performance of the Executive’s duties under this Agreement in
any way, whether directly or indirectly. It shall not be a violation of this Article
4.1(c) for the Executive to engage in a voluntary activity or other public service
which does not interfere with the Executive’s duties under this Agreement; and

	 
	 	(d)	 	notwithstanding paragraph 4.1(c), the Corporation agrees that the Executive may
be a member of the board of directors of other companies provided that

	 	(iv)	 	the holding of such position would not be in direct conflict
with the Business and

	 
	 	(v)	 	the Board of Directors of the Corporation has granted prior
approval to such position.

ARTICLE V

BASE SALARY

5.1 During the Term of this Agreement, the Corporation shall pay to the Executive a Salary of
$400,000 per annum (the “Base Salary”), less required statutory deductions, payable in equal
semi-monthly installments or as otherwise determined by the Corporation. The Executive’s Base
Salary will be reviewed by the Board of Directors of the Corporation from time to time, and may be
increased (but not decreased) at the sole discretion of the Board of Directors, based upon such
factors as the Board of Directors in its sole discretion determines are relevant, which factors may
include the performance of the Corporation and the employment compensation arrangements of other
corporations carrying on a similar business and of a similar size to the Corporation in Canada.

5.2 The Corporation shall reimburse the Executive for all reasonable out-of-pocket expenses
incurred in the performance of his duties and in accordance with the applicable policies and
procedures of the Corporation, as may be amended by the Corporation at its sole discretion from
time to time. All payments or reimbursements of expenses shall be subject to the submission by the
Executive of appropriate vouchers, bills and receipts. It is expressly acknowledged that the
Executive shall have the right, at his option, when traveling on Business related matters or
functions, to travel business class on any airline flight over three (3) hours and that the
Corporation shall reimburse the Executive reasonable travel expenses associated therewith.

 

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ARTICLE VI

INCENTIVE PAYMENTS

6.1 The Executive shall be entitled to participate in the Corporation’s long and short term
incentive plans (including stock option plans) and bonuses from time to time, in amounts and on
such terms and conditions as may be determined by the Board of Directors of the Corporation at its
sole discretion. Subject to the provisions of the bonus plan as described immediately below, its
amount will be based upon key, milestones established by the Board of Directors from time to time,
acting reasonably, as well as achievements of those key milestones, and such other factors as the
Board of Directors may reasonably take into account. Any such participation by the Executive shall
be subject to the terms and conditions of the relevant plan of the Corporation, as may be amended
by the Board of Directors of the Corporation at its sole discretion from time to time, and by the
terms and conditions of any applicable agreement between the Executive and the Corporation made
pursuant to such plan.

6.2 When the bonus plan has been established, the Corporation shall set a target for annual bonus
entitlement at 50 per cent of the Base Salary. No bonus will be paid except for completed calendar
years of service.

6.3 The terms of the stock options shall be as set forth in a separate Stock Option Agreement,
provided that the terms generally shall be 2,000,000 options in the common shares of the
Corporation shall be granted for a five (5) year term, of which 25 per cent shall vest upon
commencement of employment, and the balance shall vest in 25 per cent increments on an annual basis
(on each anniversary date of the grant), in accordance with the Corporation’s Stock Option Plan.
In the event of any conflict between the terms hereof and the terms of the Stock Option Agreement
the terms of the Stock Option Agreement shall prevail to the extent of the conflict.

6.4 In addition to the amounts payable as Base Salary, the Corporation shall pay to the
Executive a signing bonus (less applicable withholdings) in two installments, as follows:

	 	(a)	 	the sum of $200,000.00 payable forthwith after the Executive’s first day of
active employment; and

	 
	 	(b)	 	the sum of $200,000.00 on the date six months following the Executive’s first
date of active employment, subject to the Executive’s continued employment on that
date.

 

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ARTICLE VII

BENEFITS

7.1 The Executive shall be entitled to participate in all of the employment benefits provided by
the Corporation for its senior executive employees (“Benefits”), subject to the terms and
conditions of the applicable benefit plans established by the Corporation, as may reasonably
amended by the Corporation from time to time.

7.2 The Executive shall be entitled to the use of a vehicle provided by the Corporation. In the
event that a vehicle is not made available to the Executive, the Executive shall be entitled to a
vehicle allowance in the amount of $1,500 per month.

ARTICLE VIII

VACATION

8.1 The Executive shall be entitled to an annual paid vacation of 25 business days. Vacation may
be taken in such a manner and at such times as the Executive and the Corporation mutually agree. In
the event that the Executive is unable to take the entitled vacation time, the Corporation and the
Executive shall negotiate a suitable arrangement to compensate the Executive.

ARTICLE IX

TERMINATION BY CORPORATION

9.1 Subject to Section 9.3, the Corporation shall be entitled to terminate this Agreement and the
Executive’s employment at any time, for any reason, upon written Notice to the Executive, in which
case the Corporation shall provide the Executive with the following (subject to the conditions set
out in Article 9.2):

	 	(a)	 	a lump sum equal to the Monthly Base Salary as at the Termination Date,
multiplied by the number of months in the Notice Period;

	 
	 	(b)	 	a lump sum equal to the value of the Executive’s Benefits (which value shall be
deemed to be the monthly cost to the Corporation excluding GST and similar taxes),
multiplied by the number of months in the Notice Period; and

	 
	 	(c)	 	a further lump sum equal to the Executive’s average annual bonuses (for
clarity, not including the signing bonus referred to in Section 6.4) during the last
three fiscal years preceding the Termination Date (or, if the Executive has been
employed for less than three fiscal years, then for the period of employment preceding
the Termination Date), divided by 12 and multiplied by the number of months in the
Notice Period.

Payment of the amounts set out in this Article 9.1 shall represent full and final settlement of any
claims by the Executive against the Corporation or any Related Corporation, arising out of or in
any way connected to the Executive’s employment with the Corporation or any Related Corporation, or
the termination of such employment, whether at common law or under the
provision of any statute or regulation, or pursuant to the terms of any agreement between the
Parties.

 

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9.2 Payment of the amounts set out in Article 9.1 shall be subject to the following conditions:

	 	(a)	 	the prior execution by the Executive of a settlement agreement and release and
indemnity in favour of the Corporation and any Related Corporations, in a form
reasonably acceptable to the Corporation;

	 
	 	(b)	 	the tendering by the Executive of his resignation from any position he may hold
as an officer or a director of the Corporation and any Related Corporations;

	 
	 	(c)	 	any withholdings or deductions required by law to be made by the Corporation;
and

	 
	 	(d)	 	the Executive’s right to receive payment under Article 9.1 shall not be subject
to any duty to mitigate, nor affected by any actual mitigation by the Executive.

9.3 The Corporation shall be entitled to terminate this Agreement and the Executive’s employment
with the Corporation at any time, without notice, pay in lieu of notice or any other form of
severance or termination pay, for Cause.

9.4 Notwithstanding any other term or provision of this Article 9, upon termination of the
Executive’s employment by the Corporation for any reason, the Executive shall receive any Base
Salary and Benefits earned up to the Termination Date.

ARTICLE X

TERMINATION BY EXECUTIVE

10.1 The Executive may terminate this Agreement and his employment with the Corporation by
providing 60 days’ prior written Notice to the Corporation. Upon termination of his employment
pursuant to this Article 10.1, the Executive shall not be entitled to receive any notice or pay in
lieu of notice, or any other form of severance or termination pay pursuant to this or any other
agreement between the Parties.

10.2 Notwithstanding the provision in Article 10.1, the Executive may terminate his employment with
the Corporation and receive the payments set out in Article 10.3, upon the occurrence of either a
Change of Control or a Triggering Event, and subject to the conditions set out in Article 10.4.

 

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10.3 Upon the occurrence of either a Change of Control or a Triggering Event, and subject to the
conditions set out in Article 10.4, the Executive shall receive the following:

	 	(a)	 	a lump sum equal to the Monthly Base Salary as at the Termination Date,
multiplied by the number of months in the Notice Period;

	 
	 	(b)	 	a lump sum equal to the value of the Executive’s Benefits (which value shall be
deemed to be the monthly cost to the Corporation excluding GST and similar taxes),
multiplied by the number of months in the Notice Period; and

	 
	 	(c)	 	a further lump sum equal to the Executive’s average annual bonuses during the
last three fiscal years preceding the Termination Date (or, if the Executive has been
employed for less than three fiscal years, then for the period of employment preceding
the Termination Date), divided by 12 and multiplied by the number of months in the
Notice Period.

Payment of the amounts set out in this Article 10.3 shall represent full and final settlement of
any claims by the Executive against the Corporation or any Related Corporation, arising out of or
in any way connected to the Executive’s employment with the Corporation or any Related Corporation,
or the termination of such employment, whether at common law or under the provision of any statute
or regulation, or pursuant to the terms of any agreement between the Parties.

10.4 Payment of the amounts set out in Article 10.3 shall be subject to the following terms and
conditions:

	 	(a)	 	the prior execution by the Executive of a settlement agreement and release and
indemnity in favour of the Corporation and any Related Corporations, in a form
reasonably acceptable to the Corporation;

	 
	 	(b)	 	the tendering by the Executive of his resignation from any position he may hold
as an officer or a director of the Corporation and any Related Corporations;

	 
	 	(c)	 	any withholdings or deductions required by law to be made by the Corporation by
law;

	 
	 	(d)	 	the Executive’s right to receive the payments under Article 10.3 shall not be
subject to any duty to mitigate, nor affected by any actual mitigation by the
Executive; and

	 
	 	(e)	 	the receipt by the Corporation of written notice from the Executive, within 60
days of the occurrence of a Change of Control or a Triggering Event, as the case may
be, setting out the basis on which the Executive believes that a Change of Control or a
Triggering Event as the case may be, has occurred.

10.5 The Executive covenants and agrees to provide his full cooperation and assistance, in
connection with the termination of his employment upon a Triggering Event, to transfer his duties
and responsibilities to a replacement.

10.6 Notwithstanding any other term or provision of this Article 10, upon termination of the
Executive’s employment by the Executive for any reason, the Executive shall receive any Base Salary
and Benefits earned up to the Termination Date.

10.7 Payment under Article 10 shall be made on the later of the date which is 30 calendar days
after receipt by the Corporation of the Notice referred to herein and the date which is 60 calendar
days after the effective date of the Change of Control or Triggering Event, as the case may be.

 

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ARTICLE XI

TERMINATION UPON DEATH OR PERMANENT DISABILITY

11.1 This Agreement shall automatically terminate upon the death of the Executive.

11.2 In the event that the Executive shall suffer a Permanent Disability, the Corporation may
terminate this Agreement and the Executive’s employment by providing at least 30 days prior written
Notice to the Executive. Upon termination of the Executive’s employment pursuant to this Article
11.2, the Corporation shall have no further obligation to the Executive, with the exception that
the Executive shall continue to be entitled to such insurance benefits as may be provided under any
long term disability insurance plan, and to any benefit or entitlement arising from any pension
plan of the Corporation.

ARTICLE XII

STOCK OPTIONS

12.1 The Corporation, by separate Stock Option Agreement, shall provide to the Executive 2,000,000
stock options, 25 per cent of which shall vest immediately upon the grant of options and the
balance shall vest in equal portions annually until the third anniversary of the grant of options.
In the event of any discrepancy between the terms of this agreement and the Stock Option Agreement
with respect to stock options, the terms of the Stock Option Agreement shall prevail.

12.2 Upon the termination of the employment of the Executive under Article 9 or if the Executive
terminates this Agreement pursuant to Section 10.1, only those stock options and other incentive
interests held by the Executive (including, for the purposes hereof, those stock options and other
incentive interests granted to the Executive by a Related Corporation) that are vested at such
Termination Date may be exercised by the Executive in accordance with the terms of the relevant
agreement, stock option plan or other incentive plans of the Corporation in effect at the time, as
applicable, and the Executive shall have no claim to the acceleration of vesting or the exercise on
any stock options and other incentive interests which are not fully vested as at such Termination
Date other than under the terms of the relevant agreement, stock option plan or other incentive
plans of the Corporation in effect at the time, as applicable. All such remaining unvested stock
options and other incentive interests shall terminate, be null and void and of no further force and
effect notwithstanding the terms of the relevant agreement, stock option plan or other incentive
plans of the Corporation in effect at the time, as applicable.

 

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12.3 Upon termination of the Executive by reason of death or Permanent Disability, only those stock
options and other incentive interests held by the Executive (including, for the purposes hereof,
those stock options and other incentive interests granted to the Executive by a Related
Corporation) which are vested at such Termination Date may be exercised by the Executive pursuant
to the terms of the relevant agreement, stock option plan or other incentive plans of the
Corporation in effect at the time, as applicable, and the Executive shall have no claim to the
acceleration of vesting or to the exercise of any stock options which are not fully vested as at
such Termination Date, other than under the terms of the relevant agreement, stock option plan or
other incentive plans of the Corporation in effect at the time, as applicable. All such remaining
unvested stock options and other incentive interests shall terminate, be null and void and of no
further force and effect notwithstanding the terms of the relevant agreement, stock option plan or
other incentive plans of the Corporation in effect at the time, as applicable.

12.4 Notwithstanding subsections 12.3 hereof, the Parties agree that upon termination of the
Executive pursuant to Sections 9.1, 10.2, 11.1 or 11.2 hereof, the provisions of the applicable
stock option agreement supersede and shall govern in the event of any conflict with the terms of
this Agreement.

ARTICLE XIII

CONFIDENTIAL INFORMATION AND NON-COMPETITION 

13.1 The Executive acknowledges and agrees that in performing the duties and responsibilities of
his employment 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 Executive 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 Executive therefore agrees that, so
long as he is engaged by the Corporation pursuant to this Agreement, he shall not engage in any
practice or business that competes with the Business of the Corporation or its Related
Corporations. It shall not be considered a violation of this Section 13.1 for the Executive to be
involved as an investor or shareholder in securities issued by corporations that compete directly
or indirectly with the Business, provided that such investment does not constitute more than 5% of
the outstanding securities of a business or corporation whose shares trade on a recognized stock
exchange.

13.2 The Executive agrees that during the Term, and following the termination of the Executive’s
employment for any reason, he shall treat confidentially all Confidential Information belonging to
the Corporation or its Related Corporations, and shall not use or disclose the Confidential
Information to any unauthorized persons, except with the prior express written consent of the
Corporation, or otherwise as required by law.

13.3 The Executive further acknowledges and agrees that pursuant to the terms of this Agreement, it
will acquire Company Property which is and shall remain the sole and exclusive property of the
Corporation. Upon termination of the Executive’s employment and this Agreement for any reason, the
Executive shall return to the Corporation all Company Property, together with any copies or
reproductions thereof, which may have come into the Executive’s
possession during the course of or pursuant to this Agreement, and shall delete or destroy all
computer files on its personal computer which may contain any Confidential Information belonging to
the Corporation, or its Related Corporations.

 

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13.4 Notwithstanding the provision of 13.3 and 13.4, the Executive shall be permitted to disclose
Confidential Information as required by law, regulation, government body or authority or by court
order.

13.5 The Executive acknowledges and agrees that the Corporation would suffer irreparable harm in
the event that any Confidential Information or other knowledge and experience acquired by the
Executive in relation to the business of the Corporation were disclosed to a competitor of the
Corporation or used for a competitive purpose for a reasonable period of time following the
termination of his employment. Accordingly, the Executive agrees that in the event his employment
with the Corporation is terminated for Cause by the Corporation, or in the event that the Executive
voluntarily resigns his employment with the Corporation, neither he nor any employee or agent of
the Executive shall, for a period of four (4) months from the Termination Date:

	 	(a)	 	be engaged, either directly or indirectly in any manner including, without
limitation, as an officer, director, shareholder, owner, partner, member, joint
venturer, employee, independent contractor, consultant, advisor or sales
representative, in any business or enterprise which competes with the Business of the
Corporation or any Related Corporation, as such business was conducted as of the
Termination Date, with the exception that the Executive may be involved as an investor
or shareholder in securities issued by corporations that compete directly or indirectly
with the Business, provided that such investment does not constitute more than 5% of
the outstanding securities of a business or corporation whose shares trade on a
recognized stock exchange;

	 
	 	(b)	 	solicit, entice or attempt to solicit or entice, either directly or indirectly,
any customer or prospective customer of the Corporation or any Related Corporation as
at the Termination Date, to become a customer of any business or enterprise which
competes with the Corporation or any Related Corporation for any business as such
business was conducted by the Corporation or any Related Corporation as at the
Termination Date; or

	 
	 	(c)	 	solicit or entice, or attempt to solicit or entice, either directly or
indirectly, any employee of the Corporation or any Related Corporation as at the
Termination Date, to become employed by or connected with any business or enterprise
which competes with the Corporation or any Related Corporation for any business as such
business was conducted by the Corporation or any Related Corporation as at the
Termination Date.

The restrictions set out in this Section 13.5 shall apply only within North America or to any
business that directly relates to North America.

 

- 14 -

 

13.6 The Executive acknowledges and agrees that the Corporation will suffer harm in the event that
the Executive breaches any of the obligations under this Article 13, and that monetary damages
would be difficult to quantify and may be inadequate to compensate the Corporation for such a
breach. Accordingly, the Executive agrees that in the event of a breach or a threatened breach by
the Executive of any of the provisions of this Article 13, the Corporation shall be entitled to
seek, in addition to any other rights, remedies or damages available to the Corporation at law or
in equity, an interim and permanent injunction, in order to prevent or restrain any such breach or
threatened breach by the Executive.

13.7 The Executive hereby agrees that all restrictions contained in this Article 13 are reasonable
and necessary to protect the legitimate proprietary interests of the Corporation, and will not
unduly restrict his ability to secure comparable alternative employment following the termination
of his employment for any reason. If any covenant or provision of this Article 13 is determined to
be void or unenforceable in whole or in part, for any reason, it shall be deemed not to affect or
impair the validity of any other covenant or provision of this Agreement, which shall remain in
full force and effect.

13.8 The provisions of this Article 13 shall remain in full force and effect notwithstanding the
termination of this Agreement for any reason.

ARTICLE XIV

INTELLECTUAL PROPERTY 

14.1 All Intellectual Property shall belong to the Corporation, and the Corporation shall be the
sole and exclusive owner of any and all rights pertaining thereto.

14.2 The Executive shall keep signed, witnessed and dated records of any and all Intellectual
Property as described in paragraph (b) of the definition thereof.

14.3 The Corporation shall have the right to submit patent applications based on any and all
Intellectual Property described in paragraph (b) of the definition thereof. Such patents will
identify the original inventors, as required by patent law in Canada, the United States of America
(“U.S.”), and also in other countries, even if not required by law.

14.4 The Executive agrees to sign an application, assignment or any other document required to
register any and all Intellectual Property as described in paragraph (b) of the definition thereof
as patents in Canada, in the U.S. and abroad, or to assert copyright claims in respect of any and
all Intellectual Property as described in paragraph (a) of the definition thereof, as requested by
the Corporation, and otherwise assist the Corporation in obtaining such patents as well as in the
enforcement of patent or copyright infringement claims.

 

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ARTICLE XV

INDEMNIFICATION 

15.1 The Corporation covenants, both during and after the Executive’s term of service, to indemnify
and hold harmless the Executive and his heirs and legal representatives, to the maximum extent
permitted by Colorado law or other law to which the Corporation is subject (provided that the
Executive acted honestly and in good faith with a view to the best interests of the Corporation
and, in the case of a criminal or administrative action or proceeding that is enforced by monetary
penalty, the Executive had reasonable grounds for believing that his conduct was lawful), from and
against:

	 	(a)	 	all costs, charges, liabilities and expenses whatsoever that the Executive may
sustain or incur in or about or in relation to any action, suit or proceeding that is
brought, commenced or prosecuted against the Executive for or in respect of any act,
deed, matter or thing whatever made, done or permitted or not made, done or permitted
by the Executive in or about the execution of his duties as a director or officer of
the Corporation or its subsidiaries; and

	 
	 	(b)	 	all other costs, charges, liabilities and expenses that the Executive may
sustain or incur (including, without limitation, all income tax, sales tax and excise
tax liabilities resulting from any payment made pursuant to this indemnity) in or about
or in relation to the affairs of the Corporation or its subsidiaries or his position as
a director or officer of the Corporation or its subsidiaries.

15.2 The Corporation further agrees that any costs, charges and expenses referred to in paragraph
15.1(a) above shall be paid in advance of the final disposition of any such action or proceeding
upon receipt by the Corporation of a written undertaking by the Executive to repay such amount if
it shall ultimately be determined that the Executive is not entitled to be indemnified in
accordance with the terms and conditions of this Indemnity and Colorado law.

15.3 The Corporation further agrees, both during and after the Executive’s term of service, to use
its reasonable best efforts to obtain any approval or approvals necessary for such indemnification
and to co-operate with the Executive and to provide the Executive with access to any evidence which
the Corporation may have or control, which would enable the Executive to make application or obtain
any approval or approvals necessary for such indemnification.

15.4 The Corporation shall maintain a directors and officers insurance policy in such amounts as
may be customary for corporations of a similar size and business and risk profile as the
Corporation in Canada, and the Executive shall be entitled to the benefit of such insurance policy
during the Term of the Agreement and for so long after termination of the Agreement for any reason
as may be agreed to by the parties acting reasonably, for the purpose of providing continued
insurance coverage for the benefit of the Executive for all acts or omissions covered by Article 15
that occur prior to the Termination Date.

15.5 The provisions of this Article 15 shall remain in full force and effect notwithstanding the
termination of this Agreement for any reason.

 

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ARTICLE XVI

NOTICES

16.1 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:

Oilsands Quest Inc.

Suite 205, 707 — 7th Avenue S.W.

Calgary, Alberta T2P 3H6

Attention: Executive Chairman of the Board

Fax: (403) 263-9812

To the Executive:

 

 

 

 

 

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.

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

ARTICLE XVII

GENERAL

17.1 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.

17.2 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 supercede
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.

 

- 17 -

 

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

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

17.5 This Agreement is a personal services agreement and may not be assigned by either Party
without the prior written consent of the other Party.

17.6 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.

17.7 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.

17.8 The Executive agrees that following the termination of the Executive’s employment with the
Corporation for any reason, the Executive shall tender his resignation from any position he may
hold as an officer or director of the Corporation or any Related Corporation.

17.9 In the event of a Change of Control, the Corporation will use its reasonable commercial
efforts to obtain and pay for directors’ and officers’ liability insurance on a “trailing” or “run
off” basis for the Executive, covering claims made prior to or within six years from the date of
the Change of Control, such insurance to provide coverage substantially equivalent in scope and
coverage to that provided by the Corporation’s directors and officers insurance policy, if any, in
effect immediately prior to the Change of Control.

17.10 The Corporation agrees to co-operate with the Executive, to the extent permitted by
applicable tax laws, so as to permit the Executive to consider payments hereunder on termination of
employment to be retirement benefits.

17.11 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.

 

- 18 -

 

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 independent legal advice
prior to entering into this Agreement, and that they have executed this Agreement with full force
and effect from the date first written above.

	 	 	 	 	 	 	 
	 	 	OILSANDS QUEST INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 

	 	 
	 	 

	 	 
	 

	 	Per:
	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 
	 

Witness

	 	 

JAMEY FITZGIBBON
	 	 

 

- 19 -

 

Schedule “A”

Description of Duties

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