Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - MegaWest Energy Corp. - Exhibit 4.22

ESCROW AGREEMENT 

THIS AGREEMENT made and entered into as of the 5th day of
April, 2007. 

AMONG: 

  
    
      
        MEGAWEST ENERGY CORP., a British Columbia company
        

        (the "Parent")

      

    

  

 AND: 

  
    
      
        MEGAWEST ENERGY (USA) CORP., a Nevada corporation

         (the "Buyer") 

      

    

  

AND: 

  
    
      
        RAYMOND T. PIRRAGLIA 

        (the "Representative") 

      

    

  

AND: 

  
    
      
        CLARK WILSON LLP, Barristers and Solicitors,
          of 800 – 885 West Georgia Street, Vancouver, British Columbia,
          Canada V6C 3H1 

        ("Clark Wilson") 

      

    

  

WITNESS THAT WHEREAS: 

	A. 	
      The Buyer and all of the members of Deerfield Energy LLC,
      a Delaware limited liability company (the "Sellers") are parties to
      a Membership Interest Purchase Agreement made as of March 26, 2007 by and
      among the Parent, the Buyer, Deerfield Energy LLC, the Sellers and the
      Representative (the "Purchase Agreement");

	 	 
	B. 	
      Pursuant to Section 2.2 of the Purchase Agreement, the
      parties thereto have agreed that the Buyer shall deliver to an escrow
      agent, designated by the Buyer and approved by the Representative,
      US$300,000 (the "Subject Monies") and certificates representing
      4,750,000 of the Parent's fully paid and non-assessable Common Shares (the
      "Subject Securities");

- 2 - 

	C. 	
      The Buyer wishes to designate Clark Wilson as the Escrow
      Agent pursuant to the Purchase Agreement (which designation the
      Representative approves) and Clark Wilson wishes to accept such
      designation, all upon the terms hereinafter set out; and

	 	 
	D. 	
      Notwithstanding any provision of the Purchase Agreement,
      the Buyer and the Sellers have agreed that the Subject Monies and the
      Subject Securities shall be held by Clark Wilson and released thereby only
      in accordance herewith.

THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties hereto
covenant and agree as follows: 

1.                       
INTERPRETATION 

1.1             
        In this Agreement: 

	 	(a) 	
      the headings have been inserted for convenience of
      reference only and in no way define, limit, or enlarge the scope or
      meaning of the provisions of this Agreement;

	 	 	 
	 	(b) 	
      all references to any party, whether a party to this
      Agreement or not, shall be read with such changes in number and gender as
      the context or reference requires;

	 	 	 
	 	(c) 	
      when the context hereof makes it possible, the word
      "person" includes in its meaning any firm and any body corporate or
      politic; and

	 	 	 
	 	(d) 	
      in this Agreement and the recitals hereto, unless there
      is something in the subject or context inconsistent therewith, all
      capitalized terms used and not otherwise defined herein shall have the
      meaning assigned to them in the Purchase Agreement and, notwithstanding
      any other provision of the Purchase Agreement, if a conflict or
      inconsistency exists between a provision of this Agreement and a provision
      of the Purchase Agreement, the provisions of this Agreement shall
      prevail.

2.                       
DEPOSIT INTO ESCROW 

2.1                      At
Closing, the Buyer shall deliver to Clark Wilson: (a) a certified cheque or bank
draft in the amount of US$300,000, representing the Subject Monies; and (b) two
share certificates (the "Share Certificates") each representing 2,375,000
Common Shares registered in the name of the Representative, to be held in escrow
by Clark Wilson in accordance with the terms and subject to the conditions set
out herein. 

2.2                      At
Closing, the Representative shall deliver to Clark Wilson a duly executed power
of attorney, in form and substance satisfactory to Clark Wilson, in respect of
the Subject Securities represented by the Share Certificates. Without limiting
the generality of the foregoing, the Representative hereby appoints Clark
Wilson, without any further act of the Representative or any of the Sellers, as
the agent and attorney-in-fact for and behalf of the Representative in respect
of the Share Certificates. 

- 3 - 

3.                      
 ESCROW PROVISIONS 

3.1                     
Clark Wilson shall hold the Subject Securities and the Subject Monies (which
shall be deposited into a segregated interest-bearing trust account at a
Canadian chartered bank or similar financial institution of the kind of account
normally used for such purposes) for the purpose of securing the indemnification
obligations of the Sellers pursuant to Article VIII of the Purchase Agreement
for a period of six months commencing on the Closing Date, subject to the
provisions of Section 3.2 hereof (the "Escrow Period"). The Subject
Monies plus any interest accrued thereon, the Subject Securities and any Common
Shares or other equity securities issued or distributed by the Parent in respect
of the Subject Securities during the Escrow Period (the "New Shares"), as
held by Clark Wilson, are hereinafter collectively referred to as the "Escrow
Fund". 

3.2                      Notwithstanding
any other provision hereof, three months from the Closing Date the Escrow Period
with respect to one-half of the Subject Monies and one-half of the Subject
Securities shall terminate. At such time, Clark Wilson shall: (a) wire to the
Representative, as per the Representative’s wire instructions, the amount of
US$150,000, representing one-half of the Subject Monies, plus the interest
accrued thereon; and (b) deliver, via courier, to the Parent’s transfer agent
(the "Transfer Agent") the Share Certificate representing 2,375,000
Common Shares, representing one-half of the Subject Securities, along with any
related New Shares. The Parent shall instruct the Transfer Agent and shall cause
the Transfer Agent to issue to the Sellers stock certificates representing such
Common Shares, as instructed by the Representative. Notwithstanding the
foregoing, if the said portion of the Subject Monies and/or the Subject
Securities are necessary to fully satisfy any unsatisfied claims made pursuant
to Article VIII of the Purchase Agreement, as specified in any Indemnity Claim
Notice received by Clark Wilson prior to the expiration of the said three-month
period, then the said Subject Monies and Subject Securities shall be retained by
Clark Wilson; provided that if, between the expiry of the three-month period and
the expiry of the Escrow Period, Clark Wilson is instructed by notice in writing
executed by the Parent and the Representative, in form and substance
satisfactory to Clark Wilson, to deliver any or all of the Subject Monies (plus
the interest accrued thereon) and/or the Subject Securities (and any related New
Shares) to a person designated in such notice, Clark Wilson shall deliver such
Subject Monies and/or Subject Securities, as directed. 

3.3                     
Upon the expiration of the Escrow Period, Clark Wilson shall: (a) wire to the
Representative, as per the Representative’s wire instructions, the amount of any
Subject Monies remaining in the Escrow Fund plus the interest accrued thereon;
and (b) deliver, via courier, to the Transfer Agent the Share Certificate(s)
remaining in the Escrow Fund along with any related New Shares. The Parent shall
instruct the Transfer Agent and shall cause the Transfer Agent to issue to the
Sellers stock certificates representing such Common Shares, as instructed by the
Representative. Notwithstanding the foregoing, if the said portion of the
Subject Monies and/or the Subject Securities are necessary to fully satisfy any
unsatisfied claims made pursuant to Article VIII of the Purchase Agreement, as
specified in any Indemnity Claim Notice received by Clark Wilson prior to the
expiration of the Escrow Period, then the said Subject Monies and Subject
Securities shall be retained by Clark Wilson; provided that if, after the expiry
of the Escrow Period, Clark Wilson is instructed by notice in writing executed
by the Parent and the Representative, in form and substance satisfactory to
Clark Wilson, to deliver any or all of the Subject Monies and/or the Subject
Securities to a person designated in such notice, Clark Wilson 

- 4 - 

shall deliver such Subject Monies (plus the interest accrued
thereon) and/or Subject Securities (and any related New Shares), as directed.

3.4                      Clark
Wilson is authorized by each of the Buyer and the Sellers to make the deliveries
required by each of Sections 3.2 and 3.3 of this Agreement. 

3.5                      Notwithstanding
any other provision of the Purchase Agreement, the parties hereto agree that
Clark Wilson shall not be obliged to deliver copies of any proxy solicitation
materials received by it, if any, to the Sellers or to the Representative, nor
to provide quarterly statements to the Representative regarding the Escrow Fund.
At the time of making any distributions from the Escrow Fund, Clark Wilson shall
make reasonable efforts to provide the Representative with a written statement
setting out the amounts of the Subject Monies plus interest accrued thereon, the
Subject Securities and the New Shares remaining in the Escrow Fund. The Parent
agrees that, during the Escrow Period, it shall attend to the delivery of any
proxy solicitation materials to the Representative. 

4.                       
ESCROW AGENT 

4.1                     
The Parent and the Buyer shall, jointly and severally, from time to time, and at
all times hereafter, well and truly to save, defend and keep harmless and fully
indemnify Clark Wilson and its successors and assigns from and against all loss,
costs, charges, suits, demands, claims, damages and expenses which Clark Wilson
and its successors and assigns may at any time or times hereafter bear, sustain,
suffer or be put unto for or by reason or on account of its acting pursuant to
this Agreement or anything in any manner relating thereto or by reason of Clark
Wilson's compliance in good faith with the terms hereof. 

4.2                      If
case proceedings should hereafter be taken in any court respecting the Subject
Monies or the Subject Securities, Clark Wilson shall not be obliged to defend
any such action or submit its rights to the court until it has been indemnified
by other good and sufficient security in addition to the indemnity given in
Section 4.1 hereof against its costs of such proceedings. 

4.3                     
Clark Wilson shall not be bound in any way or by any contract or agreement,
verbal, written or otherwise, between the other parties hereto whether or not it
has notice thereof or of its terms and conditions and the only duty, liability
and responsibility of Clark Wilson to the other parties hereto with respect to
the subject matter hereof shall be to hold the Subject Monies and the Subject
Securities as set out herein and to deliver the same to such persons and other
such conditions as are set out herein or directed in writing by all the other
parties hereto. Without limiting the generality of the foregoing, Clark Wilson
shall have no duty, liability or responsibility to any of the other parties
hereto or their successors or assigns in respect of the loss of all or any of
the Subject Monies or the Subject Securities, except the duty to exercise in the
performance of its obligations hereunder such care, diligence and skill that a
reasonably prudent person would exercise in comparable circumstances. Clark
Wilson may act on the advice of legal counsel, but shall not be responsible for
acting or failing to act on the advice of legal counsel. 

4.4                      Clark
Wilson shall not be required to pass upon the sufficiency of any of the Subject
Securities or the notices delivered to Clark Wilson hereunder or to ascertain
whether or 

- 5 - 

not the person or persons who have executed, signed or
otherwise issued or authenticated the said documents have authority to so
execute, sign or authorize, issue or authenticate the said documents or any of
them, or that they are the same persons named therein or otherwise to pass upon
any requirement of such instruments that may be essential for their validity,
but it shall be sufficient for all purposes under this Agreement insofar as
Clark Wilson is concerned that the said documents are deposited with it as
specified herein by the other parties hereto. 

4.5                     
In the event that any or all of the Subject Monies or the Subject Securities are
attached, garnished or levied upon under any court order, or if the delivery of
such property is stayed or enjoined by any court order or if any court order,
judgment or decree is made or entered affecting such property or affecting any
act by Clark Wilson, Clark Wilson may, in its sole discretion, obey and comply
with all writs, orders, judgments or decrees so entered or issued, whether with
or without jurisdiction, notwithstanding any provision of this Agreement to the
contrary. If Clark Wilson obeys and complies with any such writs, orders,
judgments or decrees, it shall not be liable to any of the other parties hereto
or to any other person, form or corporation by reason of such compliance,
notwithstanding that such writs, orders, judgments or decrees may be
subsequently reversed, modified, annulled, set aside or vacated. 

4.6                     
Except as otherwise provided herein, Clark Wilson is authorized and directed to
disregard in its sole discretion any and all notices and warnings which may be
given to it by any of the other parties hereto or by any other person, firm,
association or corporation. It shall, however, at its sole discretion, obey the
order, judgment or decree of any court of competent jurisdiction, and it is
hereby authorized to comply with and obey such orders, judgments or decrees and
in case of such compliance, it shall not be liable by reason thereof to any of
the other parties hereto or to any other person, firm, association or
corporation, even if thereafter any such order, judgment or decree may be
reversed, modified, annulled, set aside or vacated. 

4.7                     
If Clark Wilson receives any valid court order contrary to the provisions of
this Agreement, Clark Wilson may continue to hold any or all of the Subject
Monies and the Subject Securities until the lawful determination by a court of
competent jurisdiction or otherwise of the issue between the other parties
hereto. 

4.8                     
If written notice of protest is made by the Buyer or the Representative to Clark
Wilson to any action contemplated by Clark Wilson under this Agreement, and such
notice sets out reasons for such protest, Clark Wilson may at its sole
discretion continue to hold any or all of the Subject Monies and the Subject
Securities until the right to the Subject Monies and/or Subject Securities is
legally determined by a court of competent jurisdiction or otherwise. 

4.9                     
Clark Wilson may resign as Escrow Agent by giving not less than ten (10) days
written notice thereof to the Buyer and the Representative. The Buyer and the
Representative may terminate Clark Wilson by giving not less than ten (10) days
written notice to Clark Wilson. The resignation or termination of Clark Wilson
shall be effective, and Clark Wilson shall cease to be bound by this Agreement,
on the date that is ten (10) days after the date of receipt of the termination
notice given hereunder or on such other date as Clark Wilson, the Buyer and the
Representative may agree upon. All indemnities granted to Clark Wilson hereunder
shall survive: (a) the termination of this Agreement; or (b) the termination or
resignation of Clark Wilson for whatever reason. In the event of termination or
resignation of Clark Wilson, Clark 

- 6 - 

Wilson shall, within that ten (10) days notice period, deliver
the Subject Monies, the Subject Securities and any other property in the Escrow
Fund to the new Escrow Agent to be named by the Buyer and the Representative.

4.10                     Notwithstanding
anything to the contrary contained herein, Clark Wilson may act upon any written
instructions given jointly by the Parent and the Representative. 

4.11                     Notwithstanding
any other provision hereof, if any dispute arises between any of the parties
hereto with respect to this Agreement or any matters arising in respect thereof,
Clark Wilson may in its sole discretion deliver and interplead the Subject
Monies, the Subject Securities and/or any other property in the Escrow Fund into
court and such delivery and interpleading shall be an effective discharge to
Clark Wilson of all of its obligations hereunder. 

5.                       
FEES 

5.1                      The
Buyer shall pay all of the compensation of Clark Wilson and shall reimburse
Clark Wilson for any and all reasonable expenses, disbursements and advances
made by Clark Wilson in the performance of its duties hereunder, including, but
not limited to, reasonable fees, expenses and disbursements incurred by its
counsel. 

6.                       
REPRESENTATIVE 

6.1                      The
Representative may be changed in accordance with the provisions of Section 8.5
of the Purchase Agreement. In such event, a Majority of the Sellers shall notify
Clark Wilson, the Parent and the Buyer in writing of any such change and Clark
Wilson, the Parent and the Buyer shall be entitled to rely upon such notice
without further inquiry. 

6.2                      Notices
or communications to or from the Representative shall constitute notice to or
from each of the Sellers. A decision, act, consent or instruction of the
Representative shall constitute a decision of all of the Sellers and shall be
final, binding and conclusive upon each of such Sellers; and Clark Wilson, the
Parent, the Buyer and all other members of the Seller Group may rely upon any
such decision, act, consent or instruction of the Representative as being the
decision, act, consent or instruction of each and every such Seller. Clark
Wilson, the Parent, the Buyer and all other members of the Seller Group are
hereby relieved from any liability to any person for any acts done by them in
accordance with such decision, act, consent or instruction of the
Representative. The Representative shall not be liable to the Sellers for any
act done or omitted hereunder as the Representative except as provided in
Section 8.5 of the Purchase Agreement.

7.                       
GENERAL 

7.1                     
Except as otherwise provided herein, no subsequent alteration, amendment,
change, or addition to this Agreement shall be binding upon the parties hereto
unless reduced to writing and signed by the parties hereto. 

7.2                      This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective heirs, executors, administrators, successors and assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties 

- 7 - 

hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. 

7.3                      The
parties hereto shall execute and deliver all such further documents, do or cause
to be done all such further acts and things, and give all such further
assurances as may be necessary to give full effect to the provisions and intent
of this Agreement. 

7.4                     
This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia and the federal laws of Canada applicable
therein. 

7.5                      The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the provisions of this
Agreement, this being in addition to any other remedy to which they are entitled
under this Agreement. 

7.6                      Any
notice required or permitted to be given under this Agreement shall be in
writing and may be given by delivering, sending by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy, or sending by prepaid registered mail, the notice to the following
address:

	 	(a) 	
      If to the Parent or the Buyer:

	 	 	 
	 		
      1010 - 789 West Pender Street 
Vancouver, British
      Columbia 
Canada V6C 1H2

	 	 	 
	 		
      Attention:      George Orr
      
Telephone:    (604) 606-7978
      
Facsimile:       (604)
606-7980

	 	 	 
	 	(b) 	
      If to the Representative:

	 	 	 
	 		
      Raymond T. Pirraglia 
74 Narrows Road South 
Staten
      Island, New York 10305

	 	 	 
	 		
      Telephone:    (718) 273-5950
      
Facsimile:      (718)
  815-2987

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	 	(c) 	If to Clark Wilson: 
	 	  	 
	 	  	Clark Wilson LLP 
	 	  	800 – 885 West Georgia St 
	 	  	Vancouver, British Columbia 
	 	  	Canada V6C 3H1 
	 	  	 
	 	  	Attention:      Virgil
      Z. Hlus 
	 	  	Telephone:    (604) 687-5700
  
	 	  	Facsimile:      (604)
      687-6314 

(or to such other address as any party may specify by notice in
writing to another party). Any notice delivered or sent by electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy on a business day shall be deemed conclusively to have been
effectively given on the day the notice was delivered, or the electronic
communication was successfully transmitted, as the case may be. Any notice sent
by prepaid registered mail shall be deemed conclusively to have been effectively
given on the third business day after posting; but if at the time of posting or
between the time of posting and the third business day thereafter there is a
strike, lockout, or other labour disturbance affecting postal service, then the
notice shall not be effectively given until actually delivered. 

7.7                     
Time is of the essence of this Agreement. 

7.8                      This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties hereto and delivered
to the other parties hereto, it being understood that all parties hereto need
not sign the same counterpart. This Agreement may be executed by delivery of
executed signature pages by fax and such fax execution shall be effective for
all purposes. 

IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed as of the day and year first written above. 

	MEGAWEST ENERGY CORP. 	 	MEGAWEST ENERGY (USA) CORP. 
	  	  	 	  	  
	  	  	 	  	  
	Per: 	/s/ George
      Orr 	 	Per: 	/s/ George
      Orr 
	  	Name: George Orr 	 		Name: George Orr 
	  	Title: Chief Financial Officer 	 		Title: Chief Financial Officer 
	  	  	 	  	  
	  	  	 	  	  
	THE REPRESENTATIVE: 	 	CLARK WILSON LLP 
	  	  	 	  	  
	  	/s/ Raymond
      T. Pirraglia 	 	Per: 	/s/ Bernard
      I. Pinsky 
		Raymond T. Pirraglia 	 		Name: Bernard I. Pinsky 
	  	  	 		Title: PartnerFiled by Automated Filing Services Inc. (604) 609-0244 - MegaWest Energy Corp. - Exhibit 4.24

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT made effective as of the 1st day of
January, 2007.

BETWEEN:

  
    
      
        MEGAWEST ENERGY (USA) CORP., a body corporate
          duly incorporated under the laws of the State of Nevada with an office
          in the City of Calgary, in the Province of Alberta (hereinafter called
          the “Corporation”)

      

    

  

- and -

  
    
      
        GEORGE T. STAPLETON, II, a resident of the City
          of Sugar Land, in the State of Texas (hereinafter called the “Executive”)

      

    

  

           
  WHEREAS the Corporation wishes to employ the Executive and the
Executive wishes to be employed by the Corporation as the Chief Executive
Officer of the Corporation; and

         
    AND WHEREAS the Corporation and the Executive wish to clarify
the terms of the Executive’s employment with the Corporation.

          
   NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of
the mutual covenants herein contained, and for other good valuable consideration
(the receipt and sufficiency of which is hereby acknowledged), the parties
hereto agree as follows:

ARTICLE 1 
DEFINITIONS AND INTERPRETATION

          1.1       
Definitions

In this Agreement, unless there is
something in the context or subject matter inconsistent therewith, the following
defined terms shall have the meanings hereinafter set forth:

	 	(a) 	
      “Affiliate” of a Person means any corporation,
      partnership, joint venture, or unincorporated organization in which such
      Person holds 20% or more of the outstanding capital shares or equity
      interests; provided that the Parent and each of its Affiliates shall at
      all times be deemed to be Affiliates of the Corporation;

	 	 	 	 
	 	(b) 	
      “Annual Salary” means the annual salary of the
      Executive as defined in Schedule “A”;

	 	 	 	 
	 	(c) 	
      “Benefits” means the benefits and entitlements set
      out in Schedule “B”;

	 	 	 	 
	 	(d) 	
      “Board” means the Board of Directors of the
      Corporation;

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

	 	 	 	 
	 		(i) 	
      the purchase or acquisition of Common Shares of the
      Parent and/or securities convertible into Common Shares of the Parent or
      carrying the right to acquire Common Shares of the Parent (“Convertible
      Securities”) as a result of which a Person, group of Persons or
      Persons acting jointly or in concert, or any Affiliates of any such
      Person, group of Persons or any of such Persons
acting

- 2 -

	 		
      jointly or in concert (collectively the “Holders”)
      beneficially own or exercise control or direction over Common Shares
      and/or Convertible Securities of the Parent such that, assuming after the
      conversion of the Convertible Securities beneficially owned by the Holders
      thereof, would have the right to cast more than 50% of the votes attached
      to all Common Shares of the Parent”;

	 	 	 
	 	(ii) 	
      approval by the Parent’s shareholders
  of:

	 	(A) 	
      an amalgamation, arrangement, merger or other
      consolidation or combination of the Parent with another entity pursuant to
      which the shareholders of the Parent immediately before such amalgamation,
      arrangement, merger or other consolidation or combination do not own
      securities of the successor or continuing entity which would entitle them
      to cast more than 50% of the votes attaching to all of the Common Shares
      immediately thereafter,

	 	 	 
	 	(B) 	
      a liquidation, dissolution or winding-up of the
      Parent,

	 	 	 
	 	(C) 	
      the sale, lease or other disposition of all or
      substantially all of the assets of the Parent,

	 	 	 
	 	(D) 	
      the election at a meeting of the Parent’s shareholders of
      a number of directors, who were not included in the slate for election as
      directors approved by the Parent’s prior board of directors, and would
      represent a majority of the Parent’s board of directors, or

	 	 	 
	 	(E) 	
      the appointment of a number of directors which would
      represent a majority of the Parent’s board of directors and which were
      nominated by any holder of voting shares of the Parent or by any group of
      holders of voting shares of the Parent acting jointly or in concert and
      not approved by the Parent’s prior board of
directors;

	 	(f) 	
      “Common Shares” means the common shares of the
      Parent;

	 	 	 
	 	(g) 	
      “Confidential Information” means information,
      data, technology, material or other property, of any kind and in whatever
      form, that is confidential or proprietary to the Corporation or any
      Affiliate, including without limitation, engineering reports, geological
      information, maps, well data, prospect data and seismic information or any
      other information the disclosure of which could be reasonably expected to
      materially adversely affect the Corporation or any Affiliate or which the
      Corporation or any Affiliate is obliged by contract or law to treat as
      confidential, provided that the Executive is aware of such obligation.
      Notwithstanding the preceding sentence, “Confidential Information”
      does not include information (1) which is or becomes generally available
      to the public, other than as a result of a disclosure in violation of this
      Agreement, (2) which the Executive can conclusively establish was already
      lawfully in the possession of the Executive prior to the Executive’s
      employment with the Corporation, or (3) the disclosure of which is
      required pursuant to judicial or regulatory action, law or similar
      process;

	 	 	 
	 	(h) 	
      “Constructive Dismissal” shall mean the occurrence
      of any of the following events:

- 3 -

	 	(i) 	
      a material change (other than those which are clearly
      consistent with a promotion) in the Executive’s position or duties, 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,
      provided that, such term shall not include a change consistent with the
      Corporation splitting a position into one or more positions in conjunction
      with a corporate reorganization based on the demands of such position so
      long as there is no reduction in the Executive’s Annual Salary or a
      material reduction in Benefits or other remuneration or responsibilities
      taken as a whole;

	 	 	 
	 	(ii) 	
      a reduction by the Corporation in the Executive’s Annual
      Salary or any material change in the basis upon which the Executive’s
      Annual Salary is determined, provided however it is understood there may
      be economic circumstances wherein the Executive and the Corporation agree
      that it would be in the best interest of the Corporation to temporarily
      reduce the Executive’s Annual Salary and the annual salary of other
      executives of the Corporation on a pro rata basis, conditional on
      reinstatement at some agreed time in the future and that such an event
      will not be considered as a Constructive Dismissal;

	 	 	 
	 	(iii) 	
      a change in the location at which the Executive is
      required to provide his principal services by more than 50miles;
  or

	 	 	 
	 	(iv) 	
      a material breach of this Agreement by the
      Corporation.

Provided, however, “Constructive
Dismissal” shall expressly be deemed not to include the following:

	 	(i) 	
      the occurrence of any of the aforesaid events with the
      consent of the Executive; or

	 	 	 
	 	(ii) 	
      termination of the employment of the Executive for Just
      Cause, the Executive’s death or Disability or pursuant to Section
      4.5(a);

	 	(i) 	
      “Date of Termination” shall mean the date of
      cessation of the Executive’s employment with the Corporation, regardless
      of the reason for cessation of employment;

	 	 	 	 
	 	(j) 	
      “Disability” shall mean the Executive’s inability
      to perform the material and substantial duties of his employment on a
      full-time basis for a period of six (6) cumulative months out of any
      18-month period where such inability arises as a result of sickness or
      injury;

	 	 	 	 
	 	(k) 	
      “Effective Date” shall be the effective date of a
      Change of Control;

	 	 	 	 
	 	(l) 	
      “Exchange Act” means the United States Securities
      Exchange Act of 1934, as amended from time to time.

	 	 	 	 
	 	(m) 	
      “Just Cause” means any act or course of conduct
      which at law constitutes just cause and shall include, without
      limitation:

	 	 	 	 
	 		(i) 	
      the continued failure by the Executive to substantially
      perform his duties according to the terms of his employment (other than
      any such failure resulting from the Executive’s Disability) after the
      Corporation has given the Executive reasonable notice of such failure and
      a reasonable opportunity to correct it;

- 4 -

	 	(ii) 	
      a breach by the Executive of any provision in Article 5
      or a material breach of this Agreement by the Executive;

	 	 	 
	 	(iii) 	
      the conviction of the Executive of an indictable offence
      or fraud; or

	 	 	 
	 	(iv) 	
      fraud, theft or wilful misconduct by the Executive that
      relates to or affects the Corporation or the Executive’s employment with
      the Corporation;

The Executive’s employment shall not be
considered as being terminated for Just Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership of the
Board (not counting the Executive, if the Executive shall then be a member of
the Board) at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before the Board), finding that in the
good faith opinion of the Board the Executive was guilty of the conduct
constituting Just Cause and specifying the particulars thereof. Any dispute
concerning whether Just Cause existed for a termination will be resolved by
arbitration as set forth in Article 6. The Corporation and the Executive agree
to use their best efforts to expedite any such arbitration. In the event an
arbitrator determines that Just Cause did not exist for a termination
purportedly for Just Cause, the termination will be deemed to have been a
termination without Just Cause and the Executive will be entitled to receive any
payments he would have received had his termination been specified as one
without Just Cause under Section 4.4.

	 	(n) 	
      “Parent” means MegaWest Energy Corp., a body
      corporate duly incorporated under the laws of the Province of British
      Columbia with an office in the City of Calgary, in the Province of
      Alberta. The Corporation is a wholly owned subsidiary of Parent.

	 	 	 
	 	(o) 	
      “Perquisites” means the perquisites set out in
      Schedule “C”;

	 	 	 
	 	(p) 	
      “Person” means any individual, corporation,
      limited liability corporation, limited or general partnership, joint
      venture, association, joint-stock corporation, trust, plan, unincorporated
      organization or government or any agency or political subdivisions
      thereof;

	 	 	 
	 	(q) 	
      “U.S. Stock Option Plan” means the Corporation’s
      supplementary stock option plan (the “Plan”) which was made
      effective on the 6th day of January, 2007 by way of a
      resolution of all of the directors of the Parent consenting to and
      adopting the Plan.

1.2       
Interpretation

             
For the purposes of this Agreement, except as otherwise expressly provided:

	 	(a) 	
      "this Agreement" means this Agreement, including
      the schedules hereto, and not any particular part, section or other
      portion hereof, and includes any agreement, document or instrument entered
      into, made or delivered pursuant to the terms hereof, as the same may,
      from time to time, be supplemented or amended and in effect;

	 	 	 
	 	(b) 	
      all references in this Agreement to a designated "part",
      "section" or other subdivision or to a schedule are references to the
      designated part, section, or other subdivision of, or schedule to, this
      Agreement;

- 5 -

	 	(c) 	
      the words "hereof", "herein", "hereto" and "hereunder"
      and other words of similar import refer to this Agreement as a whole and
      not to any particular part, section or other subdivision or schedule
      unless the context or subject matter otherwise requires;

	 	 	 
	 	(d) 	
      the division of this Agreement into parts, sections and
      other portions and the insertion of headings are for convenience of
      reference only and are not intended to interpret, define or limit the
      scope, extent or intent of this Agreement or any provision
  hereof;

	 	 	 
	 	(e) 	
      unless otherwise provided herein, all references to
      currency in this Agreement are to lawful money of the United States of
      America and all amounts to be calculated or paid pursuant to this
      Agreement are to be calculated in lawful money of the United States of
      America;

	 	 	 
	 	(f) 	
      the singular of any term includes the plural, and vice
      versa, and the use of any term is generally applicable to any gender and,
      where applicable, a body corporate, firm or other entity, and the word
      "or" is not exclusive and the word "including" is not limiting whether or
      not non-limiting language (such as "without limitation" or "but not
      limited to" or words of similar import) is used with reference thereto;
      and

	 	 	 
	 	(g) 	
      all references to "approval", "authorization", "consent"
      or "direction" in this Agreement means written approval, authorization,
      consent or direction.

ARTICLE 2 
EMPLOYMENT

2.1       
Engagement

	 	(a) 	
      Subject to the terms and conditions hereof, the
      Corporation shall employ the Executive as the Chief Executive Officer of
      the Corporation and, at the request of the Board, some or all of its
      Affiliates. In addition, the Executive will be nominated to and will sit
      on the Board. The Executive hereby accepts such employment in accordance
      with the terms and conditions of this Agreement. The Executive agrees to
      perform those duties and functions and have those responsibilities which
      are normally associated with his position in addition to carrying out such
      other duties and responsibilities as are assigned to him from time to time
      by the Board.

	 	 	 
	 	(b) 	
      The Corporation shall also make the Executive available
      to act as President and CEO of the Parent and Chairman of the Board of
      Directors of the Parent and the Executive accepts such employment upon the
      terms and conditions set forth in this Agreement. It is understood that
      the duties and functions of the Executive with respect to the Parent
      should not constitute more than 25% of all of the duties and functions of
      the Executive under this Agreement.

2.2       
Performance

	 	(a) 	
      The Executive shall devote the necessary energy, skill
      and best commercial efforts to the performance of his duties with respect
      to the Corporation hereunder, in a manner that will faithfully and
      diligently further the business and interests of the Corporation. The
      Executive shall provide his principal services to the Corporation from his
      home office in the State of Texas. The Executive shall at all times comply
      with all applicable laws and

- 6 -

	 		
      all policies and instructions of the Corporation in
      effect from time to time unless any such policies are in direct conflict
      with the terms of this Agreement, in which case, the terms of this
      Agreement shall govern to the extent of the conflict.

	 	 	 
	 	(b) 	
      The Executive shall devote the necessary energy, skill
      and best commercial efforts to the performance of his duties with respect
      to the Parent hereunder, in a manner that will faithfully and diligently
      further the business and interests of the Parent. The Executive shall
      provide his principal services to the Parent from such locations as the
      Parent may require. The Executive shall at all times comply with all
      applicable laws and all policies and instructions of the Parent in effect
      from time to time unless any such policies are in direct conflict with the
      terms of this Agreement, in which case, the terms of this Agreement shall
      govern to the extent of the conflict.

	 	 	 
	 	(c) 	
      The Executive may serve as a member of the board of
      directors of E-T Energy Ltd. The Executive may also serve as a member of
      the board of directors of another company if the Board, or an appropriate
      committee thereof, determines in its sole discretion that such membership
      is not adverse to the interests of the Corporation or the
  Parent.

2.3       
Term

             
This Agreement shall be for an indefinite period and may be terminated by the
Executive or the Corporation in accordance with Article 4 hereof.

ARTICLE 3 
REMUNERATION AND BENEFITS 

3.1       
Annual Salary

As consideration for the services
provided herein, the Corporation shall pay to the Executive his Annual Salary,
as defined in Schedule “A”, (less all applicable statutory withholdings and
deductions) on the Corporation’s normal payroll cycle during the term of this
Agreement.

3.2       
Commencement Bonus

Upon the execution of this Agreement,
the Corporation shall pay the Executive a commencement bonus of $300,000
USD.

3.3       
Discretionary Bonus

During the term of this Agreement and
at the discretion of the Board, the Executive may also be paid a discretionary
bonus, cash or otherwise, as additional remuneration for his services under this
Agreement with the discretionary bonus entitlement to be determined at such a
time as bonuses are scheduled for determination consistent with the
Corporation’s bonus program or policy. 

3.4       
Stock Options

	 	(a) 	
      In consideration for the performance of the Executive’s
      duties to the Corporation only, the Corporation shall issue 1,000,000
      Common Share options to the Executive in his capacity as Chief Executive
      Officer with an exercise price of $0.50 per Common Share under the terms
      and conditions of the Corporation’s Plan, to be issued upon commencement
      of employment, and shall be fully vested and may be exercised at any time
      by the both before and after termination by the Executive or his legal
      heirs until

- 7 -

	 		
      January 5, 2011. The options may also at the Executive’s
      or his legal heir(s) election be exercised on a cashless basis. Upon
      written request by the Executive the Corporation agrees to register for
      resale the shares underlying the options or shares issued pursuant to the
      options at its expense;

	 	 	 
	 	(b) 	
      In consideration for the performance of the Executive’s
      duties to the Corporation only, the Corporation shall issue 500,000 Common
      Share options to the Executive in his capacity as Director with an
      exercise price of $0.10 per Common Share under the terms and conditions of
      the Corporation’s Plan, to be issued upon commencement of employment, and
      to vest immediately;

	 	 	 
	 	(c) 	
      During the term of this Agreement and at the discretion
      of the Board acting on the recommendations of the Parent’s Corporate
      Governance and Human Resources Committee (or any replacement committee),
      the Executive may be granted options to purchase Common Shares in
      accordance with the Corporation’s Plan, as additional remuneration for the
      performance of the Executive’s duties to the Corporation
  only.

3.5       
Benefits

The Executive shall be entitled to
participate in and receive the Benefits set out in Schedule “B” to this
Agreement. The Corporation shall provide Benefits in accordance with the formal
plan documents or policies, and any issues with respect to entitlement or
payment of Benefits shall be governed by the terms of such documents or policies
establishing the Benefit in issue. Nothing herein shall be construed to limit
the right of the Corporation to amend or terminate any of the Benefits, or any
other employee benefits plans or programs provided by the Corporation at any
time, pursuant to the governing documents or policies establishing such
benefits.

3.6       
Perquisites

The Executive shall be entitled to
participate in and receive the perquisites set out in Schedule “C” to this
Agreement.

3.7       
Vacation

The Executive shall be entitled to five
(5) weeks paid annual vacation in accordance with the Corporation’s policies and
practices in effect at the relevant time for senior executives.

ARTICLE 4 
TERMINATION OF EMPLOYMENT 

4.1       
Death

The Executive’s employment and this
Agreement shall be deemed terminated on death, at which time the Executive’s
personal representatives shall be entitled to receive the amount of unpaid
Annual Salary to and including the date of death, any bonus declared but not yet
paid, plus all outstanding vacation pay and expense reimbursements (in each case
less applicable withholdings and deductions). Any options to purchase Common
Shares shall be treated in the manner set forth in Section 3.4 (a) except that
the options shall expire on the earlier of their expiry date or eighteen months
after the death of the Executive.

- 8 -

4.2       
Disability

	 	(a) 	
      The Executive shall cooperate in all respects with the
      Corporation if a question arises as to whether the Executive has a
      Disability. The Executive shall, as reasonably requested by the
      Corporation, submit to an examination by a medical doctor or other health
      care specialist mutually selected by the Corporation and the Executive. In
      the event the parties cannot agree upon a competent medical professional,
      such disagreement will be resolved by arbitration as set forth in Article
      6. If the Corporation and the Executive are unable to agree on whether a
      Disability exists, the determination of the specialist selected pursuant
      hereto shall be determinative.

	 	 	 	 	 
	 	(b) 	
      In the event of a Disability of the Executive, the
      Executive’s employment with the Corporation shall be deemed to be
      frustrated and, unless the Board determines otherwise, shall automatically
      terminate. If the Executive’s employment is terminated by reason of
      Disability, then:

	 	 	 	 	 
	 		(i) 	
      the Corporation shall pay the Executive:

	 	 	 	 	 
	 			(A) 	
      the amount of unpaid Annual Salary to and including the
      Date of Termination, any declared but unpaid bonus, and all outstanding
      vacation pay;

	 	 	 	 	 
	 			(B) 	
      outstanding expense reimbursements;

	 	 	 	 	 
	 			(C) 	
      upon receipt of an executed Release in the form of the
      Release attached as Schedule “D” to this Agreement, an amount equal to the
      Termination Amount payable to the Executive pursuant to Section
    4.4(b)

	 	 	 	 	 
	 			
      (in each case, less applicable withholdings and
      deductions); and

	 	 	 	 	 
	 		(ii) 	
      any outstanding options to purchase Common Shares shall
      be treated in the manner set forth in Section
4.4(c).

4.3       
Termination by the Corporation for Just Cause and Termination by the
Executive Without Constructive Dismissal

	 	(a) 	
      The Corporation may, at any time, immediately terminate
      the Executive’s employment for Just Cause by giving written notice setting
      forth the nature of the Just Cause.

	 	 	 
	 	(b) 	
      The Executive may terminate his employment with the
      Corporation for any reason upon thirty (30) days’ written
notice.

	 	 	 
	 	(c) 	
      If the Executive’s employment is terminated either by the
      Corporation for Just Cause or by the Executive other than for Constructive
      Dismissal, the Corporation shall pay to the Executive, within five (5)
      business days following the Date of Termination, the amount of unpaid
      Annual Salary to and including the Date of Termination, any declared but
      unpaid bonus, plus all outstanding vacation pay and expense reimbursements
      (in each case less applicable statutory withholdings and deductions), and
      the Executive has the right to exercise any vested options, up to and
      including, the Date of Termination.

- 9 -

4.4       
Termination by the Corporation Without Just Cause or Termination by the
Executive for Constructive Dismissal 

	 	(a) 	
      The Corporation may, in its absolute discretion,
      immediately terminate the Executive’s employment at any time without Just
      Cause for any reason provided that such termination without Just Cause is
      approved beforehand by a majority of the Board. At any time within 30 days
      following an event that constitutes a Constructive Dismissal hereunder,
      the Executive may terminate his employment with the Corporation upon
      thirty (30) days’ written notice.

	 	 	 	 	 
	 	(b) 	
      If the Executive’s employment is terminated either by the
      Corporation without Just Cause or by the Executive for Constructive
      Dismissal, then the Corporation shall pay to the Executive:

	 	 	 	 	 
	 		(i) 	
      the amount of unpaid Annual Salary to and including the
      Date of Termination;

	 	 	 	 	 
	 		(ii) 	
      all outstanding vacation pay and expense
      reimbursements;

	 	 	 	 	 
	 		(iii) 	
      any bonus that has been declared by the Board but not yet
      paid; and

	 	 	 	 	 
	 		(iv) 	
      within five (5) business days of receipt of an executed
      release in the form of the Release attached as Schedule ”D” to this
      Agreement, and expiration of the Release Agreement’s seven-day revocation
      period, payment of the following amount in a lump sum, in each case less
      all applicable statutory withholdings and deductions (collectively, the
      “Termination Amount”):

	 	 	 	 	 
	 			(A) 	
      a severance payment in the amount of one (1) years’
      Annual Salary, representing compensation for loss of employment;
    plus

	 	 	 	 	 
	 			(B) 	
      the sum of $10,000, less applicable withholdings and
      deductions, representing compensation for the loss of Benefits and
      Perquisites.

	 	 	 	 	 
	 	(c) 	
      Notwithstanding the provisions of any applicable stock
      option agreement, in the event of termination under this Section 4.4, all
      stock options shall automatically vest on the Date of Termination, and
      such options shall then be exercisable and expire in accordance with the
      terms of the Plan and the applicable stock option
  agreements.

4.5       
Change of Control

	 	(a) 	
      In the event of a Change of Control of the
      Corporation:

	 	 	 	 
	 		(i) 	
      the Corporation shall have the option, within seven (7)
      days of the Effective Date, to terminate the employment of the Executive
      effective immediately; and

	 	 	 	 
	 		(ii) 	
      the Executive shall have the option, within fourteen (14)
      days of the Effective Date, to terminate his employment with the
      Corporation upon providing thirty (30) days written notice (which notice
      may be provided at any time during such 14-day period following the
      Effective Date).

	 	 	 	 
	 	(b) 	
      If the Executive’s employment is terminated by either the
      Corporation or the Executive pursuant to Section 4.5(a),
  then:

- 10 -

	 	(i) 	
      the Corporation shall pay to the Executive, upon receipt
      of an executed release in the form of the Release attached as Schedule “D”
      to this Agreement, and expiration of the Release Agreement’s seven-day
      revocation period, an amount equal to the Termination Amount payable to
      the Executive pursuant to Section 4.4(b); and

	 	 	 
	 	(ii) 	
      notwithstanding the provisions of any applicable stock
      option agreement, in the event of termination pursuant to this Section
      4.5, all stock options shall automatically vest on the Date of
      Termination, and such options shall then be exercisable and expire in
      accordance with the terms of the Plan and the applicable stock option
      agreements.

	 	(c) 	
      If neither the Corporation nor the Executive elects to
      exercise the option to terminate the Executive’s employment pursuant to
      Section 4.5(a), the Executive’s employment shall continue in accordance
      with the terms of this Agreement, or on such other terms as mutually
      agreed by the Corporation and the Executive.

4.6       
Payment of Termination Amount

The Termination Amount payable to the
Executive pursuant to Sections 4.4(b), 4.4(c) or 4.5(b) shall not be reduced in
any respect in the event that the Executive shall secure or shall not reasonably
pursue alternative employment following the termination of the Executive’s
employment.

4.7       
Resignation from Offices and Directorships

Effective on the Date of Termination,
the Executive shall resign from all offices and directorships in the Corporation
and its Affiliates, save and except directorships of Affiliates that are public
companies, and the Executive shall not be entitled to receive any payment or
compensation for loss of office or directorship or otherwise by reason of the
resignation. If the Executive fails to resign as aforesaid, the Corporation is
irrevocably authorized to remove him from all offices and directorships held,
save and except those held with Affiliates which are public companies, and to
sign any documents on his behalf and do any things necessary or requisite to
give effect to such documents or resignation.

4.8       
Options to Purchase Common Shares

Subject to the provisions of this
Article 4 providing for accelerated vesting of the Executive’s options to
purchase Common Shares in certain circumstances, in the event of termination of
the Executive’s employment, any options to purchase Common Shares must be
exercised in accordance with and shall expire in accordance with the Plan and
the applicable stock option agreements.

4.9       
Return of Property

On the Date of Termination, the
Executive shall promptly surrender to the Corporation all information in
whatever form (including all Confidential Information) and any other documents,
materials, data, property, information and equipment belonging to the
Corporation or relating to the Corporation’s business in his possession, custody
or control, and the Executive shall not thereafter retain or deliver to any
other Person any of the foregoing or any summary or memorandum thereof. 

- 11 -

4.10       Expenses
Relating to Enforcement of Rights

If the Executive shall successfully
seek to enforce any provision of this Agreement or to collect any amount claimed
to be due hereunder, the Executive shall be entitled to be reimbursed by the
Corporation for any and all of its out-of-pocket expenses, including reasonable
attorneys’ fees, incurred in connection with such enforcement and/or
collection.

ARTICLE 5
COMPETING INTERESTS, CONFIDENTIALITY AND
NON-SOLICITATION

5.1       
No Breach of Proprietary Rights of Third Parties

	 	(a) 	
      The Executive represents and warrants to the Corporation
      that (i) the Executive’s employment with the Corporation and his
      performance of this Agreement will not breach any agreement or other
      obligation with respect to the confidential or proprietary information of
      a third party; and (ii) the Executive is not bound by any written or oral
      agreement with any third party that conflicts with the Executive’s
      employment with the Corporation or his obligations hereunder.

	 	 	 
	 	(b) 	
      The Executive agrees that, during his employment with the
      Corporation and in the performance of his obligations hereunder, he shall
      not improperly bring to the Corporation or use any trade secrets or
      confidential or proprietary information of any third party or otherwise
      knowingly infringe on the proprietary rights of any third
  party.

5.2       
Non-Solicitation and Other Prohibited Actions

During the Executive’s employment with
the Corporation and for a period of twelve (12) months after the Date of
Termination, the Executive shall not, without the prior written consent of the
Corporation (i) directly or (ii) knowingly and indirectly: 

	 	(a) 	
      commence an offer of any nature or kind whatsoever for
      any securities or property or assets of the Parent or any of its
      Affiliates, including without limitation a tender or exchange
  offer;

	 	 	 
	 	(b) 	
      solicit proxies from holders of securities of the Parent
      or form, join or in any way participate with a “person” (as defined in
      Sections 13(d) or 14(d) of the Exchange Act, and the rules and regulations
      thereunder) that is or becomes a “beneficial owner” (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of the Parent’s
      securities representing fifty percent plus one share or more of the
      combined voting power of the Parent’s then outstanding voting
      securities;

	 	 	 
	 	(c) 	
      engage in any discussions or negotiations, conclude any
      understandings or enter into any agreement, or otherwise act in concert,
      with any third party to propose or effect any takeover bid, amalgamation,
      merger, arrangement or other business combination with respect to the
      Parent or any of its Affiliates or substantially all of the assets of the
      Parent or any of its Affiliates or to propose or effect any acquisition or
      purchase of any assets of the Parent or any of its Affiliates;

	 	 	 
	 	(d) 	
      institute any shareholder proposal in respect of the
      Parent or otherwise attempt to influence or control the conduct of the
      security holders of the Parent; or

- 12 -

	 	(e) 	
      take any action in furtherance of any of the
      foregoing,

whether for or on his behalf or for any
entity in which he shall have a direct or indirect interest (or any Affiliate of
any such entity) whether as a proprietor, partner, co-venturer, financier,
investor or stockholder, director, officer, employer, employee, servant, agent,
representative or otherwise.

	5.3 	
      Executive shall refrain, both during the term of
      employment and thereafter, from publishing any oral or written statements
      about any directors, officers, employees, agents, investors or
      representatives of the Corporation or any Affiliate that are slanderous,
      libelous, or defamatory; or that disclose private or confidential
      information about the business affairs, directors, officers, employees,
      agents, investors or representatives of the Corporation or any Affiliate;
      or that constitute an intrusion into the seclusion or private lives of any
      of such directors, officers, employees, agents, investors or
      representatives; or that give rise to unreasonable publicity about the
      private lives of such persons; or that place any such person in a false
      light before the public; or that constitute a misappropriation of the name
      or likeness of any such person. A violation or threatened violation of
      these restrictive covenants may be enjoined by a court of law
      notwithstanding the arbitration provisions of Article 6.

	 	 
	5.4 	
      Confidentiality

	 	(a) 	
      During the period of his employment with the Corporation
      and at any time thereafter, the Executive shall receive and hold all
      Confidential Information absolutely secret, undisclosed, in trust and in
      confidence, and shall comply with the Corporation’s policies and
      guidelines and use his best efforts for the protection of Confidential
      Information.

	 	 	 
	 	(b) 	
      The Executive shall not reveal or disclose to any Person
      outside the Corporation or use for his own benefit, whether by private
      communication or by public address or publication or otherwise, any
      Confidential Information without the Corporation’s specific written
      authorization or except as required by a mandatory provision of applicable
      law, provided however, that prior to any unauthorized use or disclosure of
      Confidential Information that is required by law, the Executive shall give
      the Corporation reasonable prior notice of any disclosure of Confidential
      Information required by law and, if requested by the Corporation, shall
      use reasonable efforts to obtain a protective order or similar protection
      for the Corporation and shall permit and cooperate with any effort by the
      Corporation to obtain such an order. The Executive shall take such action
      as is reasonably necessary to ensure that no family member of the
      Executive discloses or permits the disclosure of any Confidential
      Information.

	 	 	 
	 	(c) 	
      All originals, copies and other forms of Confidential
      Information, however and whenever produced, shall be the sole property of
      the Corporation, not to be removed from the premises or custody of the
      Corporation, except in the normal course of business, without in each
      instance first obtaining written consent or authorization of the
      Corporation.

	 	 	 
	 	(d) 	
      This Agreement and all information and documents
      concerning the substance and terms of this Agreement shall be Confidential
      Information and shall be maintained in confidence and shall not be
      disclosed to any other Person without the Corporation’s specific written
      authorization or as required by law or regulation.

5.5       
Acknowledgement

The Executive acknowledges and agrees
that:

- 13 -

	 	(a) 	
      he will receive or will become eligible to receive
      substantial benefits and compensation as a result of his employment by the
      Corporation and its subsidiaries under this Agreement, which benefits and
      compensation are offered to him only because and on condition of his
      willingness to commit his commercial best efforts and loyalty to the
      Corporation, including abiding by the terms and restrictions in this
      Article 5;

	 	 	 
	 	(b) 	
      in exchange for the Corporation’s promise to provide
      Executive with some or all of the Corporation’s Confidential Information
      to which Executive has not previously had access and of which Executive
      has not had previous knowledge, Executive agrees to abide by the terms and
      restrictions in this Article 5;

	 	 	 
	 	(c) 	
      as a result of the acquisition of Confidential
      Information, the Executive will occupy a position of trust and confidence
      with the Corporation and its Affiliates;

	 	 	 
	 	(d) 	
      the Executive’s position of trust and knowledge of
      Confidential Information would enable the Executive to put the Corporation
      at a significant competitive disadvantage if the Executive breaches the
      restrictions in this Article 5;

	 	 	 
	 	(e) 	
      irreparable damage would result to the Corporation if the
      provisions of this Article 5 hereof are not specifically enforced, and the
      Executive waives all defences to the strict enforcement thereof by the
      Corporation;

	 	 	 
	 	(f) 	
      the Corporation shall be entitled to any appropriate
      legal, equitable, or other remedy, including injunctive relief, in respect
      of any failure or continuing failure on his part to comply with Article
      5;

	 	 	 
	 	(g) 	
      the restrictions contained in this Article 5 are
      reasonable and valid based on the nature of the Executive’s position with
      the Corporation; and

	 	 	 
	 	(h) 	
      any breach of this Article 5 shall constitute grounds for
      termination of the Executive’s employment for Just
Cause.

5.6       
Passive Investment

Notwithstanding anything in this
Article, nothing in this Agreement shall be deemed to prevent or prohibit the
Executive from owning shares in a publicly listed company as a passive
investment, so long as the Executive does not own more than nine per cent (9%)
of the shares thereof.

5.7       
Survival

Notwithstanding the termination of this
Agreement and the Executive’s employment, the provisions of Section 5.2 shall
survive such termination and be continuing obligations for a period of twelve
(12) months following the termination of this Agreement and the provisions of
Section 5.3 shall survive such termination and be continuing obligations for a
period of two (2) years following the termination of this Agreement.

ARTICLE 6 
ARBITRATION

	6.1 	
      Any controversy, dispute, or claim arising out of,
      relating to, or concerning this Agreement, the breach of this Agreement,
      the employment of the Executive, or the

- 14 -

		
      termination of the Executive’s employment will be
      resolved pursuant to this Article 6. This includes all claims, whether
      arising of contractual or extra-contractual liability. Any such
      controversy, dispute, or claim will be resolved in an arbitration
      proceeding in Houston, Texas in accordance with the Employment Dispute
      Rules of American Arbitration Association (the “AAA”) then existing,
      provided that, if the rules of the AAA differ from those in this Article,
      the provisions of this Article will control. Any demand for resolution of
      such a matter must be served on the other party within the period covered
      by the applicable statute of limitations.

	 	 
	6.2 	
      This Article 6 will be specifically enforceable. Judgment
      upon any award rendered by the arbitrator may be entered in any court
      having jurisdiction.

	 	 
	6.3 	
      The arbitrator will have no authority to extend, modify,
      or suspend any of the terms of this Agreement. The arbitrator must make
      his award in writing and must accompany it with an opinion discussing the
      evidence and setting forth the reasons for the award.

	 	 
	6.4 	
      The decision of arbitrator within the scope of the
      submission will be final and binding on both parties, and any right to
      judicial action on any matter subject to resolution by arbitration
      hereunder hereby is waived unless otherwise required by applicable law,
      except suit to enforce an award by the arbitrator or in the event
      resolution by an arbitrator is not available for any reason.

	 	 
	6.5 	
      The Corporation shall pay the arbitrator’s fees and
      charges; however, each party shall bear its or his own costs and expenses
      with respect to the arbitration of any controversy, dispute, or claim
      under this Article 6, including, but not limited to, any legal fees or
      expenses. Notwithstanding the foregoing, in the event that the Corporation
      is the losing party (as determined by the arbitrator), the Corporation
      shall bear both its costs and expenses and the costs and expenses of the
      Executive with respect to the arbitration of any controversy, dispute, or
      claim under this Article 6, including, but not limited to, any legal fees
      or expenses.

ARTICLE 7 
GENERAL

7.1       
Enurement

This Agreement shall enure to the benefit of and be binding
upon the Corporation, its successors and permitted assigns, and the Executive
and his personal representatives. Neither the Executive nor the Corporation may
assign its rights hereunder to another Person without the consent of the other
party. 

7.2       
Notices

Any notice required or permitted to be given under this
Agreement shall be in writing and shall be properly given if delivered
personally, by telecopy, by prepaid courier service or by certified or prepaid
registered mail, addressed as follows (or to such other address provided by one
party to the other party):

- 15 -

	Executive: 	11 Leigh Court 
	  	Sugar Land, Texas 77479 
	  	 
	  	 
	  	 
	Corporation: 	MegaWest Energy (USA) Corp.

	  	561 Keystone Avenue 
	 	Unit 229 
	  	Reno, Nevada 89503 
	  	 
	  	Attn:        David
      Sealock 
	  	 
	With Copies To: 	Clark Wilson LLP 
	  	Barristers & Solicitors

	  	Patent & Trade-mark Agents
  
	  	800 - 885 W Georgia Street 
	  	Vancouver, BC V6C 3H1 Canada
  
	  	 
	  	Attn:        Virgil
      Hlus 
	  	 
	  	Haynes and Boone, LLP 
	  	1221 McKinney Street, Suite 2100
    
	  	Houston, Texas 77010 
	  	 
	  	Attn:        Guy
      Young 

Any such notice shall be deemed to be received (i) on the date
of delivery, if delivered by hand, (ii) one (1) business day after delivery, if
delivered by courier, (iii) one (1) business day following receipt of an
appropriate electronic confirmation, if sent by telecopy, and (iv) five (5)
business days following the date of mailing, if mailed.

7.3       
Governing Law

This Agreement shall be governed by and construed in accordance
with the laws in force in the State of Texas without regard to its conflicts of
law provisions.

7.4       
Entire Agreement

This Agreement shall constitute the entire agreement between
the Executive and the Corporation in respect of the matters set forth herein.
Except as otherwise specified herein or in writing by the Corporation after the
date hereof, to the extent of any conflict or inconsistency between the terms of
this Agreement and any other agreement or document between the Executive and the
Corporation or otherwise related to the Executive’s employment with the
Corporation, this Agreement shall govern to the extent of such inconsistency or
conflict.

7.5       
Severability

The provisions of this Agreement shall be deemed severable. If
any provision of this Agreement shall be held unenforceable by any court of
competent jurisdiction, such provision shall be modified to the extent necessary
to be enforceable, and the remaining provisions shall remain in full force and
effect.

- 16 -

7.6       
Withholdings; Right of Offset

The Corporation may withhold and deduct from any benefits and
payments made or to be made pursuant to this Agreement (a) all federal, state,
local and other taxes as may be required pursuant to any law or governmental
regulation or ruling, (b) all other normal employee deductions made with respect
to employees generally, and (c) any advances made to Executive and owed to the
Corporation or any Affiliate.

7.7       
Nonalienation

The right to receive payments under this Agreement shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge or encumbrance by Executive, dependents or beneficiaries of Executive, or
to any other person who is or may become entitled to receive such payments
hereunder. The right to receive payments hereunder shall not be subject to or
liable for the debts, contracts, liabilities, engagements or torts of any person
who is or may become entitled to receive such payments, nor may the same be
subject to attachment or seizure by any creditor of such person under any
circumstances, and any such attempted attachment or seizure shall be void and of
no force and effect.

7.8       
Survival of Certain Provisions

Wherever appropriate to the intention of the parties hereto,
the respective rights and obligations of the parties shall survive any
termination or expiration of this Agreement.

7.9       
Amendments and Waivers

All modifications, amendments and supplements to this Agreement
must be made in writing and signed by both parties. No waiver by any party
hereto of any provision hereof or of any breach of this Agreement shall be
effective or binding unless such waiver is in writing, and any such waiver shall
not limit or affect such party’s rights with respect to any future breach.

7.10     
Counterparts

This Agreement may be signed in two (2) counterparts, each of
which shall be deemed an original and both of which shall together constitute
the same instrument.

7.11       Legal
Advice and Executive Acknowledgment

The Executive acknowledges having had the opportunity to seek
independent legal advice in connection with negotiation and execution of this
Agreement. Executive also acknowledges (a) being knowledgeable and sophisticated
as to business matters, including the subject matter of this Agreement, (b)
having read this Agreement and understanding its terms and conditions, (c)
having been given an ample opportunity to discuss this Agreement with
Executive’s personal legal counsel prior to execution, and (d) that no strict
rules of construction shall apply for or against the drafter or any other party.
Executive hereby represents that Executive is free to enter into this Agreement
including, without limitation, that Executive is not subject to any covenant not
to compete or other restrictive covenant that would conflict with any duties
under this Agreement.

- 17 -

IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto effective as of the date first above written.

	 	MEGAWEST ENERGY (USA) CORP. 
	 	  	  
	 	By: 	/s/ George Orr 
	 	 	(Authorized Signatory) 
	 	  	  
	 	  	  
	 	  	  
	 		/s/ George T. Stapleton, II 
	 		GEORGE T. STAPLETON, II 

SCHEDULE “A”

ANNUAL SALARY AND REMUNERATION

 

	1. 	 The Annual Salary of the Executive
        shall be USD $240,000.00 commencing as at January 1, 2007; and 

	  	  	  

		(a) 	 The salary of the Executive will be USD
        $180,000 for services rendered for the Corporation as described in Section
        2.1(a); and 

	  	  	  

		(b) 	 The salary of the Executive will be USD
        $60,000 for services rendered for the Parent as described in Section 2.1(b)
        and the Corporation will withhold and remit from such salary Canadian
        withholding tax as required under Canadian law. 

	  	  	  

	2. 	 Participation in the corporate
        executive level bonus program as promulgated by the Board from time to
        time.

SCHEDULE “B”

BENEFITS

The Executive shall be entitled to receive the following
Benefits during the term of his employment under this Agreement, unless such
Benefits are relinquished by the Executive with his consent:

	1. 	
      Any benefits which may be made available to employees or
      other executives of the Parent or the Corporation from time to time during
      the term of this Agreement, including but not limited to life or
      disability insurance and directors and officers liability and errors and
      omissions insurance, in accordance with the terms and conditions of the
      governing documents for such benefit plans or programs.

	 	 	 
	2. 	
      The Executive hereby relinquishes the following benefits
      which are offered by the Parent to Canadian employees:

	 	 	 
		(a) 	
      Alberta Health Care

	 	 	 
		(b) 	
      Group Life Insurance

	 	 	 
		(c) 	
      Additional Medical Insurance

	 	 	 
		(d) 	
      Dental Insurance

	 	 	 
		(e) 	
      Vision Coverage

	 	 	 
		(f) 	
      Canada Pension Plan

	 	 	 
		(g) 	
      Employment Insurance

	 	 	 
		(h) 	
      Workers Compensation
Insurance

SCHEDULE “C”

PERQUISITES

The Executive shall be entitled to receive the following
Perquisites during the term of his employment under this Agreement:

	1. 	
      Reimbursement of all reasonable expenses incurred by the
      Executive in carrying out his duties including but not limited to travel
      expenses (accommodation and meals) and entertainment expenses, provided no
      such expense shall be reimbursed unless Employee shall have properly
      accounted for expenses to the extent necessary to substantiate the
      Company’s Federal income tax deductions for such expenses under the
      Internal Revenue Code of 1986, as amended, and the regulations thereunder
      or equivalent subsequent legislation. Travel shall be reimbursed on the
      basis of business class (or equivalent) for flights over 4 hours and
      accommodation shall be at suitable hotels;

	 	 
	2. 	
      Reimbursement of all expenses incurred by the Executive
      relating to family medical and dental insurance policy obtained through
      the Society of Petroleum Engineers or any similar plan providing
      comparable coverage;

	 	 
	3. 	
      Reimbursement of all reasonable due diligence expenses
      and legal and accounting fees of the Executive incurred prior to execution
      of this Agreement which were made in contemplation of this
    Agreement;

	 	 
	4. 	
      For so long as the Executive shall work out of a home
      office, the Corporation shall pay Executive a home office allowance of USD
      $750 per month. The Executive shall be responsible for providing his own
      hardware (laptop, cell phone, Blackberry, and office equipment), software,
      monthly local and long distance telephone/cell phone/PDA/Internet charges,
      local postage, and all office supplies including printer/copier toner
      cartridges with respect to such home office. The Executive will be
      provided access to the Corporation FedEx account for business related
      courier charges;

	 	 
	5. 	
      Directors and Officers Liability Insurance and Errors and
      Omissions Insurance with a minimum coverage of USD $2,000,000.00 per
      occurrence;

	 	 
	6. 	
      Travel Accident Insurance with a minimum coverage of USD
      $1,000,000, 24 hours a day, covering both business and personal travel;
      and

	 	 
	7. 	
      Company shall provide Disability Insurance coverage for
      the term of this Agreement; and

	 	 
	8. 	
      The Parent may provide a moving allowance if the
      Executive is required to relocate to office in the City of Calgary, in the
      Province of Alberta: and

	 	 
	9. 	
      Subject to the provisions of the Corporation's
      Certificate of Incorporation and By-Laws, as amended from time to time in
      the absolute discretion of Corporation, Corporation shall indemnify
      Employee to the full extent permitted by applicable law and such
      Certificate of Incorporation and By-Laws, for all amounts (including
      without limitation litigation, judgments, fines, settlement payments,
      expenses, and attorney fees) incurred or paid
by

- 21 -

Executive in connection with any
action, suit, investigation or proceeding arising out of or relating to the
performance by Executive of his duties hereunder, or the acting by the Executive
as an officer or employee of the Corporation, its Parent or its Affiliates, so
long as Executive is not in material default hereunder.

SCHEDULE “D”

RELEASE

1.       
RELEASE

From and after the Effective Date (defined below) and in
consideration of the sum of __________________________Dollars $
__________________, less amounts required to be withheld and paid to the
applicable taxing authorities (the “Severance Amount”), and other good and
valuable consideration, the receipt of which is hereby acknowledged, I, George
T. Stapleton, II, do for myself and my heirs, executors, administrators,
personal representatives and assigns (hereinafter collectively referred to as
“I”) forever release, remise and discharge MegaWest Energy (USA) Corp. and its
subsidiaries, successors, predecessor companies (collectively the “Corporation”)
and the Corporation’s directors, shareholders, employees, agents, insurers and
assigns from any and all actions, causes of actions, contracts (whether express
or implied), claims and demands for damages, suits, debts, sums of money,
indemnity, expenses, interest, costs and claims of any and every kind and nature
whatsoever, at law or in equity, which I ever had or now have, or which I or my
heirs, successors or personal representatives may hereafter have, by reason of
or existing out of any causes whatsoever existing up to and inclusive of the
date of this Release, including but without limiting the generality of the
foregoing: 

	 	(i) 	
      my employment with the Corporation;

	 	 	 
	 	(j) 	
      the termination of my employment with the
    Corporation;

	 	 	 
	 	(k) 	
      the Executive Employment Agreement dated effective
      January 1, 2007 between the Corporation and me (the “Executive Employment
      Agreement”);

	 	 	 
	 	(l) 	
      any claims which I may have arising under or relating to
      the applicable employment laws and regulations, any federal, state, or
      local laws of any jurisdiction that prohibit age, sex, race, national
      origin, color, disability, religion, veteran, military status, sexual
      orientation, or any other form of discrimination, harassment, or
      retaliation (including, without limitation, the Age Discrimination in
      Employment Act, the Older Workers Benefit Protection Act, the Americans
      with Disabilities Act, Title VII of the 1964 Civil Rights Act, the Civil
      Rights Act of 1991, 42 U.S.C. § 1981, the Rehabilitation Act, the Family
      and Medical Leave Act, the Sarbanes-Oxley Act, the Employee Polygraph
      Protection Act, the Financial Institutions Reform, Recovery and
      Enforcement Act (or any other employment-related banking statute or
      regulation), the Uniformed Services Employment and Reemployment Rights Act
      of 1994, the Texas Commission on Human Rights Act, any federal, state,
      local or municipal whistleblower protection or anti-retaliation statute or
      ordinance, or any other federal, state, local, or municipal laws of any
      jurisdiction), claims arising under the Employee Retirement Income
      Security Act, or any other statutory or common law claims related to my
      employment or separation from employment with the Corporation;

	 	 	 
	 	(m) 	
      any and all claims for damages, salary, wages,
      termination pay, severance pay, vacation pay, bonuses, expenses,
      allowances, any shares, stock options or other rights to purchase shares
      or trust units granted by the Corporation, insurance or any other benefits
      (or loss thereof) arising out of my employment with the Corporation;
      and

	 	 	 
	 	(n) 	
      all such further costs, expenses or damages which may
      properly be alleged to arise in respect of the cessation of my employment
      with the Corporation.

- 2 -

Notwithstanding anything contained herein, this Release shall
not extend to or affect, or constitute a release of any right that I may have in
respect of:

	 	(a) 	
      any corporate indemnity existing by statute, contract or
      pursuant to any of the constating documents of the Corporation provided in
      my favour in respect of my having acted at any time as a director or
      officer of the Corporation, its Parent or its Affiliates;

	 	 	 
	 	(b) 	
      my entitlement to any insurance maintained for the
      benefit or protection of the directors and/or officers of the Corporation,
      its Parent or its Affiliates, including without limitation, any directors’
      and officers’ liability insurance; or

	 	 	 
	 	(c) 	
      my entitlement to any amounts pursuant to Article 4 of
      the Executive Employment Agreement.

4.        NO
ADMISSION

I acknowledge that the payment of the Severance Amount to me
pursuant to the above paragraph does not constitute any admission of liability
by or on behalf of the Corporation.

5.        INDEMNITY FOR
TAXES

I further agree that, for the aforesaid payment, I will save
harmless and indemnify the Corporation from and against all claims, taxes or
penalties and demands which may be made by the Internal Revenue Service (or by
any other government authority under any similar legislation in any country or
subdivision thereof), in respect of income tax payable in excess of the income
tax previously withheld; and in respect of any and all claims, charges, taxes or
penalties and demands which may be made on behalf of or related to the Internal
Revenue Service (or by any other similar government authority in any country or
subdivision thereof) under the applicable statutes and regulations, with respect
to any amount which may, in the future, be found to be payable by the
Corporation on my behalf.

6.        EMPLOYMENT
STANDARDS CODE

I acknowledge receipt of all wages, overtime pay, vacation pay,
general holiday pay, bonuses, benefits, pay in lieu of notice of termination of
employment, severance and other compensation that I am entitled to by virtue of
the applicable employment laws and regulations or pursuant to any other
applicable labour standards legislation or common law, and I further confirm
that there are no entitlements, overtime pay or wages due and owing to myself by
the Corporation.

7.        BENEFITS AND
INSURANCE CLAIMS

I acknowledge and agree that all of my employment benefits will
cease on _______________ and I further acknowledge and agree that I have no
further claim against the Corporation for benefits or damages arising from the
cessation of benefits. I fully accept sole responsibility to replace those
benefits that I wish to continue and to exercise conversion privileges where
applicable with respect to benefits. In the event that I become disabled, I
covenant not to sue the Corporation for insurance or other benefits, or for loss
of benefits. I hereby release the Corporation from any further obligations or
liabilities arising from my employment benefits.

- 3 -

8.       
NON-DISCLOSURE

I agree that I will not divulge or disclose, directly or
indirectly, the contents of this Release or the terms of settlement relating to
my ceasing to be employed with the Corporation to any person, including but
without limiting the generality of the foregoing, to employees or former
employees of the Corporation, except my legal and financial advisors and my
immediate family, on the condition that they maintain the confidentiality
thereof, except as may be required by law.

9.        COMPLIANCE WITH
EMPLOYMENT AGREEMENT

I continue to be bound by the provisions of Article 5 of my
Employment Agreement notwithstanding the termination of my employment and the
Employment Agreement. I agree that I will comply with the restrictions set forth
in Article 5 of my Employment Agreement for the applicable time periods set
forth therein. I acknowledge and agree that such restrictions are reasonable and
properly required for the adequate protection of the business of the Corporation
and in the event that the time limit is deemed to be unreasonable by a court of
competent jurisdiction, I agree to the reduction of the time limit to a period
as the court shall deem to be reasonable.

10.       FURTHER
CLAIMS

I agree that I will not make claim or take proceedings against
any other person or entity that might claim contribution or indemnity under the
provisions of any statute or otherwise against the Corporation or any individual
or entity discharged through this Release.

11.       TIME TO
CONSIDER RELEASE

I acknowledge that I have been advised in writing by the
Corporation that I should consult an attorney before executing this Release, and
I further acknowledge that I have been given a period of twenty-one (21)
calendar days within which to review and consider the provisions of this
Release. I understand that if I do not sign this Release before the twenty-one
(21) calendar day period expires, this Release offer will be withdrawn
automatically.

12.      REVOCATION PERIOD

I understand and acknowledge that I have seven (7) calendar
days following the execution of this Release to revoke my acceptance of this
Release. This Release will not become effective or enforceable, and the
Severance Amount will not become payable, until after this revocation period has
expired. If I do not revoke the Release within the revocation period, the
Corporation will send me the Severance Amount within five (5) business days
after the revocation period’s expiration date.

13.       UNDERSTANDING

I hereby declare that I have had the opportunity to seek
independent legal advice with respect to the matters addressed in this Release
and the terms of settlement which have been agreed to by the Corporation and me,
and I fully understand this Release and the terms of settlement. I hereby
voluntarily accept the terms for the purpose of making full and final
compromise, adjustment and settlement of all claims as aforesaid.

- 4 -

14.        NO PRIOR
REPRESENTATIONS OR INDUCEMENTS

I represent and acknowledge that in executing this Release, I
do not rely, and have not relied, on any representation(s) by the Corporation,
except as expressly contained in this Release.

15.        BINDING
RELEASE

The Corporation and I agree that this Release shall be binding
on us and our heirs, administrators, representatives, executors, successors and
assigns, and shall inure to the benefit of our heirs, administrators,
representatives, executors, successors and assigns.

16.        CHOICE OF
LAW

This Release shall, in all respects, be interpreted, enforced,
and governed under the laws of the State of Texas. The Corporation and I agree
that the language of this Release shall, in all cases, be construed as a whole,
according to its fair meaning, and not strictly for, or against, any of the
parties.

17.       
SEVERABILITY

The Corporation and I agree that should a court declare or
determine that any provision of this Release is illegal or invalid, the validity
of the remaining parts, terms or provisions of this Release will not be affected
and any illegal or invalid part, term, or provision, will not be deemed to be a
part of this Release.

18.        COMPLETE
AGREEMENT

I understand and agree that this Release contains the entire
agreement between the Corporation and me regarding my termination and that the
terms of this Release are contractual and not a mere recital.

DATED at this _____ day of , 200____.

 

	 	 	 
	Witness 	 	GEORGE T. STAPLETON, II

SCHEDULE “E”

CURRENT STOCK OPTION PLAN OF THE CORPORATION

 

U.S. Stock Option Plan

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