Document:

EMPLOYMENT AGREEMENT

(Kirk Stingley 2012)

 

This Employment Agreement (the “Agreement”)
is made and entered into by and between American Eagle Energy Corporation (the “Company”) and Kirk Stingley
(“Executive”), on the 1st day of January, 2012, (the “Effective Date”). The Company
and Executive may be referred to herein collectively as “Parties” and individually as “Party.”
In consideration of the mutual promises, covenants and conditions hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which the Parties acknowledge, the Parties agree as follows:

 

1.          Employment
and Duties. The Company shall initially employ Executive as the Company’s Chief Financial Officer. At any time during
the Term, the Company may employ Executive in such other senior executive position as may be assigned to him by the Company’s
Chief Executive Officer. Executive’s responsibilities shall initially include, but not be limited to, overseeing all accounting,
financial, compliance, SEC reporting and/or other regulatory activities typically associated with a publicly traded company (such
as overseeing the Company’s Treasury, Human Resources, Risk Management and Investor Relations functions), managing the Company’s
relationship with its external audit firm and such other senior executive duties as may be assigned to Executive from time to time
by the Company’s Chief Executive Officer. Executive shall report to the Company’s Chief Executive Officer or to such
other person as the Chief Executive Officer may designate. Executive shall devote his full time, attention and energy exclusively
to the business and interests of the Company and to the performance of his duties and obligations under this Agreement, unless
otherwise provided by this Agreement. Notwithstanding the foregoing, however, Executive shall have the right to perform incidental
accounting, tax consulting and tax compliance services at such times and in such manner as will not interfere with the performance
of his duties for the Company.

 

2.          Term
of Agreement. The term of this Agreement shall commence on the Effective Date and shall continue through and including
the 31st day of December, 2013, subject to the provisions of the Section in this Agreement entitled “Termination
or Expiration of Agreement,” (the “Term”). Notwithstanding the foregoing, the provisions of the Sections
in this Agreement entitled “Non-competition; Secrecy,” “Representations and Warranties” and
“Miscellaneous” shall survive, and continue in full force and effect, after any termination or expiration of
this Agreement, irrespective of the reason for the termination or any claim that the termination was wrongful or illegal.

 

3.          Compensation
and Other Benefits. The Company shall provide the following compensation and other benefits to Executive during the Term
in consideration of Executive’s performance of all of his obligations under this Agreement:

 

3.1        Base
Salary. Subject to the provisions of the Section in this Agreement entitled “Termination
or Expiration of Agreement,” during the Term the Company shall, commencing on the Effective Date, pay Executive an annual
base salary of One Hundred Fifty Thousand and No/100s US Dollars ($150,000.00 USD), payable in arrears on the last day of each
calendar month, in gross monthly installments of Twelve Thousand Five Hundred and No/100s US Dollars ($12,500.00 USD). The base
salary to be paid to Executive hereunder, as changed by the Parties from time-to-time, may be referred to herein as “Base
Salary.”

 

    	 

    	 

    

 

3.2         Discretionary
Bonus. Executive shall be entitled to such discretionary bonuses as the Company’s Chief Executive Officer shall determine
appropriate in the exercise his sole discretion. Notwithstanding the foregoing, however, Executive’s total annual discretionary
bonuses for any calendar year during the term of this Agreement shall not exceed Executive’s Base Salary for such period.

 

3.3         Fringe
Benefits. As additional consideration for Executive’s performance of services under this Agreement, Executive shall
be entitled to receive the following benefits (the “Fringe Benefits”):

 

3.3.1    Employee
Benefit Plans. During the Term, the Company will pay the premiums incurred to provide group medical insurance coverage
for Executive and his dependents. During the Term, the Company will also allow Executive to participate in such other group health,
pension, welfare, and insurance plans (together with the group medical insurance plan, the “Employee Benefit Plans”)
maintained by the Company from time to time for the general benefit of its executive employees, as such Employee Benefit Plans
may be modified from time to time in the Company’s sole and absolute discretion. The Company reserves the right to terminate
any one or more of its Employee Benefit Plans as it shall determine appropriate in the exercise of its sole discretion.

 

3.3.2    Other
Benefits. The Company shall provide Executive with all other benefits and perquisites as are made generally available
to the Company’s executive employees under the Company’s Employee Handbook, as such Employee Handbook may be modified
from time to time in the Company’s sole and absolute discretion.

 

3.3.3    Vacation;
Sick Leave and Holidays. Executive shall be entitled to four (4) weeks of paid vacation per year, which will be earned
ratably during the year, and to such sick leave and paid holidays as are generally made available to the Company’s executive
employees under the Company’s Employee Handbook, as such Employee Handbook may be modified from time to time in the Company’s
sole and absolute discretion.

 

3.3.4    Reimbursement
of Business Expenses. Subject to the prior approval of the Company, the Company shall reimburse Executive for all reasonable
travel, entertainment and other expenses incurred by Executive in connection with the performance of his duties under this Agreement,
upon submission by Executive to Company of reasonable documentation pertaining to such expenses.

 

3.4        Deferred
Compensation. Any deferred compensation (within the meaning of Section 409A of the Internal Revenue Code) payable under
this Agreement on account of Executive’s separation from service shall not commence prior to six months following such separation
if Executive is a key employee (within the meaning of Section 409A). Provided, that in determining whether Executive is a key employee,
any compensation realized on account of the exercise of a stock option or a disqualifying disposition of stock acquired through
exercise of an incentive stock option shall be disregarded.

 

3.5        Withholding.
All customary withholding taxes and other employment taxes which the Company is required by law to withhold and pay with respect
to compensation paid by an employer to an employee shall be subtracted and withheld from all compensation paid by the Company to
Executive for services rendered by Executive to the Company.

 

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4.           Termination
or Expiration of Agreement.

 

4.1        Termination
at Company’s Election. The Company may terminate Executive’s employment at any time during the Term, for any
reason or no reason, with or without Cause (as hereinafter defined), and with or without notice, subject to the provisions of the
Sub-sections of this Section entitled “Termination for Cause,” “Termination Without Cause” and “Severance
Following a Change in Control.”

 

4.1.1   Termination
for Cause. If Executive’s employment is terminated for Cause (defined below), Executive shall be entitled to receive
only the following: (i) payment of Executive’s Base Salary through and including the date of termination; (ii) payment for
all accrued and unused vacation time as of the date of termination, which will be paid at a rate calculated in accordance with
Executive’s Base Salary at the time of termination; and (iii) reimbursement of business expenses incurred prior to the date
of termination. Except as expressly set forth in this Sub-section, Executive shall not be entitled to receive any Base Salary,
Fringe Benefits or severance benefits in the event Executive’s employment is terminated for Cause, except that Executive
may continue to participate in the Employee Benefit Plans to the extent permitted by and in accordance with the terms of those
plans or as otherwise required by law.

 

4.1.2
   Termination Without Cause. If Executive’s employment by the Company is terminated by the
Company without Cause or if Executive’s employment is terminated for Good Reason (defined below), Executive shall
receive: (i) payment of Executive’s Base Salary through and including the date of termination; (ii) payment for all
accrued and unused vacation time existing as of the date of termination, which will be paid at a rate calculated in
accordance with Executive’s Base Salary at the time of termination; and (iii) reimbursement of business expenses
incurred prior to the date of termination. In addition, if the severance of Executive’s employment falls within the
terms of this Sub-section and if the terms of the Subsection of this Section entitled “Severance Following a Change
in Control” does not apply to the severance of Executive’s employment with the Company, then, subject to the
condition that Executive sign a general release of all claims in a form approved by the Company in the exercise of its sole
discretion, Executive shall receive a severance payment in an amount equal to Thirty Five Thousand and No/100s US
Dollars ($35,000.00 USD), less applicable withholdings.

 

4.1.3   Severance
Following a Change in Control.

 

A.           If,
immediately prior to or within twelve months following a Change in Control (defined below), (i) Executive’s employment is
terminated by the Company without Cause or (ii) Executive’s employment is terminated for Good Reason (defined below), Executive
shall receive: (x) payment of Executive’s Base Salary through and including the date of termination; (y) payment for all
accrued and unused vacation time existing as of the date of termination, which will be paid at a rate calculated in accordance
with Executive’s Base Salary at the time of termination; and (z) reimbursement of business expenses incurred prior to the
date of termination. In addition, if the severance of Executive’s employment falls within the terms of this Sub-section,
then, subject to the condition that Executive sign a general release of all claims in a form approved by the Company in the exercise
of its sole discretion, the Company shall pay Executive severance payment in an amount equal to Executive’s annual Base Salary
as the same may have been changed through the date of the severance of Executive’s employment, less applicable withholdings.

 

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B.           If
Executive severs employment with the Company within sixty (60) days of a Change in Control (defined below) for any reason other
than Good Reason (defined below), Executive shall receive: (x) payment of Executive’s Base Salary through and including the
date of termination; (y) payment for all accrued and unused vacation time existing as of the date of termination, which will be
paid at a rate calculated in accordance with Executive’s Base Salary at the time of termination; and (z) reimbursement of
business expenses incurred prior to the date of termination. In addition, if Executive severs employment with the Company within
sixty (60) days of a Change in Control for any reason other than Good Reason, then, subject to the condition that Executive sign
a general release of all claims in a form approved by the Company in the exercise of its sole discretion, the Company shall pay
Executive a severance payment in an amount equal to the product of one-half (.5) times Executive’s annual Base Salary as
the same may have been changed through the date of the severance of Executive’s employment, less applicable withholdings.

 

C.           For
purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events,
other than as occasioned by the closing of the Transaction contemplated by the Merger Agreement: (i) the consummation of any transaction
after the Effective Date in which any person or entity or group of related persons and/or entities becomes the beneficial owner,
directly or indirectly, of securities representing more than twenty percent (20%) of the combined voting power of the Company’s
outstanding voting securities, (ii) three or more directors, whose election or nomination for election is not approved by a majority
of the members of the Company’s Board of Directors on the Effective Date, are elected within any twelve month period to serve
on its Board of Directors, or (iii) any merger (other than a merger in which the Company is the survivor and there is no change
of control pursuant to (i) or (ii) of this sentence), reorganization, consolidation, liquidation, winding up or dissolution of
the Company or the sale of all or substantially all of its assets.

 

4.1.4   “Cause.”
As used in this Agreement, “Cause” means:

 

  A.           Criminal
Conduct. Executive’s conviction of a crime punishable as a felony or of any offense involving moral turpitude, dishonesty
or immoral conduct;

 

  B.           Incarceration.
Executive’s incarceration for any reason. For purposes of this provision, incarceration means any confinement of Executive
by any federal, state or local governmental agency which causes Executive to be unable to provide services for and on behalf of
the Company at its principal place of business for the period of Executive’s confinement;

 

  C.           Neglect
or Other Misconduct. Executive’s conduct, neglect or failure to act which (i) materially and adversely affects the business
or reputation of the Company; or (ii) renders his continued service in the employment of the Company materially detrimental to
the ordinary, continued, or successful operation of its business, or (iii) is or is likely to be materially detrimental to, or
which materially interferes with, his ability to effectively perform his duties for the Company; or (iv) constitutes the misappropriation,
misuse, or misdirection of the Company’s funds or property; or (v) materially interferes with or materially impairs the ordinary
operation of the Company’s business; or (vi) involves moral turpitude and which is reasonably likely to cause material damage
to the Company’s business, its reputation or its goodwill;

 

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D.           Absence. Executive’s absence from the active performance of his
duties in the operation of the Company’s business on more than an occasional basis, other than as a result of (i)
approved vacations, medical leave or personal leave, or (ii) a Permanent Disability, defined below;

 

E.           Violation
of the Company’s Rules. Executive’s violation of the Company’s material written rules, policies or procedures
(which do not conflict with the terms of this Agreement), after notice and not less than five (5) business days opportunity to
cure such failure or refusal;

 

F.           Failure
to Perform Duties. Executive’s failure or refusal to perform the duties reasonably required of him pursuant to the terms
of this Agreement, after notice and not less than five (5) business days opportunity to cure such failure or refusal; or

 

G.           Violations
of the Board of Director Directives. Executive’s intentional violation of the lawful directives of the Company’s
Board of Directors. 

 

4.1.5   “Good
Reason.” As used in this Agreement, “Good Reason”
means the occurrence of any of the following without Executive’s prior written consent and in the absence of any circumstance
that constitutes Cause: (i) the regular assignment to Executive of material duties which do not involve the performance of accounting
and compliance services for the Company; or (ii) a reduction by the Company of Executive’s annual Base Salary.

 

4.2          Termination
upon Death or Permanent Disability.

 

4.2.1   Termination
Resulting from Death or Permanent Disability. This Agreement
will terminate automatically on Executive’s death or if Executive becomes Permanently Disabled (as defined below) and the
Base Salary, Fringe Benefits and other payments and benefits which Executive, or Executive’s beneficiaries or estate, shall
be entitled to receive shall be determined exclusively by operation of this Subsection. In the event of the termination of Executive’s
employment as a result of his death or Permanent Disability, Executive, or Executive’s beneficiaries or estate, shall receive
from the Company:  (x) payment of Executive’s Base Salary through and including the date
of termination; (y) payment for all accrued and unused vacation time existing as of the date of termination, which will be paid
at a rate calculated in accordance with Executive’s Base Salary at the time of termination; and (z) reimbursement of business
expenses incurred prior to the date of termination. In addition, subject to the condition precedent that Executive or his estate
or his legal representative, as the case may be, sign a general release of all claims in a form approved by the Company in the
exercise of its sole discretion, Executive shall also receive, and the Company shall pay Executive, a severance payment in an amount
equal to the product of one-quarter (.25) times Executive’s annual Base Salary as the same may have been changed through
the date of the termination of Executive’s employment, less applicable withholdings.

 

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4.2.2    Permanent
Disability. As used in this Agreement, “Permanent Disability” and “Permanently Disabled”
shall mean the incapacity of Executive due to illness, accident, or any other reason to perform his duties for a period of ninety
(90) days, whether or not consecutive, during any twelve month period of the Term, all as determined by the Company in its reasonable
discretion. All determinations as to the date and extent of incapacity of Executive shall be made by the Company’s Board
of Directors, upon the basis of such evidence, including independent medical reports and data, as the Board of Directors in its
discretion deems necessary and desirable. All such determinations of the Board of Directors shall be final and binding upon the
Parties.

 

4.3          Termination
at Executive’s Election. Executive may resign from employment with the Company prior to the expiration of the Term
for any reason by providing written notice to the Company at least thirty (30) days prior to the date selected for resignation.
If Executive resigns from employment before expiration of the Term under any circumstances other than (i) for Good Reason (defined
above), or (ii) within sixty (60) days of a Change in Control (defined above) for any reason other than Good Reason (defined below),
then Executive shall be entitled to receive only the following: (i) payment of Executive’s Base Salary through and including
the date of resignation; (ii) payment for all accrued and unused vacation time existing as of the date of resignation, which will
be paid at a rate calculated in accordance with Executive’s Base Salary at the time of resignation; and (iii) reimbursement
of business expenses incurred prior to the date of resignation. Except as expressly set forth in this Sub-section, Executive shall
not be entitled to receive any Base Salary, Fringe Benefits or severance benefits in the event Executive resigns from employment
before expiration of the Term, except that Executive may continue to participate in the Employee Benefit Plans to the extent permitted
by and in accordance with the terms thereof or as otherwise required by law and except as otherwise provided by this Agreement.

 

4.4          Termination
on Expiration of Term. If this Agreement is terminated on the expiration of the Term in accordance with the Section in
this Agreement entitled “Term of Agreement,” Executive shall receive: (i) payment of Executive’s Base
Salary through and including the date of termination; (ii) payment for all accrued and unused vacation time existing as of the
date of termination, which will be paid at a rate calculated in accordance with Executive’s Base Salary at the time of expiration
of the Term; and (iii) reimbursement of business expenses incurred prior to the date of the expiration of the Term. Except as expressly
set forth in this Sub-section, Executive shall not be entitled to receive any Base Salary, Fringe Benefits or severance benefits
in the event that this Agreement is terminated on the expiration of the Term in accordance with the Section in this Agreement entitled
“Term of Agreement,” except that Executive may continue to participate in the Employee Benefit Plans to the
extent permitted by and in accordance with the terms thereof or as otherwise required by law and except as otherwise provided by
this Agreement.

 

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5.           Non-competition;
Secrecy. 

 

5.1      Assistance
to Competitors. Unless otherwise provided in this Subsection, Executive shall not during the Term and for a period of two
years following the severance of Executive’s employment with the Company own a material interest in, render financial assistance
to, or offer personal services to (whether for payment or otherwise), (i) any person or entity that competes with the Company in
the Company Business (as defined below), or (ii) any person or entity or any subsidiary or affiliate of any person or entity which
is pursuing any business or investment opportunity which the Company reviewed within the previous six month period. “Company
Business” shall mean the conduct of the oil and gas exploration and development business in those basins or areas of
mutual interest (i) within which the Company directly or indirectly owns, leases or otherwise holds mineral interests, (ii) as
to which the Company is actively evaluating the desirability of directly or indirectly acquiring mineral interests, or (iii) as
to which the Company is endeavoring to directly or indirectly acquire mineral interests. Notwithstanding anything to the contrary
set forth in this Agreement, Executive shall have the right to own a material interest in or render financial assistance to any
person or entity in connection with a project or opportunity in which the Company has failed or declined to exercise its right
of first refusal described below. Executive agrees that during the Term he will offer the Company a right of first refusal, in
writing, to pursue all opportunities of which Executive learns involving the exploration, development and production of hydrocarbons.
Contemporaneously with Executive’s delivery of such written notification to the Company, Executive shall provide the Company
with all material information in Executive’s possession or control which is reasonably necessary to enable the Company to
evaluate the economic viability and risks of pursuing each such opportunity. Company shall exercise its right of first refusal
to pursue such an opportunity by giving Executive written notice of its exercise within forty five business days of its receipt
of Executive’s written notification and all of the information described above.

 

5.2      Confidential
Information. Executive acknowledges and agrees that the Company is engaged in business activities in which it is and will
in the future be crucial to develop and retain proprietary, trade secret, or confidential information for the benefit of the Company
(collectively, “Confidential Information”). Accordingly, Executive shall not at any time during the Term or
for a period of three years following the termination or expiration of this Agreement, either directly or indirectly, (i) divulge,
convey or communicate any Confidential Information to any person or entity, except as may be expressly authorized in writing by
the Company or as may be necessary for Executive to perform his duties hereunder, or (ii) use any Confidential Information for
Executive’s own benefit or the benefit of any person or entity other than the Company. Confidential Information includes,
but is not limited to geological, geophysical, and engineering data, models, analyses, compilations, estimates of reserves,
interpretations, data, studies, reports, business plans, business methods, contractual and financial information, matters
of a technical or intellectual nature such as inventions, designs, improvements, processes of discovery, techniques, methods, ideas,
discoveries, developments, know-how, techniques, formulae, compounds, compositions, specifications, trade secrets, specialized
knowledge, or matters of a business nature such as information about costs and profits, records, customer lists, customer data
or sales data and other data in whatever form stored or maintained, whether oral, written, documentary, digital, computer
storage or otherwise.

 

5.3      Ownership
of Ideas. The Company shall own, and Executive hereby transfers and assigns to the Company, all rights, of every kind and
character throughout the world, in perpetuity, in and to any and all materials, ideas, concepts and results inuring from or in
connection with Executive’s performance of services for the Company, or conceived of or produced by Executive during the
Term and which relate to the Company Business. The Parties acknowledge and agree, however, that such transfer and assignment shall
not apply to, or attach in and to, any materials, ideas or concepts which fall outside the ambit of this Agreement. Executive shall
execute and deliver to the Company such assignments, certificates of authorship, or other instruments as the Company may require
from time to time to evidence the Company’s ownership of material, ideas and other results inuring from or in connection
with Executive’s performance of services for the Company, or conceived of or produced by Executive during the Term and which
relate to the Company Business.

 

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5.4        Company
Property. All records, papers, documents, materials, and electronically stored data kept, made, or received by Executive
while employed by the Company, or generated for, in the course of, or in connection with the Company Business, whether or not containing
Confidential Information, shall be and remain the exclusive property of the Company (collectively referred to as “Company
Property”) at all times during and after Executive’s employment with the Company, without regard to how Executive
came into possession of any Company Property or whether Executive played any role in creating any Company Property. Executive shall
not destroy any Company Property or remove any Company Property from the Company’s premises, whether during or after employment
by the Company, except as expressly directed for the purpose of performing services on behalf of the Company. Upon the termination
of Executive’s employment with the Company at any time and for any reason, or upon the Company’s request at any time
and for any reason, Executive shall promptly return, at Executive’s expense, all Company Property to the Company, without
keeping a copy of any such Company Property for himself or any other entity or individual. Executive
will, upon request by Company, certify his compliance with the terms of this Subsection.

 

5.5         Interference
with Employees and Clients.

 

5.5.1    Non-Solicitation
of Employees. For so long as Executive is employed by the Company, and for a three-year
period thereafter, Executive shall not, directly or indirectly, whether for his own benefit or for the benefit of any other entity
or individual: (i) solicit, encourage, or in any way influence any person employed by, or engaged to render services on behalf
of, the Company to cease performing services for the Company, or to engage in any activity contrary to or conflicting with the
interests of the Company; (ii) hire away any person employed by, or engaged to render services on behalf of, the Company; or (iii)
otherwise interfere to the Company’s detriment in any way in the Company’s relationship with any person or entity who
is employed by, or engaged to render services on behalf of, the Company.

 

5.5.2    Non-Solicitation
of Clients. For so long as Executive is employed by the Company, and for a three-year period thereafter, Executive shall
not, whether for his own benefit or for the benefit of any other entity or individual, take any action which could cause any customer
or client of the Company to limit, curtail or terminate its business relationship with the Company.

 

5.5.3    Injunctive
Relief. Executive and the Company acknowledge and agree that (i) Executive’s breach of his obligations under this
Section would cause the Company irreparable harm and that monetary damages alone would not be an adequate remedy for any such breach;
and, therefore, (ii) if Executive breaches this Section, the Company shall be entitled to obtain injunctive relief without bond
(and any other form of equitable relief), as well as any other remedies (including monetary damages) to which the Company is entitled
as a consequence of such breach or otherwise. No waiver of any breach or violation hereof shall be implied from forbearance
of failure by the Company to take any action hereon.

 

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6.           Representation
and Warranties. Executive represents and warrants to the Company that Executive is under no contractual or other restriction
or obligation that is materially inconsistent with the execution of this Agreement, the performance of his duties hereunder, or
the rights of the Company hereunder, including, without limitation, any development agreement, non-competition agreement or confidentiality
agreement previously entered into by Executive. 

 

7.           Miscellaneous.

 

7.1      Severability.
If any provision of this Agreement becomes or is found to be illegal or unenforceable for any reason, such clause or provision
must first be modified to the extent necessary to make this Agreement legal and enforceable and then, if necessary, second, severed
from the remainder of the Agreement to allow the remainder of the Agreement to remain in full force and effect. If for any reason
whatsoever, any one or more of the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid
as applied to any particular case or in all cases, such circumstances shall not have the effect of rendering such provision invalid
in any other case or of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid.

 

7.2      Amendment
and Waiver. No provision of this Agreement can be modified, amended, supplemented or waived in any manner except by an
instrument in writing signed by both Executive and the Company. The waiver by either Party of compliance with any provision of
this Agreement by the other Party shall not operate or be construed as a waiver of any other provision of this Agreement, or of
any subsequent breach by such Party of any provision of this Agreement.

 

7.3.     Applicable
Law. This Agreement, Executive’s employment relationship with the Company, and any and all matters or claims arising
out of or related to this Agreement or Executive’s employment relationship with the Company, shall be governed by, and construed
in accordance with, the laws of the State of Colorado, regardless of choice of law provisions of any jurisdiction.

 

7.4. 
   Arbitration.

 

7.4.1    Exclusive
Remedy. Except as set forth in the Subsection in this Section entitled “Claims Not Subject to Arbitration,”
arbitration shall be the sole and exclusive remedy for any dispute, claim, or controversy of any kind or nature (a “Claim”)
arising out of, related to, or connected with this Agreement, Executive’s employment relationship with the Company, or the
termination of Executive’s employment relationship with the Company, including any Claim against any parent, subsidiary,
or affiliated entity of the Company, or any director, officer, employee, or agent of the Company or of any such parent, subsidiary,
or affiliated entity. It also includes any Claim against the Executive by the Company, or any parent, subsidiary or affiliated
entity of the Company.

 

7.4.2 
  Claims Subject to Arbitration. Except for claims described in the Subsection in this
Section entitled “Claims Not Subject to Arbitration,” this Agreement specifically includes (without limitation)
all Claims under or relating to any federal, state or local law or regulation prohibiting discrimination, harassment or
retaliation based on race, color, religion, national origin, sex, sexual orientation, age, disability or any other condition
or characteristic protected by law; demotion, discipline, termination or other adverse action in violation of any contract,
law or public policy; entitlement to wages or other economic compensation; any Claim for personal, emotional, physical,
economic or other injury; and any Claim for business torts or misappropriation of confidential information or trade
secrets.

 

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7.4.3     Claims
Not Subject to Arbitration. This Subsection does not preclude either Party from making an application to a court of competent
jurisdiction for provisional remedies (e.g., temporary restraining order or preliminary injunction), subject to the Colorado Revised
Statutes. This Agreement also does not apply to any claims by Executive: (i) for workers’ compensation benefits; (ii) for
unemployment insurance benefits; (iii) under a benefit plan where the plan specifies a separate arbitration procedure; (iv) filed
with an administrative agency which are not legally subject to arbitration under this Agreement; or (v) which are otherwise expressly
prohibited by law from being subject to arbitration under this Agreement.

 

7.4.5
    Procedure. The arbitration shall be conducted in the City and County of Denver. Any Claim
submitted to arbitration shall be decided by a single, neutral arbitrator (the “Arbitrator”). The Parties
to the arbitration shall mutually select the Arbitrator not later than 45 days after service of the demand for arbitration.
If the Parties for any reason do not mutually select the Arbitrator within the 45 day period, then any Party may apply to any
court of competent jurisdiction to appoint a retired judge as the Arbitrator. The arbitration shall be conducted in
accordance with the Colorado Revised Statutes, except as modified by this Agreement. The Arbitrator shall apply the
substantive federal, state, or local law and statute of limitations governing any Claim submitted to arbitration. In ruling
on any Claim submitted to arbitration, the Arbitrator shall have the authority to award only such remedies or forms of relief
as are provided for under the substantive law governing such Claim. The Arbitrator shall issue a written decision revealing
the essential findings and conclusions on which the decision is based. Judgment on the Arbitrator’s decision may be
entered in any court of competent jurisdiction.

 

7.4.6    Interpretation of Arbitrability. The Arbitrator, and not any federal or state court, shall have
the exclusive authority to resolve any issue relating to the interpretation, formation or enforceability of this Subsection,
or any issue relating to whether a Claim is subject to arbitration under this Subsection, except that any Party may bring an
action in any court of competent jurisdiction to compel arbitration in accordance with the terms of this Section.

 

7.5.   
  Entire Agreement. All Exhibits to this Agreement are incorporated herein
by this reference. This Agreement constitutes the entire agreement between the Parties relating to the subject matter of this
Agreement and supersedes all prior and contemporaneous negotiations, understandings, or agreements between the Parties,
whether oral or written, expressed or implied.

 

7.6      Counterparts and Electronic Signatures. For
the convenience of the Parties, any number of counterparts of this Agreement may be executed by any one or more Parties
hereto, and each such executed counterpart shall be, and shall be deemed to be, an original, but all of which shall
constitute, and shall be deemed to constitute, in the aggregate but one and the same instrument. This Agreement may be
circulated for signature through electronic transmission, including, without limitation, facsimile and email, and all
signatures so obtained and transmitted shall be deemed for all purposes under this Agreement to be original signatures until
such time, if ever, as original counterparts are exchanged by the Parties.

 

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7.7  
   Headings. The headings of sections and subsections of this Agreement are included solely for
convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

7.8      Notices.
All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given (a) when delivered to and received personally by the recipient, (b) when sent
to and received by the recipient by facsimile (receipt electronically confirmed by sender’s facsimile machine) if during
normal business hours of the recipient, otherwise on the next business day, (c) one business days after the date when sent to the
recipient by overnight delivery by reputable express courier service (charges prepaid) and delivery confirmed, or (d) three business
days after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid
and such receipt is confirmed. Such notices, demands and other communications shall be sent to Parties at the addresses indicated
below or to such other address as a Party may direct on written notice given pursuant to the terms of this Subsection:

 

	If to Executive:	Kirk A. Stingley
	 	7775 Lebrun Court
	 	Lone Tree, CO  80124
	 	 
	If to the Company:	Eternal Energy Corp.
	 	2549 West Main Street, Suite 202
	 	Littleton, CO  80120

 

7.9      Attorneys’
Fees. If any Party shall commence any action, arbitration or proceeding against another Party in order to enforce the provisions
hereof, or to recover damages as the result of alleged breach of any of the provisions hereof, the prevailing Party therein shall
be entitled to recover all reasonable costs incurred in connection therewith, including, but not limited to, reasonable attorney'
fees.

 

7.10    Independent
Legal Advice. Executive acknowledges that he has been advised to obtain independent legal advice with respect to this Agreement
and that he has had the opportunity to do so.

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the day and year first above written.

 

	Executive:	 	American Eagle Energy Corporation
	 	 	 
	 	 	By:	 
	Kirk Stingley	 	 	Its: Chief Executive Officer

 

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    	11CONSULTING AGREEMENT

 

This Consulting Agreement
(this “Agreement”) is made and entered into by and between Eternal Energy Corp. (the “Company”) and Richard
Findley (“Chairman”). This Agreement shall become effective as of the consummation of the Transactions contemplated
by that certain Agreement and Plan of Merger executed by the Company and American Eagle Energy, Inc. on the 12th day
of April, 2011, (the “Effective Date”). The Company and the Chairman may be referred to herein collectively as “Parties”
and individually as “Party.” In consideration of the mutual promises, covenants and conditions hereinafter set forth
and other good and valuable consideration, the receipt and sufficiency of which the Parties acknowledge, the Parties agree as follows:

 

1.          Nature
and Purpose of Agreement. The Chairman is a shareholder of EERG and is a member of its Board of Directors (“Board”).
Prior to accepting appointment to the Board, Chairman was the Chairman of the Board of Directors of Ryland Oil Corporation and
Chairman of the Board of Directors of American Eagle Energy, Inc. The Chairman has vast experience in the oil and gas business,
particularly in Montana, North Dakota, Alberta and Saskatchewan and possesses extensive knowledge of the Company’s oil and
gas properties. The Chairman has also participated in numerous efforts to secure financing necessary to develop oil and gas investment
opportunities. The Company wishes to engage the Chairman to assist it in securing financing necessary to facilitate the Company’s
development of its oil and gas properties and other opportunities, to act together with the Company’s Chief Executive Officer
as a spokesperson for the Company as it seeks to communicate with its shareholders and with investment bankers and investors, to
coordinate the activities of the Company’s Board and to oversee issues related to the Company’s
corporate governance, all pursuant to the terms and conditions set forth in this Agreement. The Chairman desires to accept
this engagement, upon the terms and conditions set forth herein.

 

2.          Position,
Responsibilities and Extent of Services.

 

2.1        Position
and Responsibilities. Company hereby engages the Chairman to function as the Chairman of its Board of Directors throughout
the term of this Agreement. In this capacity, the Chairman will (i) work together with the Company’s Chief Executive Officer
(“CEO”) to secure financing necessary to facilitate the Company’s development of its oil and gas properties and
other opportunities, (ii) work together with the CEO to act as a spokesperson for the Company as it seeks to communicate with its
shareholders and with investment bankers and investors, (iii) participate in the creation of the Company’s strategic vision,
(iv) coordinate the activities of the Company’s Board and oversee issues related to the Company’s
corporate governance, including, without limitation, leading its Board meetings, coordinating Board subcommittees and aiding
in Board development, and (v) perform such other services as the Board may reasonably request from time to time (the “Services”).
Moreover, Company shall not require the Chairman to infringe good business and professional ethics or violate any statute, law,
rule order, decree or ordinance.

 

2.2        Acceptance
of Engagement. The Chairman hereby accepts this engagement, all upon the terms and conditions set forth herein. The Chairman
agrees to perform all Services in accordance with the highest standards of quality and professionalism. Without limiting the Chairman’s
fiduciary duties to the Company under law, the Chairman acknowledges and agrees that the Chairman owes a duty of loyalty, fidelity,
and allegiance to act at all times in the best interests of the Company and its Affiliates and the Chairman agrees (i) to do no
act which injures or which might injure the Company, its business, interests, goodwill or reputation and (ii) to observe and comply
with all local, state and federal laws, rules and regulations. In addition, the Chairman agrees to perform the duties required
of him hereunder faithfully, diligently and to the best of his ability and to use his best efforts at all times to promote the
best interests of the Company and its affiliates.

 

    	 

    	 

    

 

2.3        Extent
of Services. The Parties acknowledge and agree that the Chairman shall not be required to devote all of his time, attention
and energy to the Company’s business. However, the Chairman shall devote at least thirty percent (30%), on average, of each
normal forty hour work week exclusively to the business and interests of the Company and to the performance of the Services.

 

2.4        Conflicts
of Interest. The Chairman agrees that he shall not knowingly become involved in a conflict of interest with the Company and
upon discovery of any conflict of interest or potential conflict of interest will immediately take all action necessary to eliminate
or avoid, as the case may be, the conflict of interest of potential conflict. The Chairman shall disclose to the Company any other
facts which involve or may involve a conflict of interest with the Company.

 

3.          Term
of Agreement. The term of this Agreement shall commence on the Effective Date and shall continue through and including
June 30, 2012; provided, however, that this Agreement shall thereafter continue for successive one-year terms unless either Party
shall give the other written notice of termination of this Agreement not more than sixty days prior to expiration of the initial
term of this Agreement or of any one year extension thereof (the later of these dates may be referred to herein as the “Expiration
Date”), subject to the provisions of the Section in this Agreement entitled “Termination or Expiration of Agreement”
(the “Term”). Notwithstanding the foregoing, the provisions of the Sections in this Agreement entitled “Position,
Responsibilities and Extent of Services,” “Relationship of Parties,” “Non-competition; Secrecy,”
“Representations and Warranties” and “Miscellaneous” shall survive, and continue in full
force and effect, after any termination or expiration of this Agreement, irrespective of the reason for the termination or any
claim that the termination was wrongful or unlawful.

 

4.          Payment
of Compensation. As consideration for the performance of the Services the Chairman pursuant to the terms of this
Agreement, Company shall pay the Chairman a consulting fee (“Consulting Fee”) in the amount of Five Thousand and No/100s
US dollars ($5,000.00 USD) for each full calendar month for which the Chairman performs Services for the Company, or a prorated
amount for each portion of a calendar month for which the Chairman performs such Services. The Consulting Fee shall be payable
in arrears on the last day of each calendar month.

 

5.          Reimbursement
of Expenses. The Company shall reimburse the Chairman for all reasonable travel, meals, entertainment and other
expenses incurred by the Chairman in connection with the Chairman’s performance of the Services or otherwise incurred for
and on behalf of the Company, upon the Chairman’s submission to the Company of reasonable documentation pertaining to such
expenses. 

 

6.          Company’s
Cooperation.  The Company agrees to furnish or cause to be furnished to the Chairman access to such information and data
relating to the Company and its business as the Chairman reasonably requests, to provide the Chairman with access to its officers,
employees, agents, counsel and independent accountants as may be reasonably necessary to perform The Chairman’s duties hereunder,
and to make space available on its premises during the Chairman’s trips to Denver sufficient to enable the Chairman to perform
the Services while in Denver.

 

7.          Termination
or Expiration of Agreement.

 

7.1        Termination
at Company’s Election. The Company may terminate this Agreement at any time during the Term, for any reason or no reason,
with or without Cause (defined below), and with or without notice, subject to provisions of the Subsections of this Section entitled
“Termination for Cause,” “Termination Without Cause” and “Severance Following a
Change in Control.”

 

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7.1.1        Termination
of this Agreement for Cause. If this Agreement is terminated by the Company for Cause (defined below), the Chairman shall be
entitled to receive only the following: (i) payment of the Consulting Fee through and including the date of the termination of
this Agreement, and (ii) reimbursement of business expenses incurred by the Chairman prior to the termination of this Agreement.
Unless otherwise provided by the terms of this Subsection, the Chairman shall not be entitled to receive any Consulting Fees or
liquidated damages or any other amount in the event this Agreement is terminated for Cause.

 

7.1.2        Termination
of this Agreement Without Cause or for Good Reason. If this Agreement is terminated by the Company without Cause (defined below)
or if this Agreement is terminated by the Chairman for Good Reason (defined below) , the Chairman shall be entitled to receive
the following: (y) payment of the Consulting Fee through and including the date of the termination of this Agreement, and (z) reimbursement
of business expenses incurred by the Chairman prior to the termination of this Agreement. In addition, if this Agreement is terminated
pursuant to the terms of this Subsection and if the terms of the Subsection of this Section entitled “Termination of Agreement
Following a Change in Control” do not apply to the termination of this Agreement, then, subject to the condition precedent
that the Chairman sign a general release of all claims in a form approved by the Company in the exercise of its sole discretion,
the Company shall pay the Chairman liquidated damages in an amount equal to the Chairman’s annual Consulting Fee as the same
may have been changed through the date of the termination of the Chairman’s engagement, less applicable withholdings.

 

7.1.3        Termination
of Agreement Following a Change in Control.

 

A.           If,
immediately prior to or within twelve months following a Change in Control (defined below): (i) this Agreement is terminated by
the Company without Cause; or (ii) this Agreement is terminated for Good Reason (defined below) , the Chairman shall be entitled
to receive the following: (y) payment of the Consulting Fee through and including the date of the termination of this Agreement,
and (z) reimbursement of business expenses incurred by the Chairman prior to the termination of this Agreement. In addition, if
the termination of this Agreement falls within the terms of this Subsection, then, subject to the condition precedent that the
Chairman sign a general release of all claims in a form approved by the Company in the exercise of its sole discretion, the Chairman
shall also receive, and the Company shall pay the Chairman, liquidated damages in an amount equal to the product of two times the
Chairman’s annual Consulting Fee as the same may have been changed through the date of the termination of this Agreement.

 

B.           If
the Chairman terminates this Agreement within sixty (60) days of a Change in Control (defined below) for any reason other than
Good Reason (defined below), the Chairman shall be entitled to receive the following: (y) payment of the Consulting Fee through
and including the date of the termination of this Agreement, and (z) reimbursement of business expenses incurred by the Chairman
prior to the termination of this Agreement. In addition, if the Chairman terminates this Agreement within sixty (60) days of a
Change in Control for any reason other than Good Reason, then, subject to the condition precedent that the Chairman sign a general
release of all claims in a form approved by the Company in the exercise of its sole discretion, the Chairman shall also receive,
and the Company shall pay the Chairman, liquidated damages in an amount equal to the Chairman’s annual Consulting Fee as
the same may have been changed through the date of the termination of this Agreement.

 

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C.           For
purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events:
(i) the consummation of any transaction after the Effective Date in which any person or entity or group of related persons and/or
entities becomes the beneficial owner, directly or indirectly, of securities representing more than twenty percent (20%) of the
combined voting power of the Company’s outstanding voting securities, (ii) three or more directors, whose election or nomination
for election is not approved by a majority of the members of the Company’s Board of Directors on the Effective Date, are
elected within any twelve month period to serve on its Board of Directors, or (iii) any merger (other than a merger in which the
Company is the survivor and there is no change of control pursuant to (i) or (ii) of this sentence), reorganization, consolidation,
liquidation, winding up or dissolution of the Company or the sale of all or substantially all of its assets.

 

7.1.4           “Cause.”
As used in this Agreement, “Cause” means:

 

A.           Criminal
Conduct. The Chairman’s conviction of a crime punishable as a felony or of any offense involving moral turpitude, dishonesty
or immoral conduct;

 

B.           Incarceration.
The Chairman’s incarceration for any reason. For purposes of this provision, incarceration means any confinement of the Chairman
by any federal, state or local governmental agency;

 

C.           Neglect
or Other Misconduct. The Chairman’s conduct, neglect or failure to act which (i) materially and adversely affects the
business or reputation of the Company; or (ii) renders his continued engagement by the Company detrimental to the ordinary, continued,
or successful operation of its business, or (iii) is or is likely to be detrimental to, or which materially interferes with, his
ability to effectively perform the Services; or (iv) constitutes the misappropriation, misuse, or misdirection of the Company’s
funds or property; or (v) materially interferes with or materially impairs the ordinary operation of the Company’s business;
or (vi) involves moral turpitude and which is reasonably likely to cause damage to the Company’s business, its reputation
or its goodwill;

 

D.           Absence.
The Chairman’s absence from the active performance of his duties in the operation of the Company’s business on more
than an occasional basis, other than as a result of vacations or a disabling injury or illness;

 

E.           Violation
of the Company’s Rules. The Chairman’s violation of the Company’s material written rules, policies or procedures
(which do not conflict with the terms of this Agreement), after notice and not less than five (5) business days opportunity to
cure such failure or refusal;

 

F.           Failure
to Perform the Services. The Chairman’s failure or refusal to perform the Services, after notice and not less than five
(5) business days opportunity to cure such failure or refusal; or

 

G.           Violations
of the Board of Director Directives. The Chairman’s intentional violation of the lawful directives of the Company’s
Board of Directors.

 

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7.1.5           “Good
Reason.” As used in this Agreement, “Good Reason” means the occurrence of any of the following without the
Chairman’s prior written consent and in the absence of any circumstance that constitutes Cause: (i) the regular assignment
to the Chairman of duties materially inconsistent with the position and status of the Chairman; (ii) a material reduction in the
nature, status or prestige of the Chairman’s responsibilities or a materially detrimental change in the Chairman’s
title or reporting level, excluding for this purpose an isolated, insubstantial or inadvertent action by the Company which is remedied
by the Company promptly after the Company’s receipt of written notice from the Chairman; or (iii) a reduction by the Company
of the Chairman’s annual Consulting Fee.

 

7.2        Termination
upon Death or Permanent Disability.

 

7.2.2      Termination
Resulting from Death or Permanent Disability. This Agreement will terminate automatically on the Chairman’s death or
if the Chairman becomes Permanently Disabled (as defined below) and the Consulting Fee and other payments which the Chairman, or
the Chairman’s beneficiaries or estate, shall be entitled to receive shall be determined exclusively by operation of this
Subsection. In the event of the termination of this Agreement as a result of the Chairman’s death or Permanent Disability,
the Chairman, or the Chairman’s beneficiaries or estate, shall receive from the Company:  (y)
payment of the Chairman’s Consulting Fee through and including the date of termination; and (z) reimbursement of business
expenses incurred prior to the date of termination. In addition, subject to the condition precedent that the Chairman or his estate
or his legal representative, as the case may be, sign a general release of all claims in a form approved by the Company in the
exercise of its sole discretion, the Chairman or his beneficiaries or estate shall also receive, and the Company shall pay the
Chairman, an additional payment in an amount equal to the product of one-half times the Chairman’s annual Consulting Fee
as the same may have been changed through the date of the termination of the Chairman’s engagement, less applicable withholdings.

 

7.2.3       Permanent
Disability. As used in this Agreement, “Permanent Disability” and “Permanently Disabled” shall mean
the incapacity of the Chairman due to illness, accident, or any other reason to perform his duties for a period of ninety (90)
days, whether or not consecutive, during any twelve month period of the Term, all as determined by the Company in its reasonable
discretion. All determinations as to the date and extent of incapacity of the Chairman shall be made by the Board, upon the basis
of such evidence, including independent medical reports and data, as the Board in its discretion deems necessary and desirable.
All such determinations of the Board shall be final and binding upon the Parties.

 

7.3        Termination
at the Chairman’s Election. The Chairman may terminate this Agreement prior to the expiration of the Term for any reason
by providing written notice to the Company at least thirty (30) days prior to the effective date of the termination of this Agreement.
If the Chairman terminates this Agreement before expiration of the Term under any circumstances other than: (i) for Good Reason
(defined above), or (ii) within sixty (60) days of a Change in Control (defined above) for any reason other than Good Reason (defined
above), then the Chairman shall be entitled to receive only the following: (i) payment of the Chairman’s Consulting Fee
through and including the effective date of the termination of this Agreement, and (ii) reimbursement of business expenses incurred
by the Chairman prior to the date of upon which the Chairman gave the Company notice of his termination of this Agreement. The
Chairman shall not be entitled to receive any Consulting Fee, liquidated damages or any other sum in excess of the amount due
pursuant to the terms of this Subsection, unless otherwise expressly provided to the contrary herein.

 

7.4        Termination
on Expiration of Term. If this Agreement is terminated on the expiration of the Term in accordance with the Section in this
Agreement entitled “Term of Agreement,” the Chairman shall receive: (i) payment of the Chairman’s Consulting
Fee through and including the effective date of the termination or expiration of this Agreement, and (ii) reimbursement of business
expenses incurred by the Chairman prior to the date of the expiration of the Term. The Chairman shall not be entitled to receive
any Consulting Fee, liquidated damages or any other sum in excess of the Consulting Fee due pursuant to the terms of this Subsection

 

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8.          Relationship
of Parties.  The Company and the Chairman agree that the Chairman's relationship to the Company shall, during the
period or periods of his engagement by the Company and while performing the Services, be that of an independent contractor. The
Chairman shall, subject to the terms of this Agreement, be free to dispose of such portion of his entire time, energy, and skill
during regular business hours, in such manner as the Chairman sees fit and to such persons, firms, or corporations as he deems
advisable. The Chairman shall not be considered as having employee status with the Company or as being entitled to vacation pay,
sick leave, retirement benefits, social security, workmen's compensation, disability or unemployment insurance benefits of any
kind from the Company. The Chairman acknowledges that he shall not be treated by the Company as an employee for purposes of
the Federal Insurance Contribution Act, the Social Security Act, the Federal Unemployment Tax Act, Federal income tax withholding
or any similar law or laws enacted by the Federal government or by any State or local government. The Chairman further acknowledges
that he shall not be entitled to unemployment insurance benefits unless he is provided unemployment compensation coverage by himself
or some other entity other than the Company. The Chairman agrees that he is obligated to and shall timely pay all federal and state
income tax on any and all compensation for services rendered paid pursuant to this contractual relationship. The Chairman
agrees to promptly and timely comply with these laws. At each calendar year end, the Company shall issue to the Chairman an
IRS Form 1099 certifying the total amount of Consulting Fees paid to the Chairman by the Company during each calendar year. The
Form 1099 shall be issued using the employer identification number or such other number provided to the Company by the Chairman.

 

9.          Non-competition;
Secrecy.

 

9.1           Assistance
to Competitors. Unless otherwise provided in this Subsection, the Chairman shall
not during the Term and for a period of two years following the termination or expiration of this Agreement own a material interest
in, render financial assistance to, or offer personal services to (whether for payment or otherwise), (i) any person or entity
that competes with the Company in the Company Business (defined below), or (ii) any person or entity or any subsidiary or affiliate
of any person or entity which is pursuing any business or investment opportunity which the Company reviewed within the previous
six month period. “Company Business” shall mean the conduct of the oil and gas exploration and development business
in those basins or areas of mutual interest (i) within which the Company directly or indirectly owns, leases or otherwise holds
mineral interests, (ii) as to which the Company is actively evaluating the desirability of directly or indirectly acquiring mineral
interests, or (iii) as to which the Company is endeavoring to directly or indirectly acquire mineral interests. Notwithstanding
anything to the contrary set forth in this Agreement, the Chairman shall
have the right to own a material interest in or render financial assistance to any person or entity in connection with a project
or opportunity in which the Company has failed or declined to exercise its right of first refusal described below. The Chairman
agrees that during the Term he will offer the Company a right of first
refusal, in writing, to pursue all opportunities of which the Chairman learns involving the exploration, development and production
of hydrocarbons. Contemporaneously with the Chairman’s delivery
of such written notification to the Company, the Chairman shall
provide the Company with all material information in the Chairman’s
possession or control which is reasonably necessary to enable the Company to evaluate the economic viability and risks of pursuing
each such opportunity. Company shall exercise its right of first refusal to pursue such an opportunity by giving the Chairman
written notice of its exercise within forty five business days of its
receipt of the Chairman’s written notification and all of
the information described above.

 

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9.2           Confidential
Information. The Chairman acknowledges and agrees that the
Company is engaged in business activities in which it is and will in the future be crucial to develop and retain proprietary, trade
secret, or confidential information for the benefit of the Company (collectively, “Confidential Information”). Accordingly,
the Chairman shall not at any time during the Term or for a period
of three years following the termination or expiration of this Agreement, (i) divulge, convey or communicate any Confidential Information
to any person or entity, except as may be expressly authorized in writing by the Company or as may be necessary for the
Chairman to perform the Services, or (ii) use any Confidential Information
for the Chairman’s own benefit or the benefit of any person
or entity other than the Company. Confidential Information includes, but is not limited to geological, geophysical, and
engineering data, models, analyses, compilations, estimates of reserves, interpretations, data, studies, reports, business plans,
business methods, contractual and financial information, matters of a
technical or intellectual nature such as inventions, designs, improvements, processes of discovery, techniques, methods, ideas,
discoveries, developments, know-how, formulae, compounds, compositions, specifications, trade secrets, specialized knowledge, or
matters of a business nature such as information about costs and profits, records, customer lists, customer data, sales data and
other data in whatever form stored or maintained, whether oral, written, documentary, digital, computer storage or otherwise.

 

9.3           Ownership
of Ideas. The Company shall own, and the Chairman hereby transfers
and assigns to the Company, all rights, of every kind and character throughout the world, in perpetuity, in and to any and all
materials, ideas, concepts and results inuring from, relating to, or in connection with the Chairman’s
performance of the Services or the conduct of the Company Business, or conceived of or produced by the Chairman during the Term
and which relate to the Company Business. The Parties acknowledge and agree, however, that such transfer and assignment shall not
apply to, or attach in and to, any materials, ideas or concepts which fall outside the ambit of this Agreement. The Chairman shall
execute and deliver to the Company such assignments, certificates of authorship, or other instruments as the Company may require
from time to time to evidence the Company’s ownership of such materials, ideas and other results. 

 

9.4           Company
Property. All records, papers, documents, materials, and electronically stored data kept, made, or received or learned by the
Chairman while performing the Services or acting as the Chairman of the Company’s Board, or generated for, in the course
of, or in connection with conduct of the Company Business, whether or not containing Confidential Information, shall be and remain
the exclusive property of the Company (collectively referred to as “Company Property”) at all times during and after
the termination or expiration of this Agreement, without regard to how the Chairman came into possession of any Company Property
or whether the Chairman played any role in creating any Company Property. The Chairman shall not destroy any Company Property or
remove any Company Property from the Company’s premises, whether during the Term or after the termination or expiration of
this Agreement, except as expressly directed for the purpose of performing the Services on behalf of the Company. Upon the termination
or expiration of this Agreement at any time and for any reason, or upon the Company’s request at any time and for any reason,
the Chairman shall promptly return all Company Property to the Company, at the Chairman’s expense, without keeping
a copy of any such Company Property for himself or any other entity or individual. The Chairman will,
upon request by the Company, certify his compliance with the terms of this Subsection.

  

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9.5         Interference
with Employees and Clients. 

 

9.5.1      Non-Solicitation
of Employees. During the Term, and for a three-year period thereafter, shall not, directly
or indirectly, whether for his own benefit or for the benefit of any other entity or individual: (i) solicit, encourage, or in
any way influence any person or entity employed by, or engaged to render services on behalf of, the Company, to cease performing
services for the Company, or to engage in any activity contrary to or conflicting with the interests of the Company; (ii) hire
away any person or entity employed by, or engaged to render services on behalf of, the Company; or (iii) otherwise interfere to
the Company’s detriment in any way in the Company’s relationship with any person or entity who is employed by, or engaged
to render services on behalf of, the Company.

 

9.5.2      Non-Solicitation
of Clients. During the Term, and for a three-year period thereafter, the Chairman shall not, whether for his own benefit or
for the benefit of any other entity or individual, take any action which could cause any customer or client of the Company to limit,
curtail or terminate its business relationship with the Company.

 

9.5.3      Injunctive
Relief. The Chairman and the Company acknowledge and agree that (i) the Chairman’s breach of his obligations under this
Section would cause the Company irreparable harm and that monetary damages alone would not be an adequate remedy for any such breach;
and, therefore, (ii) if the Chairman breaches this Section, the Company shall be entitled to obtain injunctive relief (and any
other form of equitable relief), as well as any other remedies (including monetary damages) to which the Company is entitled as
a consequence of such breach or otherwise.

 

10.        Representation
and Warranties. The Chairman represents and warrants to the Company that he is under no contractual or other restriction
or obligation that is materially inconsistent with the execution of this Agreement, the performance of his duties hereunder, or
the rights of the Company hereunder, including, without limitation, any development agreement, non-competition agreement or confidentiality
agreement previously entered into by the Chairman.

 

11.        Miscellaneous.

 

11.1        Agreement
Binding. This Agreement shall be binding upon the Parties, their legal representatives, and permitted successors and assigns.
The covenants of this Agreement relating to the Chairman’s performance of the Services for and on behalf of Company may not
be assigned by the Chairman. The Company may assign this Agreement as it shall determine appropriate in the exercise of its discretion.

 

11.2        Notices.
 All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when delivered to and received personally by the recipient, (b)
when sent to and received by the recipient by facsimile (receipt electronically confirmed by sender’s facsimile machine)
if during normal business hours of the recipient, otherwise on the next business day, (c) one business days after the date when
sent to the recipient by reputable express courier service (charges prepaid) and delivery confirmed, or (d) three business days
after the date when mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid and such
receipt is confirmed. Such notices, demands and other communications shall be sent to the Parties at the addresses indicated below
or to such other address as a Party may direct on written notice given pursuant to the terms of this Section:

 

	If to the Chairman:	 	 
	 	 	 
	 	 	 

 

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	If to the Company:	Eternal Energy Corp.
	 	Attn: President 
	 	2549 S. Main Street, Suite 202
	 	Littleton, CO 80120

 

11.3        Waiver.
Any Party may, by written notice to another, (i) extend the time for the performance of any of the obligations or other actions
of the other under this Agreement; (ii) waive any inaccuracies in the representations or warranties of the other contained in this
Agreement or in any document delivered pursuant to this Agreement; (iii) waive compliance with any of the conditions or covenants
of the other contained in this Agreement; or (iv) waive performance of any of the obligations of the other under this Agreement.
The waiver by any Party hereto of a breach of any provision hereunder shall not operate or be construed as a waiver of any prior
or subsequent breach of the same or any other provision hereunder.

 

11.4        Entire
Agreement. This Agreement constitutes the entire agreement between
the Parties relating to the subject matter of this Agreement and supersedes all prior and contemporaneous negotiations, understandings,
or agreements between the Parties, whether oral or written, expressed or implied. This Agreement may be amended at any time
and in any particular by a writing signed by both Parties.

 

11.5   
   Severability. If any covenant or agreement set forth herein conflicts with any applicable statute, law,
rule or regulation, such covenant or agreement shall be deemed by the Parties to be modified but only to the extent necessary
to conform to what is allowed under such statute, law, rule or regulation. If for any reason whatsoever, any one or more of
the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid as applied to any
particular case or in all cases, such circumstances shall not have the effect of rendering such provision invalid in any
other case or of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid.

 

11.6        Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado exclusive of the
conflict of law provisions thereof.

 

11.7        Arbitration.

 

11.7.1      Exclusive
Remedy. Except as set forth in the Subsection in this Section entitled “Claims Not Subject to Arbitration,”
arbitration shall be the sole and exclusive remedy for any dispute, claim, or controversy of any kind or nature (a “Claim”)
arising out of, related to, or connected with this Agreement, the Chairman’s engagement by the Company, or the termination
or expiration of this Agreement, including any Claim against any parent, subsidiary, or affiliated entity of the Company, or any
director, officer, employee, or agent of the Company or of any such parent, subsidiary, or affiliated entity. It also includes
any Claim against the Chairman by the Company, or any parent, subsidiary or affiliated entity of the Company.

 

11.7.2      Claims
Subject to Arbitration. Except for claims described in the Subsection in this Section entitled “Claims Not Subject
to Arbitration,” this Agreement specifically includes (without limitation) all Claims under or relating to any federal,
state or local law or regulation prohibiting discrimination, harassment or retaliation based on race, color, religion, national
origin, sex, sexual orientation, age, disability or any other condition or characteristic protected by law; demotion, discipline,
termination or other adverse action in violation of any contract, law or public policy; entitlement to wages or other economic
compensation; any Claim for personal, emotional, physical, economic or other injury; and any Claim for business torts or misappropriation
of confidential information or trade secrets.

 

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11.7.3      Claims
Not Subject to Arbitration. This Subsection does not preclude either Party from making an application to a court of
competent jurisdiction for provisional remedies (e.g., temporary restraining order or preliminary injunction), subject to the Colorado
Revised Statutes. This Agreement also does not apply to any claims by the Chairman: (i) filed with an administrative agency which
are not legally subject to arbitration under this Agreement, or (ii) which are otherwise expressly prohibited by law from being
subject to arbitration under this Agreement.

 

11.7.5      Procedure.
The arbitration shall be conducted in the City and County of Denver. Any Claim submitted to arbitration shall be decided by a single,
neutral arbitrator (the “Arbitrator”). The Parties to the arbitration shall mutually select the Arbitrator not later
than 45 days after service of the demand for arbitration. If the Parties for any reason do not mutually select the Arbitrator within
the 45 day period, then any Party may apply to any court of competent jurisdiction to appoint a retired judge as the Arbitrator.
The arbitration shall be conducted in accordance with the Colorado Revised Statutes, except as modified by this Agreement. The
Arbitrator shall apply the substantive federal, state, or local law and statute of limitations governing any Claim submitted to
arbitration. In ruling on any Claim submitted to arbitration, the Arbitrator shall have the authority to award only such remedies
or forms of relief as are provided for under the substantive law governing such Claim. The Arbitrator shall issue a written decision
revealing the essential findings and conclusions on which the decision is based. Judgment on the Arbitrator’s decision may
be entered in any court of competent jurisdiction.

 

11.7.6      Interpretation
of Arbitrability. The Arbitrator, and not any federal or state court, shall have the exclusive authority to resolve any issue
relating to the interpretation, formation or enforceability of this Subsection, or any issue relating to whether a Claim is subject
to arbitration under this Subsection, except that any Party may bring an action in any court of competent jurisdiction to compel
arbitration in accordance with the terms of this Section.

 

11.8        Attorneys’
Fees. If any Party shall commence any action or proceeding against another Party in order to enforce the provisions hereof,
or to recover damages as the result of alleged breach of any of the provisions hereof, the prevailing party therein shall be entitled
to recover all reasonable costs incurred in connection therewith, including, but not limited to, reasonable attorney' fees.

 

11.9        Gender
and Number. As used herein, the masculine gender shall include the feminine and neuter genders, and the singular shall include
the plural, and vice versa, where the context requires.

 

11.10      Captions.
All captions, titles, headings and divisions hereof are for purposes of convenience and reference only, and shall not be construed
to limit or affect the interpretation of this Agreement.

 

11.11      Counterparts;
Electronic Signatures. For the convenience of the Parties, any number of counterparts of this Agreement may be executed by
any one or more Parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original, but all of
which shall constitute, and shall be deemed to constitute, in the aggregate, but one and the same instrument. This Agreement may
be circulated for signature through electronic transmission, including, without limitation, facsimile and email, and all signatures
so obtained and transmitted shall be deemed for all purposes under this Agreement to be original signatures until such time, if
ever, as original counterparts are exchanged by the Parties. 

 

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11.12         Independent
Legal Advice. The Chairman acknowledges that he has been advised to obtain independent legal advice with respect to this Agreement
and that he has had the opportunity to do so.

 

IN WITNESS WHEREOF, the Parties hereto
have executed this Agreement effective as of the day and year first above written.

 

	COMPANY:	 	THE CHAIRMAN:
	Eternal Energy Corp.	 	 
	 	 	 
	By:	 	 	 
	 	Chief Executive Officer	 	Richard Findley

 

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