CONSULTING AGREEMENT

CONSULTING AGREEMENT

This Consulting Agreement (the “Agreement”) is made by and between Allied Resources, Inc. (“Company”) and Ruairidh Campbell (“Consultant”) for the purposes and considerations herein stated.

RECITALS

1.     WHEREAS, Consultant has been providing certain services to the Company; and

2.     WHEREAS, the Company desires to continue the engagement of Consultant to be primarily responsible for carrying out on a day-to-day basis the strategic plans and policies established by the Company’s Board of Directors (the “Board”) in connection with the exploration, development and production of oil and gas; and
3.     WHEREAS, Consultant desires to be engaged by the Company in accordance with the terms and conditions of this Agreement.

AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

1.     AGREEMENT TERM. The term of this Agreement shall be five (5) years beginning on July 1, 2008, and ending on June 30, 2013 (the “Term”), unless terminated sooner pursuant to the termination provisions herein contained.
2.     POSITION AND DUTIES OF ENGAGEMENT.

a.      Consulting Duties and Title . The Company hereby engages Consultant to act as the President and Chief Executive Officer of the Company, pursuant to the terms hereof, and Consultant hereby accepts such engagement. Consultant’s duties and responsibilities generally shall be those customarily undertaken by the President of companies engaged in enterprises in which the Company is engaged, including but not necessarily limited to, general management and operations, responsibility for finance, administration, and human resources, and may include serving as a member of the Board. The Board may add, delete or otherwise alter Consultant’s duties and responsibilities, provided the Board shall make all assignments of duties and responsibilities in good faith and shall not materially alter the general character of the work to be performed by Consultant, who shall perform such duties and discharge such responsibilities as directed by the Board in a good and businesslike manner. Consultant’s duties shall be governed by such policies and procedures adopted by the Company from time to time that provide for the orderly administration of the workplace.

b.      Performance . During the Term, Consultant shall (i) devote sufficient business time to the business of the Company; (ii) faithfully serve the Company; (iii) in all respects conform to and comply with the lawful and reasonable directions and instructions given to him by the Board in accordance with the terms of this Agreement; and (iv) use his reasonable business efforts to promote and serve the interests of the Company. Notwithstanding the foregoing, provided the following does not interfere with Consultant’s ability to perform his duties under this Agreement, Consultant may (i) participate in outside activities for remuneration; (ii) participate in the activities of professional trade organizations related to the business of Company or its affiliates; (iii) engage in personal investing activities; and (iv) devote reasonable amounts of time to civic, social, community, charitable or religious pursuits.

3.     COMPENSATION AND BENEFITS.

a.      Base Fee . The Company shall pay Consultant an annual base fee of One Hundred and Twenty Thousand and No/100 Dollars ($120,000.00), which shall be payable monthly as it accrues, or at such other intervals as Company and Consultant may hereafter from time to time agree in writing. Further, the Company agrees to review Consultant’s base fee and increase the amount payable commensurate with an increase in net pre-tax profits over the Term of the Agreement.

b.      Annual Bonus . On each anniversary of the beginning of the Term, the Company, at its sole discretion, shall pay Consultant an annual bonus in an amount to be determined by the Board.

c.      Stock Options . Consultant shall be granted options to purchase Five Hundred Thousand (500,000) shares of the Common Stock of the Company, which shall vest as indicated on the schedule set forth in Exhibit A attached hereto.

All stock options described herein shall be granted in accordance with the terms and conditions of the Company’s 2008 Stock Option Plan. Notwithstanding anything to the contrary herein or in any other document or agreement between the Company and Consultant, each stock option granted to Consultant shall have an exercise price that is not less than the fair market value of the Company’s Common Stock on the date of the grant.

d.      Expenses . The Company shall reimburse Consultant for all reasonable travel, entertainment and out-of-pocket expenses incurred by Consultant in the course and scope of authorized Company business regardless of when incurred.

4.     TERMINATION OF AGREEMENT.

a.      By Company Without Cause . During the Term:

(i)     The Company may terminate the Consultant’s engagement at any time      without cause upon sixty (60) days written notice.

(ii)     In the event the Company terminates Consultant’s engagement during the Term without cause pursuant to paragraph 4.a.(i), any stock options not vested in accordance with Exhibit A will automatically vest and Consultant shall have twelve (12) months in which to exercise any such remaining stock options. Any remaining stock options that have not been exercised at the end of said twelve (12) months shall expire.

(iii)     In the event the Company terminates Consultant’s engagement during the Term without cause pursuant to paragraph 4.a.(i), the Company shall pay Consultant an amount equal to twenty four (24) months of Consultant’s then base salary plus any unpaid reimbursable expenses, any earned but unpaid annual bonus and any accrued but unpaid benefits.

b.      By the Company With Cause .

(i)     The Company may terminate Consultant’s engagement at any time for cause.

(ii)     The term “cause” shall mean (1) Consultant’s material failure, neglect or refusal to perform any duties, responsibilities or obligations specifically described in or assigned to him under article 2 of this Agreement; (2) any willful or intentional act of Consultant that has the effect of substantially injuring the reputation or business of the Company or any of its affiliates and any of their respective affiliates; (3) use of illegal drugs by Consultant or repeated drunkenness; (4) a plea of nolo contendre, admission of guilt or conviction of Consultant by a court of competent jurisdiction for the commission of (A) a felony or (B) a misdemeanor involving moral turpitude; (5) an act of fraud or embezzlement or material dishonesty by Consultant against the Company or any other person or entity; (6) excessive unexcused absenteeism not related to a disability; (7) other violations of policies adopted by the Company that provide for the orderly administration of the workplace; or (8) during the Term, any material violation of a covenant described in article 5 of this Agreement.

(iii)     Company shall give Consultant written notice of the Company’s intention to terminate Consultant’s engagement for cause under paragraph 4.b.(i) (the “Cause Notice”). The Cause Notice shall state the particular action(s) or inaction(s) giving rise to cause for termination. If the cause for termination is capable of cure, Consultant shall have a reasonable time not to exceed thirty (30) days after a Cause Notice is communicated pursuant to paragraph 7.a. to perform or correct performance of the particular duties, responsibilities or obligations described in the Cause Notice. If Consultant performs and continues to perform as required, the Company shall not terminate Consultant’s engagement for cause based upon the reasons stated in the Cause Notice.

(iv)     Upon termination by the Company for cause, Consultant shall be entitled only to accrued and unpaid compensation and benefits unreimbursed expenses and earned but unpaid bonuses as defined in article 3 of this Agreement through the date of termination, and any rights and benefits to which Consultant is entitled at law. Any stock options that have not vested at the time of termination of Consultant for cause shall expire, and Consultant shall have twelve (12) months from the date of termination to exercise any vested stock options, after which time, such vested options shall expire.

c.      Termination of Engagement by Consultant .

(i)     At any time during the Term, Consultant may terminate his engagement, with or without good reason, by giving sixty (60) days prior written notice of termination to the Company pursuant to paragraph 7.a.

(ii)     The term “good reason” shall mean the occurrence of any of the following events