EXHIBIT No. 10.26

8-K Filed 8/28/12

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”), having an effective date of May 18th,
2012 (“Effective Date”), is entered into between DALECO RESOURCES CORPORATION, a
Nevada corporation (together with its subsidiaries and affiliates, the
“Company”), and MICHAEL D. PARRISH (“Executive”).

 

BACKGROUND

 

WHEREAS, the Company desires to employ Executive as its Chief Executive Officer,
and Executive desires to accept such employment; and

 

WHEREAS, Executive and the Company desire to set forth the terms and conditions
of Executive’s employment with the Company in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, the parties hereby agree as follows, intending to be legally
bound:

 

1. Employment, Duties and Responsibilities.

 

1.1 Employment. During the Term (as defined below), Executive shall be employed
as the Chief Executive Officer of the Company and shall report directly to the
Board of Directors of the Company (the “Board”). Executive shall devote his full
business time and efforts to promote the interests of the Company. Nothing
herein, however, shall preclude Executive from devoting a portion of his time
and efforts (and retaining remuneration, if any, for such services) to (i) his
personal and family affairs and investments, (ii) charitable, educational,
civic, and military activities, or (iii) service on the boards of other
for-profit and not-for-profit entities; provided, however, in each case so long
as such activities do not materially interfere with the performance of his
duties hereunder; and provided further that with respect to engaging in outside
business activities or serving on the board of any for-profit entity, Executive
shall first obtain the prior consent of the Board.

 

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1.2 Member of the Board. During the Term, Executive shall be appointed to be a
member of the Board.

 

1.3 Duties and Responsibilities. During the Term, Executive shall have such
duties, responsibilities and authorities commensurate with his position as Chief
Executive Officer and as may be assigned to Executive from time-to-time by the
Board, consistent with Executive’s position.

 

1.4 Principal Work Location. During the Term, except for any required business
travel in connection with the performance of his duties hereunder, Executive
shall perform his duties at the principal executive offices of the Company
(currently in West Chester, Pennsylvania); provided, however, that the Board, in
its sole discretion, may determine that the executive offices of the Company
should be re-located to a different place within the Greater Philadelphia,
Pennsylvania region (the “New Headquarters”).

 

2. Term of Employment.

 

2.1 Initial Term. The initial term (“Initial Term”) of Executive’s employment
under this Agreement shall commence on May 21, 2012 (the “Commencement Date”)
and shall continue through the close of business on November 20, 2012 (the
“Initial Scheduled Expiration Date”), unless sooner terminated: (i) by
Executive’s resignation; (ii) in accordance with Paragraph 5 below; or (iii) by
the Board, at the sole discretion of the Board, if by November 1, 2012, any two
(2) (or more) of the following performance targets (the “Initial Performance
Benchmarks”) have not been achieved:

 

2.1.1 The Company has received a firm commitment (on terms reasonably acceptable
to the Board) from a third-party (reasonably acceptable to the Board) for
investment of new capital into the Company in the amount of at least
$1,000,000.00;

 

2.1.2 The Company has achieved gross operating revenues for FY2012 (ending
September 30, 2012) in the amount of at least $750,000.00;

 

2.1.3 The Company has cash on-hand in an amount of at least $650,000.00.

 

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2.2 Subsequent Terms. Executive’s employment hereunder shall be automatically
extended on an annual basis, on the terms and conditions set forth herein, for
additional periods of one-year each (each a “Subsequent Term” and collectively
the “Subsequent Terms”), with the first Subsequent Term commencing on the first
day after the Initial Scheduled Expiration Date, i.e., on November 21, 2012, and
thereafter commencing on the first day after each Subsequent Scheduled
Expiration Date, unless either party hereto gives written notice to the other
party of its or his election not to so extend Executive’s employment hereunder
at least 45 days prior to (i) the Initial Scheduled Expiration Date or (ii) the
subsequent expiration date of a Subsequent Term (“Subsequent Scheduled
Expiration Date”). The period during which Executive is employed pursuant to
this Agreement (including the Initial Term and all Subsequent Terms in
accordance with the preceding sentence) shall be referred to as the “Term.”

 

3. Compensation and Expenses. During the Term, Executive shall be entitled to
the following:

 

3.1 Salary.

 

3.1.1 Initial Term - Base Salary. Except as otherwise provided herein, during
the Initial Term, the Company shall pay Executive an initial base salary of One
Hundred Thousand Dollars ($100,000.00) (“Initial Base Salary”) payable in
installments as follows:

 

3.1.1.1 For the period commencing with the Commencement Date and expiring on
September 30, 2012, the bi-weekly or semi-monthly installments shall be
calculated using $250,000.00 as the numerator and either 26 (if the Company
makes its payroll payments on a bi-weekly basis) or 24 (if the Company makes its
payroll payments on a semi-monthly basis) as the denominator; and

 

3.1.1.2 For the remainder of the payroll installments during the Initial Term,
the bi-weekly or semi-monthly installments shall be made in such manner that
each of such remaining installments shall be approximately equal and calculated
in such manner that the total of all of the Initial Base Salary payroll
installments paid by the Company to Executive for Executive’s employment during
the Initial Term shall not exceed $100,000.00.

 

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All installments of Executive’s Initial Base Salary shall be made in accordance
with the Company’s normal payment procedures (but in no event less frequently
than semi-monthly) and subject to such withholdings and other normal employee
deductions as may be required by applicable law.

 

Notwithstanding the foregoing provisions of this Paragraph 3.1.1, in the event
that the Initial Term (and Executive’s employment with the Company) is
terminated earlier than the Initial Scheduled Termination Date pursuant to
Paragraph 2.1 above, then all installments of Executive’s Initial Base Salary
already paid by the Company (together with an amount equal to the prorata share
of the next unpaid installment of Executive’s Initial Base Salary based on the
unpaid days of Executive’s employment through the date of the early termination
of Executive’s employment) shall be deemed fully earned and such unpaid prorata
amount of Executive’s Initial Base Salary shall be promptly paid to Executive by
the Company.

 

3.1.2 Subsequent Terms - Base Salary. Except as otherwise provided herein,
during each Subsequent Term, the Company shall pay Executive a base annual
salary of Two Hundred Thousand Dollars ($200,000.00) per year (“Subsequent Term
Base Salary”) payable in substantially equal regular bi-weekly or semi-monthly
installments. All installments of Executive’s Subsequent Term Base Salary shall
be made in accordance with the Company’s normal payment procedures (but in no
event less frequently than semi-monthly) and subject to such withholdings and
other normal employee deductions as may be required by applicable law.

 

3.1.3 Adjustments to Base Salary.

 

3.1.3.1 Earned Adjustments. If, during the first twelve (12) months of the Term,
i.e., during the first twelve (12) months of Executive’s employment with the
Company, two (2) or more of the Initial Performance Benchmarks specified in
Paragraphs 2.1.1, 2.1.2, and 2.1.3 above are achieved, then Executive’s base
salary, i.e., both Executive’s Initial Base Salary and Executive’s Subsequent
Base Salary shall be adjusted to a rate of Two Hundred Fifty Thousand Dollars
($250,000.00) per year for the period beginning on the date that the second of
such Initial Performance Benchmarks shall have been achieved and continuing
until the next adjustment of Executive’s base salary.

 

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3.1.3.2 Discretionary Adjustments. At any time during the Term, the Board may
grant to Executive such other and further adjustments, i.e., increases but not
decreases, to Executive’s then applicable base salary as the Board, in the sole
discretion of the Board, determines appropriate.

 

3.1.3.3 Additional Negotiated Adjustments. Nothing in the foregoing provisions
of this Agreement shall be interpreted to limit the right and power of Executive
and the Board to negotiate any other adjustments to Executive’s salary.

 

3.2 Equity.

 

3.2.1 Initial Shares. If, during the first twelve (12) months of the Term, i.e.,
during the first twelve (12) months of Executive’s employment with the Company,
two (2) or more of the Initial Performance Benchmarks specified in Paragraphs
2.1.1, 2.1.2, and 2.1.3 above are achieved, the Company shall transfer to
Executive six hundred thousand (600,000) shares of the Company’s S-8 registered
common stock which will vest monthly at the rate of one hundred thousand
(100,000) shares per month of Executive’s employment service beginning with the
first calendar month after the date of the achievement of the second (2nd) of
the Initial Performance Benchmarks to be achieved. The shares shall be
transferred to Executive on the last day of every such month, in six (6) equal
installments. The value of such shares shall be determined by the closing price
of the stock on the day before the day of each transfer of such shares.
Notwithstanding the foregoing provisions of this Paragraph 3.2.1 (or any other
provisions of this Agreement), this Agreement shall not be interpreted or
construed to mean that Executive is being awarded any shares of the Company’s
S-8 registered common stock S-8 in consideration for any of Executive’s
fund-raising activities or fund-raising performance, and, if necessary, this
Paragraph 3.2.1 shall be modified as needed to avoid any such interpretation or
construction.

 

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3.2.2 Subsequent Shares.

 

3.2.2.1 Discretionary Shares. At any time during the Term, the Board may grant
to Executive such other and further shares of the Company’s common stock as the
Board, in the sole discretion of the Board, determines appropriate.

 

3.2.2.2 Additional Negotiated Shares. Nothing in the foregoing provisions of
this Agreement shall be interpreted to limit the right and power of Executive
and the Board to negotiate any other grants to Executive of shares of the
Company’s common stock.

 

3.3 Benefits. During the Term, Executive shall participate during the Term in
such 401(k), pension, supplemental executive retirement plan, life insurance,
health, disability and major medical insurance plans, and in such other senior
executive officer benefit and perquisite plans, programs or policies, as may be
maintained from time-to-time by the Company during the Term, in each case on a
basis no less favorable to Executive than the basis generally provided to other
similarly-situated senior executive officers of the Company and subject to the
terms and provisions of such plans, programs or policies as determined by the
Board, in the sole discretion of the Board.

 

3.4 Executive Options. On the Commencement Date of Executive’s employment with
the Company, the Company shall grant to Executive options to purchase one
million two hundred thousand (1,200,000) shares of the Company’s common stock
(the “Options”).

 

3.4.1 Exercise Strike Price. The Options shall have an exercise strike price
equivalent to the fair market value of the Company’s common stock as of the
Effective Date of this Agreement.

 

For the purpose of this Agreement, the term “fair market value of the Company’s
common stock” shall mean the US Dollar denominated amount equal to the mean
value of the mean values of the “bid” and “ask” prices for the Company’s common
stock for the five (5) trading days preceding the relevant date, i.e., with
respect to this Paragraph 3.4 the five (5) trading days before the Commencement
Date.

  

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 3.4.2 Vesting Schedule. The Options shall vest, i.e., all become eligible for
exercise by Executive, on the following schedule:

 

3.4.2.1 Fifty percent (50%) on the first (1st) anniversary of the Commencement
Date, i.e., on May 21, 2013;

 

3.4.2.2 Fifty percent (50%) on the second (2nd) anniversary of the Commencement
Date, i.e., on May 21, 2014.

 

3.4.3 Term and Expiration of Options. The basic term of the Options shall be
three (3) years from the effective date that the Options are granted, i.e., all
vested Options must be exercised by Executive within three (3) years after May
21, 2012; provided, however, notwithstanding the foregoing provisions of this
Paragraph 3.4.3, all vested Options not exercised by Executive as of the date of
the expiration of the Term (of Executive’s employment with the Company) must be
exercised by Executive within sixty (60) days after the date of such expiration
of the Term; and provided further, all vested Option not timely exercised by
Executive in accordance with the provisions of this Paragraph 3.4 shall be
deemed conclusively to be irrevocably expired and void.

 

3.5 Additional Equity Incentive Plans. During the Term, from time-to-time, at
the sole discretion of the Board. Executive shall be entitled to participate in
the Company’s equity plans and programs for senior executive officers of the
Company on a basis that is consistent with the basis upon which any other
similarly-situated senior executive officer participates.

 

3.6 Vacation. Executive shall be entitled to paid vacation of not less than two
(2) weeks during the Initial Term and thereafter four (4) weeks per year during
the remainder of the Term. Such vacation weeks shall not necessarily be
consecutive weeks. All vacation time for Executive shall be in accordance with
the Company’s policy for senior executive officers during the Term, including
without limitation any applicable “use it or lose it” policies.

 

3.7 Expenses. The Company shall promptly reimburse Executive for reasonable
business-related expenses incurred by him in connection with the performance of
his duties under this Agreement during the Term; subject, however, to the
Company’s policies relating to business-related expenses as are in effect from
time-to-time during the Term.

 

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4. Exclusivity, Confidentiality, Non-Compete.

 

4.1 Exclusivity. Executive shall to perform his duties, responsibilities and
obligations under this Agreement efficiently and to the best of his ability.
Except as set forth in Paragraph 1.1 above, Executive shall devote his full
business time, care and attention and use his reasonable best efforts to perform
his duties, responsibilities and obligations during the Term. Executive shall
perform all of his activities as an employee of the Company in substantial
conformity with applicable law and with all policies, rules and regulations and
directions of the Company not inconsistent with this Agreement.

 

During the Term, Executive shall not engage in any other business activities,
pursued for gain, profit or other pecuniary advantage, that are competitive with
the activities of the Company, except as permitted in Paragraph 4.2 below and in
Paragraph 1.1 above.

 

4.2 Other Business Ventures. During the Term, Executive shall not own, directly
or indirectly, any controlling or substantial stock or other beneficial interest
in any business enterprise which is competitive with any business engaged in by
the Company. Notwithstanding the foregoing, the Board acknowledges that the
Executive currently is an affiliate, director, and shareholder of EIHC company
shares. Additionally, Executive may own, directly or indirectly, up to 1% of the
outstanding capital stock of any such business enterprise which is competitive
with any business engaged in by the Company.

 

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4.3 Confidentiality: Non-Competition.

 

4.3.1 Confidentiality. During and after the Term, other than in the ordinary
course of performing his duties for the Company, Executive shall not make use of
or divulge to any other person, firm or corporation, any of the Company’s
confidential or proprietary trade or business secrets, processes, methods or
means, or any other confidential information concerning the business or policies
of the Company, which he may have learned in connection with his employment. For
purposes of this Agreement, a “trade or business secret, process, method or
means, or any other confidential information” shall mean and include written
information reasonably treated as confidential or as a trade secret by the
Company. Executive’s obligation under this Paragraph 4.3.1 shall not apply to
any information which (i) is known publicly (including information known
publicly within the relevant trade or industry); (ii) is in the public domain or
hereafter enters the public domain without the fault of Executive; (iii) is
known to Executive prior to his receipt of such information from the Company, as
evidenced by written records of Executive; or (iv) is hereafter disclosed to
Executive by a third party not under an obligation of confidence to the Company.
Executive shall not remove from the premises of the Company, except as a
director or an employee of the Company in the performance of his duties for the
Company or except as specifically permitted in writing by the Company, any
document or other object containing or reflecting any such confidential
information. Executive recognizes that all such documents and objects, whether
developed by him or by someone else, will be the sole exclusive property of the
Company. Upon termination of his employment hereunder, Executive shall forthwith
deliver to the Company all such confidential information, including without
limitation all lists of customers, correspondence, accounts, records and any
other documents or property made or held by him or under his control in relation
to the business or affairs of the Company, and no copy of any such confidential
information shall be retained by him; provided, however, that nothing herein
shall prevent Executive from retaining (i) his papers and other materials of a
personal nature, including, without limitation, photographs, correspondence,
personal diaries, calendars, personal files and phone books; (ii) information
showing his compensation or relating to reimbursement of his business expenses;
(iii) information that is necessary for tax purposes; and (iv) copies of plans,
programs, policies and agreements relating to his employment, or termination
thereof, with the Company and its affiliates. Anything herein or elsewhere to
the contrary notwithstanding, the provision of this Paragraph 4.3.1 shall not
apply (i) when disclosure is required by law or by any court, arbitrator,
mediator or administrative or legislative body (including any committee thereof)
with jurisdiction to order Executive to disclose or make accessible any
information or (ii) with respect to any other litigation, arbitration or
mediation involving this Agreement or any other agreement between the parties,
including, without limitation, the enforcement of such agreements.

 

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4.3.2 Non-Competition. If Executive’s employment is terminated during the Term
(i) by the Company for Cause (as defined in Paragraph 5.1 below) or (ii) by
Executive not for Good Reason (as defined in Paragraph 5.3 below), then
Executive shall not for a period of (i) two (2) years from the date of such
termination if such termination occurs prior to the first anniversary of the
Effective Date or (ii) one year from the date of such termination if such
termination occurs at any time on or after the first anniversary of the
Effective Date, directly or indirectly, whether as an employee, consultant,
independent contractor, partner, or joint venturer: (i) perform any services for
a competitor which has material operations which directly compete with the
Company in the sale of any products sold by the Company at the time of the
termination of Executive’s employment (“Competitive Business”); (ii) solicit or
induce, or in any manner attempt to solicit or induce, any person employed by,
or as agent of, the Company to terminate such person’s contract of employment or
agency, as the case may be, with the Company; or (iii) divert, or attempt to
divert, any person, concern, or entity from doing business with the Company, nor
will he solicit or cause any other person or entity to solicit any person,
concern or entity to cease being a customer or supplier of the Company.
Notwithstanding anything herein to the contrary, this Paragraph 4.3.2 shall not
prevent Executive from acquiring securities representing not more than one
percent (1%) of the outstanding voting securities of any entity.

 

In the event of any conflict between the provisions of this Paragraph 4.3 and
the provisions of any other Company agreement, plan, policy, program or
arrangement, whether entered into before, on or after the date of this
Agreement, the provisions of this Paragraph 4.3 shall control, unless Executive
shall have expressly agreed in writing that the conflicting provision will
override or amend this Paragraph 4.3.

 

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5. Termination.

 

5.1 Termination by the Company. The Company shall have the right to terminate
Executive’s employment with the Company at any time, with or without Cause;
subject, however, to the specific contractual obligations of the Company to
Executive described herein. For purposes of this Agreement, “Cause” shall mean:
(i) Executive’s substantial and continued willful failure by Executive to
perform his duties hereunder which results, or could reasonably be expected to
result, in material harm to the business or reputation of the Company, which
failure is not cured (if curable) by Executive within sixty (60) days after
written notice of such failure is delivered to Executive by the Company, (ii)
any time during the Term (but after the Initial Term) for a period of sixty (60)
consecutive days the Company has less than $650,000.00 of cash on hand in
accounts available to the Company on an unrestricted basis unless the Board
waives (on a temporary basis) this condition, i.e., this $650,000.00 of
available cash condition; (iii) Executive’s gross misconduct relating to the
performance of Executive’s duties for the Company, including, without
limitation, embezzlement, fraud, or misappropriation of the Company’s property,
(iv) the conviction of Executive, or entry of a plea of guilty or nolo
contendere by Executive to, a felony or other crime involving moral turpitude,
or (v) any material breach by Executive of any material obligation to the
Company under Paragraphs 4.1, 4.2 or 4.3 herein, which breach is not cured (if
curable) by Executive within sixty (60) days after written notice of such
failure is delivered to neExecutive by the Company. Notwithstanding anything
herein to the contrary, Executive shall not be terminated for Cause within the
meaning of clauses (i), (ii), (iii), or (v) of this Paragraph 5.1 unless he
receives written notice from the Company stating the basis for such termination
and there is a majority vote of all non-employee members of the Board to
terminate him for Cause. The decision by the Company or by Executive to allow
the Term to expire on either the Initial Scheduled Expiration Date or on any
Subsequent Scheduled Expiration Date shall not be deemed a termination without
Cause.

 

5.2 Termination Because of Death and Disability.

 

5.2.1 Death. In the event Executive dies during the Term, Executive’s employment
under this Agreement shall automatically terminate, such termination to be
effective on the date of Executive’s death.

 

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5.2.2 Disability. In the event that Executive shall suffer a Disability (as
defined below), the Company or Executive shall have the right to terminate
Executive’s employment under this Agreement, such termination to be effective
upon the giving of notice thereof to the other party in accordance with
Paragraph 6.5 hereof. For purposes of this Agreement, the term “Disability”
means Executive is receiving long-term disability benefits under the Company’s
plan(s) or, if there is no such plan, a physical or mental condition which has
prevented Executive from performing satisfactorily his duties hereunder for a
period of at least ninety (90) consecutive days as determined by a medical
doctor mutually agreeable to Executive and the Company. If the parties cannot
agree on a medical doctor, Executive and the Company shall each choose a medical
doctor and the two medical doctors shall choose a third medical doctor, who
shall be the approved “medical doctor” for this purpose.

 

5.3 Termination by Executive with or without Good Reason. Executive may
terminate his employment with the Company at any time, with or without Good
Reason; provided, however, that any termination by Executive of his employment
under this Agreement for Good Reason shall not be effective unless Executive has
provided notice to the Company of the event giving rise to Good Reason no later
than ninety (90) days after the date the event occurs or, if later, the date
Executive learns (or should have learned) of such event. For purposes of this
Agreement, each of the following shall constitute “Good Reason” unless otherwise
agreed to in writing by Executive: (i) the Company sells, leases or otherwise
transfers all or substantially all of its assets to an entity which has not, as
of the date of such transaction, either assumed the Company’s obligations under
this Agreement or entered into a new employment contract which is mutually
satisfactory to Executive and such entity; (ii) a material diminution occurs in
the duties, responsibilities or authorities of Executive as Chief Executive
Officer of the Company that is not cured within thirty (30) days after written
notice of the same is received by the Company; (iii) the Company’s failure to
pay compensation to Executive as required hereunder and such failure is not
cured within thirty (30) days after written notice of the same is received by
the Company; (iv) any change in the reporting structure so that Executive
reports to someone other than the Board; (v) failure to appoint or elect (or
re-elect) Executive as a member of the Board or the removal of Executive as a
member of the Board; (vi) the principal executive offices of the Company are
moved to a location more than twenty-five (25) miles from the New Headquarters,
unless Executive approves such relocation in writing; (vii) any decrease in
Executive’s Base Salary, unless Executive approves such decrease in writing; or
(viii) any material breach by the Company of any material obligation to
Executive under this Agreement. Notwithstanding the above, Good Reason shall not
exist unless the Executive has notified the Board of the actions or failures to
act giving rise to Good Reason, and such actions or failures, if capable of
being cured, shall not have been cured by the Company within thirty (30) days of
the receipt of such notice.

 

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5.4 Effect of Termination.

 

5.4.1 Accrued Obligations. In the event of termination of Executive’s employment
for any reason (including a termination of Executive’s employment on the Initial
Scheduled Expiration Date or any Subsequent Scheduled Expiration Date, the
Company shall pay or provide Executive (or his beneficiary or, if he has not
selected a beneficiary, his estate, in the event of his death) (i) any Base
Salary or other compensation earned but not paid to Executive prior to the
effective date of such termination, (ii) any qualified business expenses of
Executive that remain unreimbursed as of the date of termination and (iii) any
payments, benefits, or entitlements which are vested, fully and unconditionally
earned or due pursuant to this Agreement or any Company plan, policy, program or
arrangement or other agreement (clauses (i) through (iii) of this Paragraph
5.4.1 being collectively referred to as “Accrued Obligations”), and the Company
shall not have any other obligations to pay or provide any other amount or
benefits to Executive except as expressly set forth below. Executive’s
outstanding options and other equity awards shall be treated in accordance with
the terms of the applicable plans and award agreements governing such awards.

 

5.4.2 Options. If the Company terminates Executive’s employment during the Term
other than for Cause (as defined in Paragraph 5.1 above), all of Executive’s
unvested Options shall vest immediately upon Executive’s termination. If the
Company terminates Executive for Cause, then none of Executive’s unvested
Options shall vest upon Executive’s termination, i.e., all of such unvested
Options shall be deemed conclusively and irrevocably void on the date of such
termination.

 

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5.4.3 Termination Payments. In the event of a termination of Executive’s
employment during the Term: (i) by Executive for Good Reason (as defined in
Paragraph 5.3 above); (ii) by the Company prior to the Initial Scheduled
Expiration Date or any Subsequent Scheduled Expiration Date for reasons other
than for Cause; or (iii) by Executive’s death or Disability (as defined in
Paragraph 5.2.2 above); then, in addition to any Accrued Obligations, Executive
(or his estate) shall, subject to his execution of a release and waiver in the
form satisfactory to counsel for the Company (other than in the case of death),
be entitled to payment of the unpaid portion of Executive’s then applicable Base
Salary through the date of the then current scheduled expiration date and the
continued participation for Executive and his eligible dependents under the
Company’s medical and dental plans in accordance with Paragraph 3.3 above, at
the same cost Executive was paying as an employee, for a twelve (12) month
period commencing on the date Executive’s employment is terminated. Upon the
expiration of such 12-month period, Executive shall be eligible to elect medical
and/or dental continuation coverage under the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Notwithstanding the
foregoing provisions of this Paragraph 5.4, in the event of the termination of
Executive’s employment with the Company on the Initial Scheduled Expiration Date
or on any Subsequent Scheduled Expiration Date then the Company shall have no
obligation to provide any further compensation or benefits to Executive (or to
any of his dependents) other than the Accrued Obligations.

 

5.5 Full Settlement; Payment Date. Except as specifically provided in this
Agreement, Executive shall have no rights to compensation or benefits upon or
after termination of employment except as may be specifically provided under the
Company’s employee benefit plans. All payments due under Paragraph 5.4 above
shall be paid in accordance with the applicable plan, policy, program,
arrangement or other agreement.

 

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6. Obligations Absolute: Withholding. The obligations of the Company under this
Agreement shall be absolute and unconditional and shall not be affected by any
circumstances, including without limitation (i) Executive’s receipt of
compensation and benefits from another employer in the event that Executive
accepts new employment following the termination of his employment under this
Agreement, or (ii) any set-off, counterclaim, recoupment, defense or other right
which the Company may have against Executive or anyone else.

 

All payments to Executive under this Agreement may be reduced by applicable
withholding by federal, state or local law.

 

7. Change in Control.

 

7.1 Change in Control Protections. Upon the occurrence of a Change in Control
(as defined below), Executive’s Options, and all outstanding equity and
long-term incentive awards to and for the benefit of Executive, shall
immediately vest (and not be subject to forfeiture for any reason) in a manner
to enable Executive to fully participate in the Change in Control transaction,
and, to the extent any of Executive’s vested stock Options which were granted to
Executive on or after the Effective Date survive such Change in Control, then
such vested Options shall thereafter remain exercisable in accordance with their
original terms (including termination in connection with a termination of
Executive’s employment with the Company). For purposes of this Agreement,
“Change in Control” shall mean the occurrence of any of the following events:

 

7.1.1 the acquisition by any individual, entity or group [within the meaning of
Paragraph 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)] (a “Person”) of Beneficial Ownership (as defined
below) of 50% or more of either (i) the then outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this Paragraph 7.1.1 the
following acquisitions shall not constitute a Change in Control:

 

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7.1.1.1 any acquisition directly from the Company;

 

7.1.1.2 any acquisition by the Company or any corporation controlled by the
Company;

 

7.1.1.3 any acquisition by any corporation pursuant to a transaction which
complies with (i) or (ii) of this Paragraph 7.1.1;

 

7.1.1.4 if the individuals who, as of the Effective Date, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

 

7.1.2 the approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.

 

8. Representations and Warranties.

 

8.1 Executive represents and warrants to the Company that as of the Effective
Date (i) neither the execution and delivery of this Agreement nor the
performance of his duties under this Agreement violates or will violate the
provisions of any other written agreement to which he is a party or by which he
is bound; and (ii) except for obligations to maintain confidentiality of certain
information relating to previous employers which will not unreasonably interfere
with the performance of his duties hereunder, there are no written agreements by
which he is currently bound which would prevent him from performing his duties
hereunder.

 

8.2 The Company represents and warrants to Executive that (i) the execution,
delivery and performance of this Agreement by it has been fully and validly
authorized by all necessary corporate action, (ii) the officer signing this
Agreement on its behalf is duly authorized to do so, and (iii) the execution,
delivery and performance of this Agreement does not violate any applicable law,
regulation, order, judgment or decree or any agreement, plan or corporate
governance document to which it is a party or by which it is bound.

 

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9. Miscellaneous.

 

9.1 No Mitigation. Executive shall not be required to mitigate damages resulting
from the termination of his employment with the Company.

 

9.2 Indemnification/D&O Liability Insurance. Before, during and after the Term,
the Company shall indemnify and hold harmless Executive (and advance him
expenses) to the fullest extent permitted by the Company’s articles of
incorporation and/or by-laws, which shall be the articles and by-laws as in
effect as of the Effective Date (unless such documents are amended in a manner
favorable to Executive, in which case Executive shall be afforded the benefits
of such amendment), or if greater, in accordance with applicable law for actions
or inactions of Executive as an officer, director, employee or agent of the
Company or as a fiduciary of any benefit plan of any of the foregoing or as
otherwise set forth in the applicable document; provided, however, the Company
shall have no duty to defend, indemnify, or otherwise hold Executive harmless
from any acts or omissions of Executive which constitute fraud, malice, bad
faith, gross negligence, or breach of any fiduciary duty owed by Executive to
the Company or to its shareholders.

 

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9.3 Benefits of Agreement: Assignment Beneficiary. This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns,
including, without limitation, any corporation or person which may acquire all
or substantially all of the Company’s assets or business, or with or into which
the Company may be consolidated or merged. This Agreement shall also inure to
the benefit of, and be enforceable by, Executive and his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. No rights or obligations of Executive hereunder may be
assigned or transferred by Executive, without the prior written consent of the
Company, except to the extent permitted under any applicable plan, policy,
program, arrangement of, or other agreement with, the Company or by will or
operation of law. No rights or obligations of the Company under this Agreement
may be assigned without the prior written consent of Executive, except that such
rights or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity or a sale or
liquidation or other disposition of all or substantially all of the assets of
the Company, provided that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and assumes the liabilities,
obligations and duties of the Company (and to the extent applicable its
respective subsidiaries and affiliates) under this Agreement. For the avoidance
of doubt, “Company” shall include any successor entity to DALECO RESOURCES
CORPORATION.; provided, however, upon any Change in Control, if such successor,
transferee or assignee conducts businesses which were not conducted by the
Company immediately prior to such transaction (“Other Businesses”), references
to the Company and its affiliates or subsidiaries in Paragraph 4 of this
Agreement shall not include such Other Businesses nor shall any reference to
employees, agents, customers or suppliers include a reference to an employee,
agent, customer or supplier of such successor entity unless such employee,
agent, customer or supplier was also an employee, agent, customer or supplier of
the Company immediately prior to such transaction. If Executive should die while
any amount, benefit or entitlement would still be payable (or due) to Executive
hereunder if he had continued to live, all such amounts, benefits and
entitlements shall be paid or provided in accordance with the terms of this
Agreement to Executive’s beneficiary, devisee, legatee or other designee, or if
there is no such designee, to Executive’s estate.

 

9.4 Notices. Any notice required or permitted hereunder shall be in writing and
shall be sufficiently given if personally delivered, or if sent by registered or
certified mail, postage prepaid, with return receipt requested, or by a
nationally recognized overnight courier addressed: (i) in the case of the
Company, to:

 

Daleco Resources Corporation, Attention: General Counsel, at the address of the
Company’s headquarters at the time such notice is delivered, or to such other
address and/or to the attention of such other person as the Company shall
designate by written notice to Executive; and (ii) in the case of Executive, to
his then current home address as shown on the Company’s records, or to such
other address as Executive shall designate by written notice to the Company. Any
notice given hereunder shall be deemed to have been given at the time of receipt
thereof by the person to whom such notice is given (which in the case of
registered or certified mail or overnight courier, shall be the date
acknowledgment of delivery is obtained by such service).

 

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9.5 Entire Agreement; Amendment. This Agreement shall be effective and binding
on the parties as of the Effective Date first written above. Except as noted in
this Agreement, this Agreement contains the entire agreement of the parties
hereto with respect to the subject matter hereof, including, without limitation,
the terms and conditions of Executive’s employment during the Term, and
supersedes any and all prior agreements and understandings, whether written or
oral, between the parties hereto with respect to such subject matter. This
Agreement may not be changed or modified except by an instrument in writing
signed by both of the parties hereto, specifically referencing the provision
being so changed or modified.

 

9.6 Waiver. The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach hereof.

 

9.7 Headings. The paragraph headings herein are for convenience of reference
only and do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.

 

9.8 Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the internal laws of the Commonwealth of
Pennsylvania without reference to the principles of conflict of laws.

 

9.9 Agreement to Take Actions. Each party hereto shall execute and deliver such
documents, certificates, agreements and other instruments, and shall take such
other actions, as may be reasonably necessary or desirable in order to
effectuate the purposes hereof.

 

9.10 Arbitration. Except for disputes with respect to or arising out of or in
relation to Paragraph 4.4 above, every dispute between the parties hereto
respecting the meaning and intent of this Agreement or any of its terms and
provisions (each, a “Covered Claim”) shall be submitted to arbitration in
Philadelphia, Pennsylvania, in accordance with the Commercial Rules of the
American Arbitration Association then in effect, and the arbitration
determination resulting from any such submission shall be final and binding upon
the parties hereto. Each party shall be responsible for his or its own legal
fees and expenses in connection with any Covered Claim. Judgment upon any such
arbitration award may be entered in any court of competent jurisdiction.

 

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9.11 Survivorship. The respective rights and obligations of the parties
hereunder shall survive any expiration or termination of the Term of this
Agreement to the extent necessary to the intended preservation of such rights
and obligations.

 

9.12 Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision or provisions of this Agreement, which shall remain in full force and
effect.

 

9.13 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. Signatures delivered and received by
facsimile or electronic mail shall be effective for all purposes.

 

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
effective as of the date first above written and intends to be legally bound.

 

COMPANY:

 

DALECO RESOURCES CORPORATION

 

BY:     /s/ David A. Grady   Date: 8/23/12     DAVID A. GRADY, Director        
Chairman, Corporate Compensation Committee             EXECUTIVE:              
    /s/ Michael D. Parish   Date: 8/23/12     MICHAEL D. PARRISH      

 

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