Employment Agreement

 

This EMPLOYMENT AGREEMENT (the “Agreement”), is entered into as of October 30,
2015, by and between Petro River Oil Corp., a Delaware corporation (the
“Company”), and Stephen Brunner (“Executive”). The effective date of this
Agreement shall be January 1, 2016 (the “Effective Date”)

 

WHEREAS, the Company recognizes that the Executive is expected to have a
critical and essential role in guiding the Company and in developing the
Company’s leasehold interests;

 

WHEREAS, the Executive is expected to make major contributions to the stability,
growth and financial strength of the Company;

  

WHEREAS, as of the Effective Date, the Company wishes to hire the Executive as a
senior executive under the terms of this Agreement; and

 

WHEREAS, in consideration of the Executive’s employment with the Company, the
Company desires to provide the Executive with certain compensation and benefits
as set forth in this Agreement;

WHEREAS, the Executive desires to be employed by the Company on the terms
contained in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

 

1. Position and Duties.

 

(a) The Executive shall serve as the President of the Company reporting to the
Company’s Executive Chairman.

 

(b) Employee shall have such duties and authority as are consistent therewith
and as may be set forth by Executive Chairman. For purposes of the applicability
of the Company compensation plans to Employee, Employee shall be considered an
“employee.” Employee shall devote such business time as needed to the
performance of his duties hereunder. Notwithstanding the foregoing, Employee
shall be entitled to (i) serve as a member of the board of directors of
unaffiliated companies, (ii) serve on civic, charitable, educational, religious,
public interest or public service boards, (iii) and manage Employee’s personal
and family investments; provided, that such time does not interfere with his
full time employment duties hereunder and (iv) have a passive, non-management
ownership interest in other businesses, including, without limitation,
businesses engaged in the oil and gas industry.   Notwithstanding the forgoing,
the Company acknowledges and consents to the Executive’s active management and
involvement in Horizon Energy Partners, LLC (“HEP”).  

2. Term. This Agreement and Executive’s employment hereunder shall be for an
initial term of 1 year commencing on January 1, 2016 (the “Effective Date”) and
ending on the one year anniversary of the Effective Date (the “Expiration
Date”), unless terminated earlier by the Company or the Executive pursuant to
Section 4 of this Agreement (the “Term”). Thereafter, this Agreement shall
automatically be

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renewed and the Term shall be extended for additional consecutive terms of one
(1) year (each a “Renewal Term”), unless such renewal is objected to by either
the Company or the Executive upon 30 days written notice prior to the
commencement of the next Renewal Term. In the event of renewal, the last day of
each Renewal Term shall be deemed the new Expiration Date.

 

3. Compensation and Related Matters.

 

(a) Base Salary. Commencing as of the Effective Date, the Company shall pay
Executive a monthly salary of $5,000 per month for January 2016, February 2016
and March 2016 and $10,000 per month for each month thereafter during the Term
(“Base Salary”), payable in accordance with the regular payroll practices
applicable to senior executives of the Company. The Board shall review the Base
Salary annually and may increase the Base Salary, and the term “Base Salary”
shall refer to such increased amount.

(b) Annual Bonus. During the Term, the Executive may receive additional annual
cash and/or stock bonuses, in respect of each full or partial fiscal year of the
Company occurring during the Term, as well as other cash and/or stock bonuses,
as determined in the sole discretion of the Board based on its assessment of
Company and individual performance in relation to performance targets, a
subjective evaluation of Executive’s performance or such other criteria as may
be established by it (the “Annual Bonus”). The Annual Bonus will be paid no
later than the seventy-fifth (75th) day following the end of the fiscal year to
which the Annual Bonus relates.

 

(c)  Equity Grants.  On the date hereof, Employee will receive options to
purchase 10,648,763 shares of the Company’s common stock (the “Initial Grant”)
with an exercise price of $[0.01] per share (represents 1.25% of the current
outstanding shares of the Company) subject to the vesting schedule set forth on
Exhibit A.  In addition, subject to obtaining the necessary shareholder approval
of increasing the current stock option plan following the issuance of shares
under a transaction with Horizon I Investments, LLC (the “Horizon Transaction”)
and Executive’s continued employment with the Company, the Executive shall
receive options to purchase an additional 1.75% of the outstanding shares of the
Company (together with the Initial Grant, the “Option Grant”).  The Option
Grant, and the vesting schedule of the options set forth on Exhibit A in the
Employment Agreement, shall be subject to Executive continued employment with
the Company 

(d) Long Term Incentive Plan. The Executive shall be entitled to participate in
all bonus plans, policies, practices, policies and programs adopted by the
Company and applicable generally to senior executives of the Company.

 

(e) Equity Incentive Plan. The Executive shall be entitled to participate in any
and all plans providing for awards of equity or instruments convertible into
equity adopted by the Company and applicable generally to other senior
executives of the Company.

 

(f) Business Expenses. The Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses incurred by him in performing
services hereunder, in accordance with the policies and procedures then in
effect and established by the Company for its senior executive officers.

 

(g) Other Benefits. The Executive shall be entitled to participate in all
pension, savings and retirement plans, welfare and insurance plans, practices,
policies, programs and perquisites of

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employment applicable generally to other senior executives of the Company.

 

(h) Vacation. The Executive shall be entitled to accrue up to 20 paid vacation
days in each year, which shall be accrued ratably. The Executive shall also be
entitled to all paid holidays given by the Company to its executives.

 

 

(j) Withholding. All amounts payable to the Executive under this Section 3 shall
be subject to all required federal, state and local withholding, payroll and
insurance taxes.

 

4. Termination. The Executive’s employment may be terminated and this Agreement
terminated under the following circumstances:

 

(a) Death. The Executive’s employment hereunder shall terminate upon his death.

 

(b) Disability. The Company may terminate the Executive’s employment if the
Executive becomes subject to a Disability. For purposes of this Agreement,
“Disability” means the Executive is unable to perform the essential functions of
his position as President, with or without a reasonable accommodation, for a
period of one-hundred twenty (120) consecutive days or one-hundred eighty (180)
days during any rolling consecutive twelve (12) month period.

 

(c) Termination by Company for Cause. The Company may terminate the Executive’s
employment for Cause. For purposes of this Agreement, “Cause” means the
Executive’s: (i) willful misconduct or gross negligence which causes material
harm to the Company; (ii) fraud, embezzlement or other material dishonesty with
respect to the Company; (iii) conviction, plea of nolo contendere, guilty plea,
or confession to a felony or any lesser crime of which fraud, embezzlement, or
moral turpitude is a material element; or (iv) a material breach of this
Agreement, provided that a breach of this Agreement, if curable, shall not
constitute Cause unless the Company has provided the Executive with (x) written
notice of the acts or omissions giving rise to a termination of his employment
for Cause; (y) the opportunity to correct the act or omission within 30 days
after receiving the Company’s notice (the “Cure Period”); and (z) an opportunity
to be heard before the Board with the Executive’s counsel present prior to the
Board’s decision to terminate the Executive’s employment for Cause.

 

(d) Termination by the Company without Cause. The Company may terminate the
Executive’s employment at any time without Cause upon 90 days prior written
notice. For purposes hereof, the Company’s election not to renew the Term or any
Renewal Term shall constitute a termination without Cause.

 

(e) Termination by the Executive. The Executive may terminate his employment at
any time for any reason other than a Good Reason, upon 30 days prior written
notice.

 

(f) Termination by the Executive for Good Reason. The Executive may terminate
his employment for Good Reason. For purposes of this Agreement, “Good Reason”
means: (i) a material reduction in the Executive’s Base Salary; (ii) a material
diminution in the Executive’s responsibilities as President; (iii) the
assignment of duties to the Executive materially inconsistent with his position
as President; or (iv) the Company’s material breach of this Agreement; provided
that, within 90 days of the Company’s act or omission giving rise to a
resignation for Good Reason, the Executive notifies the Company in a writing of
the act or omission, the Company fails to correct the act or omission within 30

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days after receiving the Executive’s written notice (the “Cure Period”) and the
Executive actually terminates his employment within 60 days after the date the
Company receives the Executive’s notice.

 

(g) Expiration. Executive’s employment shall terminate on the Expiration Date.

 

(h) Termination Date. The “Termination Date” means: (i) if the Executive’s
employment is terminated by his death under Section 4(a), the date of his death;
(ii) if the Executive’s employment is terminated on account of his Disability
under Section 4(b), the date on which the Company provides the Executive a
written termination notice; (iii) if the Company terminates the Executive’s
employment for Cause under Section 4(c), the date on which the Company provides
the Executive a written termination notice, unless the circumstances giving rise
to the termination are subject to a Cure Period, in which case the date on which
the Company provides the Executive a written termination notice following the
end of the Cure Period; (iv) if the Company terminates the Executive’s
employment without Cause under Section 4(d), 90 days after the date on which the
Company provides the Executive a written termination notice; (v) if the
Executive resigns his employment without Good Reason under Section 4(e), 30 days
after the date on which the Executive provides the Company a written termination
notice, (vii) if the Executive resigns his employment with Good Reason under
Section 4(f), the date on which the Executive provides the Company a timely
written termination notice following the end of the Cure Period, and (viii) the
Expiration Date if the Executive’s employment terminates under Section 4(g).

  

 

5. Compensation upon Termination.

 

(a) Termination by the Company for Cause; by the Executive without Good Reason;
or upon the Expiration Date following the Executive’s election not to Renew. If
the Executive’s employment with the Company is terminated pursuant to Sections
4(c), 4(e), or 4(g) following the Executive’s election not to renew the Term or
Renewal Term, the Company shall pay or provide to the Executive the following
amounts through the Termination Date: any earned but unpaid Base Salary, unpaid
expense reimbursements, any earned but unpaid Annual Bonus and any vested
benefits the Executive may have under any employee benefit plan of the Company
(the “Accrued Obligations”) on or before the time required by law but in no
event more than 30 days after the Executive’s Termination Date.

 

(b) Death; Disability. If the Executive’s employment terminates because of his
death as provided in Section 4(a) or because of a Disability as provided in
Section 4(b), then the Executive (or his authorized representative or estate)
shall be entitled to:

 

(i) The Accrued Obligations earned through the Termination Date (payable at the
time provided for in Section 5(a)).

 

(ii) A pro-rata portion of the Executive’s Annual Bonus for the fiscal year in
which the Executive’s termination occurs based on the actual achievement of
performance criteria for that year (determined by multiplying the amount of such
bonus which would be due for the full fiscal year by a fraction, the numerator
of which is the number of days during the fiscal year of termination that the
Executive is employed by the Company and the denominator of which is 365)
payable at the same time bonuses for such year are paid to other senior
executives of the Company (the “Pro-Rata Bonus”).

 

 (iii) Subject to the Executive’s or, in the event of his death, his eligible

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dependents’ timely election of continuation coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company
shall reimburse the Executive and/or his eligible dependents the monthly premium
payable to continue his and his eligible dependents’ participation in the
Company’s group health plan (to the extent permitted under applicable law and
the terms of such plan) which covers the Executive (and the Executive’s eligible
dependents) for a period of eighteen (18) months, provided that the Executive is
eligible and remains eligible for COBRA coverage; and provided, further, that in
the event that the Executive obtains other employment that offers group health
benefits, such continuation of coverage by the Company shall immediately cease.
If the reimbursement of any COBRA premiums would violate the nondiscrimination
rules or cause the reimbursement of claims to be taxable under the Patient
Protection and Affordable Care Act of 2010, together with the Health Care and
Education Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h)
of the Code, the Company paid premiums shall be treated as taxable payments and
be subject to withholding.

 

(v) In the case of a termination due to Disability, in addition to the
aforementioned awards, continuation of the Base Salary in effect on the date of
termination until the earlier of (A) the sixth month anniversary of the date of
termination, and (B) the date Executive is eligible to commence receiving
payments under the Company’s long-term disability policy. If the net
compensation from the Base Salary is greater than the net compensation from the
long-term disability policy, the Company, through the sixth month anniversary of
the date of termination will compensate the Executive’s estate the difference in
net compensation.

 

 

(c) Termination by the Company without Cause, by the Executive with Good Reason.
If the Executive’s employment is terminated by the Company without Cause as
provided in Section 4(d) (including as a result of the Company’s failure to
renew the Term or any Renewal Term) or the Executive terminates his employment
for Good Reason as provided in Section 4(f), then the Executive shall be
entitled to the following:

 

(i) The Accrued Obligations earned through the Termination Date (payable at the
time provided for in Section 5(a)).

 

(ii) Subject to the Executive’s timely election of continuation coverage under
COBRA, the Company shall reimburse the Executive the monthly premium payable to
continue his and his eligible dependents’ participation in the Company’s group
health plan (to the extent permitted under applicable law and the terms of such
plan) which covers the Executive (and the Executive’s eligible dependents) for a
period of eighteen (18) months, provided that the Executive is eligible and
remains eligible for COBRA coverage; and provided, further, that in the event
that the Executive obtains other employment that offers group health benefits,
such continuation of coverage by the Company shall immediately cease. If the
reimbursement of any COBRA premiums would violate the nondiscrimination rules or
cause the reimbursement of claims to be taxable under the Patient Protection and
Affordable Care Act of 2010, together with the Health Care and Education
Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h) of the
Code, the Company paid premiums shall be treated as taxable payments and be
subject to withholding.

(iii) Full vesting of the Executive in any and all outstanding previously
granted equity-based incentive awards subject to time-based vesting criteria.

 

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(d) Change of Control: Termination by the Company without Cause, by the
Executive with Good Reason. If the Executive’s employment is terminated by the
Company without Cause as provided in Section 4(d) (including as a result of the
Company’s failure to renew the Term or any Renewal Term) or the Executive
terminates his employment for Good Reason as provided in Section 4(f), and such
termination occurs (x) at the same time as, or within the twelve (12) month
period following, the consummation of a Change in Control or (y) within the
sixty (60) day period prior to the date of a Change in Control where the Change
in Control was under consideration at the time of Executive’s Termination Date,
then the Executive shall be entitled to the following, it being understood that
in such event, the provisions of this Section 5 (d) shall be provided in lieu of
those otherwise available under Section 5(c), above:

 

(i) The Accrued Obligations earned through the Termination Date (payable at the
time provided for in Section 5(a)).

 

 

(iii) A pro-rata portion of the Executive’s Annual Bonus for the fiscal year in
which the Executive’s termination occurs based on the actual achievement of
performance criteria for that year (determined by multiplying the amount of such
bonus which would be due for the full fiscal year by a fraction, the numerator
of which is the number of days during the fiscal year of termination that the
Executive is employed by the Company and the denominator of which is 365)
payable at the same time bonuses for such year are paid to other senior
executives of the Company (the “Pro-Rata Bonus”).If there is no Annual Bonus for
which he is eligible in the fiscal year of the termination date, then the award
shall be based upon a pro rata share of the Annual Bonus most recently issued to
the Executive. If the Annual Bonus has been reduced either 60 days prior to a
Change in Control or within twelve months following a Change in Control then the
pro-rata bonus shall be based upon the highest Annual Bonus previously awarded
to the Executive.

 

(iv) Full vesting of the Executive in any and all outstanding previously granted
equity-based incentive awards subject to time-based vesting criteria.

 

(v) Subject to the Executive’s timely election of continuation coverage under
COBRA, the Company shall reimburse the Executive the monthly premium payable to
continue his and his eligible dependents’ participation in the Company’s group
health plan (to the extent permitted under applicable law and the terms of such
plan) which covers the Executive (and the Executive’s eligible dependents) for a
period of eighteen (18) months, provided that the Executive is eligible and
remains eligible for COBRA coverage; and provided, further, that in the event
that the Executive obtains other employment that offers group health benefits,
such continuation of coverage by the Company shall immediately cease. If the
reimbursement of any COBRA premiums would violate the nondiscrimination rules or
cause the reimbursement of claims to be taxable under the Patient Protection and
Affordable Care Act of 2010, together with the Health Care and Education
Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h) of the
Code, the Company paid premiums shall be treated as taxable payments and be
subject to withholding.

 

(e) Change of Control: For purposes of Section 5(d), a change of control shall
have occurred upon any of the following:

 

(i) any person or entity becoming the beneficial owner, directly or indirectly,
of

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securities of the Company representing 51% percent of the total voting power of
all its then outstanding voting securities;

 

 

(ii) a merger or consolidation of the Company in which its voting securities
immediately prior to the merger or consolidation do not represent, or are not
converted into securities that represent, a majority of the voting power of all
voting securities of the surviving entity immediately after the merger or
consolidation; or

 

(iii) a sale of substantially all of the assets of the Company or a liquidation
or dissolution of the Company.

 

 

(f) Consequence of a Change in Control. Notwithstanding the terms of any
employee compensation plan, if, as of the date of a Change in Control, Executive
holds equity grants issued under this Agreement or such a plan that are not
vested and exercisable, such equity grants shall become fully vested and
exercisable as of the date of the Change in Control if the acquirer does not
agree to assume such grants or substitute new grants with equivalent value and
equivalent material features..

 

(g) No Mitigation or Offset. In the event of any termination of Executive’s
employment hereunder, Executive shall be under no obligation to seek other
employment or otherwise mitigate the obligations of the Company under this
Agreement, and there shall be no offset against any amounts due under this
Agreement on account of any remuneration attributable to any subsequent
employment that Executive may obtain.

 

 

6. Section 409A Compliance.

 

(a) All in-kind benefits provided and expenses eligible for reimbursement under
this Agreement shall be provided by the Company or incurred by the Executive
during the time periods set forth in this Agreement. All reimbursements shall be
paid as soon as administratively practicable, but in no event shall any
reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits
provided or reimbursable expenses incurred in one taxable year shall not affect
the in-kind benefits to be provided or the expenses eligible for reimbursement
in any other taxable year. Such right to reimbursement or in-kind benefits is
not subject to liquidation or exchange for another benefit.

 

 

(b) To the extent that any of the payments or benefits provided for in Section
5(b), (c) or (d) are deemed to constitute non-qualified deferred compensation
benefits subject to Section 409A of the United States Internal Revenue Code (the
“Code”), the following interpretations apply to Section 5:

 

(i) Any termination of the Executive’s employment triggering payment of benefits
under Section 5(b), (c) or (d) must constitute a “separation from service” under
Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before
distribution of such benefits can commence. To the extent that the termination
of the Executive’s employment does not constitute a separation of service under
Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result
of further services that are reasonably anticipated to be provided by the
Executive to the Company or any of its parents, subsidiaries or affiliates at
the time the

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Executive’s employment terminates), any benefits payable under Section 5(b), (c)
or (d) that constitute deferred compensation under Section 409A of the Code
shall be delayed until after the date of a subsequent event constituting a
separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg.
§1.409A-1(h). For purposes of clarification, this Section 6(b)(i) shall not
cause any forfeiture of benefits on the Executive’s part, but shall only act as
a delay until such time as a “separation from service” occurs.

 

(ii) If the Executive is a “specified employee” (as that term is used in Section
409A of the Code and regulations and other guidance issued thereunder) on the
date his separation from service becomes effective, any benefits payable under
Section 5(b), (c) or (d) that constitute non-qualified deferred compensation
under Section 409A of the Code shall be delayed until the earlier of (A) the
business day following the six-month anniversary of the date his separation from
service becomes effective, and (B) the date of the Executive’s death, but only
to the extent necessary to avoid such penalties under Section 409A of the Code.
On the earlier of (A) the business day following the six-month anniversary of
the date his separation from service becomes effective, and (B) the Executive’s
death, the Company shall pay the Executive in a lump sum the aggregate value of
the non-qualified deferred compensation that the Company otherwise would have
paid the Executive prior to that date under Section 5(b), (c) or (d) of this
Agreement.

 

(iii) It is intended that each installment of the payments and benefits provided
under Section 5(b), (c) or (d) of this Agreement shall be treated as a separate
“payment” for purposes of Section 409A of the Code.

 

(iv) Neither the Company nor the Executive shall have the right to accelerate or
defer the delivery of any such payments or benefits except to the extent
specifically permitted or required by Section 409A of the Code.

 

7. Excess Parachute Payments.

 

(a) To the extent that any payment, benefit or distribution of any type to or
for the benefit of the Executive by the Company or any of its affiliates,
whether paid or payable, provided or to be provided, or distributed or
distributable pursuant to the terms of this Agreement or otherwise (including,
without limitation, any accelerated vesting of stock options or other
equity-based awards) (collectively, the “Total Payments”) would be subject to
the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”), then the Total Payments shall be reduced (but not below
zero) so that the maximum amount of the Total Payments (after reduction) shall
be one dollar ($1.00) less than the amount which would cause the Total Payments
to be subject to the excise tax imposed by Section 4999 of the Code, but only if
the Total Payments so reduced result in the Executive receiving a net after tax
amount that exceeds the net after tax amount the Executive would receive if the
Total Payments were not reduced and were instead subject to the excise tax
imposed on excess parachute payments by Section 4999 of the Code. Unless the
Executive shall have given prior written notice to the Company to effectuate a
reduction in the Total Payments if such a reduction is required, any such notice
consistent with the requirements of Section 409A of the Code to avoid the
imputation of any tax, penalty or interest thereunder, the Company shall reduce
or eliminate the Total Payments by first reducing or eliminating any cash
severance benefits (with the payments to be made furthest in the future being
reduced first), then by reducing or eliminating any accelerated vesting of stock
options or similar awards, then by reducing or eliminating any accelerated
vesting of restricted stock or similar awards, then by reducing or eliminating
any other remaining Total Payments. The preceding provisions

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of this Section 7(a) shall take precedence over the provisions of any other
plan, arrangement or agreement governing the Executive’s rights and entitlements
to any benefits or compensation.

 

 

(b) If the Total Payments to the Executive are reduced in accordance with
Section 7(a), as a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial reduction under Section 7(a), it is
possible that Total Payments to the Executive which will not have been made by
the Company should have been made (“Underpayment”) or that Total Payments to the
Executive which were made should not have been made (“Overpayment”). If an
Underpayment has occurred, the amount of any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive. In the event of an
Overpayment, then the Executive shall promptly repay to the Company the amount
of any such Overpayment together with interest on such amount (at the same rate
as is applied to determine the present value of payments under Section 280G of
the Code or any successor thereto), from the date the reimbursable payment was
received by the Executive to the date the same is repaid to the Company

 

8. Confidentiality and Restrictive Covenants.

 

(a) Covenant Against Disclosure. All Confidential Information relating to the
Business of the Company is, shall be and shall remain the sole property and
confidential business information of the Company, free of any rights of the
Executive. Other than in accordance with the Board resolution included as
Exhibit B, the Executive shall not make any use of the Confidential Information
except in the performance of his duties hereunder and shall not disclose any
Confidential Information to third parties, without the prior written consent of
the Company.

 

(b) Return of Company Documents. On the Termination Date or on any prior date
upon the Company’s written demand, the Executive will return all Confidential
Information in his possession, directly or indirectly, that is in written or
other tangible form (together with all duplicates thereof) and that he will not
retain or furnish any such Confidential Information to any third party, either
by sample, facsimile, film, audio or video cassette, electronic data, verbal
communication or any other means of communication.

 

(c) Further Covenant. During the Term and through the first anniversary of the
Termination Date, the Executive shall not, directly or indirectly, take any of
the following actions, and, to the extent the Executive owns, manages, operates,
controls, is employed by or participates in the ownership, management, operation
or control of, or is connected in any manner with, any business, the Executive
will use his best efforts to ensure that such business does not take any of the
following actions:

 

(i) persuade or attempt to persuade any customer of the Company to cease doing
business with the Company, or to reduce the amount of business any customer does
with the Company;

 

(ii) solicit for himself or any entity the business of a customer of the
Company, or solicit any business which was a customer of the Company in
competition with the Company’s Business within twelve (12) months prior to the
termination of the Executive’s employment; or

 

 

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(iii) persuade or attempt to persuade any employee of the Company to leave the
employ of the Company, or hire or engage, directly or indirectly, any individual
who was an employee of the Company within one (1) year prior to the Executive’s
Termination Date.

 

9. RESERVED

 

10. No Disparagement. During the Term and through the second anniversary of the
Termination Date, the Executive will not make public statements or
communications that disparage the Company or any of its businesses, services,
products, affiliates or current, former or future directors and executive
officers (in their capacity as such. During the Term and through the second
anniversary of the Termination Date, the Company will instruct its directors and
executives not to make public statements or communications that disparage the
Executive. The foregoing obligations shall not be violated by truthful
statements in response to legal process, required governmental testimony or
filings, or administrative or arbitral proceedings (including, without
limitation, depositions in connection with such proceedings).

 

11. Indemnification. During the Term and thereafter, the Company shall indemnify
and hold the Executive and the Executive’s heirs and representatives harmless,
to the maximum extent permitted by law, against any and all damages, costs,
liabilities, losses and expenses (including reasonable attorneys’ fees) as a
result of any claim or proceeding (whether civil, criminal, administrative or
investigative), or any threatened claim or proceeding (whether civil, criminal,
administrative or investigative), against the Executive that arises out of or
relates to the Executive’s service as an officer, director or employee, as the
case may be, of the Company, or the Executive’s service in any such capacity or
similar capacity with any affiliate of the Company or other entity at the
Company’s request, both prior to and after the Effective Date, and to promptly
advance to the Executive or the Executive’s heirs or representatives such
expenses, including litigation costs and attorneys’ fees, upon written request
with appropriate documentation of such expense upon receipt of an undertaking by
the Executive or on the Executive’s behalf to repay such amount if it shall
ultimately be determined that the Executive is not entitled to be indemnified by
the Company. During the Term and thereafter, the Company also shall provide the
Executive with coverage under its current directors’ and officers’ liability
policy to the same extent that it provides such coverage to its other executive
officers. If the Executive has any knowledge of any actual or threatened action,
suit or proceeding, whether civil, criminal, administrative or investigative, as
to which the Executive may request indemnity under this provision, the Executive
will give the Company prompt written notice thereof; provided that the failure
to give such notice shall not affect the Executive’s right to indemnification.
The Company shall be entitled to assume the defense of any such proceeding and
the Executive will use reasonable efforts to cooperate with such defense. To the
extent that the Executive in good faith determines that there is an actual or
potential conflict of interest between the Company and the Executive in
connection with the defense of a proceeding, the Executive shall so notify the
Company and shall be entitled to separate representation at the Company’s
expense by counsel selected by the Executive (provided that the Company may
reasonably object to the selection of counsel within ten (10) business days
after notification thereof) which counsel shall cooperate, and coordinate the
defense, with the Company’s counsel and minimize the expense of such separate
representation to the extent consistent with the Executive’s separate defense.
This Section 11 shall continue in effect after the termination of the
Executive’s employment or the termination of this Agreement

 

12. Disputes.

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(a) Any dispute or controversy arising out of or relating to this Agreement or
your employment, other than injunctive relief, will be settled exclusively by
arbitration, conducted before a single arbitrator in New York, New York
(applying New York law) in accordance with, and pursuant to, the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association (“AAA”). The decision of the arbitrator will be final and binding
upon the parties hereto. Any arbitral award may be entered as a judgment or
order in any court of competent jurisdiction. Either party may commence
litigation in court to obtain injunctive relief in aid of arbitration, to compel
arbitration, or to confirm or vacate an award, to the extent authorized by the
Federal Arbitration Act or the New York Arbitration Act. The Company and the
Executive will share the AAA administrative fees, the arbitrator’s fee and
expenses, and each party will pay its own attorneys’ fees.

 

 

(b) BOTH THE COMPANY AND THE EXECUTIVE HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE FEDERAL OR STATE LAW.

 

(c) In the event of any contest or dispute relating to this Agreement or the
termination of Executive’s employment hereunder, the Company shall reimburse
100% of Executive’s reasonable legal fees if Executive substantially prevails in
such contest or dispute.

 

13. Integration. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties concerning such subject matter.

 

14. Successors. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s personal representatives, executors, administrators, heirs,
distributees, devisees and legatees. In the event of the Executive’s death after
his termination of employment but prior to the completion by the Company of all
payments due him under this Agreement, the Company shall continue such payments
to the Executive’s beneficiary designated in writing to the Company prior to his
death (or to his estate, if the Executive fails to make such designation). The
Company shall require any successor to the Company to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

 

15. Enforceability. If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

16. Survival. The provisions of this Agreement shall survive the termination of
this Agreement and/or the termination of the Executive’s employment to the
extent necessary to effectuate the terms contained herein.

 

17. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any

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subsequent breach.

 

18. Notices. Any notices, requests, demands and other communications provided
for by this Agreement shall be sufficient if in writing and delivered in person
or sent by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to the Executive at
the last address the Executive has filed in writing with the Company or, in the
case of the Company, at its offices,

 

 

 

 

If to Executive:

 

 

Stephen Brunner

________________

________________

 

 

 

 

 

 

 

 

Petro River Oil Corp

 

If to Company:

205 E 42nd Street

 

 

20th Floor

 

 

New York, NY 10017

 

 

 

 

 

19. Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Company.

 

20. Governing Law. This is a New York contract and shall be construed under and
be governed in all respects by the laws of New York for contracts to be
performed in that State and without giving effect to the conflict of laws
principles of New York or any other State.

 

21. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document.

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written.

 

 

PETRO RIVER OIL CORP

 

 

 

 

By:

 /s/ Scot Cohen

 

Name:

 Scot Cohen

 

Title:

 Executive Chairman

 

 

 

 

STEPHEN BRUNNER

 

 

By:

 /s/ Stephen Brunner

 

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Exhibit A

 

All options vested as set forth in this Exhibit A will have a ten year exercise
period unless otherwise provided in this Employment Agreement.

Initial Grant

Upon the date hereof, the Company shall grant the Executive options to purchase
10,648,763 shares of Common Stock at an exercise price equal to the fair market
value of the Common Stock of the date of grant.  The granted options shall be
subject to a 3 year vesting schedule with 20% to vest upon the grant date and
the balance to grant ratably on an annual basis for the next 36 months subject
to Executive’s continued employment with the Company.

 

Treatment upon termination of employment

 

Death or Disability

Immediate vesting for entire Initial Grant.

 

 

Voluntary quit

Unvested portion of Initial Grant forfeited and cancelled.

 

 

Termination for Cause

Unvested portion of Initial Grant forfeited and cancelled.

 

 

Termination without Cause/Quit for Good Reason

Immediate vesting for the entire Initial Grant.

 

The terms of any award under this section shall be more fully set forth in an
award agreement. It is expressly acknowledged and agreed that this Exhibit A is
a summary of the contemplated terms of the award agreements which will preserve
the elements described herein, but be subject to the reasonably required terms
of the award agreements allowing for the orderly and lawful administration of
such awards.

 

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