EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of this
4th day of February, 2014 (this “Effective Date”), by and between PetroTerra
Corp., a Nevada corporation having its corporate offices at 607 28 ¼ Road, Suite
115, Grand Junction, CO 81506 (the “Company”), and John Barton (“Executive”).

 

WHEREAS, Executive was appointed and has been serving as Chief Executive Officer
of the Company since October 2, 2013; and

 

WHEREAS, the Company wishes to formalize and continue the employment of
Executive on the terms and conditions set forth in this Agreement.

 

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

 

1. Term of Employment. Subject to the terms and conditions of this Agreement,
the Company hereby agrees to employ Executive as Chief Executive Officer, and
Executive hereby agrees to serve the Company in that position, for a term which
shall commence as of the Effective Date and continue until the third (3rd)
anniversary thereof (the “Term”). The Term will be automatically extended for
additional one year terms unless either party gives the other party three (3)
months written notice of his or its determination not to renew this Agreement
prior to the end of the then current Agreement.

 

2. Position.

 

(a) Duties. Executive shall perform such duties as are currently being performed
by him for the Company. The nature and duties of Executive’s employment with the
Company shall be determined by the board of directors of the Company, and shall
be consistent with the duties customarily attendant or associated with his
position (the “Board”). Executive shall be employed at the Company’s offices
located in Grand Junction, Colorado and Executive will report to the Board.

 

(b) Devotion of Time to Company’s Business. Executive shall substantially expend
all of his normal working hours in performing his duties (and in any other
capacity relating to the business of the Company or any subsidiary of the
Company, for which he shall receive no additional compensation, unless otherwise
agreed in writing by the Company and Executive). Executive shall perform his
duties and will be required to travel as reasonably necessary to perform the
services required of him under this Agreement. Executive represents and warrants
to the Company that he is able to enter into this Agreement and that his ability
to enter into this Agreement and to fully perform his duties hereunder are not
limited to or restricted by any agreements or understandings between Executive
and any other person. For the purposes of this Agreement, the term “person”
means any natural person, corporation, partnership, limited liability
partnership, limited liability company, or any other entity of any nature.

 

 

 

 

(c) Company Rules, Policies and Regulations. The Executive shall, at all times,
conduct himself in a professional manner and adhere to the standards, ethical
obligations, rules, policies, regulations and procedures of the Company which
are presently in force or which may be established from time to time by the
Company. Executive shall take no intentional action that violates any law, rule
or regulation whatsoever while acting in his capacity as employee.

 

3. Compensation and Benefits.

 

(a) Base Salary. As of the Effective Date, the Executive shall be paid a base
salary in consideration for his services provided to the Company at the rate of
$120,000 per annum (the “Base Salary”), payable in accordance with the Company’s
normal payroll practices. Increases in Base Salary during the Term shall be
determined from time to time in the sole discretion of the Board or any
committee of the Board based upon such criteria as they deem relevant, or based
on no particular criteria whatsoever.

 

(b) Additional Compensation. The Executive shall be eligible to receive an
annual bonus (the “Annual Bonus” and, together with the Base Salary, the “Annual
Compensation”) based upon Executive’s and the Company’s performance; provided,
that any such additional compensation shall be structured and/or paid in a
manner that is either exempt from, or complies with, the requirements of Section
409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (“Code”).
The Annual Bonus shall be determined by consideration of the Board or
Compensation Committee, as applicable, in its sole discretion, based upon
criteria to be established in their sole discretion. The Annual Bonus shall be
paid to the Executive on or prior to the March 15 following the end of the year
for which such Annual Bonus was earned; provided, that if the criteria for
determining the Annual Bonus requires a review of the Company’s audited
financial statements, the Annual Bonus (if payable) shall be paid on the 20th
day after receipt by the Company of the audited financial statements.

 

(c) Equity Awards, etc.

 

(i) On each anniversary of the Effective Date during which Executive is employed
pursuant to this Agreement, the Company shall grant (the “Restricted Stock
Grant") to Executive 400,000 shares of the Company’s common stock, par value
$0.001 per share (the “Common Stock”). Such Restricted Stock Grant shall be
subject to forfeiture if Executive is no longer employed by the Company within
ten (10) months following the grant date.

 

(ii) In addition to the other compensation payable to Executive hereunder,
Executive shall be entitled to receive grants of stock options, restricted stock
and/or any other equity incentive awards available to senior executives of the
Company, under any equity incentive plans adopted by the Company, at such times
and in such amounts as shall be determined in the sole discretion of the Board
or the Compensation Committee of the Board, as applicable, which determines such
equity grants.

 

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(d) Upon the occurrence of a Change in Control (as defined below) of the
Company, if all or any portion of the payments provided under this Agreement
and/or any other payments and benefits that the Executive receives or is
entitled to receive from the Company or an affiliate thereof constitutes an
“excess parachute payment” within the meaning of Section 280G(b)(1) of the Code
(each such payment, a “Parachute Payment”), and would result in the imposition
on the Executive of an excise tax under Section 4999 of the Code (“Excise Tax”),
then in addition to any other benefits to which the Executive is entitled under
this Agreement, the Company shall pay the Executive an additional amount in cash
(the “Gross-Up Payment”) such that the net amount received by the Executive in
connection with the Change in Control, after payment of any Excise Tax by
Executive, shall be equal to the aggregate Parachute Payments payable to the
Executive. For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay Federal income tax at the highest marginal rate
of Federal income taxation in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal rate of
taxation in the state or locality of the Executive’s residence in the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction
in Federal income taxes which could be obtained from deduction of such state and
local taxes. Any Gross-Up Payment due to the Executive under this Section 3(d)
shall be paid to the Executive no later than the end of the year following the
year in which the Executive or the Company paid the related taxes.

 

(e) Withholding. All salaries, bonuses and other benefits payable to the
Executive shall be subject to payroll and withholding taxes as may be required
by law.

 

4. Employee Benefits; Business Expenses.

 

(a) Employee Benefits. During the Term, the Executive and his dependents shall
be entitled to participate in the Company’s healthcare plans, welfare benefit
plans, fringe benefit plans and any qualified or non-qualified retirement plans
as in effect from time to time (collectively, the “Employee Benefits"), on the
same basis as those benefits are made available to the other senior executives
of the Company, in accordance with the Company policy as in effect from time to
time and in accordance with the terms of the applicable plan documents (if any).
If at any time the Company does provide a health insurance plan for which the
Executive is eligible, the Executive shall be entitled to reimbursement by the
Company of the cost of health insurance paid by the Executive for the Executive
and his family. Any such reimbursement shall be paid to the Executive not later
than March 15 of the year following the calendar year in which the Executive
paid such cost.

 

(b) Expenses. The Executive shall be entitled to reimbursement for reasonable
and necessary business expenses incurred by him in the performance of his duties
and responsibilities hereunder, in accordance with the Company’s reimbursement
and expenses policies, as in effect from time to time.

 

(c) Vacation. The Executive shall be entitled to four (4) weeks paid vacation
per annum; provided, that the Executive shall be paid annually in cash for
vacation days not taken by him; provided that any such payment shall be paid to
the Executive not later than March 15 of the year following the calendar year in
which the unused vacation days accrued.

  

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5. Termination.

 

(a) Definitions. For purposes of this Agreement:

 

“Cause” shall mean (i) the Executive’s gross negligence and/or willful
misconduct (as such terms are generally understood and applied to the
performance of an executive) in the performance of his material duties with
respect to the Company as determined, in each case, by a court of competent
jurisdiction not subject to further appeal, as provided hereunder, (ii) the
conviction by the Executive of a crime constituting a felony or (iii) the
Executive shall have committed any material act of malfeasance, disloyalty,
dishonesty or breach of fiduciary duty against the Company, for which the
Executive shall have a ten (10) day cure period following notice thereof from
the Company (except for a conviction pursuant to subsection (ii), for which
there shall be no cure period).

 

“Change of Control” means the occurrence of any one or more of the following
events (it being agreed that, with respect to paragraphs (i) and (iii) of this
definition below, a “Change of Control” shall not be deemed to have occurred if
the applicable third party acquiring party is an “affiliate” of the Company
within the meaning of Rule 405 promulgated under the Securities Act of 1933, as
amended):

 

(i) An acquisition (whether directly from the Company or otherwise) of any
voting securities of the Company (the “Voting Securities”) by any “Person” (as
the term person is used for purposes of Section 13(d) or 14(d) of the Securities
and Exchange Act of 1934, as amended (the “1934 Act”)), immediately after which
such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of forty percent (40%) or more of the combined
voting power of the Company’s then outstanding Voting Securities; or

 

(ii) The individuals who, as of the Effective Date, are members of the Board
cease, by reason of a financing, merger, combination, acquisition, takeover or
other non-ordinary course transaction affecting the Company, to constitute at
least fifty-one percent (51%) of the members of the Board; or

 

(iii) the consummation, in one or a series of related transactions, of:

 

(A) A merger, consolidation or reorganization involving the Company, where
either or both of the events described in clauses (i) or (ii) above would be the
result;

 

(B) A liquidation or dissolution of or appointment of a receiver, rehabilitator,
conservator or similar person for, or the filing by a third party of an
involuntary bankruptcy against, the Company; or

 

(C) An agreement for the sale or other disposition of all or substantially all
of the assets of the Company to any Person (other than a transfer to a
subsidiary of the Company).

 

“Date of Termination” shall mean the date the Notice of Termination is given to
the respective party; provided, however, that with respect to a termination for
Cause by the Company, the Date of Termination shall not occur prior to the
expiration of any applicable cure period.

 

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“Disability” shall mean the Executive has become physically or mentally
incapacitated and is therefore unable for a period of four (4) consecutive
months to perform any of the material elements of his duties hereunder. Any
question as to whether the Executive has a Disability as to which he (or his
legal representative) and the Company cannot agree shall be determined in
writing by a qualified independent physician mutually acceptable to the
Executive (or his legal representative) and the Company. If the Executive (or
his legal representative) and the Company cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two
physicians shall select a third who shall make such determination in writing.
The determination of whether the Executive has a Disability, as made in writing
to the Company and the Executive by such physician(s), shall be final and
conclusive for all purposes of this Agreement.

 

“Good Reason” shall mean (i) a breach by the Company of any of its material
obligations or covenants set forth in this Agreement, (ii) a material reduction
of the duties, responsibilities or title of the Executive, (iii) the assignment
to the Executive of any duties or responsibilities that are inconsistent, in any
significant respect, with his position, for which the Company shall have a ten
(10) day cure period following notice thereof from Executive to the Company,
(iv) an abandonment of, or fundamental change in, the primary business or
primary products of the Company, (v) a Change of Control, but only if the
Executive’s resignation occurs within twelve (12) months after the occurrence of
such Change of Control.

 

“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated, and shall be
communicated, in writing, to the other party hereto in accordance with the
provisions of Section 10(g) hereof.

 

(b) By the Company for Cause or by the Executive Without Good Reason.

 

(i) The Term and the Executive’s employment hereunder may be terminated by the
Company for Cause, immediately upon the delivery of a Notice of Termination by
the Company to the Executive (except where the Executive is entitled to a cure
period, in which case such Date of Termination shall be upon the expiration of
such cure period if such matter constituting Cause is not cured) and shall
terminate automatically upon the Executive’s resignation (other than for Good
Reason or due to the Executive’s death or Disability).

 

(ii) If the Executive’s employment is terminated by the Company for Cause, or if
the Executive resigns other than for Good Reason, the Executive shall be
entitled to receive:

 

(A) any earned but unpaid Base Salary and/or accrued but unused vacation, all
vested equity, and any earned but unpaid bonus awards through the Date of
Termination,

 

(B) reimbursement for any unreimbursed business expenses incurred by the
Executive in accordance with the Company’s policy prior to the Date of
Termination (with such reimbursements to be paid promptly after the Executive
provides the Company with the necessary documentation of such expenses to the
extent required by such policy but in no event later than the end of the second
calendar month following the year in which the Date of Termination occurred),
and

 

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(C) such Employee Benefits, if any, as to which he may be entitled upon
termination of employment under the terms of the plan documents and applicable
law (including under the applicable provisions of Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended).

 

Following the Executive’s termination of employment by the Company for Cause or
if he resigns other than for Good Reason, except as set forth above or as
required by applicable law, the Executive shall have no further rights to any
compensation or any other benefits or perquisites under this Agreement and all
unvested option or restricted stock grant awards shall immediately be cancelled
without the need for any action by the Company.

 

(c) By the Company Other Than for Cause or by the Executive for Good Reason.

 

(i) The Term and the Executive’s employment hereunder may be terminated by the
Company other than for Cause, immediately upon the delivery of a Notice of
Termination by the Company to the Executive and shall terminate automatically
and immediately upon the Executive’s resignation for Good Reason at the end of
any applicable cure period if the circumstances giving rise to Good Reason are
not cured.

 

(ii) If the Executive’s employment is terminated by the Company other than for
Cause, or if the Executive resigns for Good Reason, the Executive shall receive
and the Company shall pay to Executive on the Date of Termination:

 

(A) any earned but unpaid Base Salary and/or accrued but unused vacation, all
vested equity, and any earned but unpaid bonus awards through the Date of
Termination, plus an additional twelve (12) months of Base Salary, together in a
lump sum payment; provided, however, that the Executive shall not be entitled to
any such additional Base Salary or earned but unpaid cash bonuses in the event
such termination or resignation is due solely to the Company’s inability to pay
its debts as they generally come due;

 

(B) acceleration of any then unvested stock options, restricted stock grants or
other equity awards;

 

(C) payment or reimbursement, as applicable, of the full health insurance costs
for the Executive and his family under a Company-provided group health plan or
otherwise for twenty four (24) following termination by the Company other than
for Cause or resignation by Executive for Good Reason, provided that any such
payment or reimbursement which constitutes deferred compensation under Section
409A shall be made annually within thirty (30) days after the end of the
calendar year in which the health insurance costs were incurred;

 

(D) reimbursement for any accrued but unused vacation days and/or unreimbursed
business expenses incurred by the Executive in accordance with the Company’s
policy prior to the Date of Termination (with such reimbursements to be paid
promptly after the Executive provides the Company with the necessary
documentation of such expenses to the extent required by such policy but in no
event later than the end of the second calendar month following the year in
which the Date of Termination occurred); and

 

(E) such other Employee Benefits, if any, as to which he may be entitled upon
termination of employment hereunder.

 

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Following the Executive’s termination of employment by the Company other than
for Cause or if he resigns for Good Reason, except as set forth above or as
required by applicable law, the Executive shall have no further rights to any
compensation or any other benefits under this Agreement. Notwithstanding the
foregoing, in order to be eligible for any of the severance payments and
benefits under this Section 5(c), the Executive must execute and deliver to the
Company a general release in a form reasonably satisfactory to the Board. If the
payments to be made under this Section 5(c) are otherwise subject to Section
409A, they shall be made, or commence to be made, on the first pay period
following the date that is thirty (30) days after the Executive’s employment
terminates. If the payments are not otherwise subject to Section 409A, they
shall be made, or commence to be made, on the first business day after the
release becomes effective. The initial payment shall include any unpaid amounts
from the date the Executive’s employment terminated, subject to the Executive’s
executing and delivering the release on the terms as set forth above.

 

(d) Death or Disability. The Executive’s employment hereunder shall terminate
upon the Executive’s death and may be terminated by the Company, within ten (10)
days after the delivery of a Notice of Termination by the Company to the
Executive (or his legal representative) in the event of the Executive’s
Disability. Upon termination of the Executive’s employment hereunder for either
Disability or death, the Executive shall be entitled to receive the same
payments and other items as set forth in clause (ii) of Section 5(b) hereof,
except that Executive (in case of Disability) or the estate (in the event of
death) shall have the right to exercise any unexercised and vested options for a
period of 90 days, and, in addition, to receive payment for accrued but unpaid
vacation time, if any. Following the Executive’s termination of employment due
to death or Disability, except as set forth herein or as required by applicable
law, the Executive (nor his estate) shall have no further rights to any
compensation or any other benefits under this Agreement.

 

(e) Payment of Amounts Owed upon Termination of Employment. Unless otherwise
provided herein, any amounts payable to the Executive for earned but unpaid Base
Salary and cash, equity or other bonus awards through the Date of Termination
shall be paid within ten (10) business days after the Date of Termination.

 

6. Restrictive Covenants.

 

(a) Definitions.

 

(i) “Competitive Activity” means any business activity which competes, directly
or indirectly, with or carries on the Company Business, or any business activity
substantially similar to the Company Business, as constituted, from time to
time.

 

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(ii) “Confidential Information” means all confidential and proprietary of,
about, or relating to the Company and the Company Business, including, without
limitation including, but not limited to, any and all documents received or
generated by Executive, existing and potential customer lists, trade secrets (as
defined under applicable state law), pricing, financial, corporate, and
personnel information, customer data, methods of operation, business plans,
techniques, prototypes, sketches, drawings, models, inventions, know-how,
processes, apparatus, software programs, computer codes, source codes,
equipment, algorithms, source documents, formulae, methods, data, descriptions
relating to current, future, and proposed products and services, information
concerning research, experimental work, development, specifications,
engineering, procurement requirements, purchasing, agents and suppliers,
business forecasts, marketing plans and information received from third parties
(including customers) that is subject to a duty on Executive’s part to maintain
its confidentiality. Confidential Information does not include information that
is generally known to the public, provided it is generally known to the public
other than as a result of disclosure of such information by Executive in
violation of this Agreement.

 

(iii) “Commercial Partner” means each third party person or entity with whom
Executive interacts on behalf of the Company during the term of his employment
with the Company, whether pursuant to this Agreement or otherwise, including,
without limitation, licensors, licensees, contract research organizations,
contract sales organizations and joint venture partners; provided that, on the
date of the termination of Executive’s employment with the Company, Commercial
Partner shall mean those third party persons and entities with whom Executive
interacted on behalf of the Company during the Lookback Period.

 

(iv) “Company Business” means the business(es) engaged in by the Company, from
time to time during the term of Executive’s employment with the Company, whether
pursuant to this Agreement or otherwise; provided that, on the date of the
termination of Executive’s employment with the Company, the Company Business
shall be the business(es) engaged in by the Company during the Lookback Period.

 

(v) “Former Employee” means any person who has been employed or engaged as an
independent contractor by the Company during the Look Back Period.

 

(vi) “Former Commercial Partner” means each third party person or entity who is
not a Commercial Partner but was a Commercial Partner during the Look Back
Period.

 

(vii) “Look Back Period” means the one (1) year period immediately preceding the
earlier of: (1) the date on which the definition in question is being
determined; or (2) the date when Executive is no longer employed by the Company,
whether pursuant to this Agreement or otherwise.

 

(viii) “Prospect” means each person or entity who is not a Commercial Partner,
not a Commercial Partner, and for whom, at any time during the Look Back Period,
the Company, whether through its employees, contractors or vendors, expended
directed marketing efforts or undertook other business development efforts which
resulted in at least an indication of interest from such person or entity of
becoming a Commercial Partner.

 

(ix) “Territory” means the United States.

 

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(b) Non-Solicitation and Non-Piracy. For the term of Executive’s employment,
whether under this Agreement or otherwise, and for a period of one (1) year
after the cancellation, termination or expiration of Executive’s employment with
the Company (the “Restriction Period”), by whatever means and for whatever
reason, Executive shall not, directly or indirectly, individually, or jointly
with others, for the benefit of Executive or any third party:

 

(i) have any equity or other ownership interest in, or become a director or
manager of, or be otherwise associated with, or engaged or employed by, any
Commercial Partner, Prospect or Former Commercial Partner or their subsidiary or
parent entities or affiliates in any job or career that relates to or concerns
any activity substantially similar, in whole or in part, to the Company Business
(provided that this subsection (A) shall only apply during the term of
Executive’s employment);

 

(ii) solicit, render services to, or accept business from any Commercial Partner
or Prospect or any of their subsidiary or parent entities or affiliates for any
business activity that relates to or concerns any activity substantially
similar, in whole or in part, to the Company Business; provided that Executive
shall not be bound by the foregoing with respect to persons to whom Executive
has made sales or otherwise provided products and services prior to the date
hereof; and provided further, however, if this Agreement is terminated pursuant
to Section 5(c), the restrictive covenant contained in this subsection shall
only apply if Employee had ever received the Base Salary and then only for so
long as Employee receives payments under Section 5(c) in a timely manner; and

 

(iii) solicit, hire, compensate or engage as an employee, agent, contractor,
shareholder, member, joint venturer, or consultant, whether or not for
consideration, any of the Company’s employees or otherwise induce any of the
Company’s employees, subcontractors or vendors to change their relationship with
the Company.

 

(c) Confidentiality. Executive shall never: (i) disclose any Confidential
Information; and (ii) directly or indirectly give or permit any person or entity
to have access to any Confidential Information; and (iii) make any use,
commercial or otherwise, of any Confidential Information, except, solely as
reasonably required to perform Executive’s employment duties with the Company
and solely for the benefit of the Company.

 

(d) Restrictive Covenants Scope. The parties acknowledge that the provisions of
this section are necessary and reasonable to protect the legitimate business
interest of the Company and any violation of the provisions of this section will
result in irreparable injury to the Company, the exact amount of which will be
difficult to ascertain, and that the remedies at law for any such violation
would not be reasonable or adequate compensation to the Company for such
violation. Accordingly, Executive agrees that if the provisions of this section
are violated, in addition to any other remedy which may be available in equity
or at law, the Company shall be entitled to specific performance and injunctive
relief, without the necessity of proving actual damages.

 

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(e) Tolling of Restriction Period. In the event of Executive’s breach of one or
more of the provisions of this section, the running of the Restriction Period
shall be tolled during the continuation of such breach(es) and recommence only
upon Executive’s full and complete compliance with the provisions of this
Section 6.

 

(f) Judicial Modification. In the event a court of competent jurisdiction holds
one or more of the provisions of the restrictive covenants invalid as to length
of time or geographic scope, then this Section 6 shall be amended to reflect a
reasonable length of time and/or reasonable geographic scope.

 

7. Company Property. Executive agrees that all Company Property (as defined
below) is the property solely of the Company and Executive waives and
relinquishes any and all interests or property rights he or she may have therein
in favor of the Company. Executive shall immediately return all of the Company
Property to the Company at the Company’s address for notices or such other
location as may be directed by the Company upon: (A) the Company’s request at
any time; and (B) upon the termination of Executive’s employment. “Company
Property” includes, but is not limited to: (X) records relating to Commercial
Partners, Former Commercial Partners, Prospectus and Confidential Information in
whatever form they exist, and by whomever prepared, including, but not limited
to, notes of Executive; (Y) tangible embodiments of or containing Confidential
Information; and (Z) tangible and intangible property pertaining to the Company
Business or arising out of or used by Executive in the performance of his duties
for the Company.

 

8. Independent Covenant. Executive acknowledges and agrees that the provisions
of sections 6 and 7 hereof are independent covenants and no actual or alleged
breach by the Company of any provision of this Agreement or the employment
relationship shall be grounds for relieving Executive from his or her
obligations thereunder.

 

9. Miscellaneous.

 

(a) Governing Law. This Agreement shall be construed and governed under and by
the laws of the State of New York, without regard to the conflicts of laws
principles thereof.

 

(b) Arbitration of Claims. In the event any dispute, claim, question or
disagreement arising from or relating to this Agreement or the breach thereof,
the Company and Executive agree to settle the dispute, claim, question or
disagreement by arbitration before a single arbitrator in New York County, New
York selected by, and such arbitration to be administered by, the American
Arbitration Association ("AAA") in accordance with its Commercial Arbitration
Rules, and judgment on the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. Each of the Company and Executive hereby
agrees and acknowledges that all disputes between or among them are subject to
the alternative dispute resolution procedures of this Section 10(b). Each of the
Company and Executive agrees that any aspect of alternative dispute resolution
not specifically covered in this Agreement shall be covered, without limitation,
by the applicable AAA rules and procedures. Each of the Company and Executive
further agree that any determination by the arbitrator regarding any dispute,
claim, question or disagreement arising from or relating to this Agreement shall
be final and binding upon the parties hereto and shall not be subject to further
appeal. Each of the Company and Executive shall bear its own costs and expenses
and an equal share of the arbitrator’s fees and administrative fees of
arbitration; provided, however, that upon receipt of the determination by the
arbitrator the prevailing party shall have all reasonable out-of-pocket fees and
expenses reimbursed promptly (in all events within 10 calendar days following
delivery to both parties of the arbitrator’s decision) by the non-prevailing
party in any such dispute.

 

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(c) Entire Agreement; Amendments. This Agreement sets forth the entire
understanding of the parties concerning the subject matter of this Agreement and
incorporates all prior negotiations and understandings. There are no covenants,
promises, agreements, conditions or understandings, either oral or written,
between them relating to the subject matter of this Agreement other than those
set forth herein. The publication, amendment, supplementation or replacement of
an employee handbook by the Company shall not be deemed to alter, amend or
modify the terms and conditions of this Agreement. No alteration, amendment,
change or addition to this Agreement shall be binding upon any party unless in
writing and signed by the party to be charged. No purported waiver by any party
of any default by another party of any term or provision contained herein shall
be deemed to be a waiver of such term or provision unless the waiver is in
writing and signed by the waiving party. No such waiver shall in any event be
deemed a waiver of any subsequent default under the same or any other term or
provision contained herein. This Agreement may not be altered, modified, or
amended except by written instrument signed by the parties hereto.

 

(d) No Waiver. No waiver of any of the provisions of this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed or be
construed as a further, continuing or subsequent waiver of any such provision or
as a waiver of any other provision of this Agreement. No failure to exercise and
no delay in exercising any right, remedy or power hereunder will preclude any
other or further exercise of any other right, remedy or power provided herein or
by law or in equity.

 

(e) Severability. If any term or provisions of this Agreement, or the
application thereof to any person or circumstance, shall be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons or circumstances, other than those as to which it is
held invalid, shall both be unaffected thereby and each term or provision of
this Agreement shall be valid and be enforced to the fullest extent permitted by
law.

 

(f) Assignment. This Agreement, and all of the Executive’s rights and duties
hereunder, shall not be assignable or delegable by the Executive; provided,
however, that if the Executive shall die, all amounts then payable to the
Executive hereunder shall be paid in accordance with the terms of this Agreement
to the Executive’s devisee, legatee or other designee or, if there be no such
devisee, legatee or designee, to his estate. The Company and its successors and
assigns may, at any time and from time to time, assign its rights and
obligations under this Agreement, including, without limitation, the rights
arising pursuant to sections 6, 7 and 8, without Executive’s consent to a buyer
of all or substantially all of the assets, or a majority of the voting stock, of
the Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such affiliate or successor
person or entity.

 

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(g) Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or internationally
recognized courier service addressed to the respective addresses set forth below
in this Agreement, or via facsimile to the number set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

 

If to the Company:

 

PetroTerra Corp.

607 28 ¼ Road, Suite 115

Grand Junction, CO 81506

Attention: President

Fax: 970 683 5499

 

If to the Executive:

 

John Barton

2355 Westwood Blvd, Apt 257

Los Angeles, CA 90064

Fax: 970 683 5499

 

To the most recent address of the Executive set forth in the personnel records
of the Company.

 

(g) Prior Agreements. This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between the Executive and the
Company regarding the terms and conditions of the Executive’s employment with
the Company.

 

(h) Cooperation. The Executive shall provide his reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during the Executive’s employment
hereunder, but only to the extent the Company requests such cooperation with
reasonable advance notice to the Executive and in respect of such periods of
time as shall not unreasonably interfere with the Executive’s ability to perform
his duties with any subsequent employer; provided, however, the Company shall
pay any reasonable travel, lodging and related expenses that the Executive may
incur in connection with providing all such cooperation, to the extent approved
by the Company prior to incurring such expenses.

 

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(i) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that the
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

(j) Survival. Sections 6, 7, and 9 shall survive the termination, cancellation
or expiration of this Agreement by whatever means for whatever reason.

 

(k) Fees and Expenses. In the event the Company shall fail or refuse to make or
authorize any payment of any amount otherwise due to the Executive hereunder
within the appropriate period of time, then the Company shall reimburse the
Executive for all reasonable expenses (including reasonable counsel fees and
expenses) incurred by him in enforcing the terms hereof, within five (5)
business days after demand accompanied by evidence of fees and expenses
incurred. With regard to any dispute pursuant to this Agreement, the Company and
Executive agree that the non-prevailing party shall promptly reimburse any and
all reasonable attorneys’ fees to the prevailing party in connection therewith.
Any reimbursement hereunder shall be paid promptly and in no event later than
the end of his taxable year next following the taxable year in which the expense
was incurred.

 

(l) Section 409A.

 

(i) The parties intend that the payments and benefits provided for in this
Agreement either be exempt from Section 409A, or be provided in a manner that
complies with Section 409A and any ambiguity herein shall be interpreted so as
to be consistent with the intent of this paragraph. In no event whatsoever shall
the Company be liable for any additional tax, interest or penalty that may be
imposed on the Executive by Section 409A or damages for failing to comply with
Section 409A. Notwithstanding anything contained herein to the contrary, all
payments and benefits which are payable upon a termination of employment
hereunder shall be paid or provided only upon those terminations of employment
that constitute a “separation from service” from the Company within the meaning
of Section 409A (determined after applying the presumptions set forth in Treas.
Reg. Section 1.409A-1(h)(1)). Further, if the Executive is a “specified
employee” as such term is defined under Section 409A at the time of a
termination of employment and the deferral of the commencement of any payments
or benefits otherwise payable hereunder as a result of such termination of
employment is necessary in order to prevent any accelerated recognition of
income or additional tax under Section 409A, then the Company will defer the
commencement of the payment of any such payments or benefits hereunder (without
any reduction in payments or benefits ultimately paid or provided to the
Executive) until the date that is at least six (6) months following the
Executive’s termination of employment with the Company (or the earliest date
permitted under Section 409A, e.g., immediately upon the Executive’s death),
whereupon the Company will promptly pay the Executive a lump-sum amount equal to
the cumulative amounts that would have otherwise been previously paid to the
Executive under this Agreement during the period in which such payments or
benefits were deferred. Thereafter, payments will resume in accordance with this
Agreement.

 

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(ii) Notwithstanding anything to the contrary in this Agreement, in-kind
benefits and reimbursements provided hereunder during any calendar year shall
not affect in-kind benefits or reimbursements to be provided in any other
calendar year, other than an arrangement providing for the reimbursement of
medical expenses referred to in Section 105(b) of the Code, and are not subject
to liquidation or exchange for another benefit. Notwithstanding anything to the
contrary in this Agreement, reimbursement requests must be timely submitted by
the Executive and, if timely submitted, reimbursement payments shall be promptly
made to the Executive following such submission, but in no event later than
December 31st of the calendar year following the calendar year in which the
expense was incurred. In no event shall the Executive be entitled to any
reimbursement payments after December 31st of the calendar year following the
calendar year in which the expense was incurred. This paragraph shall only apply
to in-kind benefits and reimbursements that would result in taxable compensation
income to the Executive.

 

(iii) Additionally, in the event that following the date hereof the Company or
the Executive reasonably determines that any compensation or benefits payable
under this Agreement may be subject to Section 409A, the Company and the
Executive shall work together to adopt such amendments to this Agreement or
adopt other policies or procedures (including amendments, policies and
procedures with retroactive effect), or take any other commercially reasonable
actions necessary or appropriate to (x) exempt the compensation and benefits
payable under this Agreement from Section 409A and/or preserve the intended tax
treatment of the compensation and benefits provided with respect to this
Agreement or (y) comply with the requirements of Section 409A.

 

[Signature Page Follows]

 

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

 

  PETROTERRA CORP.         By: /s/ John Barton   Name: John Barton   Title:
Chief Executive Officer         EXECUTIVE:         /s/ John Barton   John Barton

 

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