Document:

EX-10.1

 Exhibit 10.1 

[Execution Version] 

SEPARATION AGREEMENT AND RELEASE 

This SEPARATION AGREEMENT AND RELEASE (the “Agreement”), dated as of August 28, 2015, is entered into by and between SRA
Companies, Inc. (formerly known as Sterling Holdco, Inc.) (the “Company”) and William L. Ballhaus (the “Executive”). 

WHEREAS, the Executive is party to an Employment Agreement, dated as of July 20, 2011, by and between the Executive and the Company, and
amended as of September 27, 2013 (the “Employment Agreement”), pursuant to which the Executive currently serves as President and Chief Executive Officer of the Company, with capitalized terms used herein without definition
having the respective meanings set forth in the Employment Agreement; 
 WHEREAS, the Company previously granted to the Executive
non-qualified stock options (the “2012 Options”) to purchase 14,392 shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), under the Sterling Holdco, Inc. Stock Incentive Plan, as in
effect and as amended from time to time, evidenced by that certain Nonqualified Stock Option Agreement, dated as of February 9, 2012 (the “Option Agreement”), of which 2012 Options, as of the date hereof, options to
purchase 5,757 shares of Common Stock have vested, and options to purchase 8,635 of Common Stock remain unvested (and, of which unvested options, 7,196 are subject to the satisfaction of performance conditions based on the cash return on the Common
Stock held by the Providence Entities (as defined in the Option Agreement (the “Performance Options”)); 
 WHEREAS, the
Company also previously granted to the Executive 3,275 shares of vested and unvested Restricted Stock, of which 1,750 shares of Common Stock are outstanding and unvested (the “Unvested Restricted Stock”) and 1,261 shares of Common
Stock are outstanding and vested (the balance having been retained to pay withholding taxes) (the “Vested Restricted Stock”); 

WHEREAS, the Company is expected to shortly enter into an Agreement and Plan of Merger with Computer Sciences Corporation (the “Merger
Agreement”), pursuant to which, at the “First Merger Effective Time” (as defined in the Merger Agreement), a subsidiary of Computer Sciences Corporation will merge with and into the Company, with the Company surviving (the
“Merger”); and 
 WHEREAS, the Company and the Executive intend hereby to agree to certain matters regarding the
termination of Executive’s employment with the Company and its affiliates in connection with the Merger. 

 NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive agree as follows: 

1. Clarification of Severance Pay upon Termination of Employment. 

(a) The Company and the Executive hereby acknowledge and agree that, upon the Executive’s termination of employment with the Company and
its affiliates on the Termination Date, Executive shall, subject to the last sentence of this Section 1(a), be entitled to severance pay and termination benefits under paragraph 6(b) of the Employment Agreement equal to the Enhanced Severance
Payment as if the Executive’s employment were terminated by the Company without Cause followed by a “change in control” (i.e., the severance multiple referred to in paragraph 6(b) of the Employment Agreement shall be three
(3) rather than two (2)) (the “Severance Pay and Termination Benefits”). The Executive’s employment will terminate automatically at 11:59 p.m. on the day prior to the date on which occurs the First Merger Effective
Time (the “Termination Date”). The payment of the Severance Pay and Termination Benefits shall be subject to the Executive’s execution and delivery of the release of claims attached to the Employment Agreement (a copy of which
has been attached hereto as Exhibit A) (the “Release of Claims”) within thirty (30) days following the Termination Date and the Release of Claims becoming irrevocable as provided therein. 

(b) Effective as of the Termination Date, the Executive shall no longer be an employee of the Company or any of its subsidiaries or affiliates
from and after the Termination Date and, effective as of the Termination Date, the Executive hereby resigns, effective as of the Termination Date, from employment with the Company, and from each services position with each of its subsidiaries and
affiliates in all respects. At and following the Termination Date, the Executive shall execute promptly any documents evidencing any other resignations as the Company shall request. In no event shall such resignations affect the termination of the
Executive’s economic entitlements under the Employment Agreement, which shall be determined as if the Executive’s employment were terminated by the Company without Cause followed by a “change in control”. 

2. Separation Compensation and Benefits. Subject to Sections 1(a) and 14, the Severance Pay and Termination Benefits are estimated as
of the date of this Agreement to be each of the following: 
 (a) $6,075,000 (the “Severance Amount”), which amount is equal
to three (3) times the sum of the Executive’s current Base Salary and current Target Bonus Amount. The Severance Amount shall be finally determined at the Termination Date by reference to the Executive’s final Base Salary and final
Target Bonus Amount (if higher than the foregoing) and shall be paid as provided in the Employment Agreement in twenty-four (24) substantially equal monthly installments following the Termination Date. 

  
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 (b) $181,849.32, which is the Pro Rata Bonus (assuming a Termination Date as of the date of this
Agreement). The Pro Rata Bonus shall be paid on the thirtieth (30th) day following the Termination Date as provided in the Employment Agreement. 

(c) Provided that the Executive is eligible to elect and properly elects to receive continued health care coverage pursuant to the provisions
of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), the Company shall cause the Executive to be provided with continuation coverage pursuant to the provisions of COBRA and clause (v) of paragraph 6(b) of the
Employment Agreement for the eighteen (18) months following the Termination Date at the same premium rate that active employees of the Company pay for such coverage. 

3. Exclusive Payments; No Mitigation or Offset. The severance benefits set forth in Section 2 above are in lieu of and not in
addition to any other severance benefits payable under any severance plan or arrangement sponsored or agreed to by the Company or any of its subsidiaries or affiliates and shall satisfy the Company’s obligation under paragraph 6(b) of the
Employment Agreement. The Executive is under no obligation to mitigate the amount of any payment provided for under this Agreement by seeking other employment or otherwise, and the payments under this Agreement shall not be subject to offset. In
addition, and for avoidance of doubt, the Executive shall in all events be entitled to payment of the Accrued Compensation. 
 4.
Treatment of Equity. 
 (a) For purposes of this Section 4, the terms “Management Equity Escrow Account”,
“Providence”, “Star Vested Time-Based Options”, “Star Performance-Based Options”, “Star Restricted Stock Awards”, “Star Unvested Time-Based Options” and
“Utah Government Common Stock” shall have the meanings set forth in the Merger Agreement. 
 (b) The Executive consents to
the treatment of the unvested Star Restricted Stock Awards, the Star Performance-Based Options (all of which are acknowledged to be unvested), the Star Vested Time-Based Options and the Star Unvested Time-Based Options, in each case which were
granted to the Executive prior to the Termination Date and are outstanding immediately prior to the Effective Time, as provided in Section 3 of the Merger Agreement, specifically: 

(i) that, with respect to the Unvested Restricted Stock (referred to in the Merger Agreement as the unvested Star Restricted
Stock Awards) held by the Executive immediately prior to the Termination Date, such Unvested Restricted Stock shall become fully vested as of the Termination Date and the Executive shall be entitled following the First Merger Effective Time to
receive, for each such vested share of Common Stock, the same proportion of cash and Utah Government Common Stock as received by Providence (net of applicable withholding Taxes) pursuant to 3.7(a) of the Merger Agreement; 

  
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 (ii) that, with respect to the Vested Restricted Stock held by the Executive as
of the Termination Date, such Vested Restricted Stock shall be entitled following the First Merger Effective Time to receive, for each such vested share of Common Stock, the same proportion of cash and Utah Government Common Stock as received by
Providence pursuant to Section 3.6 of the Merger Agreement; 
 (iii) that, subject to Section 4(c)
of this Agreement, with respect to the Star Performance-Based Options held by the Executive immediately prior to the First Merger Effective Time, the obligation to provide services following the Termination Date shall be deemed satisfied, and such
Star Performance-Based Options shall, pursuant to Section 3.7(b) of the Merger Agreement, be cancelled at the First Merger Effective Time and Utah Government Common Stock of equivalent value (determined as provided in the Merger Agreement)
shall be deposited in the Management Equity Escrow Account for delivery to the Executive following the First Merger Effective Time based on the vesting schedule applicable to the Star Performance-Based Options (and such Utah Government Common
Stock shall be subject to forfeiture if such vesting does not occur); 
 (iv) that the Star Vested Time-Based Options held by
the Executive shall, pursuant to Section 3.7(c) of the Merger Agreement, be cancelled immediately prior to the First Merger Effective Time and converted into a number of shares of Common Stock based on an as-if net-exercised basis, and in
consideration of such cancellation and conversion, the Executive shall be entitled following the First Merger Effective Time to receive, for each such share of Common Stock, the same proportion of cash and Utah Government Common Stock as received by
Providence (net of applicable withholding Taxes); and 
 (v) that the vesting of the Star Unvested Time-Based Options held by
the Executive as of the Termination Date shall be fully accelerated as of the Termination Date, and all of such options shall, pursuant to Section 3.7(c) of the Merger Agreement, be treated in the Merger in the same manner as Star Vested
Time-Based Options, except that such cash and shares of Utah Government Common Stock received in respect of such options will be held in the Management Equity Escrow Account until the earlier of (A) July 20, 2016 and
(B) the Exit Event (as defined in the Option Agreement). 

  
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 (c) Additional Provisions Applicable to the Management Equity Escrow Account. 

(i) Notwithstanding paragraph 2(b)(i) of the Option Agreement, (x) upon the receipt by the
Providence Entities (as defined in the Option Agreement) of a 2.0x cash-on-cash return in respect of their Common Stock, the Executive shall be entitled to distribution from the Management Equity Escrow Account of the percentage of the shares of
Utah Government Common Stock allocable to the Executive’s Performance Options calculated pursuant to the escrow agreement for the Management Equity Escrow Account (net of applicable withholding taxes), and (y) the remaining shares
of the Utah Government Common Stock allocable to the Executive’s Performance Options shall be distributed to the Executive from the Management Equity Escrow Account (net of applicable withholding taxes) upon the Providence
Entities’ receipt of a 2.5x cash-on-cash return in respect of their Common Stock. If, immediately following the Exit Event (as defined in the Option Agreement), either or both of these performance thresholds have not been met, the
Executive shall forfeit any rights in respect of the Utah Government Common Stock held in the Management Equity Escrow Account as to which either or both of the foregoing performance goals has not been met. For the avoidance of doubt, in the event
of such forfeiture, Executive will be entitled to receive his pro rata portion of the shares of Utah Government Common Stock issuable to Company shareholders under Section 4(d) of the Management Equity Escrow Account. 

(ii) Based on termination of the Executive’s employment as if the Executive’s employment were terminated by the
Company without Cause followed by a “change in control”, the requirement of continued service applicable to the Performance Options under paragraph 4(c) of the Option Agreement is deemed met and the Executive’s entitlement to the Utah
Government Common Stock in the Management Equity Escrow Account allocable to the Performance Options shall be determined solely by reference to the performance conditions set forth in paragraph 2(b) of the Option Agreement. 

5. Restrictive Covenant Certification. The Executive hereby confirms that Executive is in compliance with the terms and conditions of
(a) his employment, (b) the Employment Agreement, including but not limited to paragraph 7 thereof and (c) any other individual written agreement between the Executive and the Company or any of its subsidiaries or
affiliates. The Executive and the Company hereby agree that the provisions of paragraph 7 of the Employment Agreement are hereby incorporated by reference herein and shall continue to apply following the execution and delivery of this Agreement and
the Executive’s termination of employment in accordance with their terms. For clarity, the provisions of paragraph 7 of the Employment Agreement are attached to this Agreement as Exhibit B. 

6. Acknowledgments and Release. As provided in the Employment Agreement, in consideration of the Company’s commitments herein, the
Executive shall execute the Release of Claims attached to the Employment Agreement and deliver the 

  
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executed Release of Claims to the Company not later than the 30th day after the Termination Date. The Executive agrees and acknowledges that
none of the benefits to which he is entitled by reason of the operation of this Agreement shall be payable to him unless and until (x) he shall have executed and delivered such Release of Claims in a timely manner and (y) the
period during which the Executive may revoke such Release of Claims shall have expired without the Executive having revoked such Release of Claims. 

7. Company Property. To the extent that the Executive has not already done so as of the Termination Date, promptly following the
Termination Date, the Executive shall return to the Company (1) all property of the Company and its affiliates in the Executive’s possession, including without limitation memoranda, photographs, records, reports, manuals, drawings,
blueprints, prototypes, notes, documents, drawings, specifications, software, media and other materials, including any copies thereof (including electronically recorded copies) and (2) any keys, equipment (such as blackberries, cell
phones and computers), identification and credit cards belonging to the Company and its affiliates. 
 8. Withholding. All payments
to be made or benefits to be provided to the Executive in accordance with this Agreement (other than the payments pursuant to Section 4(b)(ii)) are in consideration of the performance of his services as an employee of the Company and shall be
made net of all applicable income and employment taxes required to be withheld from such payments, which may be deducted from such payments or from other payments made hereunder. 

9. Effect of Death. If the Executive shall die prior to the payment of all payments and benefits owed to him under this Agreement or
the Employment Agreement, any of such unpaid amounts shall be paid to the Executive’s estate. 
 10. Notices. Except as
otherwise explicitly provided in this Agreement, any notice provided hereunder will be deemed to be given when delivered in writing by hand or sent overnight courier. All notices to the Company be marked confidential and addressed to the Company at:

 SRA Companies, Inc. 
 4300
Fair Lakes Court 
 Fairfax, VA 22033 

Attn: Senior Vice President & General Counsel 

All notices to the Executive will be addressed to the most recent address for the Executive reflected in the Company’s records (or such other address as
the Executive may from time to time specify to the Company in accordance with this notice provision). 
 11. Effect of Termination of the
Merger Agreement. This Agreement shall terminate and cease to have any force or effect, and no party shall have any rights or obligations under this Agreement, upon the termination of the Merger Agreement in accordance with its terms without the
Merger having occurred. 

  
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 12. Counterparts. This Agreement may be executed and delivered in one or more counterparts
(including via .pdf file or by electronic delivery), each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 

13. Miscellaneous. The Company hereby represents and warrants to the Executive that it has been duly authorized to enter into this
Agreement. This Agreement may be amended only by a written instrument signed by the Company and the Executive. This Agreement shall constitute the entire agreement between the Company and the Executive with respect to the subject matter hereof. This
Agreement shall be governed by the laws of the State of Delaware without giving effect to the conflicts of law principles thereof. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors,
heirs, executors, administrators (in the case of the Executive) and assigns. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions of this Agreement shall not be affected thereby. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same
instrument. 
 14. Section 409 of the Code. Solely to the extent necessary to avoid adverse tax consequences under
Section 409A of the Code, the Company will cause payments subject to Section 409A of the Code otherwise payable during the first six months following the Termination Date to be deferred until the end of such six (6) month period (or
the earliest date as is permitted under Section 409A of the Code without any adverse tax consequences to the Executive). 
 15.
Section 280G of the Code. The Company shall seek approval from the shareholders of the Company in conformance with Section 280G of the Code (a “280G Approval”), such that, if such approval is obtained, none of the
payments to be made to Executive under this Agreement shall constitute “parachute payments” under Section 280G of the Code, and Executive shall receive evidence satisfactory to Executive of the submission of the vote to the
Company’s shareholders and evidence satisfactory to Executive of the results of such vote. 
 [remainder of page intentionally left
blank; signature page follows.] 

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

			
	SRA COMPANIES, INC.
		
	By:	 	 /s/ Anne M. Donahue

	Name:	 	Anne M. Donahue
	Title:	 	Senior Vice President and General Conusel

  

			
	WILLIAM L. BALLHAUS
	
	 /s/ William L. Ballhaus

  

			
	Acknowledged on behalf of the Board of Directors of the Company:
	
	 /s/ Charles E. Gottdiener

	Name:	 	Charles E. Gottdiener
	Title:	 	A Member of the Board

  
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 Exhibit A 

Form of General Release 

1. General Release. In consideration of the terms and conditions of that certain employment agreement by and between (among others)
William L. Ballhaus (“Ballhaus”) and SRA International, Inc. (the “Company”), dated as of July 20, 2011 (the “Employment Agreement”), and with the intention of binding Ballhaus and
Ballhaus’s heirs, executors, administrators and assigns, Ballhaus does hereby release, remise, acquit and forever discharge the Company, its subsidiaries and affiliates (collectively, the “Company Affiliated Group”), Providence
Equity Partners L.L.C. and its affiliates (including those investment vehicles which are directly or indirectly managed by Providence Equity Partners L.L.C. and those entities which serve as the general partner or managing member of any such
vehicles) and each of their present and former officers, directors, executives, agents, shareholders, attorneys, employees and employee benefits plans (and the fiduciaries thereof), and the successors, predecessors and assigns of each of the
foregoing (collectively, the “Company Released Parties”), of and from any and all claims, actions, causes of action, complaints, charges, demands, rights, damages, debts, sums of money, accounts, financial obligations, suits,
expenses, attorneys’ fees and liabilities of whatever kind or nature in law, equity or otherwise, whether accrued, absolute, contingent, unliquidated or otherwise and whether now known, unknown, suspected or unsuspected which Ballhaus,
individually or as a member of a class, now has, owns or holds, or has at any time heretofore had, owned or held, against any Company Released Party (an “Action”), including, without limitation, (i) arising out of or in
connection with Ballhaus’s services to any member of the Company Affiliated Group (or the predecessors thereof) in any capacity and the termination of such service in any such capacity, (ii) for severance or vacation benefits,
unpaid wages, salary or incentive payments, (iii) for breach of contract, wrongful discharge, impairment of economic opportunity, defamation, intentional infliction of emotional harm or other tort, (iv) for violation of or
failure to comply with any public policy and (v) for any violation of applicable state and local labor and employment laws (including, without limitation, all laws concerning harassment, discrimination, retaliation and other unlawful or
unfair labor and employment practices), any and all Actions based on the Employee Retirement Income Security Act of 1974 (“ERISA”), and any and all Actions arising under the civil rights laws of any federal, state or local
jurisdiction, including, without limitation, the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, as amended (“Title VII”), the Civil Rights Act of 1991, the Americans with Disabilities Act
(“ADA”), Sections 503 and 504 of the Rehabilitation Act, the Family and Medical Leave Act of 1993, the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), and the Older Workers Benefit Protection Act,
or any other federal or state statute or local 

  
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 ordinary pertaining to discrimination in employment or the termination of employment, excepting only: 

(a) the payments, rights, interests and/or benefits to which Ballhaus is entitled under the Separation Agreement and Release
and the Employment Agreement and any rights with respect to equity compensation granted to Ballhaus in accordance with the terms of such equity compensation; 

(b) the right of Ballhaus to receive benefits required to be provided in accordance with applicable statute, including, for
example, continued medical coverage under COBRA; 
 (c) claims (i) for vested benefits under any health,
disability, retirement or other, similar employee benefit plan or arrangement of the Company Affiliated Group incurred prior to the date hereof and (ii) for earned but unused vacation pay through the date of termination in accordance
with applicable policy of the Company Affiliated Group; 
 (d) rights to indemnification Ballhaus may have
(i) under applicable corporate law, (ii) under the by-laws, certificate of incorporation or other organizational documents of any Company Released Party or (iii) as an insured under any director’s and
officer’s liability insurance policy now or previously in force; 
 (e) claims for the reimbursement of unreimbursed
business expenses properly incurred prior to the date of termination pursuant to applicable policy of the Company Affiliated Group; and 

(f) any claim based upon events that occur after the effective date of this Release of Claims. 

2. No Admissions, Complaints or Other Claims. Ballhaus acknowledges and agrees that this Release of Claims is not to be construed in
any way as an admission of any liability whatsoever by any Company Released Party, any such liability being expressly denied. Ballhaus also acknowledges and agrees that Ballhaus has not, with respect to any transaction or state of facts existing
prior to the date hereof, (i) filed any Actions against any Company Released Party with any governmental agency, court or tribunal or (ii) assigned or transferred any Action to a third party. 

3. Application to all Forms of Relief. This Release of Claims applies to any relief no matter how called, including, without
limitation, wages, back pay, front pay, compensatory damages, liquidated damages, punitive damages for pain or suffering, costs and attorney’s fees and expenses. 

4. Specific Waiver. Ballhaus specifically acknowledges that Ballhaus’s acceptance of the terms of this Release of Claims is, among
other things, a specific waiver of any and all Actions under Title VII, ADEA, ADA and any state or local law or 

  
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regulation in respect of discrimination of any kind; provided, however, that nothing herein shall be deemed, nor does anything herein purport, to be a waiver of any right or Action
which by law Ballhaus is not permitted to waive, except that, with respect to any such right or Action, Ballhaus does waive any right to money damages. This Release of Claims shall not affect Ballhaus’ rights under the Older Workers Benefit
Protection Act to have a judicial determination of the validity of this Release of Claims and does not purport to limit any right Ballhaus may have to file a charge under the ADEA or other civil rights statute, or to participate in an investigation
or proceeding conducted by the Equal Employment Opportunity Commission or other investigative agency. This Release of Claims does, however, waive and release any right by Ballhaus to recover damages in any proceeding under the ADEA or other civil
rights statute. 
 5. Voluntariness. Ballhaus acknowledges and agrees that Ballhaus is relying solely upon Ballhaus’s own
judgment; that Ballhaus is over eighteen years of age and is legally competent to sign this Release of Claims; that Ballhaus is signing this Release of Claims of Ballhaus’s own free will; that Ballhaus has read and understood the Release of
Claims before signing it; and that Ballhaus is signing this Release of Claims in exchange for consideration that Ballhaus believes is satisfactory and adequate. Ballhaus also acknowledges and agrees that Ballhaus has been informed of the right to
consult with legal counsel and has been encouraged to do so. 
 6. Complete Agreement/Severability. This Release of Claims
constitutes the complete and final agreement between the parties and supersedes and replaces all prior or contemporaneous agreements, negotiations, or discussions relating to the subject matter of this Release of Claims. All provisions and portions
of this Release of Claims are severable. If any provision or portion of this Release of Claims or the application of any provision or portion of the Release of Claims shall be determined to be invalid or unenforceable to any extent or for any
reason, all other provisions and portions of this Release of Claims shall remain in full force and shall continue to be enforceable to the fullest and greatest extent permitted by law. 

7. Acceptance and Revocability. Ballhaus acknowledges that Ballhaus has been given a period of 21 days within which to consider this
Release of Claims, unless applicable law requires a longer period, in which case Ballhaus shall be advised of such longer period and such longer period shall apply. Ballhaus may accept this Release of Claims at any time within this period of time by
signing the Release of Claims and returning it to the Company. This Release of Claims shall not become effective or enforceable until seven (7) calendar days after Ballhaus signs it. Ballhaus may revoke Ballhaus’s acceptance of this
Release of Claims at any time within that seven (7) calendar day period by sending written notice to the Company. Such notice must be received by the Company within the seven (7) calendar day period in order to be effective and, if so
received, would void this Release of Claims for all purposes. 

  
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 8. Governing Law. Except for issues or matters as to which federal law is applicable, this
Release of Claims shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflicts of law principles thereof. 

 

	
	  

	 William L. Ballhaus 

	
	Dated:                    

  
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 Exhibit B 

Restrictive Covenants from the Employment Agreement 

(Note: This is an excerpt from the Employment Agreement. Accordingly, capitalized terms used but not defined herein have the meanings
set forth in the Employment Agreement.) 
 7. Executive Covenants. 

(a) Unauthorized Disclosure. The Executive agrees and understands that in the Executive’s position with the Company, the Executive
will be exposed to and will receive information relating to the Company and its subsidiaries (collectively, the “Company Group”), including but not limited to technical information, intellectual property, business and marketing
plans, strategies, customer information, other information concerning the products, promotions, development, financing, expansion plans, business policies and practices of the Company Group, and other forms of information considered by the Company
reasonably and in good faith to be confidential and in the nature of trade secrets (“Confidential Information”). The Executive agrees that during the Employment Term and thereafter, the Executive will not, other than on behalf of
the Company Group, disclose such Confidential Information, either directly or indirectly, to any third person or entity without the prior written consent of the Company; provided, that disclosure may be made to the extent required by law,
regulation or order of a regulatory body, in each case so long as the Executive gives the Company as much advance notice of the disclosure as possible to enable the Company to seek a protective order, confidential treatment, or other appropriate
relief. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination of the Employment Term, the Executive will promptly supply to the Company (i) all property of the Company Group and
(ii) all notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical data or any other tangible product or document containing Confidential Information
produced by, received by or otherwise submitted to the Executive during or prior to the Employment Term. 
 (b) Non-competition. By
and in consideration of the Company entering into this Agreement and the payments to be made and benefits to be provided by the Company hereunder, and further in consideration of the Executive’s exposure to the proprietary information of the
Company Group, the Executive agrees that the Executive will not, during the Non-competition Term (as defined below), (i) directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner with, including but not limited to holding any position as a shareholder, director, officer, consultant, independent contractor, employee, partner, or investor in, any Restricted
Enterprise (as defined below) or (ii) provide services to, or otherwise assist or co-invest with, any 

  
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private equity investment firm (or any investment fund or other affiliate of such firm) in connection with such firm’s acquisition of a Restricted Enterprise; provided in each case that in
no event shall the Executive’s passive ownership of less than 1% of the outstanding equity securities of any issuer whose securities are registered under the Securities and Exchange Act of 1934, as amended, standing alone, be prohibited by this
Subsection (b) of this Section 7. Following termination of the Employment Term, upon request of the Company during the Non-competition Term, the Executive shall notify the Company of the Executive’s then current employment status.

 For purposes of this Agreement: 

(1) The “Non-competition Term” shall mean the period beginning on the date of this Agreement and ending on the second
anniversary of the Termination Date. 
 (2) “Restricted Enterprise” shall mean any entity as to which both clause
(a) below and clause (b) below are satisfied: 
  

	 	(a)	Such entity is known by the Company to be or to have been competing for contracts (i) that are held by the Company Group at the Termination Date, (ii) that were held by the Company Group within
the twelve (12) month period prior to the Termination Date, (iii) on which the Company Group is bidding at the Termination Date or did bid within the twelve (12) month period prior to the Termination Date or (iv) on
which the Company Group has devoted substantial time and resources within the twelve (12) month period prior to the Termination Date in preparation for a bid; and  

 

	 	(b)	All of the contracts as to which such entity is or was competing under clause (i) through (iv) above have or had an aggregate potential revenue of not less than $50 million per year; 

provided, that only the highest twelve (12) entities (determined by potential revenue as calculated pursuant to clause (b)) shall
be considered Restricted Enterprises. Not later than ten (10) business days after the Termination Date, the Company shall provide the Executive with a list of the Restricted Enterprises and such supporting documentation as the Executive shall
reasonably request related to the determination thereof. If an entity (or group of affiliated entities) consists of one or more businesses, divisions, sectors, or other business groups that are Restricted Enterprises and one or more businesses,
divisions, sectors, or other business groups that are not Restricted Enterprises (a “Mixed Business”, and the portion that does not include Restricted Enterprises, the “Noncompeting Business”), then
(I) “Restricted Enterprise” shall 

  
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not include that portion of the Mixed Business that is a Noncompeting Business and the Executive may provide services to, and take any of the other actions otherwise prohibited in
Section 7(b) above with respect to, the Noncompeting Business, provided that the Executive does not provide any Confidential Information to the portion of the entity that is a Restricted Enterprise, and (II) the Executive may
serve as CEO of the Mixed Business or in another senior executive capacity of the Mixed Business and his providing of CEO or senior executive services to the Mixed Business, and, in connection therewith, taking any of the other actions otherwise
prohibited in Section 7(b) above with respect to the Mixed Business, shall be permitted by this Agreement so long as (A) the day to day operations and strategy of the Restricted Enterprise is under the direction of executives other
than the Executive, (B) the annual revenues of the Restricted Enterprise account for one-third (33%) or less of the annual revenues of the Mixed Business and (C) the Executive does not provide any Confidential
Information to the portion of the entity that is a Restricted Enterprise. 
 (c) Non-solicitation. During the Non-competition Term,
the Executive shall not, and shall not cause any other person to, (i) interfere with or harm, or attempt to interfere with or harm, the relationship of any member of the Company Group with any Restricted Person (as defined below), or
(ii) endeavor to entice any Restricted Person away from any member of the Company Group. For purposes of this Agreement, “Restricted Person” shall mean any person who at any time during the Employment Term was an
employee or customer of any member of the Company Group, or otherwise had a material business relationship with any member of the Company Group. 

(d) Non-disparagement. During the Employment Term and for two years thereafter, the Executive shall not make or publish any disparaging
statements (whether written or oral) regarding any member of the Company Group or any of their affiliates, directors, officers or employees, and the Company shall not make or publish any disparaging statements (whether written or oral) regarding the
Executive or any member of his immediate family. 
 (e) Proprietary Rights. 

(i) Developments. The Executive agrees that the Company shall own all right, title and interest (including patent
rights, copyrights, trade secret rights and other rights throughout the world) in any inventions, works of authorship, ideas or information made or conceived or reduced to practice, in whole or in part, by the Executive (either alone or with others)
during the Employment Term (collectively “Developments”); provided, that the Company shall not own any of 

  
 15 

 
the foregoing (which shall not constitute “Developments”) for which no equipment, supplies, facility or trade secret information of the Company Group was used and which were developed
entirely on the Executive’s time, and (x) which do not relate (A) to the business of the Company Group or (B) to the Company Group’s actual or demonstrably anticipated research or development, or
(y) which do not result from any work performed by the Executive for the Company Group. Subject to the foregoing, the Executive will promptly and fully disclose to the Company, or any persons designated by it, any and all Developments
made or conceived or reduced to practice or learned by the Executive, either alone or jointly with others during the Employment Term. The Executive hereby assigns all right, title and interest in and to any and all of these Developments to the
Company. The Executive shall further assist the Company, at the Company’s expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified to be so owned or assigned.
The Executive hereby irrevocably designates and appoints the Company and its agents as attorneys-in-fact to act for and on the Executive’s behalf to execute and file any document and to do all other lawfully permitted acts to further the
purposes of the foregoing with the same legal force and effect as if executed by the Executive. In addition, and not in contravention of any of the foregoing, the Executive acknowledges that all original works of authorship which are made by him
(solely or jointly with others) within the scope of employment and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 USCA, § 101). The obligations of the
Executive described herein shall continue beyond the conclusion of the Employment Term with respect to inventions, discoveries, improvements or copyrightable works initiated, conceived or made by the Executive during the Employment Term. 

(ii) Moral Rights. To the extent allowed by law, subsection (i) above includes all rights of paternity, integrity,
disclosure and withdrawal and any other rights that may be known as or referred to as “moral rights” (collectively, “Moral Rights”). To the extent the Executive retains any such Moral Rights under applicable law, the
Executive hereby waives such Moral Rights and consents to any action consistent with the terms of this Agreement with respect to such Moral Rights. The Executive will confirm any such waivers and consents from time to time as requested by the
Company. 
 (f) Remedies. The Executive agrees that any breach of the terms of this Section 7 would result in irreparable injury
and damage to the Company Group for which the members of the Company Group would have no adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any threat of breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the Executive and/or any and all persons and/or entities acting for and/or with the Executive, without having to

  
 16 

 
prove damages, in addition to any other remedies to which the Company may be entitled at law or in equity. The terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the Executive. The Executive and the Company further agree that the provisions of the covenants contained in this Section 7
are reasonable and necessary to protect the businesses of the Company Group because of the Executive’s access to Confidential Information and his material participation in the operation of such businesses. Should a court, arbitrator or other
similar authority determine, however, that any provisions of the covenants contained in this Section 7 are not reasonable or valid, either in period of time, geographical area, or otherwise, the parties hereto agree that such covenants should
be interpreted and enforced to the maximum extent to which such court or arbitrator deems reasonable or valid. 
 The existence of any claim
or cause of action by the Executive against any member of the Company Group, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants contained in this Section 7 unless
the Company, prior to the commencement of an enforcement action, has failed to timely pay to the Executive any of the compensation or benefits to which Executive is entitled pursuant to the terms of this Agreement. 

  
 17ex10-1.htm

NATION ENERGY INC.

Suite F - 1500 West 16th Avenue

Vancouver BC V6H 4B9 Canada

 

August 30, 2015

 

 

	
TO:

	
Paltar Petroleum Limited

1555 Blake Street, Suite 1002

Denver, Colorado  80202 

 

Attention:                      Mr. Marc Bruner

 

Dear Sirs:

 

RE:           THIRD AMENDED AND RESTATED AGREEMENT regarding Paltar Petroleum Limited Australia Permits & Applications

 

This letter sets out the Third Amended and Restated Agreement (“Agreement”) reached between Nation Energy Inc., as farmee and optionee (“Nation”), and Paltar Petroleum Limited (“Paltar”), as farmor and optionor, regarding (i) the immediate grant of earning rights to Nation relating to a portion of the oil and gas exploration permits listed on Schedule A; (ii) the later grant of earning rights relating to additional portions of the oil and gas exploration permits listed on Schedule A or portions of new permits granted as a result of the pending applications listed on Schedule A (the “Applications”); (iii) the possible later sale to Nation, at Nation’s option, of Paltar’s entire interest in all such permits, the outstanding shares of Officer Petroleum Pty Ltd. (“Officer”), and, when issued, any additional exploration permits issued as a result of the Applications (collectively, the “Assets”); or (iv) a possible business combination transaction in which substantially all of the equity interests of Paltar would be exchanged for newly issued equity interests of Nation (an “Exchange Transaction”), all on the terms and conditions set forth herein (collectively, the “Transactions”).  Marc Bruner (“Bruner”) and John Hislop (“Hislop”), as major shareholders (indirectly or directly) of Paltar and Nation, respectively, agree to the terms hereof. This Agreement replaces in its entirety the Second Amended and Restated Agreement dated June 13, 2015.

 

All dollar amounts in this Agreement are expressed in Australian dollars, except those specially indicated in Paragraph 3 as being in US dollars.

 

First Farmout Group

 

	
1.  

	
On the date hereof (the “Earn-In Closing Date”) and under seven separate Earning Agreements (the “Initial Earning Agreements” and together with the Additional Earning Agreements (as defined below), the “Earning Agreements”), Paltar will farm out three specific graticular blocks in each of the six petroleum exploration permits listed on Schedule A and will cause Officer to farm out forty blocks in Exploration Permit 468 (collectively, the “Nation Blocks”) to Nation Energy (Australia) Pty Ltd, an Australian limited company and wholly owned subsidiary of Nation (“Nation Australia”), in exchange for the consideration specified in each Initial Earning Agreement.  Under each Earning Agreement, applications for Production Licenses (as defined therein) may only be made where there has been a Discovery (as defined in such Earning Agreement), so there is no assurance that Production Licenses will be granted covering any of the Nation Blocks.  There has been no discovery of petroleum on any of the exploration permits listed on Schedule A and the exploration permits currently produce no revenues.  The Earning Agreements and the rights of Nation thereunder shall be evidenced by approval and registration under the relevant petroleum legislation of the Northern Territory and Western Australia, respectively, at Nation’s option following December 31, 2015.

 

  

  

  

 

Second Farmout Group

 

	
2.  

	
On December 17, 2015, or such other date as the parties may mutually agree, Paltar and Nation will enter into additional earning agreements (the “Additional Earning Agreements”) farming out to Nation Australia on terms substantially similar to the Earning Agreements six additional graticular blocks in Exploration Permit 136, three additional blocks in Exploration Permit 143, and 18 blocks in exploration permits (whether now existing or hereafter issued under the Applications) covering lands in the Victoria Basin, with the specific blocks covered by such agreements to be selected by Nation in its sole discretion (or, if Nation fails to select blocks by 5:00 PM MST on December 16, 2015, then by Paltar), in exchange for the consideration specified therein.  The Additional Earning Agreements and the rights of Nation thereunder shall be evidenced by approval and registration under the relevant petroleum legislation of the Northern Territory at Nation’s option following December 31, 2015.

 

Share Issuance

 

	
3.  

	
Nation agrees to issue an aggregate of 600,000,000 Nation common shares (the “Earning Agreement Shares”) to Paltar, with an agreed value of US$0.03 and one-third cent per share, by December 17, 2015; provided, that in the event that an Exchange Transaction is consummated on or prior to December 16, 2015, Nation shall not be required to issue the Earning Agreement Shares to Paltar and this Agreement shall automatically be deemed to have been amended by the parties without any action of any person such that the text of this Paragraph 3 is deleted in its entirety and replaced with the words “[Reserved]”.

 

Option

 

	
4.  

	
On the Earn-In Closing Date, Paltar and Nation will execute an Option Agreement (the “Nation Purchase Option”), which will provide for an option of Nation, exercisable in its sole discretion (or its permitted designee as set forth therein) at any time before August 30, 2016 (but only if prior to such time Nation Australia (i) has executed the Additional Earning Agreements and (ii) performed its material obligations under all earning agreements to be performed through the date of exercise) to purchase (A) all of the Assets (including the right to exploration permits when the Applications for such permits are granted) and (B) all of the outstanding securities of Officer for an aggregate cash purchase price of $10,000,000.  The existence of the Nation Purchase Option and the rights of Nation thereunder may be evidenced by a filing on the personal property securities register kept under the Personal Property Securities Act (Cth) upon mutual agreement of the parties thereto.  In the event that an Exchange Transaction is consummated on or prior to December 16, 2015, the Option Agreement shall automatically terminate by its terms.

 

2

  

  

Exchange Transaction

 

	
5.  

	
Promptly following the Earn-In Closing Date, Nation and Paltar will endeavor to negotiate the terms of an Exchange Transaction.  Unless and until Nation and Paltar execute definitive documentation applicable thereto (the “Exchange Documentation”), neither Party is or will be under any obligation to enter into an Exchange Transaction.

 

Document Preparation and Closing

 

	
6.  

	
The parties agree to instruct their attorneys to co-operate and complete comprehensive documents required to complete the Transactions (the “Closing Documents”), including the Exchange Documentation.

 

	
7.  

	
The Earning Agreements and the Option Agreement will be executed and delivered on the Earn-In Closing Date.

 

	
8.  

	
Nation will be required within four days after the Earn-In Closing Date to file a comprehensive material change report on Form 8-K, and Paltar promises to provide on a timely basis such information as Nation or its attorneys or auditors consider necessary to prepare the 8-K.

 

	
9.  

	
If the Nation Purchase Option is exercised or an Exchange Transaction is consummated, Nation will be required within four business days after transfer of the Officer Shares to Nation Australia or completion of the Exchange Transaction to file a comprehensive material change report on Form 8-K and Paltar promises to provide, and to cause Officer to provide, on a timely basis, such information as Nation or its attorneys or auditors consider necessary to prepare the 8-K.  On or before delivery of the Officer Shares to Nation Australia, Paltar will provide audited financial statements regarding Officer and Paltar for the three most recent fiscal years prepared in accordance with US GAAP and accompanied by an audit report thereon from a PCAOB and SEC approved auditor which report complies with the rules and requirements of the Securities and Exchange Commission, and such additional fiscal period financial statements as may be required under SEC regulations.

 

	
10.  

	
Paltar acknowledges that, until registered in accordance with Paragraph 18(b), all of the Earning Agreement Shares, if issued, will be restricted as to sale by US securities laws and rules and will carry a restrictive legend indicating such restrictions.  Paltar also acknowledges that following the issuance of the Earning Agreement Shares, if any, Paltar will become an “affiliate” of Nation and will be required to file insider reports and otherwise comply with applicable SEC rules.  In addition, Paltar acknowledges that Nation is a reporting issuer in Canada under Multilateral Instrument 51-105, Issuers Quoted in the U.S. Over-the-Counter Markets, and will remain so for a year after Closing, and Canadian securities filings will be required during that time.  Paltar shall not sell any of the Earning Agreement Shares in Canada or to a resident of Canada for so long as Nation continues to be a reporting issuer in Canada under Multilateral Instrument 51-105.

 

3

  

  

	
11.  

	
All of the Earning Agreement Shares or, in the event that an Exchange Transaction is consummated, all shares of the common stock of Nation issued to the Paltar shareholders pursuant to the terms of the Exchange Documentation (the “Exchange Shares”), shall be held in an escrow account subject to the terms of an escrow agreement.  The escrow agreement shall provide, among other things, that (A) in the event an Exchange Transaction is consummated on or prior to December 16, 2015, the Exchange Shares issued in connection therewith shall be held in the escrow account for a period of at least 3 years, or (B) alternatively, in the event that an Exchange Transaction is not consummated on or prior to December 16, 2015 and the Earning Agreement Shares are issued on December 17, 2015, all of the Earning Agreement Shares shall be held in the escrow account for a period of at least (1) with respect to a percentage of Earning Agreement Shares then beneficially held by Bruner, 5 years, and (2) with respect to a percentage of Earning Agreement Shares beneficially held by persons other than Bruner, 3 years, in each case subject to earlier release by the escrow agent.  The escrow agreement shall provide that the escrow agent will be a newly formed Delaware limited liability company that shall be managed by a board of managers.  The board of managers shall be composed of the following 4 members, each of whom shall have equal voting rights under the terms of the escrow agent’s governing document:

 

	
(a)  

	
2 managers appointed by Bruner and David Siegel, an individual resident of Denver, Colorado (“Siegel”); so long as each of them continues to hold directly or indirectly at least 1/2% of the issued and outstanding shares of Nation’s common stock, or, if one or both of them does not hold at least 1/2% of the issued and outstanding shares of Nation’s common stock, 1 or 2 managers, as the case may be, appointed by the Nation Board (as defined below) that does not hold any equity securities of Paltar;

	
(b)  

	
1 manager appointed by Hislop, so long as he continues to hold directly or indirectly at least 1% of the issued and outstanding shares of Nation’s common stock, or, if Hislop does not hold at least 1% of the issued and outstanding shares of Nation’s common stock, 1 manager appointed by the Nation Board that does not hold any equity securities of Paltar; and

	
(c)  

	
the Independent Director (as defined below).

In the event of deadlock among the members of the board of managers of the escrow agent, the chairman of the board of managers shall possess an additional tie-breaking vote. The governing document of the escrow agent shall provide that the chairman of the board of managers of the escrow agent be Bruner or, if Bruner ceases to serve on the board of managers, then a person elected by the board of managers after the vacancy created by Bruner’s departure has been filled.

 

4

  

  

 

	
12.  

	
At the time of issuance of (A) the Earning Agreement Shares, Paltar and Hislop or (B) the Exchange Shares, Hislop, Bruner, Siegel, Darrel Causbrook and their affiliates, whichever of (A) and (B) occurs earlier, shall enter into a shareholder agreement (the “Shareholder Agreement”) which shall include a covenant that Paltar and Hislop will each vote their Nation common shares to increase the number of Nation directors to 5 and, for 5 years thereafter, to elect Hislop (or his nominee), Darrel Causbrook, Siegel, and Bruner (or such other nominees as Paltar may nominate from time-to-time), so long as each of them directly or beneficially holds at least 1% of the issued and outstanding shares of Nation’s common stock, and one independent person as members of the Board of Directors (the “Nation Board”), although there may be as many other directors of Nation as its shareholders may determine.  Prior to any issuance of the Earning Agreement Shares or the consummation of an Exchange Transaction (but not thereafter), Hislop agrees to vote his shares of Nation common stock to elect Hislop, Darrel Causbrook, Siegel, Bruner and one independent person that is also not an equity holder of Paltar (the “Independent Director”) as members of the Nation Board.

 

	
13.  

	
Provided that Paltar (or a successor operator approved by Nation that has executed a joinder to this Agreement for the purposes of this Paragraph 13) is then the operator under the applicable Earning Agreement, Paltar shall have the right of first offer to provide goods, services and work supplied or performed (i) on the Nation Blocks specified in such Earning Agreements, including permits issued as a result of the Applications, and (ii) in respect of all hydrocarbons produced therefrom (collectively, the “Proposed Work”) as follows: (A) the operator under the Earning Agreements relating to the concerned permit, in its capacity as the operator, shall first offer to Paltar, in its capacity as a third-party service provider, the contractual right to provide the Proposed Work; if Paltar indicates (1) that it or one of its affiliates, whether acting alone or in a joint venture or in some other contractual arrangement with others (in any of these events, a “Paltar entity”), is capable of providing the Proposed Work in a good and workmanlike manner and (2) that such Paltar entity wishes to enter into a contract with such operator to provide the Proposed Work, then such operator shall, before seeking any other proposals or bids concerning the Proposed Work, first negotiate in good faith with the Paltar entity in a good faith effort to reach a final contract concerning the provision of the Proposed Work; (B) such operator shall award the contract for the Proposed Work to the Paltar entity if the price and terms proposed by the Paltar entity and otherwise negotiated between such operator and the Paltar entity are competitive with and comparable to those customarily available in the open market from an arm’s length third party; and (C) Paltar shall have the first right to purchase petroleum produced from lands covered by the applicable permits at a price and upon terms competitive with and comparable to those customarily available in the open market from an arm’s length third party.  If, despite good faith efforts to do so, an agreement contemplated by the foregoing sentence cannot be reached within 30 days after the contractual rights were initially offered to Paltar, the operator shall be free to contract therefor with arms-length third parties on terms no less favorable than those offered by Paltar.  In the event an Exchange Transaction is consummated on or before December 16, 2015, the foregoing rights of Paltar shall expand to all permits set forth on Schedule A (including retention and production licenses issued in respect thereof), including permits issued after the date hereof in respect of the Applications.

 

5

  

  

	
14.  

	
The parties hereto agree to work in good faith with one another to minimize the aggregate tax liability to the parties incurred in connection with the consummation of the transactions contemplated by this Agreement.

 

Representations of Nation

 

	
15.  

	
Nation represents and warrants to Paltar that:

 

	
(a)  

	
the authorized capital of Nation consists of 5,000,000,000 common shares with no par value per share, of which there are presently 150,020,000 common shares issued and outstanding;

 

	
(b)  

	
other than as contemplated under this Agreement, there are no other rights, warrants or options outstanding pursuant to which any shares of Nation may be issued and there are no other securities issued and outstanding or issuable which are or may be convertible or converted into shares of Nation;

 

	
(c)  

	
Nation is duly incorporated under the laws of Wyoming; and

 

	
(d)  

	
all of Nation’s continuous disclosure filings with the Securities Exchange Commission of the United States are up to date and were, at the date they were filed, complete and accurate and, other than as contemplated herein, there are not and shall not, at the Earn-In Closing Date, be any material adverse changes in Nation’s business and affairs from that which was disclosed in Nation’s most recently-filed continuous disclosure documents.

 

Representations of Paltar

 

	
16.  

	
Each of Paltar and Bruner represents and warrants to Nation that:

 

	
(a)  

	
subject to required governmental and other approvals as required by law, which Paltar will use its best efforts to obtain, Paltar has the full power and authority to transfer or cause to be transferred the Assets to Nation or Nation Australia free and clear of any charges, encumbrances, liens or claims, other than royalties and overriding royalties in existence at the date of this Agreement, including without limitation the overriding royalties referred to in Paragraph 1.1 of the Joint Venture Operating Agreement between Paltar and Sweetpea Petroleum Pty Limited;

 

	
(b)  

	
other than as contemplated under this Agreement, there are no other rights or options outstanding pursuant to which any third party has any right or interest in the Assets;

 

	
(c)  

	
Paltar is duly incorporated and in good standing under the laws of Australia; and

 

	
(d)  

	
other than liens arising under the Joint Venture Operating Agreement between Paltar and Sweetpea Petroleum Pty Limited, Paltar’s interest in the Assets is free and clear of all encumbrances.

 

6

  

  

Covenants

 

	
17.  

	
Nation covenants to Paltar that, except as contemplated hereby.

 

	
(a)  

	
Nation shall conduct its business in the ordinary and normal course and shall not, without the prior written consent of Paltar, enter into any transaction which would cause any of its representations or warranties or agreements in this Agreement to be incorrect or to constitute a breach of any covenant or agreement of Nation herein;

 

	
(b)  

	
Nation shall not issue or redeem any shares in its capital nor issue any securities convertible or exchangeable into shares other than as disclosed in this Agreement.

 

	
18.  

	
Paltar covenants to Nation that, except as contemplated hereby:

 

	
(a)  

	
Paltar shall conduct its business in the ordinary and normal course and shall not enter into any transaction which would cause any of Paltar’ representations or warranties in this Agreement to be incorrect or constitute a breach of any covenant or agreement of Paltar in this Agreement;

 

	
(b)  

	
If an Exchange Transaction is not consummated on or prior to December 16, 2015, within 60 days after the issuance of the Earning Agreement Shares on December 17, 2015, Nation shall file a registration statement with the SEC seeking registration under the Securities Act of 1933 of as many of the approximately 750 million shares of common stock of Nation (on a pro rata basis) anticipated then to be beneficially owned by Hislop and Paltar as may be permitted by the SEC.  If an Exchange Transaction is consummated on or prior to December 16, 2015, within 60 days after the issuance of the Exchange Shares, Nation shall file a registration statement with the SEC seeking registration under the Securities Act of 1933 of as many of the approximately 145 million shares of common stock of Nation anticipated then to be beneficially owned by Hislop as may be permitted by the SEC.  As soon as practicable after the Earn-In Closing Date the parties may, at the request of Hislop or Paltar, as applicable, negotiate and sign a Registration Rights agreement with Hislop or Paltar, or both, as applicable, which sets out these rights and provides for penalties if registration does not occur as contemplated;

 

	
(c)  

	
Paltar shall not take any action which would result in any material adverse change to Paltar or to sell, transfer, encumber or dispose of any of the Assets or related entitlements, except as permitted in writing by Nation;

 

	
(d)  

	
Paltar shall deliver to Nation, within 60 days following the Earn-In Closing Date, consolidated financial statements for Paltar’s three most recently completed fiscal years audited by a PCAOB approved auditor in US GAAP, together with such additional fiscal period financial statements as may be required under SEC regulations; and

 

7

  

  

	
(e)  

	
Paltar will not, without the prior written consent of Nation, which may be granted or withheld by Nation in its sole and absolute discretion, transfer any of the Assets to any other party except in accordance with the terms of this Agreement.

 

Binding Agreement

 

	
19.  

	
Upon acceptance of the terms of this Agreement by all of the parties hereto, this Agreement shall be deemed to constitute and shall be a legally valid and binding agreement.

 

Confidentiality

 

	
20.  

	
Paltar acknowledges that Nation is a public company and has an obligation to disclose all material information about its affairs.  Paltar agrees that it will not trade in the securities of Nation while in possession of, and will ensure that its management does not so trade, nor will Paltar inform others of (except on a need to know basis and subject to a non-disclosure agreement), any non-disclosed material information about Nation.

 

General

 

	
21.  

	
The parties acknowledge that any provision of this Agreement that would effect an acquisition of an interest in Australian urban land [within the meaning of the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“FATA”)] is subject to and conditional upon the person making the acquisition not having received any order or notice under FATA prohibiting the person from making the acquisition or making the acquisition subject to conditions which are unacceptable to the person.  The parties further acknowledge that the Nation Purchase Option may constitute the acquisition of an interest in Australian urban land and, accordingly, Nation Australia and/or Hislop shall, on or as soon as practicable after the date of this Agreement make and pursue all necessary applications and notifications under FATA as required.  The “FATA Approval Date” referred to in Paragraph 1 of this Agreement shall be the earliest to occur of the following: (i) The date upon which Nation Australia receives notice that the grant of the Nation Purchase Option is not prohibited under FATA (provided that any conditions placed on the notice (if any) are acceptable to Nation Australia); (ii) the date upon which a notice prohibiting the acquisition can no longer be delivered to Nation Australia and / or Hislop under the FATA; and (iii) the date upon which Nation Australia and / or Hislop (as applicable) waive this condition in accordance with Paragraph 22.

 

	
22.  

	
The obligation to pursue applications and notifications under FATA, and the receipt of any approvals thereunder, may be waived by Nation Australia or Hislop (as applicable) in its or his sole and absolute discretion.

 

	
23.  

	
Each party will pay its own legal costs, whether or not the transactions contemplated hereby are completed.

 

	
24.  

	
This Agreement shall be governed and interpreted under the laws of the State of Wyoming.

 

8

  

  

	
25.  

	
This Agreement may be executed in counterparts with the same effect as if each of the parties hereto had signed the same document and all counterparts will be construed together and constitute one and the same instrument.

 

	
26.  

	
This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, personal representatives, successors and assigns.

 

	
27.  

	
This Agreement represents the entire agreement between the parties regarding the transactions contemplated herein and supersedes all other prior agreements, understandings, negotiations and discussions.

 

	
28.  

	
No modification or amendment of any provisions of this Agreement shall be valid unless it is in writing and signed by the parties hereto and the Nation Board has expressly voted in favor of such amendment (in writing or at a properly convened meeting of the Nation Board in which any holders of equity interests of Paltar have abstained from such vote).

 

[remainder of page intentionally blank]

 

 

 

  

9

  

 

If the foregoing correctly sets out our agreement, please execute this letter in the space provided.

 

 

NATION ENERGY INC.                                                                                     PALTAR PETROLEUM LIMITED

 

 

Per:           /s/ John R. Hislop                                                                 Per:           /s/ Marc Bruner                                                      

                John R. Hislop                                                                                             Marc A. Bruner

 

 

AGREED TO AND ACCEPTED,

 

 

	
/s/ Zachary Bruner

	
)

	  	  
	
Witness Signature

	
)

	  	  
	  	
)

	  	  
	
Zachary Bruner

	
)

	  	
/s/ Marc Bruner

	
Name

	
)

	  	
MARC A. BRUNER

	  	
)

	  	  
	
___________________________

	
)

	  	  
	
Address

	
)

	  	  

 

 

AGREED TO AND ACCEPTED THIS 30th DAY OF AUGUST, 2015.

 

	
/s/ Carolyn Laurin

	
)

	  	  
	
Witness Signature

	
)

	  	  
	  	
)

	  	  
	
Carolyn Laurin

	
)

	  	
/s/ John Hislop

	
Name

	
)

	  	
JOHN HISLOP

	  	
)

	  	  
	
___________________________

	
)

	  	  
	
Address

	
)

	  	  

 

  

10

  

 

SCHEDULE A

 

EXPLORATION PERMITS:

 

100% interest in the following permits:

	
Permits

	
Holder

	
Permit Date

	
EP 231

	
Paltar

	
05/09/2012

	
EP 232

	
Paltar

	
03/10/2013

	
EP 234

	
Paltar

	
05/09/2012

	
EP 237

	
Paltar

	
05/09/2012

 

and

 

 

50% interest in Northern Territory Exploration Permits 136 and 143, which are subject to the Joint Venture Operating Agreement between Paltar and Sweetpea Petroleum Pty Limited, dated September 16, 2011.

APPLICATIONS FOR EXPLORATION PERMITS

 

As to which Paltar will promise to deliver transfer instruments to Nation when and if exploration permits are issued to Paltar:

	
Applications

	
Applicant

	
Application Date

	
EP(A) 197

	
Sweetpea

	
09/03/20101

	
EP(A) 230

	
Paltar

	
19/08/2011

	
EP(A) 233

	
Paltar

	
19/08/2011

	
EP(A) 235

	
Paltar

	
19/08/2011

	
EP(A) 236

	
Paltar

	
19/08/2011

	
EP(A) 238

	
Paltar

	
19/08/2011

	
EP(A) 239

	
Paltar

	
19/08/2011

	
EP(A) 240

	
Paltar

	
19/08/2011

	
EP(A) 241

	
Paltar

	
19/08/2011

	
EP(A) 242

	
Paltar

	
19/08/2011

	
EP(A) 243

	
Paltar

	
19/08/2011

	
EP(A) 244

	
Paltar

	
19/08/2011

	
EP(A) 245

	
Paltar

	
19/08/2011

	
EP(A) 246

	
Paltar

	
19/08/2011

	
EP(A) 247

	
Paltar

	
19/08/2011

	
EP(A) 248

	
Paltar

	
19/08/2011

	
EP(A) 249

	
Paltar

	
19/08/2011

	
EP(A) 250

	
Paltar

	
23/08/2011

	
EP(A) 251

	
Paltar

	
23/08/2011

	
NTC/P 12

	
Paltar

	
23/08/2011

	
NTC/P 13

	
Paltar

	
23/08/2011

	
EP(A) 266

	
Paltar

	
18/10/2011

	
EP(A) 267

	
Paltar

	
18/10/2011

	
EP(A) 268

	
Paltar

	
18/10/2011

	
EP(A) 269

	
Paltar

	
18/10/2011

	
EP(A) 270

	
Paltar

	
18/10/2011

	
EP(A) 271

	
Paltar

	
18/10/2011

	
EP(A) 272

	
Paltar

	
18/10/2011

	
EP(A) 273

	
Paltar

	
18/10/2011

	
EP(A) 306

	
Paltar

	
22/08/2011

 

  

1 Partial interest in any exploration permit granted as a result of the Application, as provided in the Joint Venture Operating Agreement with Sweetpea Petroleum Pty Limited dated 16 September 2011, but only if such permit is granted on or before 31 December 2016.

 

 

 

  

11

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