Attached files
| file | filename |
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| 8-K - MAINBODY - DELTA OIL & GAS INC | mainbody.htm |
| EX-3.1 - EX31 - DELTA OIL & GAS INC | ex31.htm |
| EX-10.1 - EX101 - DELTA OIL & GAS INC | ex101.htm |
| EX-10.3 - EX103 - DELTA OIL & GAS INC | ex103.htm |
DELTA
OIL & GAS, INC
AMENDED
AND RESTATED CONSULTING AGREEMENT
THIS
AMENDED AND RESTATED CONSULTING AGREEMENT (the “Agreement”) is
entered into as of this 8th day of March, 2010 (the “Effective Time”), by
and between DELTA OIL &
GAS, INC., a Colorado corporation, (the “Company”) and Last Mountain Management Ltd.
(the “Consultant”).
WHEREAS,
the Company and the Consultant have previously entered into a Consulting
Agreement, dated October 14, 2009 (the “Previous Agreement”),
pursuant to which the Company retained the Consultant to serve as its President
upon the terms and conditions therein; and
WHEREAS,
the parties wish to amend and restate the Previous Agreement in its entirety
upon the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Position. The
Company retains Consultant to serve as its President.
2. Duties. Consultant
agrees to discharge the duties, functions and responsibilities commensurate with
his position and such other duties and responsibilities as may be prescribed
from time to time by the Board of Directors of the Company (the “Board”). Consultant
shall devote such business time, attention and energies reasonably necessary to
the diligent and faithful performance of its duties hereunder.
3. Term. This
Agreement shall commence as of the Effective Time and, unless terminated as set
forth in Section 7, continue through the second anniversary of the Effective
Time; provided, however, that on each anniversary of the Effective Time the term
of the Agreement shall automatically be extended for an additional one-year
period (restoring the initial two-year term), unless either party notifies the
other party in writing at least 60 days prior to such
anniversary. The term of this Agreement as in effect from time to
time shall be referred to as the “Term.”
4. Compensation. During
the Term, the Company shall pay Consultant an annual base compensation of no
less than $90,000.00 Canadian Dollars per year plus applicable taxes, payable
monthly in advance on the first of each calendar month. Such minimum
annual base compensation may be periodically reviewed and increased (but not
decreased without Consultant’s express written consent) at the discretion of the
Board or Compensation Committee of the Board (the “Committee”) to
reflect, among other matters, cost of living increases and performance results
(such annual base compensation, including any increases pursuant to this
Section 4, the “Annual Base
Compensation”).
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5. Other Compensation and
Fringe Benefits. Consultant shall be entitled to the following
during the Term:
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(a)
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100,000
common shares in the capital stock of the Company issued to the Consultant
on an annual basis, payable in advance on January 1 of each year;
and
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(b)
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the
standard Company benefits enjoyed by the Company’s other top executives as
a group.
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6. Expense
Reimbursement. In addition to the compensation and benefits
provided herein, the Company shall, upon receipt of appropriate documentation,
reimburse Consultant each month for his reasonable travel, lodging,
entertainment, promotion and other ordinary and necessary business expenses to
the extent such reimbursement is permitted under the Company’s expense
reimbursement policy.
7. Termination of
Consultant. The Company or Consultant may terminate
Consultant's service with the Company at any time and for any reason in
accordance with Subsection 7(a) below. The Term shall be deemed to
have ended on the last day of Consultant’s service with the
Company. The Term shall terminate automatically upon Consultant’s
death.
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(a)
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Notice of
Termination. Any purported termination of Consultant
(other than by reason of death) shall be communicated by written Notice of
Termination (as defined herein) from one party to the other in accordance
with the notice provisions contained in Section 23. For
purposes of this Agreement, a “Notice of
Termination” shall mean a notice that indicates the Date of
Termination (as that term is defined in Subsection 7(b)) and, with respect
to a termination due to Cause (as that term is defined in Subsection
7(d)), Disability (as that term is defined in Subsection 8(e)) or Good
Reason (as that term is defined in Subsection 7(f)), sets forth in
reasonable detail the facts and circumstances that are alleged to provide
a basis for such termination. A Notice of Termination from the
Company shall specify whether the termination is with or without Cause or
due to Consultant’s Disability. A Notice of Termination from
Consultant shall specify whether the termination is with or without Good
Reason or due to Disability.
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(b)
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Date of
Termination. For purposes of this Agreement, the “Date of
Termination” shall mean the date specified in the Notice of
Termination (but in no event shall such date be earlier than the thirtieth
(30th)
day following the date the Notice of Termination is given) or the date of
Consultant’s death. Notwithstanding the foregoing, in no event
shall the Date of Termination occur until Consultant experiences a
“separation from service” within the meaning of Code Section 409A,
and notwithstanding anything contained herein to the contrary, the date on
which such separation from service takes place shall be the “Date of
Termination.”
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(c)
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No
Waiver. The failure to set forth any fact or
circumstance in a Notice of Termination, which fact or circumstance was
not known to the party giving the Notice of Termination when the notice
was given, shall not constitute a waiver of the right to assert such fact
or circumstance in an attempt to enforce any right under or provision of
this Agreement.
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(d)
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Cause. For
purposes of this Agreement, a termination for “Cause” means a
termination by the Company based upon
Consultant’s: (i) persistent failure to perform duties
consistent with a commercially reasonable standard of care (other than due
to a physical or mental impairment or due to an action or inaction
directed by the Company that would otherwise constitute Good Reason); (ii)
willful neglect of duties (other than due to a physical or mental
impairment or due to an action or inaction directed by the Company that
would otherwise constitute Good Reason); (iii) conviction of, or
pleading nolo contendere to, criminal or other illegal activities
involving dishonesty; (iv) material breach of this Agreement; or
(v) failure to materially cooperate with or impeding an investigation
authorized by the Board.
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(e)
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Disability. For
purposes of this Agreement, a termination based upon “Disability”
means a termination by the Company based upon Consultant’s entitlement to
long-term disability benefits under the Company’s long-term disability
plan or policy, as the case may be, as in effect on the Date of
Termination.
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(f)
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Good
Reason. For purposes of this Agreement, a termination
for “Good
Reason” means a termination by Consultant during the Term based
upon the occurrence (without Consultant’s express written consent) of any
of the following:
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(i)
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a
material diminution in Consultant’s position or title, or the assignment
of duties to Consultant that are materially inconsistent with Consultant’s
position or title in effect as of immediately following the Effective
Time;
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(ii)
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a
material diminution in Consultant’s Annual Base Compensation or bonus
opportunity;
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(iii)
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within
six (6) months immediately preceding or within two (2) years immediately
following a Change in Control: (A) a material adverse change in
Consultant’s status, authority or responsibility (e.g. The Company has
determined that a change in the department or functional group over which
Consultant has managerial authority would constitute such a material
adverse change); (B) a requirement that Consultant report to a corporate
officer or consultant instead of reporting directly to the Board; (C) a
material diminution in the budget over which Consultant has managing
authority; or (D) a material change in the geographic location of
Consultant’s principal place of service with the Company;
or
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(iv)
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a
material breach by the Company of any of its obligations under this
Agreement.
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Notwithstanding
the foregoing, Consultant being placed on a paid leave for up to sixty
(60) days pending a determination of whether there is a basis to terminate
Consultant for Cause shall not constitute Good Reason. Consultant’s
continued service with the Company shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting Good Reason
hereunder; provided, however, that no such
event described above shall constitute Good Reason
unless: (1) Consultant gives Notice of Termination to the
Company specifying the condition or event relied upon for such termination
either: (x) within ninety (90) days of the initial
existence of such event; or (y) in the case of an event predating a Change
in Control, within ninety (90) days of the Change in Control; and
(2) the Company fails to cure the condition or event constituting Good
Reason within thirty (30) days following receipt of Consultant’s Notice of
Termination (the “Cure
Period”). In the event that the Company fails to remedy the
condition constituting Good Reason during the applicable Cure Period,
Consultant’s “separation from service” (within the meaning of Code
Section 409A) must occur, if at all, within one-hundred fifty (150) days
following such Cure Period in order for such termination as a result of such
condition to constitute a termination for Good Reason.
8. Obligations of the Company
Upon Termination.
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(a)
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Termination by the
Company for a Reason Other than Cause, Death or Disability and Termination
by Consultant for Good Reason. Subject to Sections 8(e)
and 17, if Consultant is terminated by: (1) the Company
for any reason other than Cause, Death or Disability; or
(2) Consultant for Good
Reason:
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(i)
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The
Company shall pay Consultant the following (collectively, the “Accrued
Obligations”): (A) within five (5) business
days after the Date of Termination, any earned but unpaid Annual Base
Compensation; (B) within five (5) business days after the Date of
Termination, any earned but unissued stock awards; (C) within a reasonable
time following submission of all applicable documentation, any expense
reimbursement payments owed to Consultant for expenses incurred prior to
the Date of Termination; and (D) no later than March 15th of the
year in which the Date of Termination occurs, any earned but unpaid Annual
Bonus payments relating to the prior calendar year;
and
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(ii)
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The Company shall pay Consultant,
within thirty (30) business days after the Date of Termination, a lump-sum
payment equal to 150% of Consultant’s Annual Base Compensation in effect
immediately prior to the Date of Termination (disregarding any reduction
in Annual Base Compensation to which Consultant did not expressly consent
in writing), including all stock awards which would have been earned
during the eighteen (18) months immediately following the Date of
Termination.
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(b)
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Termination by the
Company for Cause and by Consultant without Good
Reason. If Consultant is terminated by the Company for
Cause or by Consultant without Good Reason, the Company’s only obligation
under this Agreement shall be payment of any Accrued
Obligations.
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(c)
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Termination due to
Death or Disability. Subject to Sections 8(e), if
Consultant is terminated due to death or Disability, the Company shall pay
Consultant (or to Consultant’s estate or personal representative in the
case of death) any Accrued
Obligations.
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(d)
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Definition of Change
in Control. For purposes of this Agreement, the term
“Change in
Control” shall mean that the conditions set forth in any one of the
following subsections shall have been
satisfied:
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(i)
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the
acquisition, directly or indirectly, by any “person” (within the meaning
of Section 3(a)(9) of the Securities and Exchange Act of 1934, as
amended (the “Exchange Act”)
and used in Sections 13(d) and 14(d) thereof) of “beneficial ownership”
(within the meaning of Rule 13d-3 of the Exchange Act) of securities
of the Company possessing more than 50% of the total combined voting power
of all outstanding securities of the
Company;
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(ii)
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a
merger or consolidation in which the Company is not the surviving entity,
except for a transaction in which the holders of the outstanding voting
securities of the Company immediately prior to such merger or
consolidation hold, in the aggregate, securities possessing more than 50%
of the total combined voting power of all outstanding voting securities of
the surviving entity immediately after such merger or
consolidation;
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(iii)
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a
reverse merger in which the Company is the surviving entity but in which
securities possessing more than 50% of the total combined voting power of
all outstanding voting securities of the Company are transferred to or
acquired by a person or persons different from the persons holding those
securities immediately prior to such
merger;
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(iv)
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during
any period of two (2) consecutive years during the Term or any
extensions thereof, individuals, who, at the beginning of such period,
constitute the Board, cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds of the directors then in office
who were directors at the beginning of the
period;
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(v)
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the
sale, transfer or other disposition (in one transaction or a series of
related transactions) of assets of the Company that have a total fair
market value equal to or more than one-third of the total fair market
value of all of the assets of the Company immediately prior to such sale,
transfer or other disposition, other than a sale, transfer or other
disposition to an entity (x) which immediately following such sale,
transfer or other disposition owns, directly or indirectly, at least 50%
of the Company’s outstanding voting securities or (y) 50% or more of
whose outstanding voting securities is immediately following such sale,
transfer or other disposition owned, directly or indirectly, by the
Company. For purposes of the foregoing clause, the sale of
stock of a subsidiary of the Company (or the assets of such subsidiary)
shall be treated as a sale of assets of the Company;
or
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(vi)
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the
approval by the stockholders of a plan or proposal for the liquidation or
dissolution of the Company.
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(e)
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Six-Month
Delay. To the extent Consultant is a “specified
employee,” as defined in Section 409A(a)(2)(B)(i) of the Code
and the regulations and other guidance promulgated thereunder and any
elections made by the Company in accordance therewith, notwithstanding the
timing of payment provided in any other Section of this Agreement, no
payment, distribution or benefit under this Agreement that constitutes a
distribution of deferred compensation (within the meaning of Treasury
Regulation Section 1.409A-1(b)) upon Consultant’s “separation from
service” (within the meaning of Treasury
Regulation Section 1.409A-1(h)), after taking into account all
available exemptions, that would otherwise be payable during the six-month
period after separation from service, will be made during such six-month
period, and any such payment, distribution or benefit will instead be paid
on the first business day after such six-month period (the “Delayed Payment
Date”); provided, however, that
if Consultant dies following the Date of Termination but prior to the
Delayed Payment Date, such amounts shall be paid to the personal
representative of Consultant’s estate within thirty (30) days following
the Consultant’s death.
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9. Parachute Payment
Limit. If any payments or benefits paid or provided or to be
paid or provided to Consultant or for his benefit pursuant to the terms of this
Agreement or otherwise in connection with, or arising out of, his service with
the Company or its subsidiaries or the termination thereof (a “Payment” and,
collectively, the “Payments”) would be
subject to the excise tax (the “Excise Tax”) imposed
by Section 4999 of the Code, then, the Payments shall be reduced to one
dollar less than what would constitute a “parachute payment” under
Section 280G of the Code (the “Scaled Back
Amount”).
10. Adjustment for Changes in
Capitalization. In the event of any increase or
decrease in the capital of the Company resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the shares or
like change to the capital of the Company, the number of shares of common stock
issuable to the Consultant pursuant to Subsection 5(a) of this Agreement shall
be proportionately adjusted.
11. Non-Delegation of
Consultant’s Rights. The obligations, rights and benefits of
Consultant hereunder are personal and may not be delegated, assigned or
transferred in any manner whatsoever, nor are such obligations, rights or
benefits subject to involuntary alienation, assignment or transfer.
12. Confidential
Information. Consultant acknowledges that he will occupy a
position of trust and confidence and will have access to and learn substantial
information about the Company and its affiliates and their operations that is
confidential or not generally known in the industry including, without
limitation, information that relates to purchasing, sales, customers, marketing,
and the financial positions and financing arrangements of the Company and its
affiliates. Consultant agrees that all such information is
proprietary or confidential, or constitutes trade secrets and is the sole
property of the Company and/or its affiliates, as the case may
be. Consultant will keep confidential, and will not reproduce, copy
or disclose to any other person or firm, any such information or any documents
or information relating to the Company’s or its affiliates’ methods, processes,
customers, accounts, analyses, systems, charts, programs, procedures,
correspondence or records, or any other documents used or owned by the Company
or any of its affiliates, nor will Consultant advise, discuss with or in any way
assist any other person, firm or entity in obtaining or learning about any of
the items described in this Section 12. Accordingly, Consultant
agrees that during the Term and at all times thereafter he will not disclose, or
permit or encourage anyone else to disclose, any such information, nor will he
utilize any such information, either alone or with others, outside the scope of
his duties and responsibilities with the Company and its
affiliates.
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13. Return of the Company
Documents. Upon termination of the Term, Consultant shall
return immediately to the Company all records and documents of or pertaining to
the Company or its affiliates and shall not make or retain any copy or extract
of any such record or document, or any other property of the Company or its
affiliates.
14. Purchase of Consultant's
Company Stock. Provided that notice is given to Company by
Consultant within ten (10) days following the Date of Termination, any shares of
Company stock held by, or due to Consultant by the Company on the Date of
Termination shall be sold by Consultant and purchased by the
Company. The closing for the sale and purchase shall take place
thirty (30) days following the Date of Termination (the “Purchase
Date”). The purchase price shall be paid in cash and the
purchase price per share shall be determined by the Board in good faith based
upon the average closing price per share on the ten business days preceding the
Purchase Date.
15. Actions. The
parties agree and acknowledge that the rights conveyed by this Agreement are of
a unique and special nature and that the Company will not have an adequate
remedy at law in the event of a failure by Consultant to abide by its terms and
conditions, nor will money damages adequately compensate for such
injury. Therefore, it is agreed between and hereby acknowledged by
the parties that, in the event of a breach by Consultant of any of the
obligations of this Agreement, the Company shall have the right, among other
rights, to damages sustained thereby and to obtain an injunction or decree of
specific performance from any court of competent jurisdiction to restrain or
compel Consultant to perform as agreed herein. Consultant hereby
acknowledges that obligations under Sections and Subsections 12 and 13 shall
survive the Term of the Agreement and be binding by their terms at all times
subsequent to the termination of Consultant for the periods specified
therein. Nothing herein shall in any way limit or exclude any other
right granted by law or equity to the Company.
16. Release. Notwithstanding
any provision herein to the contrary, the Company may require that, prior to
payment of any amount or provision of any benefit under Section 8,
Consultant shall have executed a complete release of the Company and its
affiliates and related parties in such form as is reasonably required by
Company, and any waiting periods contained in such release shall have expired;
provided that the release shall not apply to Consultant's rights under the
Company's benefit plans and programs, which rights shall be determined in
accordance with the terms of such plans and programs. With respect to
any release required to receive payments owed pursuant to Section 9, the
Company must provide Consultant with the form of release no later than seven
(7) days after the Date of Termination and the release must be signed by
Consultant and returned to Company, unchanged, effective and irrevocable, no
later than sixty (60) days after the Date of Termination.
17. No
Mitigation. The Company agrees that, if Consultant is
terminated during the Term, Consultant is not required to seek other service or
employment or to attempt in any way to reduce any amounts payable to Consultant
by the Company hereunder.
18. Entire Agreement and
Amendment. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter of this
Agreement, and supersedes and replaces all prior agreements, understandings and
commitments with respect to such subject matter. This Agreement may
be amended only by a written document signed by both parties to this
Agreement.
19. Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another
jurisdiction.
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20. Successors. This
Agreement may not be assigned by Consultant. In addition to any
obligations imposed by law upon any successor to the Company, the Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the stock, business
and/or assets of the Company, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure
of the Company to obtain such assumption by a successor shall be a material
breach of this Agreement. Consultant agrees and consents to any such
assumption by a successor or parent of the Company, as well as any assignment of
this Agreement by the Company for that purpose. As used in this
Agreement, “Company” shall mean
the Company as herein before defined as well as any such successor or parent
that expressly assumes this Agreement or otherwise becomes bound by all of its
terms and provisions by operation of law.
21. Counterparts. 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.
22. Severability. If
any section, subsection or provision hereof is found for any reason whatsoever
to be invalid or inoperative, that section, subsection or provision shall be
deemed severable and shall not affect the force and validity of any other
provision of this Agreement. If any covenant herein is determined by
a court to be overly broad thereby making the covenant unenforceable, the
parties agree and it is their desire that such court shall substitute a
reasonable judicially enforceable limitation in place of the offensive part of
the covenant and that as so modified the covenant shall be as fully enforceable
as if set forth herein by the parties themselves in the modified
form. The covenants of Consultant in this Agreement shall each be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Consultant against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants in this
Agreement.
23. Notices. Any
notice, request, or instruction to be given hereunder shall be in writing and
shall be deemed given when personally delivered or three (3) days after
being sent by United States Certified Mail, postage prepaid, with Return Receipt
Requested, to the parties at their respective addresses set forth
below:
To
Company:
Delta Oil
& Gas, Inc.
Suite
604-700 West Pender Street
Vancouver,
British Columbia, Canada, V6C 1G8
Phone: 604.602.1500
Fax: 604.602.1625
To
Consultant:
Last
Mountain Management, Ltd.
At the
most recent address on file at the Company.
24. Waiver of
Breach. The waiver by any party of any provisions of this
Agreement shall not operate or be construed as a waiver of any prior or
subsequent breach by the other party.
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25. Tax
Withholding. The Company or an affiliate may deduct from all
compensation and benefits payable under this Agreement any taxes or withholdings
the Company is required to deduct pursuant to state, federal or other
laws.
26. Code
Section 409A. To the extent applicable, it is intended
that this Agreement and any payment made hereunder shall comply with the
requirements of Section 409A of the Code or an exemption or exclusion
therefrom, and any related regulations or other guidance promulgated with
respect to such Section by the U.S. Department of the Treasury or the Internal
Revenue Service (“Code
Section 409A”) and shall in all respects be administered in
accordance with Code Section 409A. Any provision that would
cause the Agreement or any payment hereof to fail to satisfy Code
Section 409A shall have no force or effect until amended to comply with
Code Section 409A in the least restrictive manner necessary and without any
diminution in the value of the payments to Consultant, which amendment may be
retroactive to the extent permitted by Code Section 409A.
IN
WITNESS WHEREOF the parties have executed this Agreement to be effective as of
immediately following the Effective Time.
DELTA OIL
& GAS, INC.
By:
/s/ Christopher
Paton-Gay
Christopher
Paton-Gay
Its:
Director and Chief Executive Officer
Last
Mountain Management Ltd.,
By: /s/ Douglas
Bolen
Doulas Bolen
Its: President
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