Clawback provision

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Both the Consultant and ______ agree that the 1,600,000 Cosmos shares collectively held by them shall be held in book entry for six months from the date of the Agreement and that such shares shall be subject to the clawback provision of Section 3(a) of the Agreement. After six (6) months, 1,000,000 of the shares shall be released from book entry (500,000 shares each to Consultant and _______) and the balance of 600,000 shares (300,000 shares each by Consultant and _____) shall remain in book entry with 200,000 shares (100,000 shares each by Consultant and _____) to be released on a monthly basis for three months at which time all shares shall be released from book entry. All shares held in book entry shall be subject to the clawback provision of Section 3(a) of the Agreement.

[FOR ASSOCIATES NOT BASED IN CALIFORNIA, CONNECTICUT, OR MASSACHUSETTS: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, “Restrictions”). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory; and Associate will forfeit, and if previously paid, repay any bonus previously paid by the Company to Associate. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company.]

[IF IN MASSACHUSETTS: Associate acknowledges and agrees that, to the extent permitted by governing law, Section 2.11 of the ARG applies to any bonus under this Agreement. Associate acknowledges and agrees that in addition to all other requirements in this Agreement to earn a bonus, Associate’s eligibility to earn a bonus is directly related to, and dependent on, compliance with the sections in this Agreement relating to confidential information, disparaging statements, and non-solicitation (all collectively, “Restrictions”). In the event the Company reasonably believes that Associate has violated any of the Restrictions at any time the applicable Restriction applied to Associate, the Company shall be entitled to seek all injunctive relief and recover all damages available to it under any legal theory. In accordance with applicable law, Associate authorizes the Company to directly deduct any sums claimed by the Company under this clawback provision from any wages owed to Associate by the Company.]

•  Under the Clawback provision if (i) the Company’s financial results are materially restated or (ii) there is a significant adverse legal finding by a court or regulator against the Company in which any participant is found to have culpability, the Administrator may review the circumstances surrounding the restatement or adverse legal finding and determine whether to (a) cancel any outstanding Option granted to any participant, in whole or in part, whether or not vested and/or (b) require any participant to repay to the Company any gain realized or value received upon the exercise of any Options.

In the event of Company accounting irregularities discovered within three years after receipt of payment in connection with a Performance Award, which requires the Company to restate its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, the Participant shall repay all amounts in excess of the Performance Award the Participant should have received as determined under the restated financial statements. The Clawback Provision related to financial restatements applies only to Participants who are Section 16b officers at the time of grant or restatement.

The Clawback provision discussed above applies only to Participants in Band 10 and above. If a Participant breaches any of the conditions set forth above in this Clawback provision, the Participant shall repay to the Company an amount equal to the value of the Performance Award. The value of the Performance Award is measured by the amount reported as income on Form W-2 for tax purposes. Any amount due hereunder shall be paid by the Participant within thirty (30) days of notice by the Company to the Participant that the Participant has breached a condition stated above.

Mr. Barton’s employment agreement contains a clawback provision which provides that any incentive-based compensation, or any other compensation, paid to the executive which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

If the Seller exercises its Put Option on February 15, 2015, and the Purchaser does not have sufficient liquidity or otherwise fails to settle the Put Option with Seller on the date of exercise, the Purchaser shall have a Cure Period of 45 calendar days in which it can attempt to settle the Put Option. Only after this Cure Period (if the Purchaser shall has not settled the Put Option) can Seller exercise its rights under the Clawback provision pertaining to the February 15, 2015 exercise date.

During February, 2014, the Company granted 5,000,000 shares of the Company’s restricted common stock to a consultant for consulting services for a term of one year. The shares were valued at $0.015 per share, the closing price of the stock on the date of grant. The Company recorded an equity compensation charge of $75,000 during the six months ended June 30, 2014. The shares were issued during May 2014. The fair value of common stock issued for services was fully expensed on the date of grant due to no clawback provision in the agreement.

Under the clawback provision added to each of the amended employment agreements, Cedar Fair’s Board of Directors may require the Executive to return his incentive compensation if (i) the payment was predicated upon achieving certain financial results that were subsequently the subject of a substantial restatement of Cedar Fair’s financial statements filed with the Securities and Exchange Commission, (ii) the Board of Directors determines that the Executive engaged in intentional misconduct that caused or substantially caused the need for the substantial restatement, and (iii) a lower payment would have been made based upon the restated financial results.

The Company’s $50,000 CD is carried at cost, which approximates market. During the nine months ended September 30, 2012, the Company realized $56 in interest income on the CD. The Company valued the current convertible note and warrant derivatives using Level 3 criterion, shown below. As of September 30, 2012, the valuations resulted in a gain on derivatives of $15,986 and loss on contract clawback provision of $198,643 for a net loss of $182,657. As of December 31, 2011, the valuations resulted in a gain on derivatives of $10,850, loss on contract clawback provision of $49,385 and goodwill impairment of $4,827 for a net loss of $53,859.

On June 29, 2012, the Company executed a multi-party agreement with the Sellers of the PetroGreen assets and Gator-Dawg Drilling, LLC (“Gator-Dawg”). In the agreement, the Company released the restriction on the 10 million shares of common stock held in escrow on behalf of the Sellers in the PetroGreen asset purchase in July of 2010. In exchange, the Sellers released all claims to the contract clawback agreement, which stated that the Sellers could repurchase the assets sold to the Company for $1.00 if the price of the Company’s stock did not reach $0.25 per share by the specified date. The Company also transferred the membership shares of AACM3, LLC to its former owner, Alex Perales. AACM3, LLC did not hold any assets at the time of transfer. Gator-Dawg agreed to transfer the drilling rig and associated assets purchased from the Company in March 2011 to AACM3, LLC. In exchange for the drilling rig transfer, the Company forfeited the $500,000 note due from Gator-Dawg for purchase of those assets (disallowed for consolidation), executed a $100,000 note payable to Gator-Dawg for rig improvements and transferred a truck and trailer purchased in early 2012 to Gator-Dawg. The completion of this multi-party agreement extinguished the contract clawback provision at June 29, 2012.

Gain on Sale/Relinquishment: On June 29, 2012, the Company executed a multi-party agreement with the Sellers of the PetroGreen assets and Gator-Dawg Drilling, LLC (“Gator-Dawg”). In the agreement, the Company released the restriction on the 10 million shares of common stock held in escrow on behalf of the Sellers in the PetroGreen asset purchase in July of 2010. In exchange, the Sellers released all claims to the contract clawback agreement. The Company also transferred the membership shares of AACM3, LLC to its former owner, Alex Perales. AACM3, LLC did not hold any assets at the time of transfer. Gator-Dawg (formerly Adino Drilling, LLC) agreed to transfer the drilling rig and associated assets purchased from the Company in March, 2011 to AACM3, LLC. In exchange for the drilling rig transfer, the Company transferred a truck and trailer purchased in early 2012 and executed a $100,000 note payable to Gator-Dawg. The completion of this multi-party agreement extinguished the contract clawback provision at June 29, 2012. The net effect of the multi-party agreement resulted in a gain on sale/relinquishment to the Company of $473,232 at June 30, 2012.

On June 29, 2012, the Company executed a multi-party agreement with the Sellers of the PetroGreen assets and Gator-Dawg Drilling, LLC (“Gator-Dawg”). In the agreement, the Company released the restriction on the 10 million shares of common stock held in escrow on behalf of the Sellers in the PetroGreen asset purchase in July of 2010. In exchange, the Sellers released all claims to the contract clawback agreement. The Company also transferred the membership shares of AACM3, LLC to its former owner, Alex Perales. AACM3, LLC did not hold any assets at the time of transfer. Gator-Dawg (formerly Adino Drilling, LLC) agreed to transfer the drilling rig and associated assets purchased from the Company in March, 2011 to AACM3, LLC. In exchange for the drilling rig transfer, the Company transferred a truck and trailer purchased in early 2012 and executed a $100,000 note payable to Gator-Dawg. The completion of this multi-party agreement extinguished the contract clawback provision at June 29, 2012.

The Company’s $50,000 CD is carried at cost, which approximates market. During the three months ended March 31, 2012, the Company realized $19 in interest income on the CD. The Company valued the Petro Energy acquisition contract clawback and the current convertible note and warrant derivatives using Level 3 criterion, shown below. As of March 31, 2012, the valuations resulted in a gain on derivatives of $50,417 and loss on contract clawback provision of $119,649 for a net loss of $69,251. As of December 31, 2011, the valuations resulted in a gain on derivatives of $10,850, loss on contract clawback provision of $49,385 and goodwill impairment of $4,827 for a net loss of $53,859.

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