January 9, 2013

 

Enclosed with this letter are amended and restated versions (the “Amended
Agreements”) of the following agreements which were originally entered into
between Eos Petro, Inc. and Clouding IP, LLC on December 26, 2012 (the “Original
Agreements”): (1) an Oil & Gas Services Agreement; (2) a Warrant to Purchase
Common Stock; (3) a Loan Agreement and Secured Promissory Note; and (4) a
Leasehold Mortgage, Assignment, Security Agreement and Fixture Filing.

 

The Amended Agreements modify the following provisions of the Original
Agreements:

(1) all of the agreements are now between Clouding IP, LLC and Cellteck, Inc.,
not Eos Petro, Inc. (Cellteck Inc. is Eos Petro, Inc.’s parent company). Since
Cellteck is incorporated under Nevada law, the governing law in all of the
agreements other than the Mortgage has also been changed to Nevada.

(2) the shares issuable to Clouding IP, LLC under the Loan Agreement and Secured
Promissory Note have been changed from shares of common stock of Eos Petro, Inc.
to shares of Series B Preferred Stock of Cellteck, Inc.

(3) The obligation to record the loan within seven business days has been
removed from the Loan Agreement and Secured Promissory Note.

(4) “Failure to Deliver Common Stock” has been removed from the events of
default in the Loan Agreement and Secured Promissory note.

(5) the shares issuable to Clouding IP, LLC upon exercise of the Warrant to
Purchase Common Stock have been changed to shares of common stock of Cellteck,
Inc. Furthermore, to protect such shares from dilution upon the occurrence of an
upcoming reverse stock split:

(a) the warrants will not be exercisable until effectuation of the reverse stock
split; and

(b) anti-dilution provisions specifically relating to the upcoming reverse stock
split have been inserted.

(6) the cashless exercise option has been removed from the Warrant to Purchase
Common Stock.

(7) the warrants issuable to Clouding IP, LLC under the Oil & Gas Services
Agreement are issuable in consideration of Clouding IP, LLC’s services without
the need for Clouding to make an additional $5,000 payment.

 

The Amended Agreements amend and restate the Original Agreements in their
entirety. By signing this letter and the attached Amended Agreements, the
undersigned parties hereby acknowledge that: (i) they have read, understand and
consent to the modifications made to the Original Agreements in the Amended
Agreements; and (ii) the Original Agreements are voided in their entirety by the
attached Amended Agreements and have no further effect.

 

EOS PETRO, INC., CLOUDING IP, LLC a Delaware corporation a Delaware limited
liability company

 

By:  /s/ Nikolas Konstant     /s/ William R. Carter, Jr.   Nikolas Konstant  
By:  William R. Carter, Jr.   Chairman of the Board of Directors   Its: 
Managing Member         CELLTECK, INC.       a Nevada corporation              
By: /s/ Nikolas Konstant         Nikolas Konstant         Chairman of the Board
of Directors      

 

 

 

 

THE ISSUANCE AND SALE OF THE SECURITIES EVIDENCED BY THIS LOAN AGREEMENT AND
PROMISSORY NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL, IN A CUSTOMARY FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

 

Principal Amount: $250,000.00 Issue Date: December 26, 2012 Note Purchase Price:
$245,000.00 ELASN-__ Stock Purchase Price: $5,000.00  

 

LOAN AGREEMENT AND SECURED PROMISSORY NOTE

 

This LOAN AGREEMENT AND SECURED PROMISSORY NOTE (this “Note”) is made between
Cellteck, Inc., a Nevada corporation (“Borrower”) whose office is located 1999
Avenue of the Stars, Suite 2520, Los Angeles, CA 90067 (fax +1.310-552.1556) and
Clouding IP, LLC, a Delaware limited liability company (“Holder”), whose office
is located at 2C Terrace Way, Greensboro, NC 27403 [fax (877) 455-7858]. The
parties agree as follows:

 

1. Loan; Principal; Collateral; Contracting; Stock; Agreement to Repay.

 

(a)   Borrower has requested Holder to make a loan (the “Loan”) to Borrower in
the principal sum of Two Hundred Fifty Thousand and 00/100 Dollars
($250,000.00). Holder has agreed to make the Loan to Borrower on the terms and
conditions set forth in this Note and the related documents referenced herein.
The Loan shall be funded on or before December 26, 2012.

 

(b) Borrower has agreed to secure repayment of the Loan by granting to the
Holder a security interest in and to certain oil and gas property rights that
are held by Borrower (the “Collateral”) pursuant to Leasehold Mortgage,
Assignment, Security Agreement and Fixture Filing (the “Assignment”) dated
concurrently herewith. Capitalized terms used but not otherwise defined in this
Note shall have the meanings, if any, ascribed thereto in the Assignment.

 

(c) Concurrently herewith Borrower and Holder are entering into an Oil & Gas
Services Agreement (the “Services Agreement”) providing that Holder and its
affiliates will provide oil and gas services to Borrower for a two-year period.
The Services agreement will provide for the provision by Holder to Borrower of a
variety of services in the oil sector along with Holder presenting new business
and acquisition opportunities to Borrower. In the Services Agreement, the
Borrower will grant to Holder and its affiliates a first right of refusal on
drilling and services contracts, contingent upon Borrower’s approval of Holder’s
affiliated company proposed to perform the services and Borrower’s determination
and evaluation as to the company’s experience and reputation at all relevant
levels and that, notwithstanding any discounts that may otherwise apply under
the Services Agreement, such company is price competitive for the services in
the respective area. Under the Services Agreement, under certain circumstances
Borrower will receive a 30% discount on all services rendered for at least one
year.

  

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(d) Borrower agrees to sell to Holder for an aggregate of Five Thousand and
00/100 Dollars ($5,000.00) and Holder agrees to purchase from Borrower for an
aggregate of Five Thousand and 00/100 Dollars ($5,000.00) 250,000 shares of
Series B Preferred Stock of Borrower (the “Stock”). The Stock shall be sold and
purchased coincident with the funding of the Loan.

 

(e) On October 12, 2012, pursuant to an Agreement and Plan of Merger dated July
16, 2012 (the “Merger Agreement”), Borrower completed a merger transaction. In
the Merger Agreement, the Borrower agreed to implement a reverse stock split at
an exchange ratio of 1-for-800 of its outstanding shares of common stock as soon
as reasonably practicable following the completion of the Merger (the “Merger
Reverse Split”). Shares of Series B Preferred Stock are all automatically
convertible into shares of common stock upon effectuation of the Merger Reverse
Split.

 

(f) If all amounts due and payable under the Note have not been paid on or
before March 31, 2013, Borrower will on such issue to Holder an additional
150,000 shares of Borrower’s Series B Preferred Stock, unless the Merger Reverse
Split has been effectuated, in which case Borrower shall instead issue to Holder
a number of shares of common stock equivalent to 150,000 shares of Series B
Preferred Stock.

 

(g) Borrower hereby promises to pay to the order of Holder, at Holder’s Office
or at such other place as Holder may from time to time designate in writing, (i)
the principal sum of the Loan, or so much thereof as shall from time to time be
unpaid hereunder, together with accrued interest from the date hereof on the
unpaid principal at the rate per annum provided below and (ii) the amounts
payable under the Lease (together, the “Obligation”). As used herein, the term
“Holder” shall mean the initial holder named above and any subsequent holder of
this Note, whichever is applicable from time to time.

 

ARTICLE I

 

GENERAL PROVISIONS

 

1.1           Maturity Date. The maturity date of the Loan is March 31, 2013
(the “Maturity Date”).

 

1.2           Interest Rate. Interest payable on this outstanding principal
amount due under Note shall accrue at the annual rate of four percent (4.0%) and
be payable on the Maturity Date, accelerated or otherwise, when the principal
and remaining accrued but unpaid interest shall be due and payable, or sooner as
described below.

 

1.3           Loan Fee. Borrower agrees to pay to Holder on the Maturity Date a
loan fee of $25,000.

 

1.4           Payment Grace Period. The Borrower shall have a grace period of 10
days to pay any monetary amounts due under this Note.

 

1.5           Prepayment. This Note may be prepaid by the Borrower in whole or
in part, at any time, subject to the guaranteed interest.

 

1.6           Security. The Obligation shall be secured by the Assignment.

 

1.7           Perfection. Borrower shall (i) file and record such collateral
assignments, financing statements and other documents in such offices as shall
be necessary or appropriate to perfect and establish the priority of the liens
granted by the Assignment (the “Collateral”) and (ii) take all such other
actions as Holder shall determine to be necessary or appropriate to perfect and
establish the priority of the liens granted by the Assignment. Holder shall
cooperate (at Borrower’s expense) with Borrower in all such actions and
activities, including by signing and delivering any documents reasonably
requested by Borrower to perfect and establish the priority of the liens granted
by the Assignment.

  

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1.8 Attorney in Fact.

 

(a)          Borrower hereby appoints Holder the attorney in fact of Borrower
for the purpose of carrying out the provisions of this Note and the Assignment
and taking any action and executing any instruments which Holder may deem
necessary or advisable to accomplish the purposes of this Note and the
Assignment, to preserve the validity, perfection and priority of the liens
granted by the Assignment and, following any default, to exercise its rights,
remedies, powers and privileges under this Note and the Assignment. This
appointment as attorney in fact is irrevocable and coupled with an interest.
Without limiting the generality of the foregoing, Holder shall be entitled under
this Note and the Assignment upon the occurrence and continuation of any Event
of Default (i) to make, sign, file and record any security instruments, (ii) to
ask, demand, collect, sue for, recover, receive and give receipt and discharge
for amounts due and to become due under and in respect of all or any part of the
Collateral; (iii) to receive, endorse and collect any instruments or other
drafts, instruments, documents and chattel paper in connection with clause (ii)
above (including any draft or check representing the proceeds of insurance or
the return of unearned premiums); (iv) to file any claims or take any action or
proceeding that Holder may deem necessary or advisable for the collection of all
or any part of the Collateral, including the collection of any compensation due
and to become due under any contract or agreement with respect to all or any
part of the Collateral; and (v) to execute, in connection with any sale or
disposition of the Collateral, any endorsements, assignments, bills of sale or
other instruments of conveyance or transfer with respect to all or any part of
the Collateral.

 

(b)          Without limiting the rights and powers of Holder under Section
1.8(a), Borrower hereby appoints Holder as its attorney in fact, effective date
hereof and terminating upon the satisfaction in full of the Obligation, for the
purpose of (i) preparing, executing on behalf of Borrower, filing, and recording
collateral assignment and financing statement documents with appropriate state
and county agencies to perfect and enforce the liens granted by the Assignment,
(ii) filing such applications with such state agencies and (iii) executing such
other documents and instruments on behalf of, and taking such other action in
the name of, Borrower as Holder may deem necessary or advisable to accomplish
the purposes of this Note and the Assignment (including the purpose of creating
in favor of Holder a perfected lien on the property and exercising the rights
and remedies of Holder hereunder). This appointment as attorney in fact is
irrevocable and coupled with an interest.

 

ARTICLE II

 

EVENT OF DEFAULT

 

The occurrence of any of the following events of default (“Event of Default”)
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment, or grace period,
all of which hereby are expressly waived, except as set forth below:

 

2.1           Failure to Pay Principal or Interest. The Borrower fails to pay
any installment of principal, interest, the loan fee or other sum due under this
Note when due, including any applicable grace period.

 

2.2           Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of this Note in any material respect and such breach, if
subject to cure, continues for a period of five (5) business days after written
notice to the Borrower from the Holder.

  

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2.3           Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Assignment, or in
any agreement, statement or certificate given in writing pursuant hereto or in
connection herewith shall be false or misleading in any material respect as of
the date made.

 

2.4           Liquidation. Any dissolution, liquidation or winding up of
Borrower or any substantial portion of its business.

 

2.5           Cessation of Operations. Any cessation of operations by Borrower
or Borrower admits it is otherwise generally unable to pay its debts as such
debts become due.

 

2.6           Maintenance of Assets. The failure by Borrower to maintain any
material intellectual property rights, personal, real property or other assets
which are necessary to conduct its business (whether now or in the future).

 

2.7           Receiver or Trustee. The Borrower or any material subsidiary of
Borrower shall make an assignment for the benefit of creditors, or apply for or
consent to the appointment of a receiver or trustee for it or for a substantial
part of its property or business; or such a receiver or trustee shall otherwise
be appointed.

 

2.8           Judgments. Any money judgment, writ or similar final process shall
be entered or filed against Borrower or any of its property or other assets for
more than $100,000, unless stayed vacated or satisfied within thirty (30) days.

 

2.9           Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law,
or the issuance of any notice in relation to such event, for the relief of
debtors shall be instituted by or against the Borrower or any Subsidiary of
Borrower.

 

2.10         Delisting. Delisting of the Borrower’s common stock from any
principal market on which it is listed or quoted, failure to comply with the
requirements for continued listing on a principal market for a period of five
(5) consecutive trading days, or notification from a principal market that the
Borrower is not in compliance with the conditions for such continued listing on
such principal market.

 

2.11         Non-Payment. A default by the Borrower under any one or more
obligations in an aggregate monetary amount in excess of $500,000 for more than
twenty (20) days after the due date, unless the Borrower is contesting the
validity of such obligation in good faith.

 

2.12         Stop Trade. A U.S. Securities and Exchange Commission (the “SEC”)
or judicial stop order or trading suspension that lasts for seven or more
consecutive trading days.

 

2.13         Financial Statement Restatement. The restatement of any financial
statements filed by Borrower with the SEC for any date or period from two years
prior to the closing date of the Reorganization and until this Note is no longer
outstanding, if the result of such restatement would, by comparison to the
unrestated financial statements, have constituted a material adverse effect on
the business, operations or financial condition of Borrower.

 

2.14         Executive Officers Breach of Duties. Any of Borrower’s named
executive officers or directors is convicted of a criminal violation of
securities laws, or a settlement in excess of $250,000 is reached by any such
officer or director relating to a violation of securities laws, breach of
fiduciary duties or self-dealing.

  

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ARTICLE III

 

CERTAIN COVENANTS

 

3.1           Corporate Existence. From the funding of the Loan and for so long
as this Note is outstanding, the Borrower shall, and shall cause each of its
material subsidiaries to (i) conduct its operations in the ordinary course of
business consistent with past practice, (ii) maintain its corporate existence
and (iii) maintain and protect all material intellectual property used and
useful in the business of the Borrower and its material subsidiaries.

 

3.2           Filing Status. For so long as the Note is outstanding, Borrower
shall timely file all reports required to be filed with the SEC pursuant to the
Exchange Act, and Borrower shall not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would otherwise permit such termination.

 

3.3           SEC Filings. For so long as the Note is outstanding, (i) Borrower
shall timely file with the SEC, within the time periods specified in the SEC’s
rules and regulations, all quarterly and annual financial information required
to be filed with the SEC on Forms 10-Q and 10-K, all current reports required to
be filed with the SEC on Form 8-K and any other information required to be filed
with the SEC; (ii) Borrower shall not terminate its status as an issuer required
to file reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would otherwise permit such termination and (iii)
Borrower shall deliver (A) copies of all such filings with the SEC to the Holder
within one (1) day after the filing thereof with the SEC, unless the foregoing
are filed with the SEC through EDGAR and are immediately available to the public
through EDGAR and (B) facsimile copies of all press releases issued by Borrower
or any of its subsidiaries on the same day as the release thereof, except to the
extent any such release is available through Bloomberg Financial Markets (or any
successor thereto) contemporaneously with such issuance.

 

3.4           Listing. Borrower shall use its reasonable best efforts to take
all actions necessary to remain eligible for quotation of its securities on the
OTC Bulletin Board and to cause the common stock of Borrower to be quoted
thereon, unless listed on another nationally recognized stock exchange,
interdealer quotation system or market. Borrower shall promptly secure the
listing of all of the Stock upon each national stock exchange, interdealer
quotation system or market, if any, upon which shares of common stock are then
listed and shall maintain, so long as any other shares of such stock shall be so
listed, such listing of all shares of the Stock. None of Borrower or any of its
subsidiaries shall take any action which would be reasonably expected to result
in the suspension or termination of trading of common stock on the Principal
Market. Borrower shall pay all fees and expenses in connection with satisfying
its obligations under this Section 3.4.

 

3.5           Conversion Right.

 

(a) The principal amount, together with any accrued and unpaid interest or other
charges or fees, may be converted at the election of the Holder into Series B
Preferred Stock at a conversion price of $2.50 per share. Upon delivery to the
Borrower of a completed Notice of Conversion, a form of which is annexed hereto
as Exhibit A, Borrower shall issue and deliver to the Holder within three (3)
business days after the date of such delivery (such third day being the
“Delivery Date”) that number of shares of Series B Preferred Stock for the
portion of the Note converted in accordance with the foregoing. At the election
of the Holder, the Borrower will deliver accrued but unpaid interest on the
Note, if any, through the conversion date directly to the Holder on or before
the Delivery Date. The number of shares of Series B Preferred Stock to be issued
upon each conversion of this Note shall be determined by dividing that portion
of the principal of the Note and interest, if any, to be converted, by the
conversion price.

  

6

 

  

(b) if Holder elects to exercise the right set forth in Section 3.5(a) after the
Merger Reverse Split has been effectuated, Borrower shall instead issue to
holder a number of shares of common stock of the Borrower equivalent to the
number of shares of Series B Preferred Stock that Holder would have received
upon its exercise of the right set forth in Section 3.5

 

ARTICLE IV

 

MISCELLANEOUS

 

4.1           Failure or Indulgence Not Waiver; Borrower Waiver. No failure or
delay on the part of the Holder hereof in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available. Moreover, Borrower waives presentment for
payment, protest and notice of protest and nonpayment of this Note.

 

4.2           Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Borrower to the address and
facsimile number set forth on the front page of this Note, Attn: CEO, and (ii)
if to the Holder, to the name, address and facsimile number set forth on the
front page of this Note.

 

4.3           Amendment Provision. The term “Note” and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.

 

4.4           Assignability. This Note shall be binding upon the Borrower and
its successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns. The Borrower may not assign its obligations under this
Note except in connection with the Reorganization.

 

4.5           Cost of Collection. If default is made in the payment of this
Note, Borrower shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys’ fees.

 

7

 

 

4.6           Governing Law. This Note is payable at the offices of Holder in
California and shall be governed by and construed in accordance with the laws of
the State of Nevada without regard to conflicts of laws principles that would
result in the application of the substantive laws of another jurisdiction. Any
action brought by either party against the other concerning the transactions
contemplated by this Agreement must be brought only in the civil or state courts
of California or in the federal courts located in California, County of Los
Angeles. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other decision in favor of the Holder.

 

4.7           Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum rate permitted by applicable law, including where no
maximum rate is prescribed. In the event that the rate of interest required to
be paid or other charges hereunder exceed the maximum rate permitted by
applicable law including all valid applicable exceptions, any payments in excess
of such maximum rate shall be credited against amounts owed by the Borrower to
the Holder and thus refunded to the Borrower.

 

4.8           Non-Business Days. Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of California, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.

 

4.9           Redemption. This Note may not be redeemed or called without the
consent of the Holder except as described in this Note.

 

IN WITNESS WHEREOF, the parties have caused this Loan Agreement and Secured
Promissory Note to be signed in their respective name by a duly authorized
officer as of the 26th day of December 2012.

 

  “Maker”   Eos Petro, Inc.         By:  /s/ Nikolas Konstant     Name: Nikolas
Konstant     Title: Chairman of the Board         “Holder”   Clouding IP, LLC  
      By: /s/ William R. Carter, Jr.     Name: William R. Carter, Jr.     Title:
Managing Member

 

8

 

 

NOTICE OF CONVERSION

 

(To be executed by the Registered Holder in order to convert the Note)

 

The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Note issued by ___________________________
on ________________, 20___ into Shares of Series B Preferred Stock of
_____________________ (the “Borrower”) according to the conditions set forth in
such Note, as of the date written below.

 

Date of Conversion:       Conversion Price:       Shares To Be Delivered:      
Signature:       Print Name:       Address: