CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT is made and entered into this 1st day of   July, 2012
by and between EOS Petro Inc. (hereinafter referred to as “EOS”), and Quantum
Advisors, LLC (hereinafter referred to as “Quantum"), and hereinafter
collectively referred to as the "Parties".

 

WITNESSETH:

 

      WHEREAS, EOS is a new public company that is engaged in the business of
oil exploration and drilling and associated business activities; and

 

      WHEREAS, John Mitola, managing member of Quantum is currently a member of
the board of the predecessor company to EOS and will be a board member of EOS as
a public company; and

 

      WHEREAS, Quantum has special abilities and experience in the areas of
general business management, business development, corporate strategy and asset
funding for operating companies and emerging growth enterprises, and in
particular companies active in the energy field; and

 

      WHEREAS, in addition to Mr. Mitola’s role as a board member, Quantum has
agreed to provide ongoing consulting services to EOS in order to assist EOS with
general business expansion strategies, board organization and management,
business management and asset/project finance funding for oil/gas land rights,
exploration, existing operating oil/gas wells, etc.; and

 

      WHEREAS, it is the desire of the Parties to define and set out their
relationship in writing and the circumstances under which Quantum shall provide
such consulting services.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained,
the Parties agree as follows:

 

1. CONSULTING SERVICES. EOS hereby agrees to retain Quantum to provide
consulting support and advisory services to include business expansion
strategies, business management, project financing and optimization support
through the contractual structure outlined by this Agreement. Quantum shall
devote such of its time and effort as may be necessary to discharge its duties
under this Agreement. While Quantum shall not be restricted from engaging in
other business activities during the Term of this Agreement, Quantum shall not
provide services to any entity that directly competes with EOS. Services shall
include but not be limited to the following:

 

·John Mitola, managing member of Quantum, will serve as a “strategic advisor” to
EOS alongside serving as a member of its board of directors (note – Mr. Mitola’s
role as a board member will be structured consistent with all other members of
the board and he will be compensated as a board member similarly to all other
members of the board.)

 

·Board Coordination, Recruitment and Management:

 

oBoard meetings - Quantum will provide complete management of board meetings
including the bulk of board meeting agendas, materials, presentations and
outline. Mr. Mitola will serve as an informal corporate secretary and as the
formal Corporate Secretary (if desired by EOS) and in so doing shall provide
follow up board meeting notes.

 

oBoard Committees - Quantum will help organize board committees in full
compliance with Sarbanes Oxley and specific requirements of the exchange that
EOS trades upon. Quantum shall organize committee meetings to meet such minimum
requirements of the corporate bylaws, exchange and SEC.

 

oBoard Recruitment – If desired by EOS, Quantum will identify, advise and lead
discussions with additional professionals targeted to be recruited to the board
of EOS.

 

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·Acquisitions:

 

oAcquisition Assessment and Board Review - Quantum will assist EOS with its
assessment of all new company acquisitions targeted by EOS. Quantum will lead in
the detailed evaluation consistent with classic Harvard Business Review outline
form and prepare an appropriate report for the EOS Board with the company’s
recommendation in accordance with corporate standards.

 

oAcquisition Negotiations – Quantum will assist and/or lead the negotiation
process of such acquisitions at the direction of EOS. Assistance shall include
travel and face-to-face meetings with such targeted acquisitions.

 

oAsset Acquisitions - Quantum will assist EOS with its assessment of any
targeted oil field, works, and associated asset acquisitions contemplated by
EOS. Work to include an assessment of new market territories and acquisition
targets. Assistance shall include travel and face-to-face meetings with such
targeted acquisitions.

 

·Financing:

 

oAssist, support and/or lead EOS efforts to secure energy project financing to
move forward with the development of EOS oil exploration.

 

oQuantum will help identify, target and lead discussions with targeted project
finance partners. Work to include travel and face-to-face meetings with such
targeted financial partners.

 

·Other specific assignments determined by EOS.

 

2. PURPOSE. The purpose of this arrangement is to carry on any and all such
other activities as may be necessary to provide the Consulting Services outlined
above and to support the growth and operation of the business of EOS.

 

3. OFFICE, SUPPLIES AND EXPENSES. While it is not anticipated that Quantum
representatives will need to work extensively from EOS offices, Quantum is
prepared to provide any on-site work as required and EOS shall provide any
necessary office space to allow Quantum to conduct any on-site work that may be
required to perform the Consulting Services outlined herein. Quantum shall be
reimbursed by EOS for all reasonable and industry standard expenses and supplies
required to carry out the duties contemplated by this Agreement. Quantum shall
obtain EOS’s written approval for any travel incurred on behalf of EOS and for
any single expense over $500. Such approval may be provided via email
transmission and reimbursement shall be made by EOS within 30 days of formal
submittal by Quantum regardless of how compensation is structured at such time.

 

4. TERM. The Agreement shall commence on July 1, 2012 and shall continue for a
minimum period of 12 months. Thereafter, this Agreement shall continue
indefinitely or until terminated by either of the Parties upon 60 days written
notice thereof to the other Party. Such notice to be provided by email
communication.

 

5. MINIMUM MANPOWER COMMITMENT AND COMPENSATION. Quantum will provide the work
necessary to meet the requirements of the Consulting Services as outlined above.
Quantum will also commit to one in-person meeting per month – preferably in a
manner that shall integrate with other Quantum travel activity to maximize
efficiency and to minimize travel expense to EOS. In addition, Quantum
recommends holding a standing conference call on two afternoons each week to
review general strategy. At other times, Quantum will provide regular email
updates along with a more formal Monthly Report.

 

Quantum will also provide availability for approximately 1 to 2 strategy or
project finance meetings/trips per month on behalf of EOS (albeit, Quantum will
always try to combine travel with other business initiatives to reduce cost to
EOS).

 

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Compensation:

 

·Monthly retainer - As compensation for the services contemplated herein,
Quantum will be paid a monthly fee of $5000 per month, payable on the 15th of
each month. This fee shall begin to be paid the first month following either a)
EOS has successfully raised and funded a minimum of $2.5 million in corporate
equity or b) EOS has become cash flow positive on a monthly basis. The cash
retainer shall be paid as a prepayment for a planned success fee related to
Quantum’s efforts to support EOS acquisitions or financings as outlined in the
Services section. Such success fee is generally targeted to equal 1% of the
project value and at no time less than $60,000 per project closing.

 

·Stock compensation – in exchange for Quantum’s initial efforts and support of
EOS during the time at which EOS is unable to pay the monthly retainer in due to
the lack of the occurrence of (a) or (b) outlined above, Quantum shall be
granted a grant of common stock in EOS of 200,000 shares. 50,000 shares shall
vest on July 1, 2012 or immediately upon the public merger closing of EOS
following July 1, 2012. If Quantum is continuing in its role for EOS at December
31, 2012, an additional 50,000 shares shall vest from the 200,000 share total
grant. If Quantum is continuing in its role on July 1, 2013 and December 31,
2013, an additional vesting of 50,000 shares shall occur on each of the
respective dates. The stock shall have equal registration status and trading
rights as stock held by Nik Konstant and his affiliates.

 

·If this effort is continuing at July 1, 2014, and, EOS is cash flow positive,
the monthly retainer shall increase to $8000 per month.

 

6. REPRESENTATIONS AND WARRANTIES. The Parties hereby represent and warrant to
each other that they have full power and authority to execute, deliver and
perform the terms and provisions of this Agreement. This Agreement constitutes
the legal, valid and binding obligation of the Parties enforceable in accordance
with its terms, except to the extent that the enforceability hereof may be
limited by bankruptcy or similar laws relating to or limiting creditors' rights
generally or by equitable principles (regardless of whether enforcement is
sought in equity or at law).

 

7, INDEMNIFICATION. Each Party hereby agrees to indemnify and hold harmless the
other Party and its directors, officers, employees and/or affiliates against any
and all losses, claims, damages obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (and all actions, suits,
proceedings and investigations in respect thereof and any and all reasonable
legal or other costs, expenses and disbursements in giving testimony or
furnishing documents in response to a subpoena or otherwise), including, without
limitation, the reasonable costs, expenses, and disbursements, as and when
incurred, of investigating, preparing, or defending any such action, proceeding
or investigation (whether or not in connection with litigation to which the
Consultant is a party) (collectively, the "Liabilities") arising out of or in
connection with the activities contemplated by this Agreement, so long as such
Liabilities arise from the negligent and/or willful misconduct of the violating
Party, or the violation in any material respect of applicable federal or state
securities laws by the violating Party with respect to any untrue statement or
alleged untrue statement of a material fact or any omission or alleged omission
to state a material fact required to be stated, or necessary to make the
statements made, in light of the circumstances under which they were made, not
misleading; provided, however, that this provision shall not apply to any
Liabilities to the extent found by a court of competent jurisdiction to have
resulted from the willful misconduct or violation in any material respect of
applicable federal or state securities laws by the other Party. to the extent
set forth in Section 8(b) hereof. Each party entitled to indemnification under
this Agreement (the "Indemnified Party"), shall give notice to the party
required to provide indemnification hereunder (the "Indemnifying Party") with
reasonable promptness after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought. Notwithstanding the foregoing, the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 8. Upon
receipt of such notice, the Indemnifying Party shall conduct the defense of such
claim or any litigation resulting there from. The Indemnified Party may,
however, participate in such defense at such Indemnified Party's sole expense.
The Indemnified Party shall furnish such information regarding the claim in
question as the Indemnifying Party may reasonably request in writing in
connection with the defense of any such claim and litigation resulting there
from.

 

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8. INDEPENDENT CONTRACTORS. Nothing herein contained shall be construed to
constitute the parties hereto as partners or as joint venturers, or either as
agent of the other, or as employer or employee. Except as otherwise expressly
provided herein, Quantum and its representatives acknowledge that they are not
an officer, director or agent of Knight in any way and as such may not commit
Knight to any action.

 

9. MISCELLANEOUS PROVISIONS.

 

(a)       Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, without giving effect to
the principles of conflicts of laws thereof.

 

(b)       Attorney Review. The Parties acknowledges that this Agreement will
have important legal consequences and imposes significant requirement on each
Party. Accordingly, the Parties acknowledge that they have considered retaining
or have retained legal counsel to review this Agreement and that each Party has
been provided with adequate time to obtain such review.

 

(c)       Arbitration. The Parties agree that in the event of any and all
disagreements and controversies arising from this Agreement such disagreements
and controversies shall be subject to binding arbitration as arbitrated in
accordance with the then current Commercial Arbitration Rules of the American
Arbitration Association to be held in Los Angeles, California before one neutral
arbitrator. Either Party may apply to the arbitrator seeking injunctive relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Without waiving any remedy under this Agreement, either Party may also
seek from any court having jurisdiction any interim or provisional relief that
is necessary to protect the rights or property of that Party, pending the
establishment of the arbitral tribunal (or pending the arbitral tribunal’s
determination of the merits of the controversy). In the event of any such
disagreement or controversy, neither Party shall directly or indirectly reveal,
report, publish or disclose any information relating to such disagreement or
controversy to any person, firm or corporation not expressly authorized by the
other Party to receive such information or use such information or assist any
other person in doing so, except to comply with actual legal obligations of such
Party or unless such disclosure is directly related to an arbitration proceeding
as provided herein, including, but not limited to, the prosecution or defense of
any claim in such arbitration. The costs and expenses of the arbitration
(including attorneys’ fees) shall be paid by the non-prevailing Party or as
determined by the arbitrator. The Parties are hereby waiving any claims against
each other party for any activities or prior business transactions between the
parties to date. This paragraph shall survive the termination of this Agreement.

 

(d)       Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties and merges and supersedes any prior
understandings or agreements, whether written or oral. The provisions of this
Agreement shall be amended or waived only with the written consent of both
parties hereto. No other course of dealing between the Parties or any delay in
exercising any rights hereunder will operate as a waiver of any rights of either
Party under this Agreement.

 

(e)       Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of, and shall be enforceable by Consultant and the Company and their
respective successors and permitted assigns. Except however, that this Agreement
will automatically terminate without further liability on the part of either
party due to the death or incapacitation of Quantum’s principal, John Mitola.

 

(f)       Nonwaiver of Rights. The failure of either Party to (i) enforce any of
the provisions of this Agreement or any rights with respect thereto or (ii)
exercise any election provided for herein shall in no way be a waiver of such
provisions, rights or elections or in any way affect the validity of this
Agreement. The failure of either Party to exercise any of said provisions,
rights or elections shall not preclude or prejudice such Party from later
enforcing or exercising the same or any other provision of this Agreement or any
rights or elections which it has hereunder.

 

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(g)       Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed effective and given upon actual
delivery, if delivered by hand, or via email transmission with a confirmation
provided by the other party. Notices may also be sent via one (1) business day
after the date sent by nationally recognized overnight courier service, telex or
facsimile transmission, or five (5) business days after the date sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed in each case, to the following addresses:

 

  i. if to EOS:     Nik Konstant     NKonstant@princevillegroup.com         ii.
if to Quantum:     John Mitola     john@quantumadvisorsllc.com           or to
600 W. Jackson, Suite 600, Chicago IL 60661

 

(h)       Assignability. This Agreement may be assigned to any wholly owned
affiliate of either Party to this Agreement. Neither this Agreement nor any
right, remedy, obligation or liability arising hereunder or by reason hereof
shall be assignable by either Party to any third party without the prior written
consent of the other party hereto.

 

(i)       Severability. If any provision of this Agreement or the application of
any such provision to any person or circumstance shall be held invalid, illegal
or unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.

 

(j)       Limitation of Liability. In no event shall either Party be liable to
the other Party for any indirect, special, punitive or consequential damages,
nor for any claim against the other Party made by any person or entity arising
from or in any way related to this Agreement or from the services provided by
hereunder, except for the liability and indemnification obligations set forth
under Section 7 hereof.

 

(k)       Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.

 

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

 

  Nik Konstant, Princeville Group and EOS Petro         By: /s/ Nikolas Konstant
          Its:  Chairman         QUANTUM ADVISORS LLC         By: /s/ John
Mitola         Its: Managing Member

 

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