Document:

exhibit10_3.htm

Exhibit 10.3

 

FIRST AMENDMENT TO CONSULTING AGREEMENT

THIS FIRST AMENDMENT TO THE CONSULTING AGREEMENT (this “First Amendment”), effective as of June 30, 2014 (“Effective Date”), is by and among Eos Petro, Inc., a Nevada corporation (“Eos”) and DVIBRI, LLC, a California limited liability company (“Consultant,” and collectively with Eos, the “Parties”).

 

WHEREAS, pursuant to an oral Consulting Agreement effective as of March 1, 2014 (the “Consulting Agreement”) between Eos and Consultant, Eos engaged Consultant to render certain financial advice regarding business and financing activities of Eos;

 

WHEREAS, Section 5 of the Consulting Agreement incorrectly states that Consultant would receive monthly shares of Eos compensation (defined as “Share Compensation” in the Consulting Agreement), and instead should have stated that Consultant would receive a warrant to purchase shares of Eos which would vest in monthly installments;

 

WHEREAS, in accordance with the incorrect provisions for Share Compensation set forth in the Consulting Agreement, in between March 10, 2014 and June 10, 2014, Eos mistakenly treated as issued and outstanding to Consultant in its financial statements 66,664 shares of its restricted common stock (the “Erroneous Shares”) out of the total amount of Share Compensation issuable pursuant to Section 5 of the Consulting Agreement;

 

WHEREAS, the Erroneous Shares were treated as issued and outstanding to Consulting in Eos’ financial statements, but no physical certificates were ever issued for any of the Erroneous Shares, nor were they entered on the book of Eos’ transfer agent;

 

WHEREAS, the Parties now wish to: (i) acknowledge that the Erroneous Shares were mistakenly issued; (ii) cancel the Erroneous Shares and any other rights related to the Share Compensation mistakenly set forth in the Consulting Agreement; and (iii) correct the terms of the compensation to be provided to Consultant for the services provided to Eos during the remaining term of the Consulting Agreement.

 

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree to amend the Consulting Agreement in this First Amendment as of the Effective Date as follows:

 

1.           Corrected Consulting Services Compensation.

 

(a)           As compensation for Consultant’s services provided during the term of the Consulting Agreement, Eos hereby agrees to issue to Consultant a warrant, dated as of the Effective Date, to purchase 199,992 shares of its restricted common stock at a strike price of $2.50 and a three year term in the form attached hereto as Exhibit A (the “New Warrant”). As of the Effective Date, 66,664 of such warrant shares shall be vested and immediately exercisable. The remainder of such warrant shares shall vest in equal installments of 16,666 on each one month anniversary of the Effective Date that the Consulting Agreement remains in effect.

 

  

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(b)           From and after the Effective Date, the “Cash Compensation” payable to Consultant pursuant to Section 5 of the Consulting Agreement shall remain in full force and effect.

(c)           From and after the Effective Date, the “Share Compensation” payable to Consultant pursuant to Section 5 of the Consulting Agreement shall be voided, cancelled and of no further force or effect.

2.           Mutual Agreement to Cancel Shares.

(a)           Consultant and Eos hereby acknowledge and agree that: (i) the Consulting Agreement mistakenly included language regarding Share Compensation instead of New Warrant compensation; (ii) Share Compensation was never intended by either Consultant or Eos to be a part of the Consulting Agreement; and (ii) the Erroneous shares were mistakenly accounted for as issued and outstanding in Eos’ financial statements. Accordingly, by signing below for the consideration contained herein, Consultant and Eos hereby mutually agree to cancel the Erroneous Shares. For the avoidance of doubt, Consultant hereby also voluntarily cancels: (x) all stock rights, rights to subscribe, liquidating or other dividends, new securities or other property to which Consultant might have been entitled to receive with respect to the Erroneous Shares or any of the other Share Compensation set forth in the original Consulting Agreement, including, but not limited to, the issuance of a different kind or number of shares of securities through reorganization, recapitalization, reclassification, stock split or reverse stock split; and (y) any distributions or proceeds relating to the Erroneous Shares or any of the other Share Compensation set forth in the original Consulting Agreement.

(b)           Consultant and Eos further agree to execute all additional documents that either party reasonably requests to carry out the intentions of this Section 2.

3.           Consultant Representations.

(a)           For purposes of this section, the Erroneous Shares and Share Compensation are collectively referred to herein as the “Share Interests.”

(b)           Consultant hereby represents and warrants that, to the best of its knowledge, none of the Share Interests have ever been certificated.

(c)           Consultant hereby represents and warrants that, to the best of its knowledge, none of the Share Interests are nor or have ever been subject to any Claims (as defined below in Section 4).

(d)           Consultant hereby represents and warrants to Eos that, as of the Effective Date, Consultant is the owner of record and the beneficial owner of the Share Interests. Consultant owns the Share Interests free and clear of all liens, security interests, encumbrances, pledges, charges, claims and restrictions on transfer of any nature whatsoever. There are no voting trusts, member agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of the Share Interests to which Consultant is a party or bound. Consultant has granted no rights or other interests in or to the Share Interests to any person or entity whatsoever.

  

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(e)           Consultant and its advisors, if any, have been afforded the opportunity to ask questions of Eos, and Consultant has sought such accounting, legal and tax advice as it has considered necessary to make an informed decisions with respect to this First Amendment. The Consultant understands that it, and not Eos, shall be responsible for its own tax liabilities and any tax reporting obligations that may arise as a result of this First Amendment.

 

4.           Release by Consultant.  In exchange for the good and valuable consideration contained in this First Amendment, the receipt of which is hereby acknowledged, Consultant hereby waives, releases and discharges Eos, its officers, directors, shareholders, employees, agents and their respective affiliates, successors and assigns from any and all manner of action, claim, lien, demands, liabilities, causes of action, charges, complaints, suits, damages, debts, demands, obligations of any other nature, past or present, known or unknown, whether in law or inequity, whether founded upon contract (express or implied), tort, statute or regulation, common law and/or any other theory or basis, from the beginning of time to the date hereof  relating to the Share Interests (collectively referred to as “Claims”), but not including any claim for the enforcement of the terms contained in this First Amendment.

 

5.           Entire Agreement.  The Consulting Agreement, as amended by this First Amendment, embodies the entire understanding among the Parties with respect to the subject matter thereof and hereof and can be changed only by an instrument in writing executed by all of the Parties.

 

6.           Conflict of Terms.  In the event of a conflict or inconsistency between the terms of the Consulting Agreement and those of this First Amendment, the terms of this First Amendment shall control and govern the rights and obligations of the Parties.

 

7.           Execution.  This First Amendment may be executed in one or more counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.  Facsimile or other electronic signatures shall be accepted by the Parties as originals.

 

[signature page follows]

  

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IN WITNESS WHEREOF, Eos and Consultant have caused this First Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

“EOS”

EOS PETRO, INC.

By:/s/ Nikolas Konstant

Name:  Nikolas Konstant

Its:  Chairman and CFO

“CONSULTANT”

DVIBRI, LLC

By: /s/ Umesh Patel

Name:  Umesh Patel

Its:

 

 

  

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EXHIBIT A

WARRANT TO PURCHASE COMMON STOCK

 

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Warrant No. EPW2014-1 June 30, 2014

 

EOS PETRO, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

**** 199,992 Shares of Common Stock ****

 

THIS WARRANT CERTIFIES THAT, for value received, DVIBRI, LLC, or registered assigns (the “Holder”), is entitled to subscribe for and purchase from Eos Petro, Inc., a Nevada corporation (the “Company”), with its principal offices located at 1999 Avenue of the Stars, Suite 2520, Los Angeles, California 90067, up to and including the number of fully paid and nonassessable shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Company set forth above (the “Warrant Shares”), at the exercise price of $2.50 per share (the “Warrant Exercise Price”) (and as adjusted from time to time pursuant to Section 3 hereof), in accordance with the exercise procedure set forth in Section 1 hereof and prior to or upon June 30, 2017 (the “Expiration Date”), subject to the provisions and upon the terms and conditions hereinafter set forth.

 

This Warrant is issued in connection with a certain Consulting Agreement, dated effective as of March 1, 2014 (as amended, modified or supplemented, the “Consulting Agreement”), between Company and Holder.  Terms used but not defined in this Warrant shall have the meanings given in the Consulting Agreement.

 

 

1.           Exercise Procedure; Method of Exercise; Cash Payment; Issuance of New Warrant.

 

(a)           The shares underlying this warrant shall vest and become exercisable as follows: as of the date first written above, 66,664 of the Warrant Shares shall be vested and immediately exercisable. Thereafter, commencing on the one month anniversary of the date first written above and continuing on each one month anniversary thereafter, so long as the Consulting Agreement remains in effect, 16,666 Warrant Shares shall vest and become exercisable in each such month. Any portion of this Warrant that has vested may be exercised, in whole or in part and from time to time, at any time until the Expiration Date, pursuant to the provisions contained in this Section 1.  However, if Holder’s Consulting Agreement is terminated for any reason, any Warrant Shares which have not yet vested will not vest.

 

(b)           If Holder elects to exercise any portion of this Warrant that has vested, Holder shall surrender this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A duly completed and executed) at the principal executive offices of Company, accompanied by payment to Company, by: (a) certified or bank check acceptable to Company; (b) cancellation by Holder of bona fide indebtedness of Company to Holder, if agreed to in advance in writing by Company in the Company’s sole and absolute discretion; (c) by wire transfer to an account designated by Company; or (d) any combination of (a), (b) and (c), of an amount equal to the then applicable Warrant Exercise Price multiplied by the number of Warrant Shares then being purchased.

 

(c)           The person or persons in whose name(s) any certificate(s) representing the Warrant Shares shall be deemed to have become the holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the shares represented thereby (and such shares shall be deemed to have been issued)

  

  

  

immediately prior to the close of business on the date or dates upon which this Warrant is exercised.  In the event of any exercise of the rights represented by this Warrant, certificates for the Warrant Shares so purchased shall be delivered to the Holder hereof as soon as possible and in any event within twenty (20) Business Days after such exercise and, unless this Warrant has been fully exercised or expired, a new warrant having the same terms as this Warrant and representing the remaining portion of such shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder hereof as soon as possible and in any event within such twenty (20) Business Day period.  For purposes of this Warrant, the term “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in Los Angeles, California are authorized or required by law to remain closed.

 

2.           Reservation of Shares.  During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant a sufficient number of shares of its capital stock to provide for the exercise of the rights represented by this Warrant.

 

3.           Adjustment of Warrant Exercise Price and Number of Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Warrant Exercise Price shall be subject to adjustment to the nearest whole share (one-half and greater being rounded upward) and nearest cent (one-half cent and greater being rounded upward) from time to time upon the occurrence of certain events, as follows.  Each of the adjustments provided by the subsections below shall be deemed separate adjustments and any adjustment of this Warrant pursuant to one subsection of this Section 3 shall preclude additional adjustments for the same event or transaction by the remaining subsections.

 

(a)           Reclassification.  In case of any reclassification or change of securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination) into the same or a different number or class of securities, the Company shall duly execute and deliver to the Holder of this Warrant a new warrant (in form and substance reasonably satisfactory to the Holder of this Warrant), so that the Holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, at a total purchase price not to exceed that payable upon the exercise of the unexercised portion of this Warrant, and in lieu of the shares of Common Stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification or change by a holder of the number of shares then purchasable under this Warrant.  The Company shall deliver such new warrant as soon as possible and in any event within five (5) Business Days after such reclassification or change.  Such new warrant shall provide for adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 3.  The provisions of this subparagraph (a) shall similarly apply to successive reclassifications or changes.

 

(b)           Stock Splits or Combination of Shares.  If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide (by stock split) or combine (by reverse stock split) its outstanding shares of capital stock of the class into which this Warrant is exercisable, the Warrant Exercise Price shall be proportionately decreased in the case of a subdivision or increased in the case of a combination, effective at the close of business on the date the subdivision or combination becomes effective and the number of shares of Common Stock issuable upon exercise of this Warrant shall be proportionately increased in the case of a subdivision or decreased in the case of a combination, and in each case to the nearest whole share, effective at the close of business on the date the subdivision or combination becomes effective.  The provisions of this subparagraph (b) shall similarly apply to successive subdivisions or combinations of outstanding shares of capital stock into which this Warrant is exercisable.

 

(c)           Common Stock Dividends.  If the Company at any time while this Warrant is outstanding and unexpired shall pay a dividend with respect to Common Stock payable in Common Stock, then: (i) the Warrant Exercise Price shall be adjusted, from and after the date of determination of stockholders

  

  

  

entitled to receive such dividend or distribution (the “Record Date”), to that price determined by multiplying the Warrant Exercise Price in effect immediately prior to such date of determination by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution and (ii) the number of shares of Common Stock issuable upon exercise of this Warrant shall be proportionately adjusted, to the nearest whole share, from and after the Record Date by multiplying the number of shares of Common Stock purchasable hereunder immediately prior to such Record Date by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution.  The provisions of this subparagraph (c) shall similarly apply to successive Common Stock dividends by the Company.

 

(d)           No adjustment in the Warrant Exercise Price shall be required unless such adjustment would require a cumulative decrease of at least $0.01 in such price; provided, however, that any adjustments that by reason of this Section 3 are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made.  All calculations under this Section 3(h) shall be made to the nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be.

 

(e)           In any case in which Section 3 provides that an adjustment shall become effective on the day next following the record date for an event, the Company may without penalty defer until the occurrence of such event issuing to the Holder with respect to any part of this Warrant exercised after such record date and before the occurrence of such event the additional shares of Common Stock issuable upon such exercise by reason of the adjustment required by such event over and above the shares of Common Stock issuable upon such conversion before giving effect to such adjustment.

 

(f)           If, at any time or from time to time while this Warrant is outstanding any event occurs of the type contemplated by the provisions of this Section 3 but not expressly provided for by such provisions (including the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s Board of Directors will make an appropriate adjustment in the Warrant Exercise Price so as to protect the rights of the holder; provided that no such adjustment will increase the Warrant Exercise Price as otherwise determined pursuant to this Section 3.

 

4.           Notice of Adjustments.  Whenever the Warrant Exercise Price or the number of shares of Common Stock purchasable hereunder shall be adjusted pursuant to Section 3 above, the Company shall deliver a written notice, setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the Warrant Exercise Price and the number of shares of Common Stock purchasable hereunder after giving effect to such adjustment, and shall use commercially reasonable efforts to cause copies of such notice to be delivered to the Holder of this Warrant within three (3) Business Days after the occurrence of the event resulting in such adjustment at such Holder’s last known address in accordance with Section 9 hereof.

 

5.           Fractional Shares.  No fractional shares will be issued in connection with any exercise hereunder, but in lieu of such fractional shares, the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number.

 

6.           Compliance with Securities Act of 1933; Transfer of Warrant or Shares.

 

(a)           Compliance with Securities Act of 1933.  The Holder of this Warrant, by acceptance hereof, agrees that this Warrant, the Warrant Shares and the capital stock issuable upon conversion of the Warrant Shares (collectively, the “Securities”) are being acquired for investment and that such holder will not

  

  

  

 

offer, sell, transfer or otherwise dispose of the Securities except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the “Securities Act”)  and any applicable state securities laws.  Upon exercise of this Warrant, unless the Warrant Shares being acquired are registered under the Securities Act and any applicable state securities laws or an exemption from such registration is available, the Holder hereof shall confirm in writing that the Warrant Shares so purchased are being acquired for investment and not with a view toward distribution or resale in violation of the Securities Act and shall confirm such other matters related thereto as may be reasonably requested by the Company.  The Warrant Shares (unless registered under the Securities Act and any applicable state securities laws) shall be stamped or imprinted with a legend in substantially the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Such legend shall be removed by the Company, upon the request of a Holder, at such time as the restrictions on the transfer of the applicable security shall have terminated.

 

 

(b)           Transferability of the Warrant.   Subject to compliance with Section 6(c) below, which provisions are intended to ensure compliance with applicable federal and states securities laws, the Securities may be transferred by the Holder hereof, in whole or in part and from time to time.

 

(c)           Method of Transfer.  With respect to any offer, sale, transfer or other disposition of the Securities, the Holder hereof shall prior to such offer, sale, transfer or other disposition:

 

(i)      surrender this Warrant or certificate representing Warrant Shares at the principal executive offices of the Company or provide evidence reasonably satisfactory to the Company of the loss, theft or destruction of this Warrant or certificate representing Warrant Shares and an indemnity agreement reasonable satisfactory to the Company,

 

(ii)      pay any applicable transfer taxes or establish to the satisfaction of the Company that such taxes have been paid,

 

(iii)      deliver a written assignment to the Company in substantially the form attached hereto as Exhibit B or appropriate stock power duly completed and executed prior to transfer, describing briefly the manner thereof, and

 

(iv)           deliver a written opinion of such Holder’s counsel, or other evidence, if reasonably requested by the Company, to the effect that such offer, sale, transfer or other disposition may be effected without registration or qualification (under the Securities Act as then in effect and any applicable state securities law then in effect) of the Securities.

As soon as reasonably practicable after receiving the items set forth above, the Company shall notify the Holder that it may sell, transfer or otherwise dispose of the Securities, all in accordance with the terms of the notice delivered to the Company.  If a determination has been made pursuant to this Section 6(c) that the opinion of counsel for the Holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the Holder promptly with details of such determination.  Notwithstanding the foregoing, the Securities may, as to such federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 under the Securities Act if the Company satisfied the provisions thereof and provided that the Holder shall furnish such information as the Company may reasonably request to provide a reasonable assurance that the provisions of Rule 144 have been satisfied.  Each certificate representing this Warrant or Warrant Shares thus transferred (except a transfer pursuant to Rule 144 or an effective registration statement) shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with

 

  

  

  

applicable federal and state securities laws, unless in the aforesaid opinion of counsel to the Holder and to the reasonable satisfaction of the Company, such legend is not required in order to ensure compliance with such laws.  Upon any partial transfer of this Warrant, the Company will issue and deliver to such new holder a new warrant (in form and substance similar to this Warrant) with respect to the portion transferred and will issue and deliver to the Holder a new warrant (in form and substance similar to this Warrant) with respect to the portion not transferred as soon as possible and in any event within five (5) Business Days after such transfer.

 

 

7.           No Rights as Shareholders; Information.  Prior to exercise of this Warrant, the Holder of this Warrant, as such, shall not be entitled to vote the Warrant Shares or receive dividends on or be deemed the holder of such shares, nor shall anything contained herein be construed to confer upon the Holder of this Warrant, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the shares of Common Stock purchasable upon the exercise hereof shall have become deliverable, as provided herein.

 

8.           Modification and Waiver; Effect of Amendment or Waiver.  This Warrant and any provision hereof may be modified, amended, waived, discharged or terminated only by an instrument in writing, designated as an amendment to this Warrant and executed by a duly authorized officer of the Company and the Holder of this Warrant.  Any waiver or amendment effected in accordance with this Section 8 shall be binding upon the Holder, each future holder of this Warrant or of any shares purchased under this Warrant (including securities into which such shares have been converted) and the Company.

 

9.           Notices and Payments. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon, (a) personal delivery or telecopy, (b) one (1) Business Day after deposit with a nationally recognized overnight delivery service such as Federal Express, with postage and fees prepaid, addressed to each of the other parties thereunto entitled at the following addresses, or at such other addresses as a party may designate by written notice to each of the other parties hereto or (c) four (4) Business Days following the date of deposit in the United States mails, first-class postage prepaid, addressed to each of the other parties thereunto entitled at the following addresses, or at such other addresses as a party may designate by written notice to each of the other parties hereto.

	
COMPANY

	
Eos Petro, Inc.

	  	
Attention: Nikolas Konstant

	  	
1999 Avenue of the Stars, Suite 2520

Los Angeles, CA 90067

	  	
Tel: (310) 552-1555

	  	
Fax: (424) 288-5650

	  	  
	
HOLDER:

	
DVIBRI, LLC

	  	
Attention: Umesh Patel

	  	
1930 W. Glenoaks Blvd., Suite 10

	  	
Glendale, CA 91201

	  	  
	  	  

 

10.           Successors.  The obligations of the Company relating to the Warrant Shares shall inure to the benefit of the successors and assigns of the Holder hereof and shall be binding upon any successor entity.  Upon such event, the successor entity shall assume the obligations of this Warrant, and this Warrant (or any substitute warrant as provided hereinbefore) shall be exercisable for the securities, cash and property of the successor entity on the terms provided herein.

 

11.           Lost Warrants or Stock Certificates.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity agreement reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such mutilated Warrant or stock certificate, the Company will issue and deliver a new warrant (containing the same terms as this Warrant) or stock certificate, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate, and any such lost, stolen, destroyed or mutilated Warrant or stock certificate shall thereupon become void.

 

  

  

  

 

12.           Descriptive Headings.  The descriptive headings of the several paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.  The language in this Warrant shall be construed as to its fair meaning without regard to which party drafted this Warrant.

 

13.           Governing Law; Jurisdiction.  This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of Nevada, without reference to principles governing choice or conflicts of laws.  Each party hereby agrees to submit any dispute under this Warrant to arbitration in accordance with the Services Agreement and irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City and County of Los Angeles, California for the entry of any judgment from such arbitration, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such arbitrator or court, that such proceeding is brought in an inconvenient forum or that the venue of such proceeding is improper.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

 

14.           WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A JURY IN ANY LEGAL PROCEEDING ARISING OUT OR A RELATED TO THIS AGREEMENT, THE NOTE, AND THE SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.

 

15.           Entire Agreement.  This Warrant constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, and undertakings of the parties, whether oral or written, with respect to such subject matter.

 

16.           No Impairment.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but will at all times in good faith assist in carrying out all the provisions of this Warrant and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.

 

17.           Issue Taxes.  The Company shall pay any and all issue and other taxes payable in respect of any issue or delivery of Common Stock upon the exercise of this Warrant that may be imposed under the laws of the United States of America or by any state, political subdivision or taxing authority of the United States of America; provided, however, that the Company shall not be required to pay any tax or taxes that may be payable in respect of any transfer involved in the issue or delivery of any Warrant or certificates for Common Stock in a name other than that of the registered holder of such Warrant (which shall be treated as a transfer under Section 6 above), and no such issue or delivery shall be made unless and until the person or entity requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

18.           Severability.  In the event that any one or more of the provisions contained in this Warrant shall for any reason be held to be invalid, illegal or unenforceable in any respect, such provision(s) shall be ineffective only to the extent of such invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Warrant and such invalidity, illegality or unenforceability shall not affect any other provision of this Warrant, which shall remain in full force and effect.

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be duly executed as of the date first written above by its duly authorized officers.

 

EOS PETRO, INC.

 

a Nevada corporation

 

 

By:         /s/ Nikolas Konstant

 

Name:    Nikolas Konstant

 

Title:      Chairman, CFO

 

  

  

  

EXHIBIT A

 

NOTICE OF EXERCISE

 

To:  EOS PETRO, INC. (the “Company”)

 

The undersigned hereby exercises the right to purchase___________________ of the shares of Common Stock (“Warrant Shares”) of the Company, evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1.           Form of Warrant Exercise Price.  The holder intends that payment of the Warrant Exercise Price shall be made as:

 

	  	  	  	
a “Cash Exercise” with respect to ______________ Warrant Shares.

	  	  	  	  

 

2.           Payment of Warrant Exercise Price.  In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the aggregate Exercise Price in the sum of $_______________ to the Company in accordance with the terms of the Warrant.

3.           Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name or names as are specified below:

_________________________________________

 

(Name)

 

_________________________________________

 

(Address)

 

_________________________________________

 

(City, State)

 

 

4.           The undersigned represents that the aforesaid shares being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, all except as in compliance with applicable securities laws, and that the undersigned is an “accredited investor” within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended.

 

	
__________________________________________

	
______________________________________

	
(Date)

	(Signature)

 

NOTICE: Signature must be guaranteed by a commercial bank or trust company or a member firm of a major stock exchange if shares of capital stock are to be issued, or securities are to be delivered, other than to or in the name of the registered holder of this Warrant. In addition, signature must correspond in all respects with the name as written upon the face of the Warrant in every particular without alteration or any change whatever.

  

  

  

EXHIBIT B

 

FORM OF ASSIGNMENT

 

 

FOR VALUE RECEIVED, the undersigned holder of the attached Warrant hereby sells, assigns and transfers unto _______________________ whose address is _______________________________________  and whose taxpayer identification number is _________________ the undersigned’s right, title and interest in and to the Warrant issued by Eos Petro, Inc., a Nevada corporation (the “Company”) to purchase _______ shares of the Company’s Common Stock, and does hereby irrevocably constitute and appoint __________________________ attorney to transfer said Warrant on the books of the Company with full power of substitution in the premises.

 

 

o    In connection with such sale, assignment, transfer or other disposition of this Warrant, the undersigned hereby confirms that:

o    such sale, transfer or other disposition may be effected without registration or qualification (under the Securities Act as then in effect and any applicable state securities law then in effect) of this Warrant or the shares of capital stock of the Company issuable thereunder and has attached hereto a written opinion of the undersigned’s counsel to that effect; or

 

such sale, transfer or other disposition has been registered under the Securities Act of 1933, as amended, and registered and/or qualified under all applicable state securities laws.

 

_______________

 

          (Date)

 

__________________________________________

 

        (Signature)

 

NOTICE:  Signature must correspond in all respects with the name as written upon the face of the Warrant in every particular without alteration or any change whatever.exhibit10_4.htm

Exhibit 10.4

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (the “Agreement”) is made and entered into effective this24th day of  June, 2014, by and between EOS Petro, Inc., a Nevada corporation (“EOS”), and YOUSSRI HASSAN an individual  (“YOUSSRY HASSAN”), with EOS and YOUSSRY HASSAN collectively referred to as the "Parties."

 

                WHEREAS, EOS is a company that is engaged in the business of locating, evaluating and purchasing international oil and gas properties, wells and reserves, along with the further development, exploitation, exploration, additional drilling potential and associated below-ground drilling, workover or recompletion activities (collectively “oil and gas activities”);

 

WHEREAS, YOUSSRY HASSAN is a geologist with extensive experience at the International level in location and evaluation of oil and gas activities, in Egypt, Libya and Africa;

 

WHEREAS, YOUSSRY HASSAN has special abilities and experience in the areas of locating investors or funds needed to acquire, develop, operate and conduct oil and gas activities, business development, corporate strategy and asset funding for emerging growth enterprises; and

 

WHEREAS, YOUSSRY HASSAN has agreed to provide consulting services to EOS in order to assist EOS with general business expansion strategies on new target acquisitions of oil and gas wells or fields; and

 

WHEREAS, it is the desire of the Parties to define and set out their relationship in writing, including but not limited to the consulting services which YOUSSRY HASSAN shall provide and compensation to YOUSSRY HASSAN.

 

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

 

1. CONSULTING SERVICES.

 

A. Services Generally:

 

EOS hereby agrees to use and retain YOUSSRY HASSAN as a “Director of Exploration and New Ventures “to provide consulting support and advisory services for oil and gas activities, including but not limited to the activities described below and related other support under this Agreement.  YOUSSRY HASSAN shall devote such of its time, as available and can be acceptably scheduled, and effort as necessary to discharge its duties under this Agreement. YOUSSRY HASSAN’s services to EOS shall include, but not be limited to, the following:

 

 

	
  

	
o

	
3D and Drilling Analysis - Analysis of geological and 3D seismic Data on new target acquisitions, business expansion strategies by evaluating additional drilling potentials.

 

 

	
  

	
o

	
Acquisition Assessment and Board Review - YOUSSRY HASSAN will assist EOS with its assessment of all new company acquisitions or asset purchases (such as well, leases and existing reserves, along with additional drilling potentials).  YOUSSRY HASSAN will lead in the detailed evaluation and prepare an appropriate report for the EOS Board with YOUSSRY HASSAN’s recommendation in accordance with energy industry standards.

 

 

	
  

	
o

	
Negotiations – YOUSSRY HASSAN will assist and/or lead the negotiation process of such company or asset acquisitions at the request of EOS.

  

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Assistance may include travel and face-to-face meeting(s) with such targeted acquisitions, as scheduling for involved parties mutually permits.

 

	
  

	
o

	
Asset Acquisitions - YOUSSRY HASSAN will assist EOS with its assessment of any targeted oil field, wells, working or royalty interest and associated asset facilities. Work shall include an assessment of new market territories and acquisition targets, whether or not the acquisition is closed or consummated.  Assistance includes expenses for travel and face-to-face meeting(s) with such targeted acquisitions, as scheduling for involved parties mutually permits.

 

	
  

	
o

	
Point of Contact for African Deals – EOS hereby appoints YOUSSRY HASSAN as its authorized representative to receive, on its behalf, all data, spreadsheets, offering documents and other documentation from third parties regarding EOS’ oil and gas activities in Africa and other areas of the world. YOUSSRY HASSAN shall immediately provide copies of any such documentation and related correspondence to EOS. EOS shall provide YOUSSRY HASSAN with an EOS e-mail account and business cards stating YOUSSRY HASSAN’s title of Director of Exploration & New Ventures within EOS, which EOS authorizes YOUSSRY HASSAN to use solely for the purposes of and in accordance with this Agreement. For the avoidance of doubt, YOUSSRY HASSAN acknowledges that he is an “Independent Contractor,” and is not in any way the legal representative or agent of EOS, and may not use the EOS e-mail account, business cards or anything else provided under this Agreement to assume or create in writing or otherwise any obligation of any kind, expressed or implied, in the name of, or on behalf of, EOS. In particular, YOUSSRY HASSAN does not have any right to, and will not attempt to, obligate the Company to any third party in any manner and will not act in any manner that could lead a third party to believe that YOUSSRY HASSAN can obligate EOS in any manner. When communicating with any third party, YOUSSRY HASSAN shall specifically state that he is an independent contractor of EOS and cannot obligate EOS in any manner.

 

	
  

	
o

	
Miscellaneous - Other specific assignments determined by EOS and approved by YOUSSRY HASSAN, as scheduling for involved parties mutually permits. YOUSSRY HASSAN agrees to make reasonable efforts 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.

 

B. Exclusivity:

 

For so long as this agreement remains in effect, YOUSSRY HASSAN shall be restricted from engaging in all other oil and gas activities for any other third parties during the Term of this Agreement. YOUSSRY HASSAN expressly agrees that he will not provide advice to, perform services for or otherwise assist any person, company or entity that, directly or indirectly, owns or is interested in oil and gas activities during the Term of this agreement, or otherwise given in written consent from EOS

3. TERM. The Agreement shall commence as of the date first written above and shall continue for a minimum period of 24 months, provided, however, that EOS may terminate during the initial term with immediate effect if YOUSSRY HASSAN commits fraud or willfully or negligently fails to comply with any of the terms of this Agreement. Thereafter, this Agreement shall continue indefinitely or until terminated by either of the Parties upon 30 days written notice thereof to the other Party at any given time.  Such notice to be provided by U.S. Mail or email communication, receipt confirmed.

 

  

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4. MINIMUM MANPOWER COMMITMENT AND COMPENSATION.

 

A. Manpower:

 

YOUSSRY HASSAN will himself provide the work necessary to meet the requirements of the Consulting Services as outlined above. YOUSSRY HASSAN will commit either to one (1) in-person or one (1) videoconference meeting per month, preferably in a manner that shall integrate with other YOUSSRY HASSAN travel activity, to maximize efficiency and to minimize travel expense to EOS. In addition, YOUSSRY HASSAN and EOS agree to be available for a conference call on one or two afternoons each week to review general strategy and status of business. At other times, YOUSSRY HASSAN will provide regular email updates along with a more formal Monthly Report. YOUSSRY HASSAN will also provide any opinion it may have, if any, regarding the use of new technology for future target acquisitions.

 

B. Compensation:

 

 

	
  

	
·

	
Transaction Fees. EOS agrees to pay YOUSSRY HASSAN the following additional commission or fee, on transactions that are located by, originated by or presented, in whole or part, by Mr. Youssry Hassan, and which shall be set forth on Exhibit A attached hereto, which may be amended from time to time by the parties by mutual written consent (“Transactions”):

 

 

	
2.5% for Transactions valued at closing under $25 million

	
2.0% for Transactions valued at closing under $50 million

	
1.5% for Transactions valued at closing under $100 million or

	
1.0% for Transactions valued at closing over $100 million;

	
provided however that to the extent EOS closes a deal with the Kuwait Energy Company that qualifies as a “Transaction ” YOUSSRY HASSAN shall receive 1.5% for such Transaction valued at closing.

 

	
  

	
·

	
Stock Compensation. In exchange for Youssry Hassan’s efforts and support of EOS’s oil and gas activities under this Agreement, YOUSSRY HASSAN shall be granted  1,000,000 restricted shares of EOS (or any affiliate or related entity that closes a transaction) common stock or membership interest (the “Shares”)as follows:

 

  

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o

	
If EOS is successfully and finally awarded the Block 3, El Matariya Onshore concession recently identified in the February 15, 2014 bid round announcement of Egyptian Natural Gas Holding Company (the “Recent Egypt Bid”), it shall issue to YOUSSRY HASSAN 250,000 of the Shares, provided that, immediately prior to such issuance: (i) YOUSSRY HASSAN truthfully and faithfully completes the subscription agreement attached hereto as Exhibit B; and

 

	
  

	
(ii) such completed subscription agreement provides EOS with an exemption from registration for issuing such Shares to YOUSSRY HASSAN. Failure to qualify for such an exemption will eliminate EOS obligation to provide Shares to YOUSSRY HASSAN under this subparagraph.

 

	
  

	
o

	
If, after EOS is successfully and finally awarded the Recent Egypt Bid, it drills on such property and discovers oil and/or gas reserves, it shall issue to YOUSSRY HASSAN 250,000 of the Shares, provided that, immediately prior to such issuance: (i) YOUSSRY HASSAN truthfully and faithfully completes the subscription agreement attached hereto as Exhibit B; and (ii) such completed subscription agreement provides EOS with an exemption from registration for issuing such Shares to YOUSSRY HASSAN. Failure to qualify for such an exemption will eliminate EOS obligation to provide Shares to YOUSSRY HASSAN under this subparagraph.

 

	
  

	
o

	
If EOS successfully acquires another oil and gas property(other than the 2014 Egypt Bid) with a net minimum of 25,000,000 barrels of proved oil reserves after the date of this Agreement, and such acquisition otherwise qualifies as a “Transaction” for which YOUSSRY HASSAN provided services pursuant to this Agreement, it shall issue to YOUSSRY HASSAN 250,000 of the Shares, provided that, immediately prior to such issuance:(i) YOUSSRY HASSAN truthfully and faithfully completes the subscription agreement attached hereto as Exhibit B; and (ii) such completed subscription agreement provides EOS with an exemption from registration for issuing such Shares to YOUSSRY HASSAN. Failure to qualify for such an exemption will eliminate EOS obligation to provide Shares to YOUSSRY HASSAN under this subparagraph.

 

	
  

	
o

	
The remaining 250,000 of the Shares may be granted to YOUSSRY HASSAN for other exemplary services provided under this Agreement as the Board of Directors may decide, from time to time and in its sole and absolute discretion, to award to YOUSSRY HASSAN.

 

 

	
  

	
·

	
Monthly Fees. Commencing on September 1, 2014 and continuing on each one month anniversary thereof for so long as this Agreement remains in effect, EOS shall provide to YOUSSRY HASSAN a NET monthly consulting fee of $25,000.00 as follows: (i) $15,000.00 shall be paid immediately, if such date is a business day, or if not, on the next business day, to YOUSSRY HASSAN; and (ii) the remaining $10,000.00 of the $25,000.00 monthly consulting fee shall be deferred, but not abated, until the end of the fiscal year in which such fees were earned, at which point EOS shall within fifteen business days of the end of such fiscal year pay to YOUSSRY HASSAN all deferred fees earned by YOUSSRY HASSAN in that year.

 

	
  

	
·

	
Annual Bonus. Commencing at the end of the 2014 fiscal year and continuing thereafter on each one year anniversary thereof, EOS shall pay to YOUSSRY HASSAN an annual bonus equal to a NET of $50,000.00 for an entire year of services provided under this Agreement. Such bonus shall be paid to YOUSSRY HASSAN within fifteen business days of the end of each such fiscal year. If this Agreement is terminated at any time other than the end of a fiscal year, the annual bonus payable to YOUSSRY HASSAN shall be reduced proportionately to the number of days in the fiscal year that this Agreement remained in effect. For the avoidance of doubt, the annual bonus payable to YOUSSRY HASSAN at the end of the 2014 fiscal year shall be proportionately reduced from $50,000 to take into account that the services provided by YOUSSRY HASSAN under this Agreement did not commence until the date first written above. Additionally Mr. Hassan will receive annually $10,000 US dollars to cover personal and family medical insurance. 

 

 

  

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·

	
Expenses. EOS shall reimburse YOUSSRY HASSAN for certain out-of pocket expenses incurred in the performance of this Agreement, but such expenses shall be reimbursable only if the following criteria are satisfied: (i) expenses are pre-approved in writing by EOS; (ii) expenses are reasonable and actually incurred by YOUSSRY HASSAN; and (iii) YOUSSRY HASSAN provides appropriate documentation.

 

	
  

	
·

	
Any fees, stock options, stock warrants or other compensation due to YOUSSRY HASSAN, shall survive any termination of this Agreement, including but not limited to any commissions or fees due and payable to YOUSSRY HASSAN at the closing of any such Transaction or any issuance of Shares. In addition, any assignment or transfer of this Agreement, in whole or part, shall be made subject to the terms and conditions of this Agreement, including but not limited to all fees or commissions due or that may be due to YOUSSRY HASSAN.

 

5. REPRESENTATIONS AND WARRANTIES.

 

A. General:

 

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).

 

B. Foreign Corrupt Practices:

 

EOS has apprised YOUSSRY HASSAN of the Foreign Corrupt Practices Act, 15 U.S.C. § 78 dd et seq., ("FCPA"). YOUSSRY HASSAN has reviewed the purposes of the FCPA, the prohibited transactions and the penalties for violation thereof. YOUSSRY HASSAN further acknowledges such appraisal and receipt of a copy of the FCPA. The FCPA makes it illegal to make, offer or agree to offer anything of value to any government official, political party or official thereof, of candidate for governmental office in order to obtain, retain or direct business to any business enterprise or person, or to obtain an improper advantage. YOUSSRY HASSAN represents that it understands the purposes, prohibitions and penalties stated in the FCPA. YOUSSRY HASSAN shall not commit any act that would place EOS in jeopardy under the FCPA. Violations of the FCPA by YOUSSRY HASSAN shall not be suggested, condoned or encouraged by EOS.

 

6. MUTUAL INDEMNIFICATION.  YOUSSRY HASSAN agrees to indemnify, defend and hold EOS harmless from and against any and all claims, demands, judgments, liabilities, defense costs, or suits, including, but not limited to claims, demands, judgments or suits for property damage, bodily injury, illness, disease, death or for loss of services, or wages or for loss of consortium or society, by YOUSSRY HASSAN or its agents, subcontractors, any employee or their spouses, relatives, or dependents, which in any way, directly or indirectly, arise out of or relate to the performance of work or services provided under this Agreement, regardless of whether the damage, bodily injury, illness, disease, death or loss was caused by the sole, concurrent or partial negligence, fault or strict liability of EOS or any other person, and whether or not such negligence, fault or strict liability precedes the execution of this Agreement, except to the extent

  

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caused by the willful misconduct or gross negligence of the Indemnified Party or its representatives. EOS shall likewise, to the same extent and under the same terms written in this paragraph above, indemnify, defend and hold YOUSSRY HASSAN harmless from any and all such claims, demands, judgments, liabilities, defense costs, or suits, including, but not limited to claims, demands, judgments or suits for property damage, bodily injury, illness, disease, death or for loss of services, or wages or for loss of consortium or society, by EOS or its agents, subcontractors, any employee or their spouses, relatives, or dependents, which in any way, directly or indirectly, arise out of or relate to the performance of work or services provided in connection with this Agreement, regardless of whether the damage, bodily injury, illness, disease, death or loss was caused by the sole, concurrent or partial negligence, fault or strict liability of YOUSSRY HASSAN or any other person, and whether or not such negligence, fault or strict liability precedes the execution of this Agreement, except to the extent caused by the willful misconduct or gross negligence of the Indemnified Party or its representatives.

 

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. 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.

 

7.  INDEPENDENT CONTRACTOR. YOUSSRY HASSAN shall perform all Services pursuant to this Agreement as an independent contractor and neither YOUSSRY HASSAN nor its employees, officers, agents or subcontractors shall be subject to the control or direction of EOS as to details of performing the work, except as to the results of the services and work provided and the acceptable condition of any equipment. EOS shall, however, be entitled to make such requests for reports and information as it may deem necessary in furtherance of its interests and to ensure compliance with this Agreement. YOUSSRY HASSAN agrees to comply with all laws, rules, and regulations, whether federal, state, or municipal, which now or in the future may be applicable to all service or work performed.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, YOUSSRY HASSAN and its representatives acknowledge that it, or its offices or employees, are not an officer, director or agent of EOS in any way and as such may not commit EOS to any action.

8.  MISCELLANEOUS PROVISIONS.

(a)           Confidentiality. Simultaneously with the execution of this Agreement, EOS and YOUSSRY HASSAN shall execute the Confidentiality and Non-Disclosure Agreement attached hereto as Exhibit C.

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

 

  

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(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 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 YOUSSRY HASSAN 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 YOUSSRY HASSAN. YOUSSRY HASSAN may not assign all or any part of this Agreement without the express prior written consent of EOS. No assignment or transfer of any rights hereunder by EOS shall relieve it or the acquiring party of any obligations and responsibilities hereunder to YOUSSRY HASSAN, and the assignment or transfer shall be made subject to the terms and conditions of this Agreement.

 

  

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(f)           No waiver 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 YOUSSRY HASSAN 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.

(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.           To EOS Petro, Inc.:

 

                                Nikolas Konstant

1999 Avenue of the Stars Suite 2520

Los Angeles, CA. 90067

e-mail: nkonstant@eos-petro.com

fax: 310-277-0591

ii.           To YOUSSRY HASSAN :

 

Youssry Hassan

No. 110, Road 12, Area 2, 5th Suburb, 5th Settlement

New Cairo, Egypt

e-mail: yhassaan2005@hotmail.com

(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. Any assignment or transfer shall be made subject to the terms of this Agreement, and the assignment or transfer shall void unless made subject to this Agreement.

 

(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.

 

  

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(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.

  

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

EOS Petro Inc.

By: /s/ Nikolas Konstant

Name: Nikolas Konstant

Its: Chairman of the Board

YOUSSRY HASSAN

By: /s/ Youssry Hassan

Name: Youssry Hassan

An Individual

  

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EXHIBIT A – list of qualifying “Transactions”

*Block 3 El Matariya Onshore bid

*Kuwait Energy Company

  

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EXHIBIT B

SUBSCRIPTION AGREEMENT AND

 

INVESTOR QUESTIONNAIRE

 

EOS PETRO, INC.

 

[provided separately]

  

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EXHIBIT C

NON-DISCLOSURE, NON-CIRCUMVENTION AND CONFIDENTIALITY AGREEMENT

This Non-Disclosure, Non-Circumvention and Confidentiality Agreement (this “Agreement”) is made and entered into as of June 24, 2014 by and between Eos Petro, Inc. (“Disclosing Party”) and Youssry Hassan (the “Receiving Party”). Disclosing Party and Receiving Party shall each sometimes be referred to individually as a “Party” and collectively as the “Parties.”

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

1.     Purpose.  The Parties wish to explore a business consulting opportunity of mutual interest (the “Opportunity”) in strict confidence.  Solely and exclusively for the purpose of evaluating the Opportunity, Disclosing Party or its affiliates or such Party’s or its affiliates’ respective directors, officers, employees, representatives (including, without limitation, financial, scientific or technical advisors, attorneys and accountants) or agents (collectively, the “Representatives,” and together with the Disclosing Party, the “Disclosing Parties”) may provide to the Receiving Party or its Representatives (together with the Receiving Party, the “Receiving Parties”) certain nonpublic, confidential or proprietary business, financial, technical and scientific information or data that the Disclosing Party desires each of the Receiving Parties to treat as confidential. Receiving Party agrees to keep all such information confidential and agrees that Receiving Party will be responsible for any breach of this Agreement by any of its Representatives.

 

2.     Confidential Information.

 

a.      “Confidential Information” means: (i) any information disclosed by Disclosing Party to Receiving Party, either directly or indirectly, in writing, orally or by inspection of tangible objects, including, without limitation, financial analyses, financing strategies, samples of concepts, data, design documents, development plans, data, drafts, drawings, engineering information, flow sheets, formulae, feasibility studies, hardware configuration information, know-how, ideas, inventions, methods, notes, processes, projections, records, reports, research, specifications, studies, technical information, technology, test, sample or any other results, timelines, trade secrets or any other information which is designated as “confidential” or “proprietary” or by words of similar effect, either in writing or orally, prior to, at or promptly after the time of disclosure; (ii) any information that Receiving Party clearly understands by the nature of the information to be confidential, proprietary information of Disclosing Party (collectively with the information in Section 2.a.(i), the “Disclosed Information”); or (iii) any information obtained, directly or indirectly, by a Receiving Party or its Representatives through inspection ,review or analysis of the Disclosed Information.

 

b.      Confidential Information may also include information of a third party that is disclosed under this Agreement.  Confidential Information shall not, however, include any information that: (i) becomes publicly known and made generally available in the public domain prior to or after the time of disclosure by Disclosing Party through no action or inaction of Receiving Party; (ii) is obtained by Receiving Party from a third party lawfully in possession of such information and without a breach of such third party’s obligations of confidentiality; (iii) is independently developed by Receiving Party without use of or reference to Disclosing Party’s Confidential Information, as shown by documents and other competent evidence in Receiving Party’s possession; or (iv) is lawfully in Receiving Party’s possession without breach of any duty of confidentiality to Disclosing Party prior to the date hereof.

 

  

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c.      The Parties and their Representatives further expressly acknowledge and agree that the existence and content of the Parties’ discussions regarding the Opportunity are Confidential Information.  Except as expressly authorized under this Agreement, Receiving Party shall not disclose to any person or entity, including, without limitation, any publication, journal, member of the press, any investor, lender, stockholder, employee or consultant of the other Party, or any other unauthorized third party, that such discussions are taking or have taken place.  Receiving Party shall not make any unilateral public disclosure, whether “on” or “off” the record, concerning the substance of such discussions and/or concerning the fact that such discussions have occurred, regardless of whether or not any business arrangement or agreement is achieved by the Parties.  Any public disclosure must be approved in writing by Disclosing Party prior to release or publication.  Notwithstanding the foregoing, the Parties expressly understand and agree that both Parties shall be permitted, without the consent of any other Party, to file or furnish a Current Report on Form 8-K with the United States Securities and Exchange Commission and such other reports as each Party reasonably believes is/are required under the rules and regulations of the federal and state securities laws concerning the Opportunity or any definitive agreement, understanding or arrangement that may reached between the Parties concerning the Opportunity.

 

d.      The Receiving Party expressly acknowledges and agrees that the Disclosing Party is the owner of all of its Confidential Information, any and all copies thereof, and any and all copyrights, trade secrets, patents, trademarks, industrial design rights and other intellectual or industrial property rights therein or associated therewith. The Receiving Party further acknowledges and agrees that all Confidential Information disclosed by the Disclosing Party to the Receiving Party is and shall remain the Disclosing Party’s property.

 

3.      Restrictions on Use and Disclosure of Confidential Information.

 

a.      Receiving Party shall not disclose the Confidential Information without the prior written consent of the Disclosing Party and shall at all times during the term of this Agreement maintain the secrecy and confidentiality of the Confidential Information.  Receiving Party shall not, without the prior written consent of the Disclosing Party, use the Confidential Information for personal gain, personal benefit or any purpose other than to evaluate and engage in discussions with the Disclosing Party regarding the Opportunity; provided, however, that Receiving Party may disclose the Confidential Information to its Representatives who have: (i) a bona fide and articulable need to have the Confidential Information in order for a Receiving Party to evaluate or engage in discussions concerning the Opportunity; (ii) been expressly informed by Receiving Party of the confidential nature of the Confidential Information; (iii) agreed in writing to be bound by this Agreement or who are otherwise legally bound in writing to protect Confidential Information as provided in this Agreement.

 

b.      Receiving Party shall not: (i) reverse engineer, disassemble or decompile any prototypes, software or other tangible objects that embody the Confidential Information and that are provided to, inspected by or worked on by the Receiving Party under this Agreement; (ii) attempt to or assist others to develop, produce, market or sell any product or provide any service based on or utilizing, in whole or in part, any such Confidential Information; or (iii) make copies, excerpts or summaries of any Confidential Information without first requesting and receiving the Disclosing Party’s prior written consent to such action.

 

c.      If Receiving Party receives notice of a request enforceable by law requiring that it disclose or produce any Confidential Information to a court, other governmental agency, private litigant or the like, such Receiving Party shall, if legally permitted, provide Disclosing Party with prompt written notice of such requirement sufficiently in advance of such required disclosure to allow Disclosing Party an opportunity to seek a protective order or other appropriate relief prohibiting or limiting such disclosure, and the Receiving Party shall provide such assistance as Disclosing Party may reasonably request in obtaining such order or other relief.  Subject to compliance with the foregoing sentence, the Receiving Party may furnish that portion (and only that portion) of the Confidential Information that the Receiving Party is legally compelled or is otherwise legally required to disclose.

 

  

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4.      No Trading on or Tipping of Confidential Information.  Receiving Party acknowledges and agrees that certain or all of the Confidential Information may be deemed “material, nonpublic information” under applicable federal and state securities laws, rules and regulations.  Receiving Party acknowledges that it and its Representatives are aware that United States securities laws would prohibit any person who has material non-public information about a company from purchasing or selling, directly or indirectly, securities of such company (including entering into hedge transactions involving such securities), or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.  Receiving Party will not use or permit any third party to use, and will use its best efforts to assure that none of its Representatives use or permit any third party to use, any Confidential Information in contravention of United States securities laws.  Receiving Party will not purchase, sell, trade, transfer or otherwise transact in the Disclosing Party’s securities while in possession of any Confidential Information and will use its best efforts to assure that none of its Representatives not purchase, sell, trade, transfer or otherwise transact in the Disclosing Party’s securities while in possession of any Confidential Information.

 

5.      Maintenance of Confidentiality.  Receiving Party agrees that it shall protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information.  Without limiting the foregoing, Receiving Party shall take at least those measures to protect the Confidential Information as it takes to protect its own confidential information of a similar nature, but in no case less than reasonable care.  Receiving Party shall ensure that any Representatives who have access to the Confidential Information have agreed in writing to be bound by this Agreement or are otherwise legally bound in writing to protect Confidential Information as provided in this Agreement, prior to any disclosure of Confidential Information.  All Confidential Information must be retained by the Receiving Party in a secure place with access limited to only such of the Receiving Party’s Representatives as have fulfilled the requirements specified in this Agreement.  Receiving Party shall reproduce Disclosing Party’s proprietary rights notices on any such authorized copies, in the same manner in which such notices were set forth in or on the original.  Receiving Party shall immediately notify Disclosing Party of any use or disclosure of the Confidential Information in violation of this Agreement of which the Receiving Party becomes aware.

 

6.      No Obligation.

 

a.      Nothing in this Agreement shall obligate either Party to: (i) engage in discussions regarding the Opportunity; (ii) disclose any particular Confidential Information to the other Party; or (iii) enter into or proceed or continue with any agreement, transaction or relationship with the other Party.

 

b.      The exchange of any Confidential Information between the Parties is not intended to be interpreted that the Parties have thereby formed or will form a partnership, joint venture or other relationship.  Any business relationship between the Parties, if any, must be memorialized and governed by a separate written agreement signed by the Parties.

 

c.      Each Party reserves the right, in its sole discretion, to terminate: (i) any discussions regarding the Opportunity at any time and for any reason; and (ii) any agreement, transaction or relationship in accordance with the terms of any such agreement, transaction or relationship and applicable law.

 

7.      Representations and Limitations Regarding Confidential Information.

 

  

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a.      Disclosing Party: (i) warrants that it has the right to disclose all Confidential Information that it will disclose to the Receiving Party pursuant to this Agreement; and (ii) agrees to indemnify and hold harmless the Receiving Party from all claims by a third party related to any alleged wrongful disclosure of such third party’s information to the Receiving Party.

 

b.      Except as expressly provided in Section 7.a. above, the Parties mutually acknowledge and agree that all Confidential Information is being provided by the Disclosing Party to the Receiving Party on an “AS IS” basis.  THE DISCLOSING PARTY MAKES NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, RESPECTING THE PROVISION OF THE CONFIDENTIAL INFORMATION, INCLUDING WITHOUT LIMITATION, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR OF MERCHANTABILITY.

 

8.      Return or Destruction of Confidential Information.

 

a.      All documents and other tangible objects containing or representing the Confidential Information, and all copies or extracts thereof, that are in the possession of Receiving Party, shall be and remain the property of Disclosing Party.

 

b.      Within five (5) calendar days following delivery by the Disclosing Party to the Receiving Party of a written request that all or specified portions of the Confidential Information be returned to the Disclosing Party, the Receiving Party shall assemble and return to the Disclosing Party (or alternatively, with the consent of the Disclosing Party, shall destroy) all such Confidential Information, including all copies, excerpts and/or summaries thereof, that remains in the Receiving Party’s possession, custody or control at that time.  Within five (5) calendar days following either Party’s election not to continue discussions regarding the Opportunity or not to proceed with or continue any transaction or relationship between the Parties, Receiving Party shall assemble and return to the Disclosing Party (or alternatively, with the consent of the Disclosing Party, shall destroy) all Confidential Information, including all copies, excerpts and/or summaries thereof, that remains in the Receiving Party’s possession, custody or control at that time.  In either case, an officer of the Receiving Party shall certify in writing to the Disclosing Party that the specified Confidential Information has been returned or destroyed, as the case may be.

 

9.      No License.  Nothing contained in this Agreement is intended as or may be deemed or construed to constitute the grant of a license or other right the Disclosing Party to a Receiving Party in any Confidential Information or in any patents, copyrights, trademarks, trade secret rights or other proprietary rights of the Disclosing Party under any intellectual property principles or laws.

 

10.      Non-Circumvention.  For a period of two (2) years from the date first written above, Receiving Party agrees that it will not, without Disclosing Party’s prior written authorization, undertake or enter into a specific transaction, the existence of or opportunity for which was first disclosed by a Disclosing Party to a Receiving Party as Confidential Information, with any third party except through and with the involvement of a Disclosing Party; provided, however, that the foregoing will not preclude a Receiving Party from investing in, discussing, negotiating or otherwise communicating with parties known to or that become known to the Receiving Party in the ordinary course of its business if such activities do not involve specific transactions disclosed by Disclosing Party as Confidential Information.  As used in this Section 10, a “specific transaction” means a specific business transaction involving identified assets and structure that is clearly identified at the time of disclosure, and does not mean merely the names of persons, entities and the like.

 

11.      Term.  The obligations of Receiving Party under this Agreement shall survive until such time as all Confidential Information disclosed hereunder becomes publicly known and made generally available through no action or inaction of  Receiving Party, but in no event more than two (2) years after the last disclosure of Confidential Information under this Agreement.

 

  

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12.      Remedies.  Receiving Party understands and agrees that its breach or threatened breach of this Agreement will cause irreparable injury to Disclosing Party and that money damages will not provide an adequate remedy for such breach or threatened breach, and Receiving Party hereby agrees that, in the event of such a breach or threatened breach, Disclosing Party will be entitled, without the requirement of posting a bond or other security, to obtain equitable relief, including injunctive relief and specific performance.  Disclosing Party’s rights under this Agreement are cumulative, and Disclosing Party’s exercise of one right shall not waive Disclosing Party’s right to assert any other legal remedy.  Disclosing Party shall be entitled to recover all of its direct, indirect, and consequential damages from Receiving Party for any breach or threatened breach of this Agreement.

 

13.      Counterparts and Facsimiles.  The Parties (and their respective Representatives) may execute this Agreement in counterparts, each of which is deemed an original, but all of which together constitute one and the same agreement.  This Agreement may be delivered by facsimile or electronic transmission, including by e-mail as a PDF, and facsimile or PDF copies of executed signature pages shall be binding as originals.

 

14.      Notices.  Any written notice or request provided for or permitted under this Agreement will be treated as having been given when delivered personally, sent by confirmed facsimile, sent by commercial overnight courier with written verification of receipt or mailed postage prepaid by certified or registered mail, return receipt requested, to the Parties to be notified, at the addresses set forth on the signature page(s) hereto, or at such other place of which the other Party has been notified in accordance with the provisions of this Section 14.

 

15.      Miscellaneous.

 

a.      If any provision of this Agreement is found to be illegal or unenforceable, the other provisions shall remain effective and enforceable to the greatest extent permitted by law.

 

b.      This Agreement shall benefit and bind each Party and its respective Representatives and their respective successors, heirs, legal representatives and permitted assigns.

 

c.      This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of California.  The Parties and their respective Representatives accordingly agree that jurisdiction of any dispute which may arise hereunder shall lie in the District Court for the County of Los Angeles, State of California.  The prevailing Party in any legal action arising under or relating to this Agreement shall be entitled to recover costs, expenses and reasonable attorneys’ fees (including on appeal) from the non-prevailing Party.

 

d.      This Agreement constitutes the entire agreement between the Parties and their respective Representatives and supersedes all prior written and oral agreements between the Parties and their respective Representatives regarding the subject matter of this Agreement, and neither Party or their respective Representatives shall have any obligation, express or implied by law, with respect to trade secret or proprietary information of the other Party or their respective Representatives except as set forth in this Agreement.

 

e.      Neither Party may assign, transfer or delegate the rights and obligations created by this Agreement without the express written consent of the other Party.

 

  

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f.      No provision of this Agreement may be waived except by a writing executed by the Party against whom the waiver is to be effective.  A Party’s failure to enforce any provision of this Agreement shall neither be construed as a waiver of the provision nor prevent the Party from enforcing any other provision of this Agreement.

 

g.      No provision of this Agreement may be amended or otherwise modified except by a writing signed by the Parties to this Agreement.

 

h.      The Parties and their respective Representatives agree that each of them and/or their respective counsel has reviewed and had the opportunity to revise this Agreement and, therefore, the Agreement shall not be construed against the Party preparing it, but shall be construed as if all parties jointly prepared this Agreement and any uncertainty and ambiguity shall not be interpreted against any one Party.

 

[Remainder of Page Left Intentionally Blank; Signature Page Follows]

 

  

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date set forth below their signatures.

	
“DISCLOSING PARTY”

EOS PETRO, INC.

/s/ Nikolas Konstant

 

By: Nikolas Konstant

Name:

Title:

 

Date: June 24, 2014

 

Address for notices:

Nikolas Konstant

Chief Financial Officer

1999 Avenue of the Stars, Suite 2520

Los Angeles, CA 90067

Telephone: 310-552-1555

Facsimile: 310-277-0591

 

 

	
“RECEIVING PARTY”

___________________________________

/s/ Youssry Hassan

 

By: Youssry Hassan

Name:

Title:

 

Date: June 24, 2014

 

Address for notices:

________________________________________________

 

________________________________________________

 

________________________________________________

 

 

Telephone:    _____________________________________                                                            

 

Facsimile:       _____________________________________

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