Document:

exhibit10_1.htm

Exhibit 10.1

 

July 1, 2014

	
  

	
Re:

	
Eos Petro, Inc. Loan and Warrant

Dear Vicki P. Rollins:

Reference is made to the Loan Agreement effective May 22, 2012, as subsequently amended (the “Loan”) by and between Eos Petro, Inc., a Nevada corporation and its wholly-owned subsidiary, Eos Global Petro, Inc. (collectively referred to as “Eos”) and Vicki P. Rollins (“Lender,” collectively referred to with Eos as the “Parties”).

You are hereby requested in this letter (this “Letter Agreement”) to indicate your agreement to, and acknowledgement of, the following:

	
1.  

	
The Parties hereby agree that the maturity date of the Loan is extended to December 31, 2014.

	
2.  

	
In consideration for Lender initially entering into the Loan, Eos issued to Lender 175,000 warrants to purchase restricted shares of common stock of Eos at an exercise price of $2.50 per share (the “Initial Warrants”). While the Initial Warrants expired on May 22, 2014, in consideration of Lender’s further extension of the Loan maturity date to December 31, 2014 in this Letter Agreement, Eos hereby agrees that, upon receipt of Lender’s signature below, Eos shall provide to Lender a fully executed document representing the issuance of an additional 175,000 warrants to purchase restricted shares of common stock of Eos at $2.50 per share, expiring August 1, 2018, in the form attached hereto as Exhibit A.

	
3.  

	
The Parties further agree that the principal amount of the Loan shall no longer be deemed to bear any interest, retroactively to the initial date the Loan was made. Moreover, the Loan shall no longer be deemed to start accruing interest at 18% per annum in the event the Loan is not repaid by the new December 31, 2014 maturity date.  In exchange for this total cancellation of accruing interest, Eos  agrees that, upon receipt of Lender’s signature below, Eos shall provide to Lender a fully executed document representing the issuance of an additional 75,000 warrants to purchase restricted shares of common stock of Eos at $4.00 a share, expiring August 1, 2018, in the form attached hereto as Exhibit B.

	
4.  

	
The Parties hereby acknowledge that the following is a complete and accurate summary of the amount loaned to Eos under the Loan, the interest accruing thereon, the maturity date of the Loan, as amended by this Letter Agreement, and any consideration given or promised to be given to Lender under the Loan through the date first written above:

On May 22, 2012, Eos entered into the Loan to obtain a $350,000 loan from Lender. The maturity date of the Loan is December 31, 2014, and the Loan does not accrue any interest. Eos agreed to issue to Lender 175,000 warrants to purchase common stock with an exercise price of $2.50, which expire August 1, 2018. Moreover, Eos agreed to issue to Lender an additional 75,000 warrants to purchase common stock with an exercise price of $4.00, which expire August 1, 2018. The loan is secured by a subordinate blanket security interest in Eos’ collateral.

	
5.  

	
Acknowledgement of Good Standing.  Parties agree and acknowledge that any and all Events of Default which may have occurred under the Loan on or prior to the date hereof are hereby waived, and the Parties further acknowledge that the Loan, as modified by this letter agreement, is in good standing and full force and effect as of the date hereof.

 

  

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6.  

	
Further Assurances. The Parties agree to execute and deliver such further instruments and take or cause to be taken such other or further action as may be reasonably requested in order to perfect, confirm or evidence the release of any security interest pursuant to Section 3 above, or of any other obligation evidenced by this letter agreement.

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Please acknowledge your agreement to, and acceptance of, the foregoing by signing this Letter Agreement below.  Please return a signed copy to the undersigned, it being agreed that this Letter Agreement may be executed in counterparts and signatures received by electronic transmission shall have the same effect as original signatures.

Sincerely,

NIKOLAS KONSTANT, Chairman of the Board of Eos Petro, Inc., a Nevada corporation

/s/ Nikolas Konstant

ACKNOWLEDGED AND AGREED TO AS OF JULY 1,  2014 BY:

	  	  
	
Vicki P. Rollins

 

 

By: /s/ Vicki Rollins

Name:_____________________

	  

 

  

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Exhibit A

 

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. EPW2014-6

 

July 1, 2014

 

EOS PETRO, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

****175,000 Shares of Common Stock****

 

THIS WARRANT CERTIFIES THAT, for value received, Vicki P. Rollins, or registered assigns (the “Holder”), is entitled to subscribe for and purchase from Eos Petro, Inc., a Nevada corporation (the “Company”), up to and including the number of fully paid and nonassessable, restricted shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Company set forth above, at the exercise price of $2.50 per share ( the “Warrant Exercise Price”) (and as adjusted from time to time pursuant to Section III hereof), at any time or from time to time from the date first set forth above (the “Issue Date”) and prior to or upon August 1, 2018 (the “Expiration Date”), subject to the provisions and upon the terms and conditions hereinafter set forth:

 

I.           Method of Exercise; Cash Payment; Issuance of New Warrant.

 

A.         Subject to the provisions of this Warrant, the purchase right represented by this Warrant may be exercised by the Holder hereof, in whole or in part and from time to time, at the election of the Holder hereof, by the surrender of 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 the Company and accompanied by payment to the Company, by wire transfer to an account designated by the Company, of an amount equal to the then applicable Warrant Exercise Price multiplied by the number of Warrant Shares then being purchased.

 

B.         The person or persons in whose name(s) any certificate(s) representing the shares of the Company’s capital stock to be issued upon exercise of this Warrant (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) 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 20-day period.

 

II.           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.

  

 

  

 

III.            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 III 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 20 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 III.  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.

 

  

 

  

 

IV.           Notice of Adjustments.  Whenever the Warrant Exercise Price or the number of shares of Common Stock purchasable hereunder shall be adjusted pursuant to Section III 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 twenty (20) days after the occurrence of the event resulting in such adjustment at such Holder’s last known address in accordance with Section IX hereof.

 

V.           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.

 

VI.           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 EVIDENCE 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.  Notwithstanding anything herein to the contrary, the Warrants shall be transferable to any other person with the prior written consent of the Company, which shall not be unreasonably withheld.

 

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 evidence, including a written opinion of such Holder’s counsel 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 VI.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 20 days after such transfer.

 

VII.           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.

 

VIII.           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 VIII 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.

 

IX.           Notices.  Any notices or other communications required or permitted to be given under this Warrant must be in writing and addressed to Company or Holder at the addresses below, or at such other address as either party may from time to time designate in writing.  Any notice or communication that is addressed as provided in this Section will be deemed given (a) upon delivery, if delivered personally or via certified mail, postage prepaid, return receipt requested; or (b) on the first business day of the receiving party after the transmission if by facsimile or after the timely delivery to the courier, if delivered by overnight courier.  Other methods of delivery will be acceptable only upon proof of receipt by the party to whom notice is delivered.

 

To Company:

EOS Petro, Inc.

Attn: Nikolas Konstant

1999 Avenue of the Stars, Suite 2520

Los Angeles, CA 90067

 

  

 

  

To Holder:

Vicki P. Rollins

1120 Via Zumrya

Palos Verdes, EST CA 90274

X.           Reorganizations.  In case of any reorganization of the Company, or in case of the consolidation or merger of the Company with or into any other legal entity (other than a merger or consolidation in which the Company is the continuing legal entity) or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other legal entity (collectively, "Reorganizations"), each Warrant shall after such Reorganization be exercisable, upon the terms and conditions specified in this Warrant Certificate, for the stock or other securities or property (including cash) to which a holder of the number of Common Shares purchasable (at the time of such Reorganization) upon exercise of such Warrant would have been entitled upon such Reorganization if such Warrant had been exercised in full immediately prior to such Reorganization; and in any such case, if necessary, the provisions set forth in this Section X with respect to the rights and interests thereafter of the holders of the Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any such stock or other securities or property thereafter deliverable upon exercise of the Warrants.

 

XI.           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.

 

XII.           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.

 

XIII.           Governing Law.  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.

 

XIV.           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.

 

XV.           No Impairment.  The Company will not, by an 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.

 

XVI.           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, 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.

 

XVII.           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.

 

XVIII.           Survival of Representations, Warranties and Agreements.  All representations and warranties of the Company and the Holder hereof shall survive the Issue Date of this Warrant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder.  All agreements of the Company and the Holder hereof contained herein shall survive indefinitely, until by their respective terms, they are no longer operative.

 

XIX.           Counterparts.  This Warrant may be executed in two or more counterparts, each of which shall be an original, and all of which together shall constitute one instrument.

 

 

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

EOS PETRO, INC.

a Nevada corporation

By:                /s/ Nikolas Konstant

Name:           Nikolas Konstant

Title:             Chairman of the Board

  

 

  

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

To:  EOS PETRO, INC. (the “Company”)

 

1.      The undersigned hereby elects to purchase __________ shares of Common Stock of the Company pursuant to the terms of the attached Warrant, and tenders herewith:

 

           ____           payment of the purchase price of such shares in full

 

2.      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)

 

3.      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.

 

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

	
  

	 	
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.

  

 

  

Exhibit B

 

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. EPW2014-7

 

July 1, 2014

 

EOS PETRO, INC.

 

WARRANT TO PURCHASE COMMON STOCK

 

****75,000 Shares of Common Stock****

 

THIS WARRANT CERTIFIES THAT, for value received, Vicki P. Rollins, or registered assigns (the “Holder”), is entitled to subscribe for and purchase from Eos Petro, Inc., a Nevada corporation (the “Company”), up to and including the number of fully paid and nonassessable, restricted shares of common stock, par value $0.0001 per share (the “Common Stock”) of the Company set forth above, at the exercise price of $4.00 per share ( the “Warrant Exercise Price”) (and as adjusted from time to time pursuant to Section III hereof), at any time or from time to time from the date first set forth above (the “Issue Date”) and prior to or upon August 1, 2018 (the “Expiration Date”), subject to the provisions and upon the terms and conditions hereinafter set forth:

 

I.           Method of Exercise; Cash Payment; Issuance of New Warrant.

 

A.         Subject to the provisions of this Warrant, the purchase right represented by this Warrant may be exercised by the Holder hereof, in whole or in part and from time to time, at the election of the Holder hereof, by the surrender of 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 the Company and accompanied by payment to the Company, by wire transfer to an account designated by the Company, of an amount equal to the then applicable Warrant Exercise Price multiplied by the number of Warrant Shares then being purchased.

 

B.         The person or persons in whose name(s) any certificate(s) representing the shares of the Company’s capital stock to be issued upon exercise of this Warrant (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) 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 20-day period.

 

II.           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.

  

 

  

 

III.            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 III 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 20 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 III.  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.

 

  

 

  

 

IV.           Notice of Adjustments.  Whenever the Warrant Exercise Price or the number of shares of Common Stock purchasable hereunder shall be adjusted pursuant to Section III 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 twenty (20) days after the occurrence of the event resulting in such adjustment at such Holder’s last known address in accordance with Section IX hereof.

 

V.           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.

 

VI.           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 EVIDENCE 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.  Notwithstanding anything herein to the contrary, the Warrants shall be transferable to any other person with the prior written consent of the Company, which shall not be unreasonably withheld.

 

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 evidence, including a written opinion of such Holder’s counsel 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 VI.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 20 days after such transfer.

 

VII.           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.

 

VIII.           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 VIII 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.

 

IX.           Notices.  Any notices or other communications required or permitted to be given under this Warrant must be in writing and addressed to Company or Holder at the addresses below, or at such other address as either party may from time to time designate in writing.  Any notice or communication that is addressed as provided in this Section will be deemed given (a) upon delivery, if delivered personally or via certified mail, postage prepaid, return receipt requested; or (b) on the first business day of the receiving party after the transmission if by facsimile or after the timely delivery to the courier, if delivered by overnight courier.  Other methods of delivery will be acceptable only upon proof of receipt by the party to whom notice is delivered.

 

To Company:

EOS Petro, Inc.

Attn: Nikolas Konstant

1999 Avenue of the Stars, Suite 2520

Los Angeles, CA 90067

 

  

 

  

To Holder:

Vicki P. Rollins

1120 Via Zumrya

Palos Verdes, EST CA 90274

X.           Reorganizations.  In case of any reorganization of the Company, or in case of the consolidation or merger of the Company with or into any other legal entity (other than a merger or consolidation in which the Company is the continuing legal entity) or of the sale of the properties and assets of the Company as, or substantially as, an entirety to any other legal entity (collectively, "Reorganizations"), each Warrant shall after such Reorganization be exercisable, upon the terms and conditions specified in this Warrant Certificate, for the stock or other securities or property (including cash) to which a holder of the number of Common Shares purchasable (at the time of such Reorganization) upon exercise of such Warrant would have been entitled upon such Reorganization if such Warrant had been exercised in full immediately prior to such Reorganization; and in any such case, if necessary, the provisions set forth in this Section X with respect to the rights and interests thereafter of the holders of the Warrants shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any such stock or other securities or property thereafter deliverable upon exercise of the Warrants.

 

XI.           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.

 

XII.           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.

 

XIII.           Governing Law.  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.

 

XIV.           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.

 

XV.           No Impairment.  The Company will not, by an 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.

 

XVI.           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, 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.

 

XVII.           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.

 

XVIII.           Survival of Representations, Warranties and Agreements.  All representations and warranties of the Company and the Holder hereof shall survive the Issue Date of this Warrant, the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of rights hereunder.  All agreements of the Company and the Holder hereof contained herein shall survive indefinitely, until by their respective terms, they are no longer operative.

 

XIX.           Counterparts.  This Warrant may be executed in two or more counterparts, each of which shall be an original, and all of which together shall constitute one instrument.

 

 

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

EOS PETRO, INC.

a Nevada corporation

By:                /s/ Nikolas Konstant

Name:           Nikolas Konstant

Title:             Chairman of the Board

  

 

  

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

To:  EOS PETRO, INC. (the “Company”)

 

1.      The undersigned hereby elects to purchase __________ shares of Common Stock of the Company pursuant to the terms of the attached Warrant, and tenders herewith:

 

           ____           payment of the purchase price of such shares in full

 

2.      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)

 

3.      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.

 

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

	
  

	 	
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_2.htm

Exhibit 10.2 

Agreement Date: June 26, 2014

 

Chief Kojo Aidoo

BAYCHESTER PETROLEUM LIMITED

TEMA Ghana

 

	
  

	
Re:

	
Business Partner and Advisory Agreement

 

Dear Chief Kojo Aidoo:

 

The purpose of this letter agreement (the "Agreement") is to confirm and set forth the terms and conditions of the engagement of BAYCHESTER Petroleum, a GHANAIAN limited company (the "Partner"), by Eos Petro, Inc., a Nevada corporation (the "Company"), to render certain oil and gas Services (defined below) to the Company subject to the following terms and conditions:

 

1.           Definition of Services. For the purposes of this Agreement, "Services" is defined as:

 

(a)           making itself reasonably available for consultation on such business matters as may be determined by the Company's Chief Executive Officer ("CEO") and/or Chairman ("Chairman");

 

(b)           advising the Company on strategic partnerships;

 

(c)           assisting Company in the acquisitions of onshore and offshore concessions in the West African region;

 

(d)           assisting the Company in developing a business and/or strategic plan;

 

(e)           assisting the Company in heightening investor awareness of the Company by introducing  the Company's management to: various related corporations in the region and strategic partners.; members of the media such as Broadcasting Channels in each region; stock brokers; and "sell side" analysts, as appropriate; and

 

(f)           utilizing Partners network of contacts to introduce the Company to potential board members, advisers, technical and managerial employees and consultants.

 

2.           Engagement.  The Company hereby engages Partner to perform the Services on a best efforts basis upon the terms and conditions set forth in this Agreement.  Partner accepts this engagement.  During the terms of its engagement, Partner will consult with the Company in developing business plans, marketing plans, strategic models and strategic strategies.  The Partner will assist the Company in organizing its due diligence materials, preparing Company presentations and making the Company’s material information available to appropriate parties.  

 

  

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Appropriate parties are, but not limited to, potential underwriters, merger and acquisition candidates, commercial and strategic partnerships and joint venture relationships. Partner may perform other services as agreed by the parties.  The parties agree that Partner is not a registered broker/dealer and Partner will not be required to engage in the offer or sale of securities on behalf of the Company.  While Partner has relationships and contacts with various investors, broker/dealers, underwriters, and investment funds, Partner’s participation in the offer or sale of the Company’s securities shall be limited to that of a Partner to the Company and as a "finder" of investors, broker/dealers and funds.  The Company acknowledges and agrees that the solicitation and consummation of any purchases of the Company’s securities shall be handled by the Company or by one or more FINRA member firms engaged by the Company.

 

3.           Compensation to the Partner. The Company will compensate Partner as follows (collectively referred to herein as the “Compensation”):

 

(a)           On or about October 3, 2011, Partner entered into a Business Partner and Advisory Agreement (the “Original Agreement”) with Eos Global Petro, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Eos Global”), pursuant to which Partner was entitled to certain compensation. The Company acknowledges that, as of the date of this Agreement, Eos Global owes to Partner an aggregate of $35,000.00 in compensation under the Original Agreement (“Original Compensation”). The Company hereby agrees to pay the Original Compensation to Partner no later than ten business days after August 31, 2014. So long as Partner receives the Original Compensation in accordance with the immediately preceding sentence, Partner hereby agrees that: (i) Partner shall consider all of Eos Global’s obligations under the Original Agreement satisfied in full; and (ii) Partner shall be entitled to no further compensation from the Original Agreement, including but not limited to the shares of common stock referenced in Section 2(a)(ii) of the Original Agreement.

 

(b)           Commencing July 1st, 2014, and continuing on the first calendar day of every month thereafter that this Agreement remains in effect, the Company will pay Partner a monthly fee of $10,000.00 for Services rendered, provided, however, that the Company reserves the right to audit and review the Services provided to Company every three months, and if the Company determines that the Services rendered are not commensurate with $10,000.00 a month in compensation (or documentation provided by Partner for the audit upon request of the Company is inadequate to support $10,000.00 a month in compensation for Services rendered), the Company may, in its sole and absolute discretion, upon written notice to Partner, immediately decrease or terminate any and all remaining future monthly cash fee payments to Partner to be provided pursuant to this Section 3(b), and continue to do so every three months upon continued audits.

 

(c)           The Company has, as of the date first written above, made certain applications to acquire concessions in Ghana. If the Ministry of Energy formally invites the Company to a meeting to negotiate the terms of a deal regarding the Company’s acquisition of any such concession, within 5 business days of the last date of such meeting (or, if the Company declines to attend such meeting, within 30 calendar days of its receipt of such invite), regardless of the outcome of such meeting, the Company will pay to Partner an additional $35,000.00 for Services rendered in connection therewith. In the 

 

  

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event the Company consummates any other business arrangement as a result of Partner’s introduction or contact not covered by the immediately preceding sentence, Partner may be entitled to a bonus fee payable in cash at the sole and absolute discretion of the Board of Directors of the Company, and subject to such further terms and conditions as the Board of Directors of the Company may reasonably require.

 

(d)           In addition to the other compensation referenced above, the Company will reimburse the Partner for pre-approved travel and business expenses in connection with Partner’s performance of the Services.

 

4.           Compensation Not for Offers.  The Company acknowledges and agrees that all compensation received by Partner pursuant to this Agreement shall be in consideration Partner’s consulting and advisory Services.  It is further acknowledged and agreed that the Services do not include, and no compensation was paid to Partner in connection with, the offer and sale of securities in a capital-raising transaction.

 

 

5.           Obligations of the Company.

(a)           The Company agrees to take all necessary and appropriate steps to authorize all actions required by this Agreement.

 

(b)           The Company will furnish to Partner all information Partner may reasonably request to facilitate Partner’s performance of Partner services, including, but not limited to, access to company facilities, members of the management, and copies of management reports, budgets and the like.

 

6.           Representations and Warranties of the Company.  The Company represents and warrants that any information furnished to Partner for use in any business plans, marketing plans, strategic models or strategies, and/or business arrangement(s), to the best of the Company's knowledge and belief will contain no untrue statement of any material fact nor omit any material fact which would make the information misleading.  The Company further warrants that if the circumstances relating to information or documents furnished to Partner change at any time, the Company will inform Partner promptly of the changes and immediately deliver to Partner documents or information necessary to ensure the continued accuracy and completeness of all information and documents.

 

7.           Representations, Warranties and Covenants of Partner.  In addition to and in furtherance of the representations and warranties contained in paragraph 8 below, Partner represents, warrants and covenants to the Company that:

 

(a)            Partner will not, in relation to the execution of this Agreement or the performance of services hereunder, to the best of Partner’s officers’ knowledge and belief, make any untrue statement of material fact.

 

(b)           To the best of Partner’s officers’ knowledge and belief, all actions taken by it, on behalf of the Company, in connection with its’ Partner services will be conducted in compliance with all applicable international, state and federal laws.

 

  

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(c)           Partner shall comply with any procedures that might be reasonably imposed by the Company or its legal counsel to ensure compliance with such laws.

 

8.           Foreign Corrupt Practices Compliance, Representations & Warranties.

(a)           The parties acknowledge that Company and all of its employees, officers, directors and representatives are subject to the United Stated Foreign Corrupt Practices Act (“FCPA”) and the United Kingdom Bribery Act (the “Bribery Act,” and together with the FCPA, the “Acts”) and that, accordingly, all of Partner’s activities under or in connection with this Agreement are subject to the requirements of the Acts.  Partner warrants that it has read and understands the full text of the Acts.  Partner further warrants and agrees that it and all who act on its behalf will fully aid faithfully comply with all requirements of the Acts, as the same may hereafter be amended from time to time, in connection with all of their activities under or in respect of this Agreement. Specifically, Partner warrants and agrees that neither it nor anyone acting on its behalf will pay, offer or promise to pay, authorize the payment of or give anything of value to any foreign government official, political party or political candidate, any public international organization official or any other person with the knowledge that the payment, promise or gift, in whole or in part, will be passed on to any of the foregoing in order to influence an official act or decision that will assist the Company or the Partner in securing an improper advantage or in obtaining or retaining business or in directing business to any other person or entity. Partner acknowledges that no employee, officer or other representative of Company is authorized to waive Company’s compliance with this paragraph 8 of the Agreement.

 

(b)           Partner has disclosed to Company in writing the names of all persons and entities who have a beneficial ownership interest in Partner.  Partner shall immediately notify Company in writing in the event any change in such beneficial ownership occurs or is expected to occur.  Partner represents and warrants that neither it nor any person or entity acting on its behalf is or while this Agreement is in force will become, except with the prior written consent and approval of Company, a government entity, a government official, a political party, a political candidate, a public international organization or a public international organization official.  Company shall have the right to immediately terminate this Agreement for cause upon receipt of any such notice if Company’s continuation of its relationship with Partner under this Agreement following the actual or proposed change of Partner’s beneficial ownership would constitute a violation of the Acts, or in the event of any breach in any of the other representations in this paragraph 8.

(c)           Partner agrees that all invoices, reports, statements, books and other records which it or any other person or entity acting on its behalf prepares or submits will be true and accurate in all respects, will fully and accurately describe Services rendered and the nature and recipient of expenditures and or payments made and will not fail to reveal any material information which Company may require in order to accurately prepare its own books and records.  Company shall be entitled to immediately terminate this Agreement for cause in the event of any breach of the foregoing undertaking.

 

  

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(d)           Company shall maintain accurate, written books and records regarding all activities conducted pursuant to this Agreement.  Company shall have the right to cause an audit of the Partner’s books and records to be conducted by an independent auditor at any time upon reasonable notice.  Partner shall cooperate fully with any such independent audit.

(e)           In the event Company terminates this Agreement pursuant to this paragraph 8, no further payment of any kind shall be due Partner, if any such termination occurs as a result of Second Party’s failure to comply with the Acts, and Partner shall promptly refund to Company all amounts previously paid to Partner by Company pursuant to this Agreement.  Partner shall indemnify and hold Company, its affiliated companies and their respective officers, directors and employees harmless from any claim, liability, fine, penalty, loss or damage that arises as a result of Partner’s failure or alleged failure to comply with its obligations under this Agreement.  The remedies set forth herein are not exclusive and Company shall have the right to pursue any other remedy, right or recovery which may be available to it under applicable law.  For purposes of any action seeking to enforce such indemnity, Partner agrees to submit to the jurisdiction of the state and federal courts of the State of California and that an order of enforcement in respect of any judgment rendered by such Court may be validly entered in any court having jurisdiction over any of Partner’s assets.

 

9.           Review and Approval of Documentation.  The Company shall have the right to review and approve, prior to distribution, the content of any business or marketing plans, strategic models or strategies, funding strategies or disclosure or offering documents prepared by Partner.

 

10.           Cooperation of Parties.  The Company and its counsel shall cooperate with Partner and its counsel with respect to the preparation of any due diligence investigation of the Company. In addition, the Company shall cooperated with Partner in preparing any Company business plans, marketing plans, strategic models and strategies, and any other related documentation, as may be required in the rendering of Partner services to the Company.

 

11.           No Obligation to Consummate Transactions.  The Company shall not be obligated to enter into any business arrangement presented to it by Partner.  Partner shall have no authority to make any representations on behalf of the Company or to otherwise bind the Company.  If the Company elects to consummate a transaction presented to it by or as a result of the efforts of Partner, the final terms of the transaction shall be subject to negotiation by the Company and its legal counsel.  The parties understand and acknowledge that neither party has represented to or assured the other that a business arrangement will actually be entered into as a result of Partner’s services hereunder.

 

12.           Indemnification of Partner.  The Company agrees to indemnify and hold the Partner and each of its affiliates, directors, officers, employees, agents and any person controlling a person or entity (hereinafter "Indemnified Person") harmless against any losses, actions, proceedings, claims, damages, liabilities, whether joint or several, arising under any statute, common law, or otherwise, which arises in connection with or based upon any document or representation provided by the Company or transaction entered into by the Company contemplated by this 

 

  

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Agreement.  The Indemnified Person shall be entitled to reimbursement of any travel, legal or other out-of-pocket expenses reasonably incurred by the Indemnified Person.  This indemnification shall include any amounts paid in settlement, if such settlement is effected with the written consent of the Company.  The foregoing indemnity shall be in addition to any other rights which an Indemnified Person may have at common law or otherwise.

 

13.           Term and Termination of Agreement.  Unless otherwise terminated pursuant to this paragraph or paragraph 8, this Agreement shall remain in full force and effect for a term of 1 year. Thereafter, the Company and Partner may elect to extend the term of this Agreement for an additional year.  Either party may terminate this Agreement by giving 30 days’ advanced notice in writing to the other party.

 

14.           Other Engagements. During the term of this Agreement, Partner shall be the lead strategic Partner to the Company in connection with the Services.  The Company agrees not to enter into any similar or like agreement with any other party in relation to the West African region during this period without the prior written consent of Partner.  In connection with the foregoing, Partner acknowledges that, as of the date of this Agreement, the Company has made available to it a list of the Company’s existing third party advisors. Partner hereby approves the Company’s employment of all such advisors and acknowledges that such employment will not conflict with the terms of this Agreement. Company hereby acknowledges that the existence of such other advisors will in no way reduce the compensation owed to Partner under this Agreement.

 

15.           Survival.  The indemnity provisions set forth in paragraph 12, the non-circumvention provisions set forth in paragraph 22 and the Foreign Corrupt Practice compliance and reimbursement requirements set forth in paragraph 8 shall survive any termination of this Agreement.

 

16.           Rights of Parties.  Partner shall be entitled to assign all of its rights and obligations hereunder to a designee upon the prior written consent of Company, which shall not be unreasonably withheld.  As long as the Company’s written consent has been obtained, an assignment shall be effective upon the execution by the assignee of a counterpart of this Agreement.  Upon assignment, the term "Partner", as used herein, shall refer to the assignee.  Except as otherwise provided above, no party shall be entitled to transfer or assign any of its rights or obligations under this Agreement without the prior written consent of the other party.  This Agreement shall be binding upon and inure to the benefit of, the parties and their respective successors and assigns. In the event the Company merges into or is otherwise acquired by a public company (a "Public Company"), the Company shall cause the Public Company to assume this agreement and the obligations.

 

17.           Legal Counsel: Waiver of Conflict of Interest.  The parties have had the opportunity to review the terms of this Agreement with their legal counsel and have either obtained the advice of legal or do hereby expressly waive their right to seek such legal counsel in connection with this transaction.

 

18.           Governing Law.  This Agreement shall be interpreted in accordance with the laws of the State of California.

 

  

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19.           Attorneys’ Fees.  Should it become necessary to enforce any provision of this Agreement the prevailing party shall be entitled to recover fees and costs including but not limited to reasonable attorneys’ fees.

 

20.           Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, representations and statements, if any, whether oral or written.  No modification of this Agreement shall be valid or binding unless in writing and signed by both parties.

 

21.           Headings.  The headings used in this Agreement have been inserted for convenience only and are not to be considered in construing the meaning of the Agreement.

 

22.           Non-Circumvention.   Each party agrees that for a period of two (2) years from the date of this Agreement it will not circumvent this agreement by contacting, for the purpose of initiating a business relationship that excludes the other party, in any way any party introduced to it by the other party related to the purpose, without the prior written consent of that party, which written consent may be in the form of letter, fax, scanned document or email and  Unless a party is given prior written authorization, the parties agree to pay the injured party a commission of one and a half percent (1.5%) of all revenues gained from the business  in violation of any of the foregoing, and such commission shall be due and payable within thirty (30) days after the revenue has been earned by that party.

23.           Execution.  This Agreement 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.

 

 [remainder of page intentionally left blank; signature page follows]

  

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THIS AGREEMENT is acknowledged and agreed to by the undersigned as of the date first written above.

 

“COMPANY”

EOS PETRO, INC.

/s/ Nikolas Konstant

By: Nikolas Konstant

Its: Chairman and CFO

“PARTNER”

BAYCHESTER PETROLEUM LTD.

/s/ Kojo Aidoo

By: Kojo Aidoo

Its: CEO

  

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