Document:

uapcex102.htm

Exhibit 10.2

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	  	
Right to Purchase 150,000 shares of Common Stock of United American Petroleum Corp. (subject to adjustment as provided herein)

 

COMMON STOCK PURCHASE WARRANT

No. ___________ Issue Date:  January 20, 2011

United American Petroleum Corp., a corporation organized under the laws of the State of Nevada (the “Company”), hereby certifies that, for value received, _______, or its assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time commencing on the Issue Date until 5:00 p.m., P.T. on the fifth anniversary of the Issue Date (the “Expiration Date”), up to 150,000 fully paid and nonassessable shares of Common Stock at a per share purchase price of $1.00.  The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the “Purchase Price.”  The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein.  The Company may reduce the Purchase Price for some or all of the Warrants, temporarily or permanently.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Senior Secured Convertible Promissory Note (the “Promissory Note”), dated as of January 20, 2011, entered into by the Company and the Holder in connection with the Holder’s purchase of certain debt securities of the Company.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

(a)           The term “Company” shall include United American Petroleum Corp., and any corporation that shall succeed or assume the obligations of United American Petroleum Corp. hereunder.

 

(b)           The term “Common Stock” includes (a) the Company’s common stock, $.001 par value per share, as authorized on the date of the Promissory Note, and (b) any other securities into which or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

(c)           The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) that the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

 

(d)           The term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this Warrant.

 

1.           Exercise of Warrant.

 

1.1.           Number of Shares Issuable upon Exercise.  From and after the Issue Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.

 

1.2.           Full Exercise.  This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and delivery within two days thereafter of payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect.  The original Warrant is not required to be surrendered to the Company until it has been fully exercised.

 

1.3.           Partial Exercise.  This Warrant may be exercised in part (but not for a fractional share) by delivery of a Subscription Form in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect.  On any such partial exercise provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.

 

1.4.           Fair Market Value.  Fair Market Value of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:

 

(a)           If the Company’s Common Stock is listed, traded, or quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange, the American Stock Exchange, LLC, the OTC Bulletin Board, or the Pink OTC Markets Inc., then the average of the closing or last sale prices, respectively, reported for the ten trading days immediately preceding the Determination Date;

 

(b)           If the Company’s Common Stock is not listed, traded, or quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange, the American Stock Exchange, LLC, the OTC Bulletin Board, or the Pink OTC Markets Inc., but is traded in the over-the-counter market, then the average of the closing bid and ask prices reported for the ten trading days immediately preceding the Determination Date;

 

  

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(c)           Except as provided in clause (d) below and Section 3.1, if the Company’s Common Stock is not so publicly listed, traded or quoted, then as the Holder and the Company agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided with such arbitration to be conducted in New York City, New York; or

 

(d)           If the Determination Date is the date of a liquidation, dissolution or winding-up, or any event deemed to be a liquidation, dissolution, or winding-up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.

 

1.5.           Company Acknowledgment.  The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant.  If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

 

1.6.           Trustee for Warrant Holders.  In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Warrants pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.

 

1.7           Delivery of Stock Certificates, etc. on Exercise.  The Company agrees that the Warrant Shares shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which delivery of a Subscription Form shall have occurred and payment made for such shares as aforesaid.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within ten (10) business days thereafter (“Warrant Share Delivery Date”), the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.  The Company understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the Holder.  As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Shares upon exercise of this Warrant the proportionate amount of $100 per business day after the Warrant Share Delivery Date for each $10,000 of Purchase Price of Warrant Shares for which this Warrant is exercised which are not timely delivered.  The Company shall pay any payments incurred under this Section in immediately available funds upon demand.  Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

 

1.8           Buy-In.  In addition to any other rights available to the Holder, if the Company fails to deliver to a Holder the Warrant Shares as required pursuant to this Warrant within seven (7) business days after the Warrant Share Delivery Date and the Holder or a broker on the Holder’s behalf purchases (in an open market transaction or otherwise) shares of common stock to deliver in satisfaction of a sale by such Holder of the Warrant Shares which the Holder was entitled to receive from the Company (a “Buy-In”), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of common stock so purchased exceeds (B) the aggregate Purchase Price of the Warrant Shares required to have been delivered, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price of Warrant Shares to have been received upon exercise of this Warrant, the Company shall be required to pay the Holder $1,000, plus interest.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

 

2.           Cashless Exercise.

 

(a)           If a registration statement (“Registration Statement”) is effective for the public unrestricted resale of all of the Warrant Shares issuable upon exercise of this Warrant, this Warrant may be exercised in whole or in part for cash only as set forth in Section 1 above.  If such Registration Statement is not available, payment upon exercise may be made at the option of the Holder either in (i) cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants in accordance with Section (b) below or (iii) by a combination of any of the foregoing methods, for the number of Common Stock specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms of this Warrant) and the holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.

 

(b)           Subject to the provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Subscription Form in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula:

 

X=Y (A-B)

A

Where           X=           the number of shares of Common Stock to be issued to the holder

	
  

	
Y=

	
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)

 

	
  

	
A=

	
the average of the closing sale prices of the Common Stock for the ten (10) Trading Days immediately prior to (but not including) the Exercise Date, (or if no such closing prices are available, then the Fair Market Value)

 

	
  

	
B=

	
Purchase Price (as adjusted to the date of such calculation)

 

For purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood, and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Promissory Note.

 

  

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3.           Adjustment for Reorganization, Consolidation, Merger, etc.

 

3.1.           Fundamental Transaction.  If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another entity, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), (E) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b) if the Company is acquired in (1) a transaction where the consideration paid to the holders of the Common Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a person or entity not traded on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, cash equal to the Black-Scholes Value.  For purposes of any such exercise, the determination of the Purchase Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Purchase Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.  The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3.1 and ensuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.  “Black-Scholes Value” shall be determined in accordance with the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of such request, and (iii) an expected volatility equal to the 100-day volatility obtained from the HVT function on Bloomberg L.P. determined as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction.

 

3.2.           Dissolution.  In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense, deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of the Warrants after the effective date of such dissolution pursuant to this Section 3 to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Warrants.  Such property shall be delivered only upon payment of the Warrant exercise price.

 

3.3.           Continuation of Terms.  Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4.  In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company’s securities and property (including cash, where applicable) receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section 3.2.

 

4.           Extraordinary Events Regarding Common Stock.  In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4.  The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect on the date of such exercise.

 

5.           Certificate as to Adjustments.  In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 12 hereof).

 

6.           Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements.  The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.  This Warrant entitles the Holder hereof to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company’s Common Stock.

 

  

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7.           Assignment; Exchange of Warrant.  Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

 

8.           Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

9.           Reserved.

 

10.           Maximum Exercise.  The Holder shall not be entitled to exercise this Warrant on an exercise date in connection with that number of Common Stock which would be in excess of the sum of (i) the number of Common Stock beneficially owned by the Holder and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding Common Stock on such date.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the issuance of more than 4.99%.  The restriction described in this paragraph may be waived, in whole or in part, upon sixty-one (61) days prior notice from the Holder to the Company to increase such percentage to up to 9.99%.  The Holder may allocate which of the equity of the Company deemed beneficially owned by the Subscriber shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%.

 

11.           Reserved.

 

12.           Warrant Agent.  The Company may, by written notice to the Holder of the Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such Warrant Agent.

 

13.           Transfer on the Company’s Books.  Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

14.           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:  if to the Company, to:  United American Petroleum Corp., 3101 Bee Caves Road, Centre II, Suite 301, Austin, TX 78746. Attn: Michael Carey, President, facsimile: (__) ___-____ and (ii) if to the Holder, __________________ ___________________________________, facsimile (__) ___-____.

 

 

15.           Law Governing This Warrant.  This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of Nevada or in the federal courts located in the State of Nevada.  The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The Company and Holder waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.

 

 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

 

  

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

 

UNITED AMERICAN PETROLEUM CORP.

 

By:          _____________________________________________ 

Michael Carey

Its:           President

 

  

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Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO:  UNITED AMERICAN PETROLEUM CORP.

The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

[___]           ________ shares of the Common Stock covered by such Warrant; or

[___]           the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________.  Such payment takes the form of (check applicable box or boxes):

[___]           $__________ in lawful money of the United States; and/or

[___]           the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or

 

[___]           the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

 

The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _______________________________________________________________________ whose address is

 

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act.

 

	
Dated:  _______________, ____

	
__________________________________________________

(Signature must conform to name of holder as specified on the 

face of the Warrant)

 

__________________________________________________

__________________________________________________

(Address)

  

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Exhibit B

 

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of UNITED AMERICAN PETROLEUM CORP., to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of UNITED AMERICAN PETROLEUM CORP., with full power of substitution in the premises.

 

	
Transferees

	
Percentage Transferred

	
Number Transferred

	  	  	  
	  	  	  
	  	  	  

	
Dated:  ________________, _____

 

 

 

Signed in the presence of:

 

____________________________________________________

(Name)

 

 

ACCEPTED AND AGREED:

[TRANSFEREE]

 

 

____________________________________________________

(Name)

 

	
_________________________________________________

(Signature must conform to name of holder as specified on the 

face of the warrant)

 

 

 

 

_________________________________________________

_________________________________________________

(address)

 

_________________________________________________

_________________________________________________

(address)

7infospi_ex101.htm

EXHIBIT 10.1

 

INFOSPI, INC.

19495 Biscayne Blvd., Suite 411

Aventura, Florida 33180

Phone (305) 608-5465

January 20, 2011

CONFIDENTIAL

Mr. Jon Cooper, Chief Executive Officer and President

NexPhase Lighting, Inc.

7301 Wiles Road, Unit 103

Coral Springs, Florida 33067

Dear Jon:

This Letter of Intent (the “Letter”), when countersigned by each of the Parties, will confirm the intent, upon Closing of the transaction contemplated herein by the signing of a “Definitive Agreement” (per Section “4” that follows), subject to the terms hereof, of InfoSpi, Inc., a Nevada corporation (“ISPI”), to enter into such Definitive Agreement with the shareholders of NexPhase Lighting, Inc., a Florida corporation, (“NLI”), wherein ISPI will acquire all the issued and outstanding shares of NLI in exchange for a number of shares of ISPI common stock (the “Share Exchange”).  (In this Letter, ISPI and NLI may be individually referred to as a “Party” and collectively, as the “Parties.”)

This Letter is subject to the terms and conditions, described as follows in this Letter.  It represents only the Parties good-faith intentions to negotiate and enter into a Definitive Agreement, and remains subject to successful negotiation of the Definitive Agreement and related other agreements, in a form acceptable to both Parties.  None of the Parties hereto shall have any liability to the other, economic or otherwise, if either of them fails to execute a Definitive Agreement for any reason.  Statements made under section “1” below as to what the Parties will do, shall do, agree to do, etc., are so expressed for further discussion and development only, and are understood in all instances to be subject to the Parties’ mutual continued willingness to proceed with the transaction contemplated herein. Such statements make under section “1” are therefore non-binding.

When this Letter is signed by all Parties, it will confirm ISPI’s and NLI’s agreement to the terms that follow.

Fundamental Terms and Conditions

 

	
1.  

	
The Parties agree that the following shall be the fundamental terms and conditions of the transaction contemplated herein:

a. Prior to Closing, all of ISPI’s issued and outstanding capital stock shall have been duly authorized and validly issued, fully paid, non assessable, free of pre-emptive rights, and issued in accordance with all applicable federal and state laws and regulations.

  

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b. At Closing ISPI shall receive all the issued and outstanding capital stock of NLI from NLI’s shareholders, and in exchange ISPI will issue to the shareholders of NLI a quantity of restricted shares of common stock of ISPI (the “ISPI Shares”) that is acceptable to both Parties, and consistent with results of a third party appraisal of the value of NLI’s intellectual property on which the issuance of the ISPI Shares are based.  Such third party appraisal shall be delivered to each of the Parties prior to Closing.

c. At Closing all existing material contracts of NLI including, but not limited to, those of distribution, licensing and marketing, and those dealing with the granting of rights for the use of any and all intellectual property by, and for the benefit of, NLI will be transferred and assigned to ISPI.

	
  

	
d. At Closing ISPI will assume all other assets of NLI including, but not limited to, all licenses and royalty rights, all equipment and fixtures, product designs and prototypes, marketing and sales materials, logos, trademarks, copyrights, and website URL(s), as well as the liabilities of NLI, including all trade and debt obligations to be listed as an exhibit to the Definitive Agreement wherein such obligations shall immediately become obligations of ISPI.

	
  

	
e. The remaining terms and conditions of the transaction contemplated herein shall be finalized at the closing of the transaction (the “Closing”) through the signing by the Parties of the Definitive Agreement, the terms and conditions of which remain to be negotiated and finalized.

Other Terms and Conditions

The following sections “2” through “17” of this Letter are the sole legally binding and enforceable agreements between ISPI and NLI in this Letter.

	
2.

	
Due Diligence.  Prior to the earlier of (a) a written notice of termination of this Letter by either Party or (b) the Closing, each Party shall have full access at reasonable times to all corporate books, records, financial statements and any other documents and data, that may be deemed Confidential Information, Proprietary Information or Trade Secret Information of the other (see section “7” that follows), in order to complete its due diligence investigation of the other Party prior to Closing, the satisfaction and thoroughness of such process shall be determined solely by the examining Party.  (The “Due Diligence”)

 

	
3.

	
Other Negotiations.  The Parties agree that prior to the earlier of (i) Closing (as hereinafter defined) or (ii) termination of this Letter, that neither of the Parties will directly or indirectly, through any representative, agent, affiliate, business associate or otherwise, solicit offers from, or in any manner encourage any proposal from any other person or entity that will bypass or circumvent the spirit, intent and purpose of the transaction contemplated herein.

  

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4.  

	
Execution and Closing.  Each Party mutually agrees to use its best efforts in good faith to negotiate and execute the Definitive Agreement which shall contain representations, conditions, covenants and other provisions typical in similar transactions in addition to the terms of the transaction contemplated herein, including, but not limited to, cross indemnification by each Party for the other regarding each Party’s representations and warranties in the transaction.  Consummation of the Definitive Agreement shall be subject to (i) the completion of the Due Diligence of one Party by the other, to the sole satisfaction of each examining Party, (ii) the satisfaction of any applicable federal or state regulatory requirements, (iii) the approval of the terms and conditions of the Definitive Agreement by the Boards of Directors of ISPI and NLI, (iv) the completion of any related Closing documents, including, if required, the consent of a majority of the shareholders of either Party, and (v) any other conditions customary or required in law and regulation of similar transactions.  Closing (the “Closing”) shall take place upon the successful completion of each of the above listed items in this section on a date and at a location to be determined by, and acceptable to, each Party, but not later than 5:00 p.m. EST on February 21, 2011.

	
5.  

	
Acceptance and Termination.  This Letter must be accepted by all Parties by 5:00 p.m. EST on Friday, January 21, 2011 or it will terminate.  Once accepted, the enforceable provisions of this Letter of Intent may be terminated (i) by written notice of either NLI or ISPI to the other, the termination of which need have no reason given, or (ii) automatically if no Definitive Agreement has been executed by 5:00 p.m. EST on February 21, 2011. If a Definitive Agreement and its related documents and agreements are executed, such documents shall supersede the provisions of this Letter in all respects and this Letter will be of no further effect whatsoever, except that any section herein that so states that it shall survive any such termination shall do so.

	
6.  

	
Expenses.  Each Party shall bear its own expenses for the pursuit and completion of the transaction contemplated herein including, but not limited to, any and all expenses related to its Due Diligence of the other Party (see “Section “2” above).

	
7.  

	
Confidentiality, Non-Disclosure. As to the knowledge and understanding gained by either Party, its employees, agents or representatives, of the other Party as a result of its Due Diligence of the other Party in connection with this Letter, wherein such information is not in the public domain (collectively, the “Confidential Information”), such Confidential Information shall be held in trust and in the strictest confidence by each Party hereto.  In addition,

  

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Each Party may make disclosures of the Confidential Information only to its employees, agents, representatives or consultants on a “need to know” basis, wherein such persons may be described as those (i) who are directly involved in evaluating and/or performing the Due Diligence and whose receipt and knowledge of the Confidential Information is essential to the evaluation of the transaction contemplated herein; and (ii) who, as third party’s receiving such information, either Party has obligated under a separate written “confidentiality, non-disclosure agreement” to hold such Confidential Information in trust and strictest confidence and otherwise to comply with the terms and provisions of this Letter in advance of disclosure of any such confidential information. Each Party agrees to diligently monitor its employees, agents, representatives or consultants, having access to the Confidential Information; and to maintain a document file available for inspection upon reasonable advance notice by the Party owing such Confidential Information, of the confidentiality, non-disclosure agreements signed by any third party having obligation to protect such Party’s Confidential Information.

 

All such Confidential Information and any other information that either Party, in its sole discretion and judgment, deems to also be “Confidential Information”, or “Proprietary Information”, or “Trade Secret Information”, that a Party obtains pursuant to the Due Diligence or the transaction contemplated herein, wherein such information is tangible or intangible, obtained verbally or in writing, shall be protected from disclosure for a period of not less than three (3) years from the date of each such disclosure, or the maximum period permitted by law if such period is less than three (3) years.  All such information of a Party shall be protected by the other, its affiliates, employees, agents, representatives or consultants, with at least the same care, and precaution that such Party would use to protect Confidential, Proprietary or Trade Secret Information of its own.

 

The Parties hereby shall agree in writing on the language for, and timing of, any public disclosure, in whole or in part, of: (i) the existence of this Letter, or (ii) its economic or other implications to any Party or their interests, whether or not the transaction contemplated herein is consummated.

 

The intent and content of this section “7”, “Confidentiality, Non-Disclosure”, shall survive the termination of this Letter for any reason.

 

	
8.  

	
Governing Law. The agreement evidenced by signature of this Letter by both Parties is made in Aventura, Florida, under, and shall be construed in accordance with, the internal laws of the State of Florida without resort to Florida’s conflict of laws provisions.  Any and all proceedings which shall arise among the Parties regarding this Letter shall be held in Broward County, Florida.

	
9.  

	
Assignment.   Neither NLI nor ISPI may assign its rights or delegate its obligations herein without the express prior written consent of the other Party.

	
10.  

	
No Waiver; Severability.   No waiver of any provision of this Agreement, which waiver must be in writing, shall be deemed a waiver of any other provision, or constitute a continuing waiver.  The terms and conditions set forth in this Letter are each deemed separate and independent, and if any such covenant or agreement is determined by any court of competent jurisdiction to be invalid the remaining provisions shall continue in full force and effect.

  

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11.  

	
Headings.   The headings in this Letter are for convenience of reference only and will not alter or otherwise affect the meaning of this Letter.

	
12.  

	
Counterparts. The Letter may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and each such counterpart taken together shall constitute one and the same instrument. 

	
13.  

	
No Modification.  This Letter may not be amended, modified or extended except by a written agreement signed by duly authorized officers of both NLI and ISPI.

	
14.  

	
Attorney’s Fees.  In the event of any court proceeding to enforce the terms hereof or of any dispute hereunder, the prevailing party in such proceeding and/or dispute shall be entitled to recover its expenses associated therewith including, without limitation, reasonable attorney‘s and paralegals’ fees and costs through and including all trial and appellate levels and post-judgment proceedings.

	
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Entire Agreement.  This Letter constitutes the entire agreement between the Parties with respect to the subject matter herein and supersedes all prior agreements, understandings and arrangements, oral and written, between the Parties regarding such subject matter.

	
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No Liability.  Section “1” and its provisions do not constitute and will not give rise to any legally binding obligation on the part of either of the Parties.  Moreover, except as expressly provided in sections “2” through “17” (or as expressly provided in any Definitive Agreement and the related documents and agreements that the Parties may enter into in the future), no past or future action, course of conduct, or failure to act relating to the transaction contemplated herein, or relating to the negotiation of the terms of the transaction or any of its documents, will give rise to or serve as a basis for any obligation or other liability, economic or otherwise, on the part of either Party.

	
17.  

	
Authority to Bind. A responsible officer and/or director of each Party has read and understands the contents of this Letter and is empowered and duly authorized by its Board of Directors on behalf of that Party to execute it.

 

The foregoing is a summary of the proposed transaction, and each of the “Fundamental Terms” must be interpreted in the form in which each will appear finally in the Definitive Agreement and related documents and agreements. While it is the intention of both Parties that the transaction be completed, this Letter cannot in any way be construed as a commitment by either Party to develop and finalize the Definitive Agreement or complete this transaction. Each Party may, in its sole judgment and discretion, determine at any time not to proceed with the transaction contemplated by this Letter.

 

  

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