EXHIBIT 10.38
EUROGAS, INC.
Warrant to Acquire up to
1,666,666 Shares of Restricted Common Stock
Par values $0,001
THIS WARRANT WILL BE VOID
AFTER THE LATER OF 11:59 P.M. MOUNTAIN TIME ON DECEMBER 31,
2003
OR THE TIME SET FORTH IN PARAGRAPH 1 OF THE WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT), AND IS
A "RESTRICTED SECURITY" WITHIN THE MEANING OF RULE 144
PROMULGATED UNDER THE SECURITIES ACT, THIS WARRANT HAS BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED
WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISSAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE OR OTHER
REGULATORY AUTHORITY, NOR HAS THE COMMISSION OR ANY STATE OR
OTHER REGULATORY AUTHORITY PASSED ON THE ACCURACY OR ADEQUACY OF
THIS WARRANT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
1. Grant of Warrant. This certifies that, for value received,
Oxbridge Limited, (the "Holder"), is entitled to purchase, and
receive up to 1,666,666 fully paid and non-assessable shares of
common stock, par value $0,001 (the "Warrant Shares"), of
EuroGas, Inc., a Utah corporation (the "Company"), at a price of
$.55 per Warrant Share (the `Exercise Price"). This Warrant
shall be exercisable on presentation and surrender of this
Warrant with the purchase form attached hereto, duty executed,
at the principal office of the Company at 942 East 714S South,
#101A, Midvale, Utah 84047, and by paying in full and in lawful
money of the United States of America by cash or cashier's
check, the Exercise Price for the Warrant Shares as to which
this Warrant is exercised, all on the terms and conditions
hereinafter set forth. The number of Warrant Shares to be
received on exercise of this Warrant and the Exercise Price may
be Adjusted on the occurrence of such events as described
herein. If the rights represented hereby are not exercised by
the later of 11:59 p.m., Mountain Time, on December 31, 2003,
this Warrant shall automatically become void and of no further
force or effect, and all rights represented hereby shall cease
and expire.
2. Exercise of Warrant. On the exercise of all or any
portion of this Warrant in the manner provided above, the Holder
exercising the same shall be deemed to have become a holder of
record of the Warrant Shares for all purposes, and certificates
for the securities so purchase shall be delivered to the Holder
within a reasonable time, but in no event longer that ten days
after this Warrant shall have been exercised as set forth above,
This Warrant may be exercised in whole or in part, so long as
each exercise is in increments of 25,000 shares. If this
Warrant shall be exercised in respect to only a part of the
Warrant Shares covered hereby, the Holder shall be entitled to
receive a similar Warrant of like tenor and date covering the
number of Warrant Shares with respect to which this Warrant
shall not have been exercised, and, until receipt of same this
Warrant shall represent the Warrant relating to the remaining
shares subject to this Warrant. On the exercise of all or any
portion of this Warrant, at the instruction of the Holder, the
Company shall offset any amounts due by it to Holder against
payment of the exercise price for the Warrants.
3. Exchange of Warrants. This Warrant is exchangeable, on
the presentation and surrender hereof, by the Holder at the
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office of the Company, for a new Warrant or Warrants of like
tenor representing in the aggregate the right to subscribe for
and purchase the number of Warrant Shares which may be
subscribed for and purchased hereunder.
4. Fully Paid Shares. The Company covenants and agrees that
the Warrant Shares which will be issued on the exercise of this
rights represented by this Warrant will be, when issued, fully
paid and non-assessable and free from all taxes, liens, and
charges with respect to the issue thereof. The Company further
covenants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company
will have authorized and reserved a sufficient number of shares
of it common stock, $0.001 per share, to provide for the
exercise of the rights represented by this Warrant.
5. Anti-Dilution Provisions. The Exercise Price and
number of Warrant Shares purchasable pursuant
to this Warrant may be subject to adjustment from time to
time as follows:
a) If the Company shall take a record of the holders of
its common stock for the purpose of entitling them to
receive a dividend in shares, the Warrant Price and the
number of Warrant Shares in effect immediately prior to the
effective date of such dividend shall be adjusted so that
the Holder of this Warrant shall thereafter be entitled to
receive the number of Warrant Shares to which the Holder
would have been entitled had such Warrant been exercised
immediately prior to the effective date of such dividend.
Such adjustment shall become effective immediately after the
opening of business on the day following the date on which
such dividend becomes effective.
b) If the Company shall subdivide the outstanding shares
of common stock into a greater number of shares, combine the
outstanding shares of common stock into a smaller number of
shares, or issue by reclassification any of its shares, the
Warrant Price in effect immediately prior thereto and the
number of Warrant Shares shall be adjusted so that the
Holder of this Warrant thereafter surrendered for exercise
shall be entitled to receive, after the occurrence of any of
the events described, the number of Warrant Shares to which
the Holder would have been entitled had such Warrant been
exercised immediately prior to the occurrence of such event.
Such adjustment shall become effective immediately after the
opening of business on the day following the date on which
such subdivision, combination, or reclassification, as the
case may be, becomes effective.
c) If any capital reorganization or reclassification of
the Company's common stock, or consolidation or merger of
the Company with another corporation or the sale of all or
substantially all of its assets to another corporation shall
be effected in such a way that holders of common stock shall
be entitled to receive stock, securities, or assets with
respect to or in exchange for common stock, then, as
condition of such reorganization, reclassification,
consolidation, merger, or sale, lawful adequate provisions
shall be made whereby the Holder of this Warrant shall
thereafter have the right to acquire and receive on exercise
hereof such shares of stock, securities, or assets as would
have been issuable or payable (as part of the
reorganization, reclassification, consolidation, merger, or
sale) with respect to or in exchange for such number of
outstanding common shares of the Company as would have been
received on exercise of this Warrant immediately before such
reorganization, reclassification, consolidation, merger or
sale.
In any such case, appropriate provision shall be made with
respect to the rights and interests of the Holder of this
Warrant to the end that the provisions hereof shall
thereafter be applicable in relation to any shares of stock,
securities, or assets thereafter deliverable on the exercise
of this Warrant. In the event of a merger or consolidation
of the Company with or into another corporation or the sale
of all or substantially all of its assets that results in
the issuance of a number of shares of common stock of the
surviving or purchasing corporation greater or less than the
number of shares of common stock of the Company outstanding
immediately prior to such merger, consolidation, or purchase
are issuable to holders of common stock of the Company, then
the Warrant Price in effect immediately prior to such
merger, consolidation, or purchase shall be adjusted in the
same manner as thought there was subdivision or combination
of the outstanding shares of common stock of the Company.
The Company will not effect any such consolidation or merger
or the corporation purchasing such assets shall assume by
written instrument mailed or delivered to the Holder hereof
at its last address appearing on the books of the Company,
the obligation to deliver to such Holder such shares of
stock, securities, or assets as, in accordance with the
foregoing provisions, such Holder may be entitled to acquire
on exercise, of this Warrant.
d) If (i) the Company shall take a record of the holders
of its shares of common stock for the purpose of entitling
them to receive a dividend payable otherwise than in cash,
or any other distribution in respect of the shares of common
stock (including cash), pursuant to, without limitation, any
spin-off, split-off, or distribution of the Company's
assets; or (ii) the Company shall, take a record of the
holders of its shares of common stock for the purpose of
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entitling them to subscribe for or purchase any shares of
any class or to receive any other rights; or (iii) in the
event of any classification, reclassification, or other
reorganization of the shares that the Company is authorized
to issue, any consolidation or merger of the Company with or
into another corporation, or any conveyance of all or
substantially all of the assets of the Company; or, (iv) in
the event of the voluntary or involuntary dissolution,
liquidation, or winding up of the Company; then, and in any
such case, the Company shall mail to the Holder of this
Warrant, at least 30 days prior thereto, a notice stating
the date or expected date on which a record is to be taken
for the purpose of such dividend, distribution of rights, or
the date on which such classification, reclassification,
reorganization, consolidation, merger, conveyance,
dissolution, liquidation, or winding up, as the case may be.
Such notice shall also specify the date or expected date, if
any is to be fixed, as of which holders of shares of common
stock of record shall be entitled to participate in such
dividend, distribution, or rights, or shall be entitled to
exchange their shares of common stock for securities or
other property deliverable upon such classification,
reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation, or winding up, as the
case may be,
e) If the Company, at any time while this Warrant shall
remain unexpired and unexercised, sells shares of common
stock to an affiliate of the Company, excluding shares
issued on the exercise of Warrants issued and outstanding as
of the date hereof and shares issued to officers and
directors under stock Warrant plans of the Company existing
as of the date hereof. at a price lower than the Exercise
price provided herein, as the same may from time to time be
adjusted pursuant to this section 5, that the Exercise Price
of these Warrants shall be reduced automatically to such
lower price at which the Company has sold or agreed to sell
its common stock.
f) No fraction of a share shall be issued on exercise, but, in
lieu thereof, the Company, notwithstanding any other provision
hereof, may pay therefore, in cash, the fair value of any such
fractional share at the time of exercise.
6. Security Restrictions. Any common shares of the Company
issuable to the Holder pursuant to this Warrant shall bear the
following restrictive legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER, THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE TRANSFERRED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT
OR THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR
INTERPRETIVE LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION OR AN OPINION OF COUNSEL REASONABLE
SATISFACTORY TO THE ISSUER, AND ITS COUNSEL TO THE EFFECT
THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH STATE STATUTES.
The legend need not be placed on any certificates which by law
are not restricted due to the applicability of Rule 144 or
other statutes, rules or regulations then in effect.
7. Transfer. This Warrant may be transferred.
8. Governing law. This agreement shall be construed under and
be governed by the laws of the State of Utah.
9. Notices. All notices, demands, requests, or other
communications required or authorized hereunder shall be deemed
given sufficiently if in writing and if personally delivered; if
sent by facsimile transmission, confirmed with a written copy
thereof sent by second day express delivery or registered mail,
return receipt requested and postage prepaid; if sent by
registered mail or certified mail, return receipt requested and
postage prepaid; or if sent by second day express delivery:
If to the Company, to: Borre Dahl
EuroGas Inc.
01-687 Warsaw, Poland
ul. Lektykarska 18
Facsimile Transmission: 0048 (22) 832-5560
Confirmation: 0048 (22) 833-0468
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If to the Holder as follows: Oxbridge Limited
or other such addresses and facsimile transmission as shall be
furnished by any party in the manner for giving notices
hereunder, and any such notice, demand, request, or other
communication shall be deemed to have been given as of the date
so delivered or sent by facsimile transmission, three days after
the date so mailed, or two days after the date so sent by second
day delivery.
10. Loss, theft, Destruction, or Mutilation. Upon receipt by
the Company of reasonable evidence of the ownership of and the
loss, theft, destruction, or mutilation of this Warrant, the
Company will execute and deliver, in lieu thereof, a new Warrant
of like tenor.
11. Replacement. This Warrant is issued on lieu of the
Warrant issued at December 6, 1999 and according to its
paragraph 10. It shall have the same effect as the Warrant it
replaces and thus the date for the calculation of the dilution
effect according to paragraph 5 remains December 6, 1999. The
issuance of the Warrant makes the Warrant of December 6, 1999 no
longer valid.
DATED this 8 Day of September 2000
EUROGAS, INC.
By /s/ Karl Arleth
----------------------------
Karl Arleth, President & CEO
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