Second Amendment to Subscription Agreement
This second amendment to Subscription Agreement is entered into 11th day of
November 1998 by and between EuroGas, Inc. (the "Company") and Thomson Kernaghan
& Co., Ltd. ("Purchaser"), agent for the beneficial subscribers to 30,000 shares
of the Company's Series B Convertible Preferred Stock ("Shares") at the price of
$1,000 per share.
Recitals
WHEREAS, on or about May 28, 1998, Purchaser purchased 8,000 Shares
pursuant to a Subscription Agreement and attached Registration Rights Agreement
which are incorporated herein by reference; and
WHEREAS, on or about August 7, 1998, and as amended on September 14, 1998,
the Company completed a Registration Statement covering the resale of common
shares issuable upon conversion of Shares by Purchaser; and
WHEREAS, the parties amended one part of the Subscription Agreement
contemporaneously with a second funding tranche of $5,500,000 for 5,500 shares
of the Shares on or about September 21, 1998;
AND WHEREAS, the parties have agreed to a second amendment to the
Subscription Agreement contemporaneously with a third funding tranche of
$3,500,000 for 3,500 of the shares to be closed through the Escrow Agent.
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Incorporation of Recitals. The above stated Recitals are incorporated
herein by reference.
2. Amendment. Paragraph 1(a) of the Subscription Agreement is hereby
amended in its entirety to provide as follows:
The undersigned hereby irrevocably subscribes for and agrees to
purchase up to 30,000 Shares at a purchase price of $1,000.00 per Share, upon
the terms set forth in this Subscription Agreement. The funding shall be
provided as follows: $8,000,000, less placement fees, shall be paid over to the
Company upon closing on or before May 28, 1998; $5,500,000 less placement fees
shall be paid to the Company upon closing on or before September 21, 1998;
$3,500,000 less placement fee shall be paid to the Company upon closing on or
before November 17, 1998 and thereafter; the Company may request a fourth
funding tranche in the amount of not more than $4,000,000 less placement fees be
paid to the Company, within the thirty day period after the registration
statement covering the resale of the Shares is declared effective and closing of
the second funding tranche of the $5,500,000 and every thirty day period
thereafter, as long as at the time of each request, (a) the closing bid price
for the Company's common stock is at or above $3.00, (b) the daily trading
volume for the Company's common stock on the NASDAQ Electronic Bulletin Board or
a U.S. stock exchange is at or above 75,000 shares during any five trading day
period in the preceding 30 days and (c) there is no materially adverse change in
the business of the Company. The Shares shall pay a 6% cumulative dividend,
payable in arrears at the time of each conversion, in cash or in common stock of
the Company, $.001 par value ("Common Stock"), at the Company's option. If paid
in Common Stock, the number of shares of the Company's Common Stock to be
received shall be determine pursuant to Section 4(d) hereof. If the dividend is
to be paid in cash, the Company shall make such payment within 5 business days
of the conversion payment date. If the dividend is to be paid in Common Stock,
said Common Stock shall be delivered to the Purchaser, or per Purchaser's
instructions, within 10 business days of the conversion date. The Shares are
subject to automatic conversion at the end of two years from the date of
issuance at which time all Shares outstanding will be automatically converted
based upon the formula set forth in this Section 4(d). The closing for the
initial tranche of $8,000,000 shall be deemed to have occurred on the date all
$8,000,000 of the funds, less placement fees, are received by the Company (the
"Closing Date"). Each subsequent tranche will be deemed to have occurred on the
date all the funds less placement fees are received by the Company (subsequent
closing date). Each subsequent tranche shall not require the execution of
another complete Subscription Agreement and such may be done in letter or other
form acceptable to the parties and the Escrow Agent. All subsequent tranches
shall require the issuance of the requisite number of Shares by the Company to
the Purchaser.
3. Except as specifically amended herein, all other provisions of the
Subscription Agreement and Registration Rights Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
The Company:
EUROGAS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Vice President
Purchaser:
THOMSON, KERNAGHAN & CO., LTD.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and
Director
