Document:

ex1024.htm

Exhibit 10.24

 

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO US NATURAL GAS CORP. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Right to Purchase 1,600,000 shares of Common Stock of US NATURAL GAS CORP. (subject to adjustment as provided herein)

 

COMMON STOCK PURCHASE WARRANT

	
No. _________________

	
Issue Date: September 7, 2010

 

US Natural Gas Corp., a corporation organized under the laws of the State of Florida hereby certifies that, for value received, Caesar Capital Group, LLC. or its assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company (as defined herein) at any time commencing Six (6) months after the Issue Date of this Warrant until March 7, 2014, but subject to Section 1.5 below, up One Million Six Hundred Thousand (1,600,000) fully paid and non-assessable shares of Common Stock (as hereinafter defined), $0.001 par value per share, at the applicable Exercise Price per share (as defined below).  The number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein.

 

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

 

(a) The term “Common Stock” includes (i) the Company’s common stock, par value $0.001 per share; and (ii) any other securities into which or for which any of the securities described in the preceding clause (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

(b) The term “Company” shall include US Natural Gas Corp., a Florida corporation, and any person or entity which shall succeed, or assume the obligations of, US Natural Gas Corp., hereunder.

 

(c) The “Exercise Price” applicable under this Warrant shall be $0.025.

 

(d) 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) which 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.

 

1. Exercise of Warrant.

 

1.1. Number of Shares Issuable upon Exercise.  From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.

 

1.2. Fair Market Value.  For purposes hereof, the “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 traded on the American Stock Exchange or another national exchange or is quoted on the National or Capital Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date.

 

(b) If the Company’s Common Stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the NASD Over the Counter Bulletin Board, then the mean of the average of the closing bid and asked prices reported for the last business day immediately preceding the Determination Date.

 

 

 

  

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(c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect 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.

 

(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 the Warrant are outstanding at the Determination Date.

 

1.3. Company Acknowledgment.  The Company will, at the time of the exercise of this 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.

 

1.4. Trustee for Warrant Holders.  In the event that a bank or trust company shall have been appointed as trustee for the holders of this Warrant 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.

 

1.5. Termination of Warrant.  In the event the Warrants are not exercised within Three (3) years from March 7, 2011, the right to exercise shall terminate.

 

2. Procedure for Exercise.

 

2.1. Delivery of Stock Certificates, Etc., on Exercise.  The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance herewith.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) 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, 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.  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.

 

2.2. Exercise.

 

(a) Payment may be made at the option of the Holder by either: (i) cash by wire transfer of immediately available funds or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by “cashless exercise” method by delivery of this Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of this Warrant in accordance with the formula set forth in subsection (b) below, or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such Exercise Notice (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) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise 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 exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice 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 this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being exercised (at the date of such calculation)

	
A =

	
the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)

	
B =

	
the Exercise Price per share (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 Subscription Agreement, regardless of whether subsequent changes or modifications have been made to this Warrant or the exercise price.

 

 

 

  

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3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

 

3.1. Reorganization, Consolidation, Merger, Etc.  If there occurs any capital reorganization or any reclassification of the Common Stock of the Company, the consolidation or merger of the Company with or into another person (other than a merger or consolidation of the Company in which the Company is the continuing entity and which does not result in any reorganization or reclassification of its outstanding Common Stock) or the sale or conveyance of all or substantially all of the assets of the Company to another person, then, as a condition precedent to any such reorganization, reclassification, consolidation, merger, sale or conveyance, the Holder will be entitled to receive upon surrender of the Warrant to the Company (a) to the extent there are cash proceeds resulting from the consummation of such reorganization, reclassification, consolidation, merger, sale or conveyance, in exchange for such Warrant, cash in an amount equal to the cash proceeds that would have been payable to the Holder had the Holder exercised such Warrant immediately prior to the consummation of such reorganization, reclassification, consolidation, merger, sale or conveyance, less the aggregate Exercise Price payable upon exercise of the Warrant, and (b) to the extent that the Holder would be entitled to receive Common stock (or Other Securities) (in addition to or in lieu of cash in connection with any such reorganization, reclassification, consolidation, merger, sale or conveyance), the same kind and amounts of securities or other assets, or both, that are issuable or distributable to the holders of outstanding Common Stock (or Other Securities) of the Company with respect to their Common Stock (or Other Securities) upon such reorganization, reclassification, consolidation, merger, sale or conveyance, as would have been deliverable to the Holder had the Holder exercised such Warrant immediately prior to the consummation of such reorganization, reclassification, consolidation, merger, sale or conveyance less an amount of such securities having a value equal to the aggregate Exercise Price payable upon exercise of the Warrant.

 

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, concurrently with any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to a bank or trust company specified by the Holder and having its principal office in New York, NY as trustee for the Holder  (the “Trustee”).

 

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 shares of stock and 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 such stock or 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 transactions described in this Section 3, then the Company’s securities and property (including cash, where applicable) receivable by the Holder will be delivered to the Holder or 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 or any preferred stock issued by the Company (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 Exercise Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Exercise 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 Exercise Price then in effect. The Exercise 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 shall thereafter, on the exercise hereof as provided in Section 1, 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 Exercise Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Exercise Price in effect on the date of such exercise (taking into account the provisions of this Section 4).  Notwithstanding the foregoing, in no event shall the Exercise Price be less than the par value of the Common Stock.

 

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 this Warrant, 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 this 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 Exercise 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 and any warrant agent of the Company (appointed pursuant to Section 11 hereof).

 

6. Reservation of Stock, Etc., Issuable on Exercise of Warrant.  The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant.

 

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”) in whole or in part.  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 evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, the provision of a legal opinion from the Transferor’s counsel (at the Company’s expense) that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant 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 will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

9. Registration Rights. If at any time while this Warrant is issued and outstanding (the “Piggy-Back Period”) the Company proposes to file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the Securities Act of any of its securities (other than a Registration Statement on Form S-4 or Form S-8 (or their equivalents at such time) relating to securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall include the shares of Common Stock underlying the Warrant on such registration statement.

 

 

 

  

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10. Maximum Exercise.  Notwithstanding anything herein to the contrary, in no event shall the Holder be entitled to exercise any portion of this Warrant in excess of that portion of this Warrant upon exercise of which the sum of (a) the number of shares of Common Stock beneficially owned by the Holder and its Affiliates and (b) the number of shares of Common Stock issuable upon the exercise of the portion of this Warrant with respect to which the determination of this limitation is being made, would result in beneficial ownership by the Holder and its Affiliates of any amount greater than 4.99% of the then outstanding shares of Common Stock.  As used herein, the term “Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act.   For purposes of the second preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13(d)-(g) thereunder.  The limitations set forth herein may be waived in whole or in part, upon sixty-one (61) days prior written notice from the Holder to the Company.

 

11. Warrant Agent.  The Company may, by written notice to the Holder of the Warrant, appoint an 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 agent.

 

12. 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.

 

13. Notices, Etc.  All notices and other communications from the Company to the Holder shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder who has so furnished an address to the Company.

 

14. Miscellaneous.  This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF NEW YORK.  The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorneys’ fees and costs.  In the event that any provision of this Warrant 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 with 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 this Warrant.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.  The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof.  The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party.

 

 

 

  

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

 

	 	
 
US NATURAL GAS CORP.

	 
	 	 	 	 
	
Date

	
By: 

	 	 
	 	 	 
By: Wayne Anderson

	 
	 	 	 
President

	 
	 	 	 	 

Witness:

________________________________

By: _____________________________

Title: ____________________________

 

 

 

 

 

  

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EXHIBIT A

 

FORM OF SUBSCRIPTION

 

(To Be Signed Only On Exercise Of Warrant)

TO:           US Natural Gas Corp.

______________________________

______________________________

Attention:                      Chief Financial Officer

 

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 Exercise 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 2.2, 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 US Natural Gas Corp., into 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 US Natural Gas Corp. with full power of substitution in the premises.

 

 

	 
Transferees

	 	 
Address

	 	 
Percentage Transferred

	 	Number Transferred
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

 

 

	  	  	  	  
	
Dated:

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

	  	  	
Address:                                                                  

  

 

	  	  	
SIGNED IN THE PRESENCE OF:

 

 

	  	  	  
	  	  	
(Name)

	
ACCEPTED AND AGREED:

[TRANSFEREE]

 

 

	  
	  	  
	
(Name)

	  

7ex1025.htm

Exhibit 10.25

 

 

 

AMENDMENT TO COMMON STOCK PURCHASE WARRANT

THIS AMENDMENT TO COMMON STOCK PURCHASE WARRANT (hereinafter the “Amendment”) is this ________ day of September, 2010 entered into by and is between US Natural Gas Corp., (hereinafter “the Company”), which is a for-profit corporation that is organized and that exists under the Laws of the State of Florida, and which has its principal place of business located and situated in St. Petersburg, Florida, and Caesar Capital Group, LLC, (hereinafter “the Holder”), which is a limited liability company that is organized and that exists under the Laws of the State of Texas, and which has its principal place of business located and situated in New York, New York.

RECITALS

WHEREAS, the Holder is the holder and owner of Common Stock Purchase Warrants (hereinafter the “Underlying Warrant”) issued by the Company giving the Holder the right and opportunity to purchase at least Five Hundred Thousand (500,000) shares of Common Stock of the Company upon the terms and conditions set out therein. The Underlying Warrants which are to be amended include all warrants issued by the Company in August 2010 to the Holder.  A specimen of the Underlying Warrants is appended hereto as Exhibit “A” and is incorporated herein by this express reference thereto.

WHEREAS, the Company and the Holder of these Underlying Warrants desire to amend the Underlying Warrants to change the exercise price of the Underlying Warrants.

WHEREAS, the Company and the Holder of these Underlying Warrants desire to amend the Underlying Warrants to change the amount of shares into which the Underlying Warrants are convertible.

WITNESSETH

WHEREFORE, the Company and the Holder agree, covenant, contract and agree as set out hereinafter.

	
1.  

	
AMENDMENT OF EXERCISE PRICE OF UNDERLYING WARRANT.  The Company and Holder hereof now restate and amend the “Exercise Price” of Five Cents  ($0.05) per share contained in the Underlying Warrant to Two and One-Half Cents ($0.025) per share.

	
2.  

	
EXERCISE OF THE UNDERLYING WARRANT IN CASH.  Upon the sooner of February 6, 2011 or the effective registration of the Underlying Warrants, the Holder shall be able to exercise the Underlying Warrants, as amended herein, for the purchase of no more than Four Point Nine Nine Percent (4.99%) of the issued and outstanding common shares of the Company. If the Holder already owns shares, then the aggregate of the shares already owned and the shares to be purchased through the Warrant shall not exceed Four Point Nine Nine Percent (4.99%) Except as amended herein, Holder shall comply with the procedures for exercise of the Underlying Warrants as set out in Paragraph 2 Procedure for Exercise of the Underlying Warrants. Upon the complete exercise of the Underlying Warrants as required herein, the Underlying Warrants shall be extinguished and cancelled.

	
3.  

	
OTHER TERMS REMAIN.  Except as otherwise expressly altered or amended by this Amendment and except to the extent necessary to effectuate fully this Amendment, all of the other terms, conditions, provisions and parts of the Underlying Agreement remain in full force and effect and are not otherwise altered or amended.

	
4.  

	
NO PARTNERSHIP, NO JOINT VENTURE.  It is expressly agreed and understood that a partnership between Company and Holder is not created under this Amendment or between or among Holder and Company’s owners, members, shareholders, officers, directors, or employees.  It further agreed and understood that a joint venture is not entered into or created by this Amendment.

	
5.  

	
NO AGENCY.  Holder shall have no authority to transact business, enter into agreements, or otherwise make commitments on behalf of Company.  Holder is not the agent of Company and possesses neither actual nor apparent authority to contract for, bind or commit Company.

	
6.  

	
NO AMENDMENTS.  This Amendment may only be modified, changed, altered, amended, or revised upon the joint agreement of Company and Holder in writing, and in the absence of a writing executed by both Company and Holder no such modification, change, alteration, amendment or revision of this Amendment will have occurred.

	
7.  

	
NO WAIVERS.  No provision of this Amendment may be waived by either Company or Holder and the failure of either Company or Holder to insist upon or require compliance with any the terms hereof shall not result in any waiver of any such provision or the terms hereof and shall not prohibit or prevent the enforcement of such provision or the specific terms hereof at a future date or time.  No delay or failure by either party to exercise any rights hereunder or to enforce any obligation hereunder, and no partial or single exercise of any such right or partial insistence upon the performance of any such obligation, shall constitute a waiver of that or any other right or obligation.  In addition, no term of this Amendment may be modified, cancelled, altered or amended by waiver, delay, failure to act, action or conduct, and any alleged modification, cancellation, alteration, or amendment must be in writing and signed by both parties hereto in order to be valid or enforceable.

 

 

 

  

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8.  

	
FINAL AGREEMENT.  Company and Holder acknowledge and agree that no representation or statement and no understanding or agreement other than the specific terms hereof has been made, or exists, and that, in entering into this Amendment, neither Company, nor Holder, have relied upon anything done or said or any presumption of fact or law other than the specific terms hereof and the terms of the Underlying Warrant.  This Amendment and the Underlying Warrant are the full, final, and complete agreement between Company and Holder pertaining to the subject matter set out herein.  All prior negotiations, discussions, and proposals are contained and merged in this Amendment and Underlying Warrant.  It is expressly agreed that this Amendment and the Underlying Warrant are the entire agreement between the parties, and that there are, and were, no verbal representations, warranties, understandings, stipulations, agreements or promises pertaining to the subject matter of this Amendment or the Underlying Warrant that are not otherwise and fully incorporated into this Amendment or Underlying Warrant, and that there are, and were, no other written representations, warranties, understandings, stipulations, agreements or provisions between Company and Holder that are not otherwise and fully incorporated included in this Amendment or Underlying Warrant.  All exhibits/riders to this Amendment and Underlying Warrant, if any, are attached thereto and incorporated therein by this reference.  This Amendment and Underlying Warrant are the full and final contract, agreement and covenant between Holder and Company, and all prior or contemporaneous discussions, writings or agreements between them are contained and merged herein.

	
9.  

	
SEVERABILITY.  If any provision of this Amendment or the application thereof to any person or circumstances shall be invalid or unenforceable to any extent, the remainder of this Amendment and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.  Each and every section, paragraph, provision or sentence of this Amendment is deemed to be and is severable in the event that any part or provision of this Amendment is deemed unenforceable.  In such event, the remainder of this Amendment shall remain enforceable.  Each covenant and agreement, and any breach of any such covenant or agreement by one of the parties hereto, shall not discharge or relieve the other party hereunder from the obligation to otherwise perform each and every covenant and agreement of this Amendment.

	
10.  

	
HEADINGS.  The headings contained in this Amendment are for the convenience of Company and Holder and shall not be utilized to construe the meaning of any of the terms or provisions hereof.

	
11.  

	
GOVERNING LAW.  This Amendment is made in accordance with the Laws of the State of New York.  This Amendment shall be interpreted in accordance with the Laws of the State of New York.  This Amendment was executed in the State of New York, and will be interpreted under the Jurisprudence and Laws of the State New York, and including, in the event that any dispute or disagreement arises as to the validity, meaning, scope, extent or purpose of or the remedies or damages available under this Amendment, such dispute or disagreement shall be decided under the Jurisprudence and Laws of the State of New York.

	
12.  

	
ACTIONS NECESSARY TO COMPLETE THIS TRANSACTION.  Company and Holder agree that they will execute and deliver any and all other such documents or instruments and take any action necessary in order to effectuate the transactions contemplated by this Amendment.

	
13.  

	
ATTORNEYS’ FEES AND COSTS.  Company and Holder agree that, in the event that either of them resorts to litigation or arbitration to enforce the terms of this Amendment, the prevailing party in such arbitration or litigation as determined by the adjudicating tribunal or arbitrator or arbitrators shall be entitled to recover reasonable attorneys’ fees and litigation expenses from the other party.

	
14.  

	
DISPUTE RESOLUTION.  Company and Holder agree that, in the event that any dispute, disagreement, contest or claim with respect to the scope, meaning, interpretation, performance, lack of performance, breach, or enforcement of or remedies or damages available this Amendment or the Underlying Warrant arises between them, or in the event that any dispute, disagreement, contest, or claim with respect to the Company products or otherwise arises between them, such dispute, disagreement, contest or claim will be resolved through binding arbitration.  The Commercial Rules promulgated by the American Arbitration Association at the time of the dispute, disagreement, contest or claim arises, and any expedited procedures thereunder, will govern the arbitration, except that one single arbitrator, who may or may not be sanctioned by the American Arbitration Association, shall preside at the arbitration, which such arbitrator will be satisfactory and acceptable to both Company and Holder, and such arbitration proceeding will be conducted in New York, New York.  In the event that the parties cannot agree upon an arbitrator, either or both may file an action in the Supreme Court of New York County, New York State to compel arbitration and to have the Supreme Court appoint such arbitrator.  In the event that this arbitration clause is unenforceable or unable to be effectuated for any reason, Company and Holder agree that any dispute, disagreement, contest or claim between them resulting in litigation shall be litigated in the Supreme Court of New York County, in the State of New York, and the Supreme Court of New York County shall have sole and exclusive jurisdiction of any such dispute, and both Company and Holder hereby submit to the personal jurisdiction of the Supreme Court of New York County, in the State of New York.

(SIGNATURE PAGE TO FOLLOW)

  

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US NATURAL GAS CORP.

	 	 	 
CAESAR CAPITAL GROUP, LLC

	 
	 	 	 	 	 
	 	 	 	 	 
	SEAL	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
By:

	 	 	
By:

	 
	
 
Name: Wayne Anderson

	 	 	
 
Name:  Michael Woloshin

	 
	
 
Title: President

	 	 	
 
Title:    Managing Member

	 
	 	 	 	 	 
	 	 	 	 	 
	ATTEST:	 	 	 
ATTEST:

	 
	Name:	 	 	 
Name:

	 
	 
Title:

	 	 	 
Title:

	 

 

 

 

 

 

 

 

3

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