Document:

Exhibit 10.5 Common Stock Warrant H. Richard Grisham 30,000 Shares

    
      
        

      

       

      COMMON
        STOCK WARRANT

       

       

      Electric
        & Gas Technology, Inc.

       

       

      NEITHER
        THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
        NO
        SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE
        EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO,
        (ii) AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE
        COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR
        (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
        COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
        THE
        WARRANT EVIDENCED HEREBY IS NON-TRANSFERABLE 

       

       

      Serial
        00458

       

       

      Right
        to
        Purchase 30,000

       

       

      Shares
        of
        Common Stock

       

       

      Electric
        & Gas Technology, Inc., a Texas corporation (the "Company")
        hereby
        certified that, for value received, GRANTEE NAME, is entitled, on the terms
        set
        forth below, to purchase from the Company at any time during the period
        commencing on February 15, 2005 (the "Exercisability
        Date")
        and,
        subject to the provisions of Section 1 below, ending at 5:00 p.m.,
        Central Standard time, on February 15, 2007, Thirty Thousand (30,000) fully
        paid
        and nonassessable shares of the common stock, par value $0.01 per share (the
        "Warrant
        Shares"),
        of
        the Company, at a price of $0.80 per share, subject to adjustments as provided
        below (the "Purchase
        Price").
        As
        used herein, the term "Stock"
        shall
        mean the Company's presently authorized common stock or any stock into or
        for
        which such common stock may hereafter be converted or exchanged prior to
        or
        concurrent with the exercise of this Warrant. 

       

      1.
        

      Expiration.
        This
        Warrant shall expire at 5:00 p.m., Central Standard time, on
        February 15, 2007. 

       

      2.
        

      Exercise
        of Warrant.
        

      (a)
        

      Exercisability
        of the Warrant.
        This
        Warrant will become exercisable on the Exercisability Date. 

       

      (b)
        

      Full
        Exercise.
        This
        Warrant may be exercised by the Holder at any time during the period commencing
        on the Exercisability Date and ending upon its expiration for the full number
        of
        Warrant Shares by surrendering this Warrant and the Notice of Exercise attached
        hereto as Exhibit A
        properly
        endorsed to the Company's principal office, accompanied by payment in cash,
        by
        check or by wire transfer in an amount equal to the product of the Purchase
        Price and the number of Warrant Shares indicated on the face of this Warrant.
        

       

      (c)
        

      Taxes.
        The
        Company will not be required to pay any tax imposed in connection with any
        transfer involved in the issuance of a Warrant or a certificate for shares
        of
        Stock in any name other than that of the original holder hereof, and in such
        case, the Company will not be required to issue or deliver any stock certificate
        or warrant until such tax is paid. 

      

      3.
        

      Representations
        and Covenants of the Holder.
        This
        Warrant has been issued by the Company in reliance upon the following
        representations and covenants of the Holder: 

      

      (a)
        

      Investment
        Purpose.
        The
        Stock issuable upon exercise of the Holder's rights contained herein will
        be
        acquired for investment and not with a view to the sale or distribution of
        any
        part thereof, and the holder has no present intention of selling or engaging
        in
        any public distribution of the same except pursuant to a registration or
        exemption. 

       

      (b)
        

      Private
        Issue.
        The
        Holder understands (i) that the Stock issuable upon exercise of this
        Warrant is not registered under the Act or qualified under applicable state
        securities laws on the ground that the issuance contemplated by this Warrant
        will be exempt from the registration and qualifications requirements thereof,
        and (ii) that the Company's reliance on such exemption is predicated on the
        representations set forth in this Section 3. 

       

      (c)
        

      Disposition
        of Holder's Rights. This
        Warrant and all rights hereunder are non-transferable. 

       

      The
        Stock
        issuable upon exercise of this Warrant is non-transferable, except in accordance
        with the terms of this provision. Notwithstanding the foregoing, the
        restrictions imposed upon the transferability of shares of the Stock shall
        terminate as to any particular share of Stock when (1) the transfer of such
        security shall have been effectively registered under the Act and transferred
        by
        the Holder thereof in accordance with such registration, or (2) such
        security shall have been sold without registration in compliance with
        Rule 144 under the Act or (3) a letter shall have been issued to the
        Holder at its request by the staff of the Securities and Exchange Commission
        or
        a ruling shall have been issued to the Holder at its request by such Commission
        stating that no action shall be recommended by such staff or taken by such
        Commission, as the case may be, if such security is transferred without
        registration under the Act in accordance with the conditions set forth in
        such
        letter or ruling and such letter or ruling specifies that no subsequent
        restrictions on transfer are required. Whenever the Stock issuable upon exercise
        of this Warrant may be sold pursuant to Rule 144(k), the restrictions
        imposed herein shall terminate, the Holder or holder of a share of Stock
        issued
        upon exercise of this Warrant as to which such restrictions have terminated
        shall be entitled to receive from the Company, without expense to such holder,
        one or more new certificates for the Warrant or for such shares of Stock
        not
        bearing any restrictive legend. 

       

      (d)
        

      Financial
        Risk.
        The
        Holder has such knowledge and experience in financial and business matters
        as to
        be capable of evaluating the merits and risks of its investment, and has
        the
        ability to bear the economic risks of its investment. 

       

      (e)
        

      Risk
        of No Registration.
        The
        Holder understands that if a registration statement covering the transfer
        of the
        Stock under the Act is not in effect when it desires to sell the Stock issuable
        upon exercise of this Warrant, it may be required to hold such securities
        for an
        indefinite period. The Holder also understands that any sale of Stock issuable
        upon exercise of this Warrant which might be made by it in reliance upon
        Rule 144 under the Act may be made only in accordance with the terms and
        conditions of that Rule. 

       

      4.
        

      Delivery
        of Stock Certificates on Exercise.
        Promptly
        after the exercise of this Warrant and the payment of the Purchase Price
        pursuant to Section 2(b) or after the net exercise of this Warrant
        pursuant to Section 2(c), the Company will issue to the Holder or upon the
        order of the Holder hereof, a certificate or certificates for the number
        of
        whole shares of Stock to which the Holder is entitled; provided, however,
        that
        (i) the Holder shall have furnished to the Company at the time of such
        exercise a signed Investment Representation Statement substantially in the
        form
        attached hereto as Exhibit B
        and
        (ii) the Company will place on each certificate the following legend:

       

      "THE
        SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
        NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
        THESE
        SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
        REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT. 

       

       

      Furthermore,
        the Company will place on each certificate any legend required by any applicable
        state blue sky law. 

       

      5.
        

      Adjustment
        for Dividends in Other Stock or Property;
        Reclassifications.
        The
        Purchase Price and the number and type of Warrant Shares and/or other property
        issuable upon exercise of this Warrant shall be appropriately and
        proportionately adjusted to reflect any stock dividend, stock split, combination
        of shares, reclassification, recapitalization, any corporate reorganization
        other than as provided in Section 1 hereof or other similar event affecting
        the number or character of outstanding Warrant Shares, so that the number
        and
        type of securities and/or other property issuable upon exercise of this Warrant
        shall be equal to that which would have been issuable with respect to the
        number
        of Warrant Shares subject hereto at the time of such event, had such Warrant
        Shares then been outstanding. 

       

      6.
        

      Certificate
        as to Adjustments.
        In each
        case of an adjustment in the Purchase Price or in the shares of Stock or
        other
        stock, securities or property receivable on the exercise of the Warrant,
        the
        Company, at its expense, will compute such adjustment in accordance with
        the
        terms of the Warrant and prepare a certificate setting forth such adjustment
        and
        showing in detail the facts upon which the adjustment is based. The Company
        will
        mail a copy of each such certificate to the Holder of the Warrant outstanding
        at
        that time. 

       

      7.
        

      Notices
        of Record Date.
        In case
        (i) the Company takes a record of the holders of its Stock (or other stock
        or securities at the time receivable upon the exercise of the Warrant) for
        the
        purpose of entitling them to receive any dividend or other distribution,
        or any
        right to subscribe for any purchase any shares of stock of any class or any
        other securities; or (ii) of any capital reorganization of the Company, any
        reclassification of the common stock of the Company, any consolidation or
        merger
        of the Company with or into another corporation, including, without limitation,
        any Merger or Consolidation, or any conveyance of all or substantially all
        of
        the assets of the Company to another corporation; or (iii) of any voluntary
        dissolution,, liquidation or winding-up on the Company; then, in each such
        case.
        The Company will mail or cause to be mailed to each Holder of a Warrant at
        the
        time outstanding a notice specifying, as the case may be, (a) the date on
        which a record is to be taken for the purpose of such dividend, distribution
        or
        right, and stating the amount and character of such dividend, distribution
        or
        right, or (b) the date on which such reorganization, reclassification,
        consolidation, merger, conveyance, dissolution, liquidation or winding-up
        is to
        take place, and time, if any is to be fixed as of which the holders of record
        of
        Stock (or such other stock or securities at the time receivable upon the
        exercise of the Warrant) will be entitled to exchange their shares of Stock
        (or
        such other stock or securities) for securities or other property deliverable
        upon such reorganization, reclassification, consolidation, merger, conveyance,
        dissolution, liquidation or winding-up, and in the case of a reorganization,
        consolidation, merger or conveyance, the fair market value of such securities
        or
        other property as determined by the Board of Directors of the Company. Such
        notice shall be mailed at least ten (10) days prior to the date specified
        therein; provided, however, that in the event of a Merger or Consolidation
        the
        Company shall use its best efforts to provide such notice in accordance with
        Section 11 below at least twenty-one (21) days prior to the closing
        date of such Merger or Consolidation and, in any event, shall provide such
        notice in accordance with Section 11 below at least fifteen (15) days
        prior to such closing date. 

       

      8.
        

      Reservation
        of Stock Issuable on Exercise of Warrant.
        The
        Company will at all times reserve and keep available, solely for issuance
        and
        delivery upon the exercise of this Warrant, all such shares of Stock and
        other
        stock, or such other stock, securities and property as from time to time
        are
        receivable upon the exercise of the Warrant. 

      9.
        

      Replacement
        of Warrant.
        Upon
        receipt of evidence reasonably satisfactory to the Company of the loss, theft,
        destruction or mutilation of this Warrant and (in the case of loss, theft
        or
        destruction) upon delivery of an indemnity agreement in such reasonable amount
        as the Company may determine, or (in the case of mutilation) upon surrender
        and
        cancellation thereof, the Company at its expense, will issue a replacement
        warrant in substantially identical form to this Warrant. 

       

      10.
        

      Notices.
        Any
        notices, demand, offer, request or other communication required or permitted
        to
        be given by either the Company or a Holder (collectively, a "Notice")
        pursuant to the terms of this Agreement, if delivered to the Holder, shall
        be
        sent to the following address: 

      

      
        	 	
                 

              	
                 

              
	 	
                 

                 

              	
                 

                 

              
	
                Fax
                  No. 

              	
                 

              	
                 

              
	
                With
                  a copy to:

              	
                 

              	
                 

              
	 	
                 

              	
                 

              
	 	
                 

                 

              	
                 

                 

              
	
                Fax
                  No. 

              	
                 

              	
                 

              

      

       

      or
        at
        such other addressed provided to the Company or such other address as a party
        may request by notifying the other in writing. 

       

      (a)
        

      Any
        notice shall be delivered in writing. Any such Notice shall be deemed
        effectively given the earlier of (i) when received, (ii) when
        delivered personally, (iii) one (1) business day after being delivered
        by facsimile (with receipt of appropriate confirmation), (iv) one
        (1) business day after being deposited with an overnight courier service
        and (v) four (4) days after being deposited in the U.S. mail, First
        Class with postage prepaid. 

       

      11.
        

      Change;
        Waiver.
        Neither
        this warrant nor any term hereof may be changed, waived, discharged or
        terminated orally, but only by an instrument in writing signed by the party
        against which enforcement of the change, waiver, discharge or termination
        is
        sought. 

       

      12.
        

      No
        Fractional Shares or Script.
        No
        fractional shares or script representing fractional shares shall be issued
        upon
        the exercise of this Warrant, but in lieu of such fractional shares the Company
        shall make cash payment therefore upon the basis of the Purchase Price then
        in
        effect. 

       

      13.
        

      No
        Rights as Stockholder.
        This
        Warrant does not entitle the Holder to any voting rights or other rights
        as a
        stockholder of the Company prior to the exercise of this Warrant. 

       

      14.
        

      Headings.
        The
        headings in this Warrant are for purposes of reference only and shall not
        be
        deemed to constitute a part hereof. 

       

      15.
        

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

       

      16.
        

      Governing
        Law.
        This
        Warrant is delivered in the State of Texas and shall be construed in accordance
        with and governed by the laws of such state. 

       

      17.
        

      Confidentiality;
        No Public Disclosure.
        The
        terms and conditions of this Warrant are confidential. Neither party shall
        make
        any public disclosure concerning the terms and conditions of this Warrant
        without the prior written consent of the other party, except as required
        by the
        rules and regulations of the securities and Exchange Commission, the Nasdaq
        National Market or any other applicable stock exchanges. 

      

      
        	
                Dated:
                  February 15, 2005

              	
                 

              	
                Electric
                  & Gas Technology, Inc..

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                 

                Signature
                  of Authorized Signatory

              
	
                 

                 

              	
                 

                 

              	
                 

                George
                  M. Johnston, CFO 

                 

                Print
                  Name and Title

              
	
                 

                Agreed
                  and Accepted:

              	
                 

                 

              	
                 

                H.
                  Richard Grisham

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                 

                Signature
                  of Authorized Signatory

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                 

                Print
                  Name and Title

              

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A 

       

       

      Serial
        00458

       

       

      NOTICE
        OF EXERCISE 

       

       

      TO:
        Electric & Gas Technology, Inc. 

       

       

              1.     The
        undersigned hereby elects to purchase 30,000 shares of Common Stock of Electric
        & Gas Technology, Inc. pursuant to the terms of the attached Warrant.

       

       

              2.     Exercise
        (Please initial the blank): 

       

      
        	 	
                 

              	
                The
                  undersigned elects to exercise the attached Warrant by means of
                  a cash
                  payment, and tenders herewith payment in full for the purchase
                  price of
                  the shares being purchased, together with all applicable transfer
                  taxes,
                  if any.

              

      

      3.
        

      Please
        issue a certificate, or certificates representing said shares of stock, in
        the
        name of the undersigned or in such other name as are specified below

      

      
        	
                 

              	
                 

              	
                 

                (Name)

              	
                 

              	
                 

              
	
                 

              	
                 

              	 	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

                (Address)

              	
                 

              	
                 

              

      

      4.
        

      The
        undersigned represents that the aforesaid shares of stock are being acquired
        for
        the account of the undersigned for investment and not with a view to, or
        for
        resale in connection with, the distribution thereof and that the undersigned
        has
        no present intention of distributing or reselling such shares. In support
        thereof, the undersigned has executed an Investment Representation Statement
        attached hereto as Exhibit B.
        

      
        	
                 

                 

              	
                 

                 

              	
                 

                 

                Name
                  of Warrantholder

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                Signature
                  of Authorized Signatory

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                Print
                  Name and TitleExhibit 10.6 Common Stock Warrant H. Richard Grisham 15,000 Shares

    
      
        

      

       

      COMMON
        STOCK WARRANT

       

       

      Electric
        & Gas Technology, Inc.

       

       

      NEITHER
        THIS WARRANT NOR THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
        NO
        SALE, TRANSFER OR OTHER DISPOSITION OF THIS WARRANT OR SAID SHARES MAY BE
        EFFECTED WITHOUT (i) AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO,
        (ii) AN OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE
        COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR
        (iii) RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
        COMMISSION TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
        THE
        WARRANT EVIDENCED HEREBY IS NON-TRANSFERABLE 

       

       

      Serial
        00467

       

       

      Right
        to
        Purchase 15,000

       

       

      Shares
        of
        Common Stock

       

       

      Electric
        & Gas Technology, Inc., a Texas corporation (the "Company")
        hereby
        certified that, for value received, GRANTEE NAME, is entitled, on the terms
        set
        forth below, to purchase from the Company at any time during the period
        commencing on October 4, 2005 (the "Exercisability
        Date")
        and,
        subject to the provisions of Section 1 below, ending at 5:00 p.m.,
        Central Standard time, on October 4, 2007, Fifteen Thousand (15,000) fully
        paid
        and nonassessable shares of the common stock, par value $0.01 per share (the
        "Warrant
        Shares"),
        of
        the Company, at a price of $0.87 per share, subject to adjustments as provided
        below (the "Purchase
        Price").
        As
        used herein, the term "Stock"
        shall
        mean the Company's presently authorized common stock or any stock into or
        for
        which such common stock may hereafter be converted or exchanged prior to
        or
        concurrent with the exercise of this Warrant. 

       

      1.
        

      Expiration.
        This
        Warrant shall expire at 5:00 p.m., Central Standard time, on October
        4, 2007. 

       

      2.
        

      Exercise
        of Warrant.
        

      (a)
        

      Exercisability
        of the Warrant.
        This
        Warrant will become exercisable on the Exercisability Date. 

       

      (b)
        

      Full
        Exercise.
        This
        Warrant may be exercised by the Holder at any time during the period commencing
        on the Exercisability Date and ending upon its expiration for the full number
        of
        Warrant Shares by surrendering this Warrant and the Notice of Exercise attached
        hereto as Exhibit A
        properly
        endorsed to the Company's principal office, accompanied by payment in cash,
        by
        check or by wire transfer in an amount equal to the product of the Purchase
        Price and the number of Warrant Shares indicated on the face of this Warrant.
        

       

      (c)
        

      Taxes.
        The
        Company will not be required to pay any tax imposed in connection with any
        transfer involved in the issuance of a Warrant or a certificate for shares
        of
        Stock in any name other than that of the original holder hereof, and in such
        case, the Company will not be required to issue or deliver any stock certificate
        or warrant until such tax is paid. 

      

      3.
        

      Representations
        and Covenants of the Holder.
        This
        Warrant has been issued by the Company in reliance upon the following
        representations and covenants of the Holder: 

      

      (a)
        

      Investment
        Purpose.
        The
        Stock issuable upon exercise of the Holder's rights contained herein will
        be
        acquired for investment and not with a view to the sale or distribution of
        any
        part thereof, and the holder has no present intention of selling or engaging
        in
        any public distribution of the same except pursuant to a registration or
        exemption. 

       

      (b)
        

      Private
        Issue.
        The
        Holder understands (i) that the Stock issuable upon exercise of this
        Warrant is not registered under the Act or qualified under applicable state
        securities laws on the ground that the issuance contemplated by this Warrant
        will be exempt from the registration and qualifications requirements thereof,
        and (ii) that the Company's reliance on such exemption is predicated on the
        representations set forth in this Section 3. 

       

      (c)
        

      Disposition
        of Holder's Rights. This
        Warrant and all rights hereunder are non-transferable. 

       

      The
        Stock
        issuable upon exercise of this Warrant is non-transferable, except in accordance
        with the terms of this provision. Notwithstanding the foregoing, the
        restrictions imposed upon the transferability of shares of the Stock shall
        terminate as to any particular share of Stock when (1) the transfer of such
        security shall have been effectively registered under the Act and transferred
        by
        the Holder thereof in accordance with such registration, or (2) such
        security shall have been sold without registration in compliance with
        Rule 144 under the Act or (3) a letter shall have been issued to the
        Holder at its request by the staff of the Securities and Exchange Commission
        or
        a ruling shall have been issued to the Holder at its request by such Commission
        stating that no action shall be recommended by such staff or taken by such
        Commission, as the case may be, if such security is transferred without
        registration under the Act in accordance with the conditions set forth in
        such
        letter or ruling and such letter or ruling specifies that no subsequent
        restrictions on transfer are required. Whenever the Stock issuable upon exercise
        of this Warrant may be sold pursuant to Rule 144(k), the restrictions
        imposed herein shall terminate, the Holder or holder of a share of Stock
        issued
        upon exercise of this Warrant as to which such restrictions have terminated
        shall be entitled to receive from the Company, without expense to such holder,
        one or more new certificates for the Warrant or for such shares of Stock
        not
        bearing any restrictive legend. 

       

      (d)
        

      Financial
        Risk.
        The
        Holder has such knowledge and experience in financial and business matters
        as to
        be capable of evaluating the merits and risks of its investment, and has
        the
        ability to bear the economic risks of its investment. 

       

      (e)
        

      Risk
        of No Registration.
        The
        Holder understands that if a registration statement covering the transfer
        of the
        Stock under the Act is not in effect when it desires to sell the Stock issuable
        upon exercise of this Warrant, it may be required to hold such securities
        for an
        indefinite period. The Holder also understands that any sale of Stock issuable
        upon exercise of this Warrant which might be made by it in reliance upon
        Rule 144 under the Act may be made only in accordance with the terms and
        conditions of that Rule. 

       

      4.
        

      Delivery
        of Stock Certificates on Exercise.
        Promptly
        after the exercise of this Warrant and the payment of the Purchase Price
        pursuant to Section 2(b) or after the net exercise of this Warrant
        pursuant to Section 2(c), the Company will issue to the Holder or upon the
        order of the Holder hereof, a certificate or certificates for the number
        of
        whole shares of Stock to which the Holder is entitled; provided, however,
        that
        (i) the Holder shall have furnished to the Company at the time of such
        exercise a signed Investment Representation Statement substantially in the
        form
        attached hereto as Exhibit B
        and
        (ii) the Company will place on each certificate the following legend:

       

      "THE
        SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE
        NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").
        THESE
        SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
        REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT. 

       

       

      Furthermore,
        the Company will place on each certificate any legend required by any applicable
        state blue sky law. 

       

      5.
        

      Adjustment
        for Dividends in Other Stock or Property;
        Reclassifications.
        The
        Purchase Price and the number and type of Warrant Shares and/or other property
        issuable upon exercise of this Warrant shall be appropriately and
        proportionately adjusted to reflect any stock dividend, stock split, combination
        of shares, reclassification, recapitalization, any corporate reorganization
        other than as provided in Section 1 hereof or other similar event affecting
        the number or character of outstanding Warrant Shares, so that the number
        and
        type of securities and/or other property issuable upon exercise of this Warrant
        shall be equal to that which would have been issuable with respect to the
        number
        of Warrant Shares subject hereto at the time of such event, had such Warrant
        Shares then been outstanding. 

       

      6.
        

      Certificate
        as to Adjustments.
        In each
        case of an adjustment in the Purchase Price or in the shares of Stock or
        other
        stock, securities or property receivable on the exercise of the Warrant,
        the
        Company, at its expense, will compute such adjustment in accordance with
        the
        terms of the Warrant and prepare a certificate setting forth such adjustment
        and
        showing in detail the facts upon which the adjustment is based. The Company
        will
        mail a copy of each such certificate to the Holder of the Warrant outstanding
        at
        that time. 

       

      7.
        

      Notices
        of Record Date.
        In case
        (i) the Company takes a record of the holders of its Stock (or other stock
        or securities at the time receivable upon the exercise of the Warrant) for
        the
        purpose of entitling them to receive any dividend or other distribution,
        or any
        right to subscribe for any purchase any shares of stock of any class or any
        other securities; or (ii) of any capital reorganization of the Company, any
        reclassification of the common stock of the Company, any consolidation or
        merger
        of the Company with or into another corporation, including, without limitation,
        any Merger or Consolidation, or any conveyance of all or substantially all
        of
        the assets of the Company to another corporation; or (iii) of any voluntary
        dissolution,, liquidation or winding-up on the Company; then, in each such
        case.
        The Company will mail or cause to be mailed to each Holder of a Warrant at
        the
        time outstanding a notice specifying, as the case may be, (a) the date on
        which a record is to be taken for the purpose of such dividend, distribution
        or
        right, and stating the amount and character of such dividend, distribution
        or
        right, or (b) the date on which such reorganization, reclassification,
        consolidation, merger, conveyance, dissolution, liquidation or winding-up
        is to
        take place, and time, if any is to be fixed as of which the holders of record
        of
        Stock (or such other stock or securities at the time receivable upon the
        exercise of the Warrant) will be entitled to exchange their shares of Stock
        (or
        such other stock or securities) for securities or other property deliverable
        upon such reorganization, reclassification, consolidation, merger, conveyance,
        dissolution, liquidation or winding-up, and in the case of a reorganization,
        consolidation, merger or conveyance, the fair market value of such securities
        or
        other property as determined by the Board of Directors of the Company. Such
        notice shall be mailed at least ten (10) days prior to the date specified
        therein; provided, however, that in the event of a Merger or Consolidation
        the
        Company shall use its best efforts to provide such notice in accordance with
        Section 11 below at least twenty-one (21) days prior to the closing
        date of such Merger or Consolidation and, in any event, shall provide such
        notice in accordance with Section 11 below at least fifteen (15) days
        prior to such closing date. 

       

      8.
        

      Reservation
        of Stock Issuable on Exercise of Warrant.
        The
        Company will at all times reserve and keep available, solely for issuance
        and
        delivery upon the exercise of this Warrant, all such shares of Stock and
        other
        stock, or such other stock, securities and property as from time to time
        are
        receivable upon the exercise of the Warrant. 

      9.
        

      Replacement
        of Warrant.
        Upon
        receipt of evidence reasonably satisfactory to the Company of the loss, theft,
        destruction or mutilation of this Warrant and (in the case of loss, theft
        or
        destruction) upon delivery of an indemnity agreement in such reasonable amount
        as the Company may determine, or (in the case of mutilation) upon surrender
        and
        cancellation thereof, the Company at its expense, will issue a replacement
        warrant in substantially identical form to this Warrant. 

       

      10.
        

      Notices.
        Any
        notices, demand, offer, request or other communication required or permitted
        to
        be given by either the Company or a Holder (collectively, a "Notice")
        pursuant to the terms of this Agreement, if delivered to the Holder, shall
        be
        sent to the following address: 

      

      
        	 	
                 

              	
                 

              
	 	
                 

                 

              	
                 

                 

              
	
                Fax
                  No. 

              	
                 

              	
                 

              
	
                With
                  a copy to:

              	
                 

              	
                 

              
	 	
                 

              	
                 

              
	 	
                 

                 

              	
                 

                 

              
	
                Fax
                  No. 

              	
                 

              	
                 

              

      

       

      or
        at
        such other addressed provided to the Company or such other address as a party
        may request by notifying the other in writing. 

       

      (a)
        

      Any
        notice shall be delivered in writing. Any such Notice shall be deemed
        effectively given the earlier of (i) when received, (ii) when
        delivered personally, (iii) one (1) business day after being delivered
        by facsimile (with receipt of appropriate confirmation), (iv) one
        (1) business day after being deposited with an overnight courier service
        and (v) four (4) days after being deposited in the U.S. mail, First
        Class with postage prepaid. 

       

      11.
        

      Change;
        Waiver.
        Neither
        this warrant nor any term hereof may be changed, waived, discharged or
        terminated orally, but only by an instrument in writing signed by the party
        against which enforcement of the change, waiver, discharge or termination
        is
        sought. 

       

      12.
        

      No
        Fractional Shares or Script.
        No
        fractional shares or script representing fractional shares shall be issued
        upon
        the exercise of this Warrant, but in lieu of such fractional shares the Company
        shall make cash payment therefore upon the basis of the Purchase Price then
        in
        effect. 

       

      13.
        

      No
        Rights as Stockholder.
        This
        Warrant does not entitle the Holder to any voting rights or other rights
        as a
        stockholder of the Company prior to the exercise of this Warrant. 

       

      14.
        

      Headings.
        The
        headings in this Warrant are for purposes of reference only and shall not
        be
        deemed to constitute a part hereof. 

       

      15.
        

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

       

      16.
        

      Governing
        Law.
        This
        Warrant is delivered in the State of Texas and shall be construed in accordance
        with and governed by the laws of such state. 

       

      17.
        

      Confidentiality;
        No Public Disclosure.
        The
        terms and conditions of this Warrant are confidential. Neither party shall
        make
        any public disclosure concerning the terms and conditions of this Warrant
        without the prior written consent of the other party, except as required
        by the
        rules and regulations of the securities and Exchange Commission, the Nasdaq
        National Market or any other applicable stock exchanges. 

      

      
        	
                Dated:
                  October 4, 2005

              	
                 

              	
                Electric
                  & Gas Technology, Inc..

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                 

                Signature
                  of Authorized Signatory

              
	
                 

                 

              	
                 

                 

              	
                 

                George
                  M. Johnston, CFO 

                 

                Print
                  Name and Title

              
	
                 

                Agreed
                  and Accepted:

              	
                 

                 

              	
                 

                H.
                  Richard Grisham

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                 

                Signature
                  of Authorized Signatory

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                 

                Print
                  Name and Title

              

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        A 

       

       

      Serial
        00467

       

       

      NOTICE
        OF EXERCISE 

       

       

      TO:
        Electric & Gas Technology, Inc. 

       

       

              1.     The
        undersigned hereby elects to purchase 15,000 shares of Common Stock of Electric
        & Gas Technology, Inc. pursuant to the terms of the attached Warrant.

       

       

              2.     Exercise
        (Please initial the blank): 

       

      
        	 	
                 

              	
                The
                  undersigned elects to exercise the attached Warrant by means of
                  a cash
                  payment, and tenders herewith payment in full for the purchase
                  price of
                  the shares being purchased, together with all applicable transfer
                  taxes,
                  if any.

              

      

      3.
        

      Please
        issue a certificate, or certificates representing said shares of stock, in
        the
        name of the undersigned or in such other name as are specified below

      

      
        	
                 

              	
                 

              	
                 

                (Name)

              	
                 

              	
                 

              
	
                 

              	
                 

              	 	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

                (Address)

              	
                 

              	
                 

              

      

      4.
        

      The
        undersigned represents that the aforesaid shares of stock are being acquired
        for
        the account of the undersigned for investment and not with a view to, or
        for
        resale in connection with, the distribution thereof and that the undersigned
        has
        no present intention of distributing or reselling such shares. In support
        thereof, the undersigned has executed an Investment Representation Statement
        attached hereto as Exhibit B.
        

      
        	
                 

                 

              	
                 

                 

              	
                 

                 

                Name
                  of Warrantholder

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                Signature
                  of Authorized Signatory

              
	
                 

                 

              	
                 

                 

              	
                 

                 

                Print
                  Name and Title

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