REPRESENTATIVE'S WARRANT AGREEMENT
BETWEEN
NATURAL GAS VEHICLE SYSTEMS, INC.
AND
COMMONWEALTH ASSOCIATES
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Dated as of January __, 1997
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REPRESENTATIVE'S WARRANT AGREEMENT dated as of January __, 1997 between
NATURAL GAS VEHICLE SYSTEMS, INC., a Delaware corporation (the "Company"), and
COMMONWEALTH ASSOCIATES ("Commonwealth").
The Company proposes to sell to Commonwealth common stock purchase
warrants (the "Warrants") to purchase an aggregate of 150,000 shares (the
"Shares") of the Company's common stock, par value $.01 per share (the "Common
Stock"), in connection with a public offering by the Company, pursuant to a
registration statement (the "Registration Statement") on Form SB-2 (File No.
333-14185) filed by the Company with the Securities and Exchange Commission, of
1,500,000 shares of Common Stock (the "Offering").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Company and Commonwealth hereby agree as
follows:
1. Issuance of Warrants; Form of Warrant; Execution of Warrants. The
Company shall issue, sell and deliver the Warrants to Commonwealth or, at
Commonwealth's direction, to its bona fide officers or designees, for an
aggregate purchase price of $150.00, concurrently with the closing (the
"Closing") under the underwriting agreement dated January __, 1997 between the
Company and Commonwealth (the "Underwriting Agreement") relating to the
Offering. The Warrants, together with the purchase and assignment forms to be
printed on the reverse thereof or attached thereto, shall be substantially in
the form of Exhibit A attached hereto. The Warrants shall be executed on behalf
of the Company by the manual or facsimile signature of its present or any future
Chairman or President, under its corporate seal affixed or in facsimile, and
attested by the manual or facsimile signature of its Secretary or Assistant
Secretary.
2. Registration. The Warrants shall be numbered and shall be registered in
a Warrant register as they are issued. The Company shall be entitled to treat
the registered holder of any Warrant (the "Holder") as the owner in fact thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to or interest in such Warrants on the part of any other person, and shall
not be liable for any registration or transfer of Warrants that are registered
or to be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with the actual knowledge that a fiduciary or nominee is committing
a breach of trust in requesting such registration or transfer, or with such
knowledge of such facts that its participation therein amounts to bad faith. The
Warrants shall be registered initially in the name of "Commonwealth Associates"
in such denominations as Commonwealth may request in writing to the Company;
provided, however, that prior to the Closing, Commonwealth may designate that
the Warrants be issued in varying amounts directly to its bona fide officers or
designees and not to Commonwealth. Such designation will only be made by
Commonwealth if it determines such issuances would not violate the
interpretation of the Board of Governors of the National Association of
Securities Dealers, Inc. (the "NASD") relating to the review of corporate
financing arrangements.
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3. Transfer of Warrants.
3.1 The Warrants may not be sold, assigned, transferred, pledged or
hypothecated for a period of one year after the effective date of the
Registration Statement, except that they may be assigned, in whole or in part,
to any successor, officer, employee or partner of Commonwealth, or to officers,
employees or partners of any such successor or partner. The Warrants shall be
transferable only on the books of the Company maintained at its principal
executive office (the "Company Office") upon delivery thereof duly indorsed by
the Holder or by the Holder's duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or authority to
transfer. In all cases of transfer by an attorney, the original power of
attorney, duly approved, or a copy thereof, duly certified, shall be deposited
and remain with the Company. In case of transfer by executors, administrators,
guardians or other legal representatives, duly authenticated evidence of their
authority shall be produced, and may be required to be deposited and remain with
the Company in its discretion.
3.2 Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the persons entitled thereto. The Warrants may be
exchanged, at the option of the Holder thereof, for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of shares of Common Stock upon
surrender to the Company or its duly authorized agent. Notwithstanding the
foregoing, the Company shall have no obligation to cause Warrants to be
transferred on its books to any person, unless the Holder or Holders thereof
shall furnish to the Company evidence of compliance with the Securities Act of
1933 (the "Act") in accordance with the provisions of section 11 of this
agreement.
4. Exercise of Warrants; Term of Warrants.
4.1 Each Warrant shall entitle the Holder thereof to purchase from the
Company one share of Common Stock at a purchase price of $_____ per share or at
such adjusted purchase price as may be established from time to time pursuant to
the provisions of section 8 hereof, payable in full at the time of exercise of
the Warrant. Except as the context otherwise requires, the term "Exercise Price"
as used in this agreement shall mean the purchase price of one share of Common
Stock, reflecting all appropriate adjustments made in accordance with section 8
hereof. Each Warrant may be exercised for a four-year period commencing on the
first anniversary of the effective date of the Registration Statement. The term
"Expiration Date" as used in this agreement shall mean the latest time and date
at which the Warrants may be exercised. After the Expiration Date, any
unexercised Warrants shall be void and all rights of Holders with respect
thereto shall cease.
4.2 During the period specified in and subject to the provisions of this
section 4, Warrants may be exercised by their surrender at the Company Office
with the election-to-purchase form set forth on (or attached to) the Warrant
duly completed and executed, accompanied by payment in full to the Company of
the aggregate Exercise Price in effect at the
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time of the exercise, together with any taxes payable pursuant to section 5
hereof, for each share of Common Stock with respect to which Warrants are being
exercised, which amounts shall be paid in full, in United States currency, by a
bank cashier's check or money order payable to the order of the Company or by
wire transfer to an account designated by the Company. Within five (5) business
days after the exercise of any Warrants, the Company shall issue a certificate
or certificates for the number of full Shares to which the Holder is entitled,
registered in accordance with the instructions set forth in the election to
purchase, together with cash as provided in section 9 of this agreement payable
in respect of fractional shares. All Shares shall be duly authorized and validly
issued, fully paid, nonassessable and free of preemptive rights, and free from
all taxes, liens, and charges. Certificates representing such Shares shall be
delivered by the Company in such names and denominations as are required for
delivery to, or in accordance with the instructions of, the Holder.
4.3 Each person in whose name any such certificate for Shares is issued
shall for all purposes be deemed to have become the holder of record of the
Shares represented thereby on the date upon which such Warrants were surrendered
for exercise, accompanied by payment of the Exercise Price as aforesaid,
irrespective of the date of issuance or delivery of such certificate for Shares;
provided, however, that if, at the date of the surrender of such Warrants and
payment of the Exercise Price, the transfer books for the Common Stock or other
class of stock purchasable upon the exercise of such Warrants shall be closed,
the certificates for the Shares or for shares of such other class of stock in
respect of which such Warrants are then exercised shall be issuable as of the
date on which such books shall next be opened (whether before or after the
Expiration Date) and, until such date, the Company shall be under no duty to
deliver any certificate for such Shares or for shares of such other class of
stock; provided further, that the transfer books of record, unless otherwise
required by law, shall not be closed at any one time for a period longer than
twenty (20) days.
4.4 The Warrants shall be exercisable, at the election of the Holders
thereof, in full or from time to time in part and, in the event that less than
all of the surrendered Warrants are exercised, the Company shall execute and
mail, by first-class mail, within thirty (30) days of the date upon which the
Warrants were exercised, to the Holder of such Warrants or such other person as
shall be designated in the election to purchase, a new Warrant representing the
number of full Warrants not exercised. In no event shall a fraction of a Warrant
be exercised, and the Company shall distribute no fractions of Warrants under
this or any other section of this agreement.
5. Payment of Taxes. The Company shall promptly pay all documentary stamp
taxes attributable to the issuance of Shares upon the exercise of any Warrants,
but any transfer taxes that may be payable in connection with the issuance of
Warrants or certificates for Shares in any name other than that of the Holder of
the Warrant surrendered shall be paid by such Holder.
6. Mutilated or Missing Warrants. In case any of the Warrants shall be
mutilated, lost, stolen, or destroyed, the Company shall issue and deliver in
exchange and substitution for
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and upon cancellation of the mutilated Warrant, or in lieu of and substitution
for the lost, stolen, or destroyed Warrant, a new Warrant of like tenor and
representing an equivalent right or interest; but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction of
such Warrant. Applicants for such substitute Warrants shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company may prescribe.
7. Reservation of Shares. The Company shall at all times reserve and keep
available for issuance upon the exercise of Warrants a number of its authorized
but unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants. Continental Stock Transfer & Trust
Company, the transfer agent for the Company's Common Stock (the "Transfer
Agent"), and every subsequent transfer agent for any shares of the Company's
capital stock issuable upon the exercise of Warrants, shall be irrevocably
authorized and directed at all times to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company will keep a
copy of this agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of Warrants. The Company shall supply the Transfer Agent (and any such
subsequent transfer agent) with duly executed stock certificates for such
purpose and will provide or otherwise make available any cash that may be
payable as provided in section 9 hereof. All Warrants surrendered upon the
exercise thereof shall be canceled and such canceled Warrants shall constitute
sufficient evidence of the number of shares of Common Stock (or other shares of
capital stock) that have been issued upon the exercise of the Warrants. After
the Expiration Date, no shares shall be subject to reservation in respect of any
unexercised Warrants.
8. Adjustments.
8.1 Adjustment of Number of Shares. The number of shares of Common Stock
that the holder of this Warrant shall be entitled to receive upon each exercise
hereof shall be determined by multiplying:
(a) the number of shares of Common Stock that would otherwise (but
for the provisions of this section 8) be issuable upon such exercise, as
designated by the holder hereof pursuant to section 4; by
(b) a fraction of which the numerator is $_____ and the denominator
is the Exercise Price in effect on the date of such exercise;
provided, however no adjustment pursuant to this section 8 shall occur as a
result of the issuance of (i) shares of Common Stock sold pursuant to the
Underwriting Agreement (including the over-allotment shares referred to
therein), (ii) up to an aggregate of 500,000 shares of Common Stock issued to
employees upon the exercise of options granted pursuant to the Company's Amended
and Restated Natural Gas Vehicle Systems, Inc. Stock Option Plan or 1996
Combined Incentive and Nonqualified Stock Option Plan, (iii) up to an aggregate
of 158,717 shares of Common Stock
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issued pursuant to warrants of the Company issued and outstanding as of the date
hereof, and (iv) shares of Common Stock issued in connection with any business
combination; provided that the Company's Board of Directors determines that the
consideration for each such share equals or exceeds the fair market value
thereof, in such Board's express reasonable judgment (collectively, the
"Excluded Issuances").
8.2 Adjustment of Exercise Price.
8.2.1 Initial Exercise Price. The Exercise Price, which initially will be
$_____, shall be adjusted and readjusted from time to time as provided in this
section 8 and, as so adjusted or readjusted, shall remain in effect until a
further adjustment or readjustment thereof is required by this section 8;
provided, however there shall be no adjustment of the Exercise Price due to the
Excluded Issuances.
8.2.2 Issuance of Additional Shares of Common Stock. In case the Company,
at any time or from time to time after January __, 1997 (the "Effective Date"),
shall issue or sell Additional Shares of Common Stock (as defined below),
including Additional Shares of Common Stock deemed to be issued pursuant to
section 8.3 or section 8.4, without consideration or for a consideration per
share less than either the Exercise Price or the Fair Market Value (as defined
below) of the shares of Common Stock outstanding immediately prior to such issue
or sale, then, and in each such case, the Exercise Price shall be reduced,
subject to section 8.8, concurrently with such issue or sale, to a price
(calculated to the nearest cent) determined by multiplying such Exercise Price
by a fraction of which
(a) the numerator shall be (i) the number of shares of Common Stock
outstanding immediately prior to such issue or sale plus (ii) the number
of shares of Common Stock which the aggregate consideration received by
the Company for the total number of Additional Shares of Common Stock so
issued or sold would purchase at the lesser of such Exercise Price or Fair
Market Value immediately prior to such issue or sale, and
(b) the denominator shall be the number of shares of Common Stock
outstanding immediately after such issue or sale.
For the purposes of this section 8.2.2, (x) immediately after any Additional
Shares of Common Stock shall be deemed to be issued pursuant to section 8.3 or
section 8.4, such Additional Shares shall be deemed to be outstanding, and (y)
treasury shares shall not be deemed to be outstanding. "Additional Shares of
Common Stock" shall mean all shares (including treasury shares) of Common Stock
issued or sold (or pursuant to sections 8.3 or 8.4, deemed to be issued) by the
Company after the Effective Date hereof, whether or not subsequently reacquired
or retired by the Company, other than shares of Common Stock issued upon the
exercise of the Warrants. "Fair Market Value", with respect to shares of Common
Stock outstanding at any time shall be determined as follows:
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(a) If a public market exists for the Common Stock, the Fair Market
Value of the Common Stock shall be (i) the closing price of the Common
Stock on the Business Day prior to such issuance on the National Market
System of the National Association of Securities Dealers Automated
Quotations System ("NASDAQ") or on the principal national securities
exchange on which the Common Stock is at the time traded or (ii) if there
is not such a sale on such day or if the Common Stock is not at that time
traded on the National Market System of the NASDAQ or on a national
securities exchange, the average of the lowest closing bid and highest
closing asked prices on such day as reported by the National Association
of Securities Dealers (or any successor organization); or
(b) If a public market for the Common Stock does not exist, the Fair
Market Value of the Common Stock shall be determined in good faith by the
Board of Directors promptly after the issuance of any Additional Shares of
Common Stock or the occurrence of any other event or the existence of any
other circumstance as a result of which the Fair Market Value of the
Common Stock would be required for any provision of this agreement and the
Company shall promptly deliver to each Holder a certificate of the
Secretary of the Company setting forth the amount of the Fair Market Value
of the Common Stock and certifying that the amount was determined by the
Board of Directors of the Company. If any Holder disagrees with the Fair
Market Value set forth in that certificate, such Holder may, together with
any other Holders who so disagree, engage an independent investment bank
or firm of independent public accountants to act as appraiser, the expense
of which shall be shared equally by such Holder or Holders, to determine
the Fair Market Value of the Common Stock, and such Holder shall deliver
such appraisal to the Company within 30 days after the date of delivery of
the certificates referenced to above. Within five days after delivery to
the Company of such appraisal, the appraiser engaged by the Holder and a
person designated by the Board (the expense of which shall be borne by the
Company) shall meet in order to resolve any questions or differences with
respect to the Fair Market Value of the Common Stock. If such persons
agree on a Fair Market Value of the Common Stock, such Fair Market Value
shall be the Fair Market Value. If no such agreement is reached, the Fair
Market Value shall be determined within ten days after such meeting by an
appraiser who shall be selected by the appraiser engaged by the Holder and
the person designated by the Board (or, if they do not agree on an
appraiser within ten days, another independent investment bank or firm of
independent public accountants to act as appraiser selected by the
American Arbitration Association), the expense of which shall be shared
equally by such Holder or Holders, on the one hand, and the Company, on
the other hand, and the determination of that third appraiser shall be
conclusive and binding on both the Company and the Holders. In determining
the Fair Market Value of any share of Common Stock, all Warrants shall be
treated as if they had been exercised for the number of shares of Common
Stock issuable upon their exercise, and the Fair Market Value of any
Warrant shall be equal to the Fair Market
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Value of the Shares of Common Stock issuable upon the exercise of such
Warrant less the exercise price of such Warrant.
8.2.3 Dividends and Distributions. In case the Company at any time or from
time to time after the Effective Date shall declare, order, pay or make a
dividend or other distribution on Common Stock (including, without limitation,
any distribution of stock or other securities, property or options by way of
dividend, spin-off, reclassification, corporate rearrangement, and any
redemption or acquisition of stock or options or other securities), then, and in
each such case, the Exercise Price in effect immediately prior to the close of
business on the record date fixed for the determination of holders of any class
of securities entitled to receive such dividend or other distribution shall be
reduced, subject to section 8.8, effective as of the close of business on such
record date, to a price (calculated to the nearest cent) determined by
multiplying such Exercise Price by a fraction of which
(a) the numerator shall be the Exercise Price in effect immediately
prior to the close of business on such record date minus the value of such
dividends or other distributions (as determined in good faith by the Board
of Directors of the Company) applicable to one share of Common Stock, and
(b) the denominator shall be such Exercise Price in effect
immediately prior to the close of business on such record date;
provided, however, that no such reduction shall be made pursuant to this section
8.2.3 for a dividend payable in Additional Shares of Common Stock or in Options
(as defined below) for Common Stock, or a dividend payable in cash or other
property and declared out of the earned surplus (i.e., retained earnings, when
and if the Company has any) of the Company (excluding any portion thereof
resulting from a reevaluation of property). For purposes of the foregoing, a
dividend payable other than in cash shall be considered payable out of earned
surplus only to the extent that such earned surplus is charged an amount equal
to the fair value of such dividend at the time of declaration as determined in
good faith by the Board of Directors of the Company. "Options" shall mean
rights, options or warrants to subscribe for, purchase or otherwise acquire
either Additional Shares of Common Stock or Convertible Securities. "Convertible
Securities" shall mean any shares (other than Common Stock), evidences of
indebtedness or other securities directly or indirectly convertible into or
exchangeable for Additional Shares of Common Stock.
8.3 Treatment of Options and Convertible Securities. In case the Company,
at any time or from time to time after the Effective Date shall issue, sell,
grant or assume, or fix a record date for the determination of holders of any
class of securities entitled to receive, any Options or Convertible Securities,
then, and in each such case, the maximum number of Additional Shares of Common
Stock issuable upon the exercise of such Options or the conversion or exchange
of such Convertible Securities shall be deemed to be issued for purposes of
section 8.2.2 as of the time of such issue, sale, grant or assumption, or, in
case such a record date shall have been fixed, as of the close of business on
such record date; provided, however, that such Additional Shares of
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Common Stock shall not be deemed to be issued if the consideration per share of
such shares, as determined pursuant to section 8.5, would be equal to or greater
than the greater of the Exercise Price or the Fair Market Value of the shares of
Common Stock on the Business Day (as defined below) on which such Additional
Shares of Common Stock shall be deemed to be issued; and provided further,
however, that in each such case in which Additional Shares of Common Stock would
have been deemed to be issued,
(a) no further Additional Shares of Common Stock shall be deemed to
be issued upon the subsequent issue or sale of Common Stock or any other
securities of the Company pursuant to the exercise of such Options or the
conversion or exchange of such Convertible Securities;
(b) if such Options or Convertible Securities by their terms shall
provide in any manner for any increase in the consideration payable to the
Company, or decrease in the number of Additional Shares of Common Stock
issuable, upon the exercise, conversion or exchange thereof, the Exercise
Price computed upon the original issue, sale, grant or assumption of such
Options or Convertible Securities (or upon the fixing of the record date
with respect thereto), and any subsequent adjustments in such Exercise
Price, shall, upon any such increase in consideration or decrease in the
number of Additional Shares of Common Stock issuable becoming effective,
be recomputed to reflect such increase or decrease insofar as it affects
such Options, or the rights of conversion or exchange under such
Convertible Securities, as are outstanding at the time such increase or
decrease becomes effective;
(c) upon the expiration of any such Options or of the rights of
conversion or exchange under any such Convertible Securities which shall
not have been exercised, or upon purchase by the Company and cancellation
or retirement of any such Options which shall not have been exercised or
of any such Convertible Securities the rights of conversion or exchange
under which shall not have been exercised, the Exercise Price computed
upon the original issue, sale, grant or assumption of such Options or
Convertible Securities (or upon the fixing of the record date with respect
thereto), and any subsequent adjustments in such Exercise Price, shall,
upon such expiration, cancellation or retirement, be recomputed as if:
(i) in the case of Options for Common Stock or of Convertible
Securities, the only Additional Shares of Common Stock issued or
sold were the Additional Shares of Common Stock, if any, actually
issued or sold upon the exercise of such Options or the conversion
or exchange of such Convertible Securities and the consideration
received thereupon was
(A) in the case of Options, an amount equal to (x) the
consideration actually received by the Company for the issue,
sale, grant or assumption of all such Options, plus (y) the
consideration actually
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received by the Company upon exercise of any such Options,
minus (z) the consideration paid by the Company for any
purchase of such Options which were not exercised, or
(B) in the case of Convertible Securities, an amount
equal to (x) the consideration actually received by the
Company for the issue, sale, grant or assumption of all such
Convertible Securities (unless theretofore taken into account
pursuant to clause (ii) below) which were actually converted
or exchanged, plus (y) the consideration actually received by
the Company upon such conversion or exchange, minus (z) the
consideration paid by the Company for any purchase of such
Convertible Securities the rights of conversion or exchange
under which were not exercised, and
(ii) in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued or sold upon the
exercise of such Options were issued at the time of the issue, sale,
grant or assumption of such Options, and the consideration received
by the Company for the Additional Shares of Common Stock deemed to
have then been issued was an amount equal to (x) the consideration
actually received by the Company for the issue, sale or grant of all
such Options, plus (y) the consideration deemed to be received by
the Company (pursuant to section 8.5) upon the issue or sale of the
Convertible Securities with respect to which such Options were
actually exercised, minus (z) the consideration paid by the Company
for any purchase of such Options that were not exercised; and
(d) no readjustment pursuant to subdivision (b) or (c) above shall
have the effect of increasing the Exercise Price by an amount in excess of
the amount of the adjustment thereof originally made pursuant to the
issue, sale, grant or assumption of such Options or Convertible
Securities.
"Business Day" shall mean any day of the year which is not a Saturday,
Sunday or a day on which banks are required or authorized to close in the State
of New York.
8.4 Treatment of Stock Dividends, Stock Splits, etc. In case the Company
at any time or from time to time after the Effective Date shall fix a record
date for the determination of holders of any class of securities entitled to
receive any dividend or other distribution on any class of stock of the Company
payable in Common Stock, or shall otherwise effect any subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock, then, and in each such case, Additional Shares of Common Stock shall be
deemed to be issued (a) in the case of any such dividend or other distribution,
immediately after the close of business on such record date, or (b) in the case
of any such subdivision, at the close of business on the day immediately prior
to the day upon which such corporate action shall have become effective.
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8.5 Computation of Consideration. For the purposes of this section 8:
(a) The consideration for any Additional Shares of Common Stock
actually issued or sold or for the issue, sale, grant or assumption of any
Options or Convertible Securities, irrespective of the accounting
treatment of such consideration, shall
(i) insofar as it consists of cash, be computed as the amount
of cash actually received by the Company, without deducting any
expenses paid or incurred by the Company, or any commissions or
compensation paid or concessions or discounts allowed by the
Company, to underwriters, dealers or others performing similar
services in connection with any such issue or sale,
(ii) insofar as it consists of consideration (including
securities as defined in the Act) other than cash, be computed as
the market value thereof at the time of any such issue, sale, grant
or assumption as determined in good faith by the Board of Directors
of the Company (which determination shall be evidenced in a
certificate delivered promptly to each Holder and which
determination shall be subject to the procedures for disagreement as
provided in item (b) of the definition of "Fair Market Value" in
section 8.2.2), and
(iii) insofar as Additional Shares of Common Stock are issued
or sold, Options or Convertible Securities are issued, sold, granted
or assumed together with other stock or securities or other assets
of the Company for a consideration that covers both, be the
proportion of such consideration (computed as provided in clauses
(i) and (ii) above) allocable to such Additional Shares of Common
Stock or Convertible Securities as determined in good faith by the
Board of Directors of the Company (which determination shall be
evidenced in a certificate delivered promptly to each Holder and
which determination shall be subject to the procedures for
disagreement as provided in item (b) of the definition of "Fair
Market Value" in section 8.2.2).
(b) The following shall be deemed to be issued without
consideration: (i) all Additional Shares of Common Stock, Options or
Convertible Securities issued in payment of any dividend or other
distribution on any class of stock of the Company, and (ii) all Additional
Shares of Common Stock issued to effect a subdivision of the outstanding
shares of Common Stock into a greater number of shares of Common Stock
otherwise than by payment of a dividend in Common Stock. Additional Shares
of Common Stock, Options or Convertible Securities issued to directors,
management, employees and related parties shall be deemed to be issued (i)
without consideration if not issued for cash or property and (ii) for less
than either the Exercise Price or the Fair Market Value to the extent that
any cash or the fair value of property, as determined in
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good faith by the Board of Directors, received for such securities is less
than either the Exercise Price or the Fair Market Value of such
securities.
(c) Additional Shares of Common Stock deemed to have been issued for
consideration pursuant to section 8.3 shall be deemed to have been issued
for a consideration per share determined by dividing
(i) the total amount, if any, actually received by the Company
as consideration for the issue, sale, grant or assumption of the
Options or Convertible Securities in question, plus the minimum
aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration)
payable to the Company upon the exercise of all such Options or the
conversion or exchange of all such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of all such
Options for Convertible Securities and the conversion or exchange of
all such Convertible Securities, in each instance computing such
consideration as provided in the foregoing subdivision (a), by
(ii) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion
or exchange of such Convertible Securities or, in the case of
Options for Convertible Securities, the exercise of such Options and
the conversion or exchange of such Convertible Securities.
8.6 Adjustments for Combinations, etc. In case the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
increased proportionately.
8.7 Dilution in Case of Other Securities. In case any Other Securities (as
defined below) shall be issued or sold, or shall become subject to issue or sale
upon the conversion or exchange of any Common Stock or Other Securities of the
Company (or any issuer of Other Securities or any other Person (as defined
below) referred to in section 9), or shall become subject to subscription,
purchase or other acquisition pursuant to any Options issued, sold, granted or
assumed by the Company (or any such other issuer or Person) for a consideration
that dilutes, in accordance with the standards established in the other
provisions of this section 8 or otherwise, the purchase rights granted by this
Warrant, then, and in each such case, the computations, adjustments and
readjustments provided for in this section 8 with respect to the Exercise Price
shall be made and applied as nearly as possible in the manner so provided, to
determine the amount of Other Securities that the holder of this Warrant shall
be entitled to receive upon the
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exercise of this Warrant, in order to protect such holder against such dilution
of purchase rights. "Person" shall mean an individual, a corporation, a
partnership, a trust, an unincorporated organization or a government or any
agency or political subdivision thereof. "Other Securities" shall mean any stock
(other than Common Stock) of the Company or of any other Person that the Holders
of the Warrants at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrants, in lieu of or in addition to Common
Stock, or that 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 9 or otherwise.
8.8 Minimum Adjustment of Exercise Price. If the amount of any adjustment
of the Exercise Price required pursuant to this section 8 would be less than
$0.10, such amount shall be carried forward, and adjustment with respect thereto
shall be made at the time of and together with any subsequent adjustment that,
together with such amount and any other amount or amounts so carried forward,
shall aggregate at least $0.10.
9. Consolidation, Merger, Sale of Assets, Reorganization, etc. General
Provisions.
9.1 In case the Company, after the Effective Date, (a) shall consolidate
with or merge into any other Person and shall not be the continuing or surviving
Person of such consolidation or merger, or (b) shall permit any other Person to
consolidate with or merge into the Company and the Company shall be the
continuing or surviving Person but, in connection with such consolidation or
merger, Common Stock or Other Securities shall be changed into or exchanged for
cash, stock or other securities of any other Person or any other property, or
(c) shall transfer, directly or indirectly through transactions involving any of
or all its subsidiaries, all or substantially all its properties and assets to
any other Person or (d) shall effect a capital reorganization or
reclassification of Common Stock or Other Securities (other than a capital
reorganization or reclassification resulting in the issue of Additional Shares
of Common Stock for which adjustment in the Exercise Price is provided in
section 8.2.2 or section 8.2.3), then, and in the case of each such transaction,
the Company shall make proper provision such that, upon the terms and in the
manner provided in section 8, the holder of this Warrant, upon the exercise
hereof at any time after the consummation of each such transaction, shall be
entitled to receive, at the Exercise Price in effect immediately prior to such
consummation, in lieu of the Common Stock or Other Securities issuable upon such
exercise immediately prior to such consummation, the highest amount of cash,
securities or other property to which such holder would actually have been
entitled as a shareholder upon such consummation if such holder had exercised
this Warrant immediately prior thereto, subject to adjustments subsequent to
such consummation as nearly equivalent as possible to the adjustments provided
for in section 8 and this section 9; provided, however, that if prior to the
consummation of such transaction, a purchase, tender or exchange offer shall
have been made to and accepted by the holders of more than 50% of the
outstanding shares of Common Stock, and if the holder of this Warrant, by
written notice to the Company (in compliance with section 15) signed on or
before the date immediately preceding the date of expiration of such purchase,
tender or exchange offer, declares an intention to exercise this Warrant in
whole or in part, such holder shall be entitled, upon consummation of such
offer, to
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receive upon exercise the highest amount of cash, securities or other property
to which such holder would actually have been entitled as a shareholder if such
holder had exercised this Warrant prior to the expiration of such purchase,
tender or exchange offer, and if all shares of Common Stock which such holder
would have owned as a result of such exercise had been purchased pursuant to
such purchase, tender or exchange offer, subject to adjustments from and after
the consummation of such purchase, tender or exchange offer as nearly equivalent
as possible to the adjustments provided for in section 8.
9.2 Assumption of Obligations. Notwithstanding anything contained in this
agreement to the contrary, the Company shall not effect any of the transactions
described in subdivisions (a) through (d) of section 9.1 unless, prior to the
consummation thereof, each Person (other than the Company) that may be required
to deliver any cash, stock or other securities or other property upon the
exercise of this Warrant as provided herein shall assume, by written instrument
delivered to the holder of the Warrants, and reasonably satisfactory to
Commonwealth or holders of a majority-in-interest of the Warrants (a) the
obligations of the Company under this agreement and the Warrants (and if the
Company shall survive the consummation of any such transaction, such assumption
shall be in addition to, and shall not release the Company from, any continuing
obligations of the Company under this agreement and the Warrants) and (b) the
obligation to deliver to such holder such cash, stock or other securities or
other property as such holder may be entitled to receive in accordance with the
provisions of this section 9.
9.3 Other Dilutive Events. The Board of Directors of the Company shall
have an ongoing obligation to determine in good faith whether any event has
occurred as to which the provisions of section 8 shall not be strictly
applicable, but with respect to which the failure to make any adjustment to the
Exercise Price would not fairly protect the purchase rights represented by this
Warrant in accordance with the intent and principles of that section. In each
case in which such determination shall be made, the Company shall appoint a firm
of independent public accountants reasonably acceptable to Commonwealth or a
majority-in-interest of the Warrants, which shall give its opinion upon the
adjustments, if any, consistent with the intent and principles established in
sections 8 and 9, necessary to preserve without dilution the purchase rights
represented by this agreement and the Warrants. Upon receipt of such opinion,
the Company will promptly mail a copy thereof to the holder of the Warrants and
shall make the adjustments described therein.
9.4 No Dilution or Impairment. The Company shall not, by amendment of its
certificate of incorporation or by-laws or through any consolidation, merger,
reorganization, transfer of assets, dissolution, issue, sale, grant or
assumption of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this agreement or the
Warrants, but will at all times, whether or not requested to do so, in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holders of the Warrants against dilution or other impairment. Without limiting
the generality of the foregoing, the Company
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(a) shall take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of all Warrants
from time to time outstanding, and
(b) shall not take any action that results in any adjustment of the
Exercise Price if the total number of shares of Common Stock (or Other
Securities) issuable after such action upon the exercise of all Warrants
from time to time outstanding would exceed the total number of shares of
Common Stock (or Other Securities) then authorized by the Company's
certificate of incorporation and available for the purpose of issue upon
such exercise.
9.5 Notice, Evidence of Adjustments. Whenever the Exercise Price is
adjusted, as herein provided, the Company shall promptly cause a notice setting
forth the adjusted Exercise Price and adjusted number of Shares issuable upon
exercise of each Warrant to be mailed to the Holders, at their last addresses
appearing in the Warrant register, and shall cause a certified copy thereof to
be mailed to the Transfer Agent. The Company shall retain a firm of independent
public accountants of recognized standing selected by the Board of Directors
(who may be the regular accountants employed by the Company) to make any
computation required by section 8, and a certificate signed by such firm shall
accompany said notice and shall be conclusive evidence of the correctness of
such adjustment.
10. Fractional Interests. The Company shall not be required to issue
fractions of shares of Common Stock on the exercise of Warrants. If more than
one Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of Shares that shall be issuable upon the exercise thereof
shall be computed on the basis of the aggregate number of Shares purchasable on
exercise of the Warrants so presented. If any fraction of a share of Common
Stock would, except for the provisions of this section 10, be issuable on the
exercise of any Warrant (or specified portions thereof), the Company shall
purchase such fraction for an amount in cash equal to the same fraction of the
Exercise Price then in effect on the date of exercise.
11. Restrictions on Dispositions. The Shares have not been registered
under the Act. Commonwealth represents and warrants to the Company that it
understands that (a) the Shares may not be transferred except pursuant to (i) an
effective registration statement under the Act relating thereto, or (ii) any
available exemption from registration under the Act permitting such disposition
of securities and an opinion of counsel, reasonably satisfactory to counsel for
the Company, that an exemption from such registration is available and (b) the
Warrants may not be transferred except in accordance with the provisions of
section 3, pursuant to an effective registration statement under the Act
relating thereto or pursuant to any available exemption from registration under
the Act permitting such disposition of securities and an opinion of counsel,
reasonably satisfactory to counsel for the Company, that an exemption from such
registration is available.
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12. Certificates to Bear Legends. The Warrants shall be subject to a
stop-transfer order and the certificate or certificates therefor shall bear the
following legend:
NEITHER THE WARRANTS NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE
SOLD OR TRANSFERRED PRIOR TO ________, 1998 (SUBJECT TO CERTAIN LIMITED
EXCEPTIONS), SUCH SECURITIES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT RELATING THERETO, OR (ii) AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION
OF SECURITIES AND AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR
THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE, AND
THE WARRANTS MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 3 OF THE WARRANT AGREEMENT DATED THIS DATE BETWEEN NATURAL GAS VEHICLE
SYSTEMS, INC. AND COMMONWEALTH ASSOCIATES PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT RELATING THERETO OR PURSUANT TO ANY AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE ACT PERMITTING SUCH DISPOSITION OF SECURITIES AND AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
The Shares or other securities issued upon exercise of the Warrants shall
be subject to a stop-transfer order and the certificate or certificates
evidencing any such Shares or securities shall bear a legend in substantially
the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT"). SUCH SHARES MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
RELATING THERETO, OR (ii) AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH
ACT RELATING TO THE DISPOSITION OF SECURITIES AND AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT AN EXEMPTION FROM
REGISTRATION UNDER THE ACT IS AVAILABLE.
13. Registration Rights.
13.1 Demand Registration Rights. Upon written request of the then
Holder(s) of at least a majority of the Warrants, including Shares, if issued,
made at any time within the period commencing one (1) year and ending five (5)
years after the effective date of the Registration Statement, the Company shall
file within a reasonable period of time and, in any event, within forty-five
(45) days after receipt of such written request, at its sole expense, on no more
than one occasion, a registration statement under the Act registering the
Warrants and/or Shares for sale to the public. Within 15 days after receiving
any such notice, the Company shall give notice to the
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other Holders of the Warrants and/or Shares advising that the Company is
proceeding with such registration statement, and offering to include therein the
Warrants and/or Shares of such other Holders. The Company shall not be obligated
to so include the Warrants and/or Shares of any such other Holder unless such
other Holder shall accept such offer by notice in writing to the Company within
ten (10) days after receipt of such notice from the Company. Without the consent
of each Holder who elects to include Warrants and/or Shares in such registration
(which consent may be unreasonably withheld), no other securities of the Company
shall be entitled to participate in such registration. The Company shall use its
best efforts, through its officers, directors, auditors and counsel in all
matters necessary or advisable, to file and cause to become effective such
registration statement as promptly as practicable and for a period of one (1)
year thereafter to reflect in the registration statement financial statements
that are prepared in accordance with section 10(a)(3) of the Act and any facts
or events arising that, individually or in the aggregate, represent a
fundamental and/or material change in the information set forth in the
registration statement to enable any Holders of Warrants to exercise Warrants
and/or sell the underlying Shares during said one-year period. If any
registration pursuant to this section 13.1 is an underwritten offering, the
Company will select an underwriter (or managing underwriter if such offering
should be syndicated) approved by the Holders of a majority of the Warrants
and/or Shares to be included in such registration, such approval not to be
unreasonably withheld.
13.2 Piggyback Registration Rights. If, at any time within the period
commencing two (2) years from the effective date of the Registration Statement
and ending three (3) years thereafter, it proposes to register any class of
security under the Act in a primary registration on behalf of the Company and/or
in a secondary registration on behalf of holders of such securities and the
registration form to be used may be used for registration of the Warrants and/or
Shares underlying the Warrants, the Company will give prompt written notice
(which, in the case of a registration pursuant to the exercise of demand
registration rights other than those provided in section 13.1 above, shall be
within ten (10) business days after the Company's receipt of notice of such
exercise and, in any event, shall be at least thirty (30) days prior to such
filing) to the Holders of Warrants and/or Shares (regardless of whether some of
the Holders shall have theretofore availed themselves of the right provided in
section 13.1 above) at the address(es) appearing on the records of the Company
of its intention to effect a registration and will offer to include in such
registration such number of Warrants and/or Shares with respect to which the
Company has received written requests for inclusion therein within ten (10) days
after receipt of such notice from the Company. All registrations requested
pursuant to this section 13.2 are referred to herein as "Piggyback
Registrations". This section 13.2 is not applicable to any Registration
Statement to be filed by the Company on Forms S-4 or S-8 or any successor forms.
Notwithstanding the foregoing, if the managing underwriter of the offering
being registered shall determine in good faith and advise the Company in writing
that the distribution of the Warrants and/or Shares requested to be included in
the registration concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such securities by
the Company, then the Holders of such Warrants and/or Shares shall delay their
offering and sale for such period ending on (a) the earlier of (i) ninety (90)
days following the
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effective date of the Company's registration statement and (ii) the day upon
which the underwriting syndicate, if any, for such offering shall have been
disbanded or, (b) such date as the Company, the managing underwriter and Holders
of Warrants and/or Shares shall otherwise agree. In the event of such delay, the
Company shall file such supplements or post-effective amendments and take any
such other steps as may be necessary to permit such Holders to make their
proposed offering and sale for a period of one hundred eighty (180) days
immediately following the end of such period of delay. If any party disapproves
of the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the managing underwriter.
13.3 Other Registration Rights. In addition to the rights above provided,
the Company will cooperate with the then-Holders of the Warrants and/or Shares
in preparing and signing any registration statement or notification on Form 1-A,
in addition to the registration statements and notifications discussed above,
required in order to sell or transfer the aforesaid Shares and will supply all
information required therefor, but such additional registration statement or
notification shall be at the then-Holders' cost and expense unless the Company
elects to register or qualify additional shares of the Common Stock, in which
case the cost and expense of such registration statement or notification will be
pro rated between the Company and the Holders according to the aggregate sales
price of the securities being issued. Notwithstanding the foregoing, the Company
will not be required to file a registration statement or notification on Form
1-A pursuant to this section 13 at a time when the audited financial statements
required to be included therein are not available, which time shall be deemed to
be the period commencing 45 days prior to the end of a fiscal year of the
Company and ending 90 days after the end of such fiscal year.
13.4 Action to be Taken by the Company. In connection with the
registration of Warrants and/or Shares in accordance with sections 13.1, 13.2 or
13.3, the Company shall:
(a) Bear the expenses of any registration under section 13.1 or
section 13.2, including but not limited to legal, accounting and printing
fees, provided, however, that in no event shall the Company be obligated
to pay (A) any fees and disbursements of legal counsel retained by Holders
of Warrants and/or Shares, or (B) any underwriters' discount or commission
payable in respect of such Warrants and/or Shares, payment of which shall,
in each case, be the sole responsibility of the Holders of the Warrants
and/or Shares;
(b) Use its best efforts to register or qualify the Warrants and/or
Shares for offer or sale under state securities or blue sky laws of such
jurisdictions in which the participating Holders propose to offer Warrants
and/or Shares, and to do any and all other acts and things that may be
necessary or advisable to enable the Holders to consummate the proposed
sale, transfer or other disposition of such securities in any
jurisdiction; and
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(c) Enter into a cross-indemnity agreement, in customary form, with
each underwriter, if any, and each Holder of securities included in such
Registration Statement provided that, if so requested by the underwriter,
such holders shall provide the underwriters with several indemnity
agreements as to information regarding such holders.
13.5 Information by Holders. Each Holder shall provide, upon reasonable
request by the Company, information for inclusion in such Registration Statement
as may be required by the applicable rules and regulations of the Act.
14. Notices to Holders.
14.1 Nothing contained in this agreement or in any of the Warrants shall
be construed as conferring upon the Holders thereof the right to vote or to
receive dividends or to consent or to receive notice as stockholders in respect
of the meetings of stockholders or the election of directors of the Company or
any other matter, or any rights whatsoever as stockholders of the Company;
provided, however, that in the event that a meeting of stockholders shall be
called to consider and take action on a proposal for the voluntary dissolution
of the Company, other than in connection with a consolidation, merger, or sale
of all, or substantially all, of its property, assets, business and good will as
an entirety, then and in that event the Company shall cause a notice thereof to
be sent by first-class mail, postage prepaid, at least twenty (20) days prior to
the date fixed as a record date or the date of closing the transfer books in
relation to such meeting, to each registered Holder of Warrants at such Holder's
address appearing on the Warrant register; but failure to mail or to receive
such notice or any defect therein or in the mailing thereof shall not affect the
validity of any action taken in connection with such voluntary dissolution. If
such notice shall have been so given and if such a voluntary dissolution shall
be authorized at such meeting or any adjournment thereof, then from and after
the date on which such voluntary dissolution shall have been duly authorized by
the stockholders, the purchase rights represented by the Warrants and all other
rights with respect thereto shall cease and terminate.
14.2 In the event the Company intends to:
(a) make any distribution on or to holders of its Common Stock (or
other securities that may be purchasable in lieu thereof upon the exercise
of Warrants), including, without limitation, any dividend or distribution
from earned surplus, any dividend or distribution of stock, assets or
evidences of indebtedness, any distribution to be made in connection with
a consolidation or merger in which the Company is the surviving
corporation or any distribution of shares of stock of any corporation at
least a majority of whose outstanding stock is owned by the Company,
(b) issue subscription rights or warrants to holders of its Common
Stock,
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(c) issue shares of its Common Stock (excluding shares issued in any
of the transactions described in section 8 above) for a consideration per
share less than the Fair Market Value on the date the Company fixes the
offering price of such additional shares or
(d) issue any securities convertible into or exchangeable for its
Common Stock for a consideration per share of Common Stock initially
deliverable upon conversion or exchange of such securities (determined as
provided below) less than the then Fair Market Value or less than the
Exercise Price in effect immediately prior to the issuance of such
securities,
then the Company shall cause a notice of its intention to make such distribution
or issuance to be sent by first-class mail, postage prepaid, at least twenty
(20) days prior to the date fixed as a record date or the date of closing the
transfer books in relation to such distribution, to each registered Holder of
Warrants at such Holder's address appearing on the Warrant register, but failure
to mail or to receive such notice or any defect therein or in the mailing
thereof shall not affect the validity of any action taken in connection with
such distribution or issuance. All computations for purposes of this section 14
shall be made in accordance with the provisions of section 8 hereof.
15. Notices. Any notice or demand required by this agreement to be given
or made by the Holder to or on the Company shall be sufficiently given or made
if sent by first-class or registered mail, postage prepaid, or by facsimile
transmission addressed as follows:
NATURAL GAS VEHICLE SYSTEMS, INC.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No. (000) 000-0000
Attention: Xxxx X. Xxxxx
Any notice or demand required by this agreement to be given or made by the
Company to or on the Holder of any Warrant shall be sufficiently given or made,
whether or not such Holder receives the notice, if sent by first-class or
registered mail, postage prepaid, addressed to such Holder at his last address
as shown on the books of the Company.
16. Governing Law. The validity, interpretation and performance of this
agreement, of each Warrant issued hereunder and of the respective terms and
provisions thereof shall be governed by the law of the state of New York.
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17. Counterparts. This agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and the same instrument.
NATURAL GAS VEHICLE SYSTEMS, INC.
By: _____________________________
Name: Xxxx X. Xxxxx
Title: President
COMMONWEALTH ASSOCIATES
By: _____________________________
Name:
Title:
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EXHIBIT A
(Form of Warrant Certificate)
NEITHER THE WARRANTS NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE
SOLD OR TRANSFERRED PRIOR TO __________, 1998 (SUBJECT TO CERTAIN LIMITED
EXCEPTIONS), SUCH SECURITIES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT RELATING THERETO, OR (ii) AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION
OF SECURITIES AND AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR
THE COMPANY, THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT IS AVAILABLE AND
THE WARRANTS MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 3 OF THE WARRANT AGREEMENT DATED THIS DATE BETWEEN NATURAL GAS VEHICLE
SYSTEMS, INC. AND COMMONWEALTH ASSOCIATES, PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT RELATING THERETO OR PURSUANT TO ANY AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE ACT PERMITTING SUCH DISPOSITION OF SECURITIES AND AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
No. ________ ____________ Warrants
VOID AFTER 5:00 P.M. NEW YORK CITY TIME
On _________, 2002
NATURAL GAS VEHICLE SYSTEMS, INC.
Warrant Certificate
THIS CERTIFIES THAT for value received COMMONWEALTH ASSOCIATES, or
registered assigns, is the registered holder of the number of Warrants set forth
above, each of which entitles the owner thereof to purchase at any time from
__________, 1998 until 5:00 p.m., New York City time on __________, 2002 (the
"Expiration Date"), one fully paid and nonassessable share of the common stock,
par value $.01 per share (the "Common Stock"), of Natural Gas Vehicle Systems,
Inc., a Delaware corporation (the "Company"), at a purchase price per share (the
"Exercise Price") initially equal to $____ upon presentation and surrender of
this Warrant Certificate with the Form of Election to Purchase duly executed.
The number of Warrants evidenced by this Warrant Certificate (and the number of
shares that may be purchased upon exercise thereof) set forth above, and the
Exercise Price per share set forth above, are the number and Exercise Price as
of the date of original issuance of the Warrants, based on the shares
of Common Stock of the Company as constituted at such date. As provided in the
Warrant Agreement referred to below, the Exercise Price and the number or kind
of shares that may be purchased upon the exercise of the Warrants evidenced by
this Warrant Certificate are, upon the happening of certain events, subject to
modification and adjustment.
This Warrant Certificate is subject to, and entitled to the benefits of,
all of the terms, provisions and conditions of an agreement dated as of January
__, 1997 (the "Warrant Agreement") between the Company and Commonwealth
Associates, which Warrant Agreement is hereby incorporated herein by reference
and made a part hereof and to which Warrant Agreement reference is hereby made
for a full description of the rights, limitations of rights, duties and
immunities hereunder of the Company and the holders of the Warrant Certificates.
Copies of the Warrant Agreement are on file at the principal office of the
Company.
This Warrant Certificate, with or without other Warrant Certificates, upon
surrender at the principal office of the Company, may be exchanged for another
Warrant Certificate or Warrant Certificates of like tenor and date evidencing
Warrants entitling the holder to purchase a like aggregate number of shares of
Common Stock as the Warrants evidenced by the Warrant Certificate or Warrant
Certificates surrendered entitled such holder to purchase. If this Warrant
Certificate shall be exercised in part, the holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
No fractional shares of Common Stock will be issued upon the exercise of
any Warrant or Warrants evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Warrant Agreement.
No holder of this Warrant Certificate shall be entitled to vote or to
receive dividends or to consent or to receive notice as a stockholder at the
meetings of stockholders for the election of directors of the Company or any
other matter, or to any rights whatsoever as stockholder of the Company, except
as provided in the Warrant Agreement, until the Warrant or Warrants evidenced by
this Warrant Certificate shall have been exercised and the shares of Common
Stock shall have become deliverable as provided in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Company's Common Stock or other
class of stock purchasable upon the exercise of this Warrant are closed for any
purpose, the Company shall not be required to make delivery of certificates for
shares purchasable upon such exercise until the date of the reopening of said
transfer books.
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IN WITNESS WHEREOF, Natural Gas Vehicle Systems, Inc. has caused the
signature (or facsimile signature) of its President and Secretary to be printed
hereon and its corporate seal (or facsimile) to be printed hereon.
Dated: January __, 1997
NATURAL GAS VEHICLE SYSTEMS, INC.
By: _____________________________
Xxxx X. Xxxxx
[Corporate Seal]
Attest:
_______________________________
, Secretary
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FORM OF
ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificates).
TO NATURAL GAS VEHICLE SYSTEMS, INC.:
FOR VALUE RECEIVED ______________________ hereby sells, assigns and
transfers unto _______________ this Warrant Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint _______________, to transfer the within Warrant Certificate on the books
of the within-named Company, with full power of substitution.
DATED: ,
Signature _________________________
Signature Guaranteed:
NOTICE
The signature of the foregoing assignment must correspond to the name as
written upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
FORM OF
ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Warrant Certificate).
TO NATURAL GAS VEHICLE SYSTEMS, INC.:
The undersigned hereby irrevocably elects to exercise Warrants represented
by this Warrant Certificate to purchase the shares of Common Stock issuable upon
the exercise of such Warrants and requests that certificates for such shares be
issued in the name of:
Please insert social security or other
identifying number
_______________________________
_______________________________
_______________________________
(Please print name and address)
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:
Please insert social security or other
identifying number
_______________________________
_______________________________
_______________________________
(Please print name and address)
Dated: ,
_______________________________
Signature
(Signature must conform in all respects to name of holder as specified on the
face of this Warrant Certificate) Signature Guaranteed:
