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Exhibit 4.5
WARRANT AGENCY AGREEMENT
This WARRANT AGENCY AGREEMENT (this "Agreement") is made and entered
into as of ___________________, 1998, by and among ▇▇▇▇▇▇ NATURAL GAS SERVICES,
INC., a Delaware corporation (the "Company"), and AMERICAN SECURITIES TRANSFER &
TRUST, INC., as Warrant Agent (the "Warrant Agent").
W I T N E S S E T H
WHEREAS, the Company has declared a dividend in the form of a warrant
(a "Warrant") to be exercisable for a period of five (5) years from the date of
issuance thereof to purchase one share of the Company's Common Stock at a
purchase price of $6.00 per share, for every four shares of Common Stock held by
a stockholder on __________, 1998; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission a Registration Statement on Form S-3, Reg. No. 333-_____ , as
amended, for the registration, under the Securities Act of 1933, as amended, of,
among others, the issuance of the shares of Common Stock issuable upon exercise
of the Warrants; and
WHEREAS, the Company desires to provide for the issuance, registration,
transfer, exchange and exercise of certificates representing the Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, registration, transfer, and exchange of the Warrants, the issuance of
certificates representing the Warrants, the exercise of the Warrants, and the
rights of the holders thereof; and
WHEREAS, all acts and things have been done and performed which are
necessary to make the Warrants, when executed on behalf of the Company and
countersigned by or on behalf of the Warrant Agent, as provided herein, the
valid, binding and legal obligations of the Company, and to authorize the
execution and delivery of this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth and for the purpose of defining the terms and
provisions of the Warrants and the certificates representing the Warrants and
the respective rights and obligations thereunder of the Company, the holders of
certificates representing the Warrants and the Warrant Agent, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS. As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:
(a) "Commission" shall mean the Securities and Exchange Commission.
(b) "Common Stock" shall mean Common Stock, par value $.01 per share,
of the Company, whether now or hereafter authorized.
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(c) "Corporate Office" shall mean the office of the Warrant Agent (or
its successor) at which at any particular time its principal business shall be
administered, which office is located on the date hereof at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(d) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(e) "Exercise Date" shall mean, subject to the provisions of Section 5,
as to any Warrant, the date on which the Warrant Agent shall have received both
(i) the Warrant Certificate representing such Warrant, and the Election to
Purchase Form thereon duly executed by the Registered Holder thereof or his
attorney duly authorized in writing, and (ii) payment in cleared funds, whether
made in cash, by wire transfer or by check made payable to the Warrant Agent, of
an amount in lawful money of the United States of America equal to the
applicable Warrant Price.
(f) "Initial Warrant Exercise Date" shall mean, as to each Warrant,
__________, 1998.
(g) "Record Date" shall mean, as to each Warrant, __________, 1998.
(h) "Redemption Date" shall mean the date fixed for the redemption of
the Warrants in accordance with the terms hereof.
(i) "Registered Holder" shall mean the person in whose name any
certificate representing a Warrant or Warrants shall be registered on the books
maintained by the Warrant Agent pursuant to Section 6.
(j) "Registration Statement" shall mean the Company's Registration
Statement on Form S-3 (SEC File No. 333-___________________), as amended.
(k) "Securities Act" shall mean the Securities Act of 1933, as amended.
(l) "Subsidiary" or "Subsidiaries" shall mean any corporation or
corporations, as the case may be, of which stock having ordinary power to elect
a majority of the board of directors of such corporation or corporations
(regardless of whether or not at the time the stock of any other class or
classes of such corporation shall have or may have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by the
Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
(m) "Transfer Agent" shall mean American Securities Transfer & Trust,
Inc. as the Company's transfer agent, or its authorized successor, as such.
(n) "Warrant" or the "Warrants" shall mean and include up to
___________________ Warrants to purchase __________________________ authorized
and unissued shares of Common Stock of the Company, each of such Warrants
initially evidencing the right to purchase one share of Common Stock.
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(o) "Warrant Certificate" shall mean a certificate representing each of
the Warrants substantially in the form attached hereto as Exhibit A.
(p) "Warrant Expiration Date" shall mean, unless the Warrants are
redeemed as provided in Section 9 hereof prior to such date, 5:00 p.m. (Denver,
Colorado time) on ________ __, 2003; provided, however, that if such date shall
in the State of Colorado be a holiday or a day on which banks are authorized to
close, then 5:00 pm. (Denver, Colorado time) on the next following day which in
the State of Colorado is not a holiday or a day on which banks are authorized to
close. Upon at least 30 days prior written notice to all Registered Holders, the
Company shall have the right to extend the Warrant Expiration Date.
(q) "Warrant Price" shall mean the exercise price of $6.00 per share of
Common Stock to be paid upon exercise of each Warrant in accordance with the
terms hereof, subject to adjustment from time to time pursuant to the provisions
of Section 8, and subject to the Company's right to reduce the Warrant Price
upon at least 30 days prior written notice to all Registered Holders.
(r) "Warrant Shares" shall mean and include up to ________ authorized
and unissued shares of Common Stock reserved for issuance on exercise of the
Warrants, and shall include any additional shares of Common Stock or other
property which may hereafter be issuable or deliverable on exercise of the
Warrants pursuant to Section 8.
SECTION 2. WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.
(a) Each Warrant shall initially entitle the Registered Holder of the
Warrant Certificate representing such Warrant to purchase one share of Common
Stock upon the exercise thereof at the Warrant Price at any time prior to the
Warrant Expiration Date, and otherwise in accordance with the terms hereof,
subject to modification and adjustment as provided in Section 8 hereof.
(b) On the Record Date, Warrant Certificates representing up to
___________Warrants to purchase up to an aggregate of ________ shares of Common
Stock, subject to modification and adjustment as provided in Section 8, shall be
executed by the proper officers of the Company and delivered to the Warrant
Agent.
(c) From time to time, the Company shall cause the Transfer Agent to
countersign and deliver stock certificates in required whole number
denominations upon the exercise of Warrants in accordance with this Agreement.
(d) From time to time, up to the Warrant Expiration Date, the Warrant
Agent shall countersign and deliver Warrant Certificates in required whole
number denominations to the Persons entitled thereto in connection with any
transfer or exchange permitted under this Agreement; provided, however, that no
Warrant Certificates shall be issued except (i) Warrant Certificates initially
issued hereunder, (ii) Warrant Certificates issued on or after the Initial
Warrant Exercise Date, upon the exercise of fewer than all Warrants represented
by any Warrant Certificate, to evidence any unexercised Warrants held by the
exercising Registered Holder, (iii)
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Warrant Certificates issued upon any transfer or exchange pursuant to Section 6;
(iv) Warrant Certificates issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7; and (v) at the option of
the Company, Warrant Certificates in such form as may be approved by its Board
of Directors, to reflect any adjustment or change in the Warrant Price, the
number of shares of Common Stock purchasable upon exercise of a Warrant or the
redemption price therefor.
SECTION 3. FORM AND EXECUTION OF WARRANT CERTIFICATES.
(a) Warrant Certificates shall be substantially in the form attached
hereto as Exhibit A and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or stock market on
which the Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether upon initial
issuance, transfer, exchange at in lieu of mutilated, lost, stolen, or destroyed
Warrant Certificates) and issued in registered form.
(b) Warrant Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President and by its Treasurer
or Assistant Treasurer or its Secretary or an Assistant Secretary, by manual
signatures or by facsimile signatures printed thereon, and shall have imprinted
thereon a facsimile of the Company's seal. Warrant Certificates shall be
manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be such officer of
the Company before the date of issuance of the Warrant Certificates or before
countersignature by the Warrant Agent and issue and delivery thereof, such
Warrant Certificates may nevertheless be countersigned by the Warrant Agent,
issued and delivered with the same force and effect as though the person who
signed such Warrant Certificates had not ceased to be such officer of the
Company.
SECTION 4. EXERCISE.
(a) Warrants in denominations of one or whole number multiples thereof
may be exercised by the Registered Holder thereof at any time on or after the
Initial Warrant Exercise Date, but not after the Warrant Expiration Date, upon
the terms and subject to the conditions set forth herein and in the applicable
Warrant Certificate. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise Date, provided that
the Warrant Certificate representing such Warrant, with the exercise form
thereon duly executed by the Registered Holder thereof or his attorney duly
authorized in writing, together with payment in cash or by check made payable to
the Warrant Agent for the account of the Company of an amount in lawful money of
the United States of America equal to the applicable Warrant Price, have been
received by the Warrant Agent. The person entitled to receive the securities
deliverable upon such exercise shall be treated for all purposes as the holder
upon exercise thereof as of the close at business on the Exercise Date. As soon
as practicable on or after the Exercise Date, the Warrant Agent shall deposit
the proceeds received from the exercise of a Warrant and shall notify the
Company in writing of the exercise of such Warrant. Promptly
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following, and in any event within five business days after, the date of such
notice from the Warrant Agent, the Warrant Agent, on behalf of the Company,
shall cause to be issued and delivered by the Transfer Agent, to the person or
persons entitled to receive the same, a certificate or certificates for the
securities deliverable upon such exercise (plus a Warrant Certificate for any
remaining unexercised Warrants of the Registered Holder), unless prior to the
date of issuance of such certificates the Company shall instruct the Warrant
Agent to refrain from causing such issuance of certificates pending clearance of
checks received in payment of the Warrant Price pursuant to such Warrants. Upon
the exercise of any Warrants and clearance of the funds received, the Warrant
Agent shall promptly, and in no event later than three business days following
the day in which the funds clear, remit the payment received for the Warrant to
the Company or as the Company may direct in writing.
(b) No issuance of Warrant Shares shall be made unless there is an
effective registration statement under the Securities Act (or an exemption
therefrom), and registration or qualification of the Warrant Shares (or an
exemption therefrom) has been obtained from the state or other regulatory
authorities in the jurisdiction in which such Warrant Shares are sold. The
Company will provide to the Warrant Agent written confirmation of all such
registration or qualification, or an exemption therefrom, when requested by the
Warrant Agent.
(c) Notwithstanding any other provision of this Agreement to the
contrary, no issuance of the Warrant Shares shall be made, and the Company is
authorized to refuse to honor the exercise of any Warrant, if the exercise of
any Warrant would result, in the opinion of the Company's Board of Directors
upon advice of counsel, in the violation of law.
(d) Upon at least thirty (30) days prior written notice to all
Registered Holders of Warrants, the Company shall have the right to reduce the
Warrant Price and/or to extend the term of the Warrants beyond the Warrant
Expiration Date to a new Warrant Expiration Date.
SECTION 5. RESERVATION OF SHARES; REGISTRATION OF WARRANTS; LISTING OF
SECURITIES; PAYMENT OF TAXES; ETC.
(a) The Company shall at all times reserve and keep available out of
its authorized Common Stock, solely for the purpose of issuance upon exercise of
Warrants, such number of shares of Common Stock as shall then be issuable upon
the exercise of all outstanding Warrants. The Company covenants that, upon
exercise the Warrants and payment of the Warrant Price for the shares of Common
Stock underlying the Warrants, all shares of Common Stock which shall be
issuable upon exercise of the Warrants shall be duly and validly issued, fully
paid, nonassessable, free from all preemptive or similar rights, and free from
all taxes, liens and charges with respect to the issue thereof (other than those
which the Company shall promptly pay or discharge), and that upon issuance such
shares shall be listed on each national securities exchange, if any, on which
the other shares of outstanding Common Stock of the Company are then listed or
quoted, or if not then so listed or quoted on each place (whether the Nasdaq
Stock Market, Inc., the National Association of Securities Dealers OTC
Electronic Bulletin Board, the National Quotation Bureau "pink sheets" or
otherwise) on which the other shares of outstanding Common Stock are listed or
quoted.
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(b) The Company covenants that if the issuance of any Warrants
hereunder require registration with, or approval of, any governmental authority
under any federal securities law before such Warrants may be validly delivered
upon such issuance, then the Company shall, in good faith and as expeditiously
as reasonably possible, endeavor to secure such registration or approval if
necessary. The Company shall use reasonable efforts to obtain appropriate
approvals or registrations with respect to such Warrants under the "blue sky"
securities laws in all states which Registered Holders reside.
(c) The Company covenants that if any securities to be reserved for the
purpose of exercise of Warrants hereunder require registration with, or approval
of, any governmental authority under any federal securities law before such
securities may be validly issued or delivered upon such exercise, then the
Company shall in good faith and as expeditiously as reasonably possible,
endeavor to secure such registration or approval including, to file a
registration statement under the federal securities laws or a post-effective
amendment to a registration statement, use its best efforts to cause the same to
become effective, keep such registration statement current while any of the
Warrants are outstanding and deliver a prospectus which complies with Section
10(a)(3) of the Securities Act, to the Registered Holder exercising the Warrant
(except, if, in the opinion of counsel to the Company, such registration is not
required under the federal securities law or if the Company receives a letter
from the staff of the Commission stating that it would not take any enforcement
action if such registration is not affected). The Company shall use reasonable
efforts to obtain appropriate approvals or registrations with respect to such
securities under the "blue sky" securities laws of all states in which
Registered Holders reside. However, Warrants may not be exercised or sold by,
nor may shares of Common Stock or other securities be issued to, any Registered
Holder in any state or jurisdiction in which such exercise or sale would be
unlawful.
(d) The Company shall pay all documentary, stamp or similar taxes and
other governmental charges that may be imposed with respect to the issuance of
Warrants, or the issuance or delivery of any shares upon exercise of the
Warrants; provided, however, that if the shares of Common Stock are to be
delivered in a name other than the name of the Registered Holder of the Warrant
Certificate representing any Warrant being exercised, then no such delivery
shall be made unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto, if any.
(e) The Warrant Agent is hereby irrevocably authorized to requisition
the Company's Transfer Agent from time to time for certificates representing
shares of Common Stock required upon exercise of the Warrants, and the Company
will authorize the Transfer Agent to comply with all such proper requisitions.
The Company shall file with the Warrant Agent a statement setting forth the name
and address of the Transfer Agent of the Company for shares of Common Stock
issuable upon exercise of the Warrants, unless the Warrant Agent and the
Transfer Agent are the same entity.
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SECTION 6. EXCHANGE AND REGISTRATION OF TRANSFER.
(a) Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of Warrants of the same
class or may be transferred in whole or in part. Warrant Certificates to be so
exchanged shall be surrendered to the Warrant Agent at its Corporate Office, and
upon satisfaction of the terms and provisions hereof, the Company shall execute
and the Warrant Agent shall countersign, issue and deliver in exchange therefor
the Warrant Certificate or Certificates which the Registered Holder making the
exchange shall be entitled to receive.
(b) The Warrant Agent shall keep at its Corporate Office books in
which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and the transfer thereof in accordance with its
regular practice. Upon due presentment for registration of transfer of any
Warrant Certificate at such office, the Company shall execute and the Warrant
Agent shall issue and deliver to the transferee or transferees a new Warrant
Certificate or Certificates representing an equal aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for registration
of transfer, or for exchange or exercise, the subscription or assignment form,
as the case may be, on the reverse thereof shall be duly endorsed, or be
accompanied by a written instrument or instruments of transfer or subscription,
in form satisfactory to the Company and the Warrant Agent, duly executed by the
Registered Holder thereof or his attorney-in-fact duly authorized in writing.
(d) A service charge may be imposed by the Warrant Agent against a
Registered Holder for any exchange or registration of transfer of Warrant
Certificates. In addition, the Company may require payment by such holder of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith.
(e) All Warrant Certificates surrendered for exercise, or for exchange
in case of mutilated Warrant Certificates, shall be promptly canceled by the
Warrant Agent and thereafter retained by the Warrant Agent until termination of
this Agreement or resignation as Warrant Agent, or disposed of or destroyed, at
the direction of the Company.
(f) Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than a duly authorized officer of the Company or
the Warrant Agent) for all purposes and shall not be affected by any notice to
the contrary.
SECTION 7. LOSS OR MUTILATION OF WARRANT CERTIFICATES. Upon receipt by
the Company and the Warrant Agent of evidence satisfactory to them of the
ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and (in case of loss, theft or destruction) of indemnity
satisfactory to them, and (in the case of mutilation) upon surrender and
cancellation thereof, the Company shall execute and the Warrant Agent shall (in
the absence of notice to the Company and/or Warrant Agent that the Warrant
Certificate has been acquired by a bona fide purchaser) countersign and deliver
to the Registered Holder in lieu thereof a new
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Warrant Certificate of like tenor representing an equal aggregate number of
Warrants. Applicants for a substitute Warrant Certificate shall comply with such
other reasonable regulations, provide such reasonable indemnification and pay
such other reasonable charges as the Warrant Agent or the Company may prescribe.
SECTION 8. ADJUSTMENT TO EXERCISE PRICE AND NUMBER OF SHARES OF COMMON
STOCK OR WARRANTS.
(a) In the event the Company shall, at any time or from time to time
after the Record date, issue any shares of Common Stock as a stock dividend to
the holders of Common Stock, or subdivide or combine the outstanding shares of
Common Stock into a greater or lesser number of shares (any such sale, issuance,
subdivision or combination being herein called a "Change of Shares"), then, and
thereafter upon each further Change of Shares, the applicable Warrant Price in
effect immediately prior to such Change of Shares shall be changed to a price
(including any applicable fraction of a cent) determined by multiplying the
Warrant Price in effect immediately prior thereto by a fraction, the numerator
of which shall be the sum of (a) the total number of shares of Common Stock
outstanding immediately prior to such Change of Shares and (b) the number of
shares of Common Stock which the aggregate consideration received by the Company
upon such sale, issuance, subdivision or combination (determined in accordance
with subsection (e) below) could have purchased at the then current Warrant
Price, and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after such Change of Shares.
(b) In the event of any reclassification or capital reorganization of
outstanding shares of Common Stock, or in case of any consolidation or merger of
the Company with or into another Company (other than a consolidation or merger
in which the Company is the continuing Company and which does not result in any
reclassification or capital reorganization of outstanding shares of Common
Stock), or in case of any sale or transfer to another Company of all or
substantially all of the assets of the Company (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall cause effective
provision to be made so that each holder of a Warrant then outstanding shall, in
substitution for all rights theretofore represented by such Warrant, have the
right thereafter, by exercising such Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash) receivable upon
such reclassification or capital reorganization, consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock that might have
been purchased upon exercise of such Warrant, immediately prior to such
reclassification or capital reorganization, consolidation, merger, sale or
transfer. Any such provision shall include provision for adjustments that shall
be as nearly equivalent as may be practicable to the adjustments provided for in
this Section 8. The foregoing provisions shall similarly apply to successive
reclassifications or capital reorganizations of outstanding shares of Common
Stock and to successive consolidations, mergers, sales or transfers.
(c) Upon each adjustment of the applicable Warrant Price pursuant to
the provisions of this Section 8, the total number of shares of Common Stock or
other securities purchasable upon the exercise of each Warrant shall (subject to
the provisions contained in Section 8(b) hereof) be such number of shares of
Common Stock or other securities (calculated to the nearest hundredth)
purchasable at the applicable Warrant Price immediately prior to such adjustment
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multiplied by a fraction, the numerator of which shall be the applicable Warrant
Price in effect immediately prior to such adjustment and the denominator of
which shall be the applicable Warrant Price in effect immediately after such
adjustment.
(d) Irrespective of any adjustments or changes in the Warrant Price or
the number of shares of Common Stock purchasable upon exercise of the Warrants,
the Warrant Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant Certificates pursuant to
Section 2(d), continue to express the applicable Warrant Price per share and the
number of shares purchasable thereunder as were expressed in the Warrant
Certificates when the same were originally issued.
(e) After each adjustment of the Warrant Price pursuant to this Section
8, the Company shall promptly prepare a certificate signed by its Chairman of
the Board, President, or any Vice President, and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, of the Company
setting forth: (i) the applicable Warrant Price as so adjusted, (ii) the number
of shares of Common Stock or other securities or property purchasable upon
exercise of each Warrant after such adjustment, and, if the Company shall have
elected to adjust the number of Warrants, the number of Warrants to which the
registered holder of each warrant shall then be entitled, and (iii) a brief
statement of the facts accounting for such adjustment. The Company shall
promptly file such certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to each Registered Holder of
Warrants at his last address as it shall appear on the registry books of the
Warrant Agent. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity thereof. The affidavit of an officer
of the Warrant Agent or the Secretary or an Assistant Secretary of the Company
that such notice has been mailed shall, in the absence of fraud, be prima facie
evidence of the facts stated therein.
(f) For purposes of Section 8(a) and 8(b), the following provisions
shall also be applicable:
(i) The number of shares of Common Stock outstanding at any
given time shall include shares of Common Stock owned or held by or for the
account of the Company and the sale or issuance of such treasury shares or the
distribution of any such treasury shares shall not be considered a Change of
Shares for purposes of such Sections.
(ii) No adjustment of the Warrant Price shall be made unless
such adjustment would require an increase or decrease of at least $.05 in such
price; provided, however, that any adjustments which by reason of this clause
(ii) are not required to be made shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment which, together
with any adjustment(s) so carried forward, shall require an increase or decrease
of at least $.05 in the Warrant Price then in effect hereunder.
(g) As used in this Section 8, the term "Common Stock" shall mean and
include the Company's Common Stock authorized on the date of the original issue
of the Warrants and shall also include any capital stock of any class of the
Company thereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary liquidation,
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dissolution or winding up of the Company; provided, however, that the shares
issuable upon exercise of the Warrants shall include only shares of such class
designated in the Company's Certificate of Incorporation, as from time to time
amended and/or restated, as Common Stock on the date of the original issue of
the Warrants or, (i) in the case of any reclassification, change, consolidation,
merger, sale or conveyance of the character referred to in Section 8(c), the
stock, securities or property provided for in such section, or (ii) in the case
of any reclassification or change in the outstanding shares of Common Stock
issuable upon exercise of the Warrants as a result of a subdivision or
combination or consisting of a change in par value, or from par value to no par
value, or from no par value to par value, such shares of Common Stock as so
reclassified or changed.
(h) Any determination as to whether an adjustment in the Warrant Price
in effect hereunder is required pursuant to this Section 8, or as to the amount
of any such adjustment, if required, shall be binding upon the holders of the
Warrants and the Company if made in good faith by the Board of Directors of the
Company.
(i) Before taking any action that would cause an adjustment pursuant to
this Section 8 hereof reducing the portion of the Warrant Price required to
purchase one share of capital stock below the then par value (if any) of a share
of such capital stock, the Company will use its best efforts to take any
corporate action which, in the opinion of its counsel, may be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
shares of such capital stock.
SECTION 9. REDEMPTION.
(a) At any time the Company may, at its option, redeem the Warrants in
whole, but not in part, for a redemption price of $.01 per Warrant, on at least
thirty (30) days' prior written notice to the Registered Holders. The right to
redeem the Warrants may be exercised by the Company only in the event that (a)
during a period of at least twenty (20) consecutive trading days ending within
thirty (30) days preceding the date the Company gives written notice of the call
for redemption, the closing sale price for the Common Stock, as reported on the
Nasdaq National Market or the Nasdaq SmallCap Market or any national securities
exchange or any other stock market, stock exchange or stock quotation system
which constitutes the primary trading or quotation market for the Common Stock,
equals or exceeds $7.50 per share, subject to adjustment in the same events and
in the same proportion as cause adjustments to the Warrant Price, provided that
in the event the Common Stock is not traded on a given day or such market, the
average of the closing bid and asked prices of the Common Stock on such day
shall be substituted; (b) the Company has a registration statement (or a
post-effective amendment to an existing registration statement) pertaining to
the Warrant Shares effective under the Securities Act, which registration
statement would enable a Registered Holder to exercise the Warrants provided the
Registered Holder resides in a jurisdiction in which exercise is permitted; and
(c) the expiration of the notice period is prior to the Warrant Expiration Date.
In the event the Company exercises its right to redeem the Warrants, the Warrant
Expiration Date shall be deemed to be, and the Warrants will be exercisable
until the close of business on, the date fixed for redemption in such notice. If
any Warrant called for redemption is not exercised by such time, it will cease
to be exercisable and the Registered Holder thereof will be entitled only to the
redemption price of $0.01 per Warrant.
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(b) In case the Company shall exercise its right to redeem all of the
Warrants, it shall give or cause to be given notice to the Registered Holders of
the Warrants, by mailing to such Registered Holders a notice of redemption,
first class, postage prepaid, at their last address as shall appear on the
records of the Warrant Agent. Any notice mailed in the manner provided herein
shall be conclusively presumed to have been duly given, whether or not the
Registered Holder receives such notice.
(c) The notice of redemption shall specify (i) the redemption price,
(ii) the date fixed for redemption, which shall in no event be less than thirty
(30) days after the date of mailing of such notice, (iii) the place where the
Warrant Certificates shall be delivered and the redemption price shall be paid,
and (iv) that the right to exercise the Warrant shall terminate at 5:00 p.m.
(Denver, Colorado time) on the business day fixed for redemption. The date fixed
for the redemption of the Warrants shall be the "Redemption Date" for purposes
of this Agreement. No failure to mail such notice nor any defect therein or in
the mailing thereof shall affect the validity of the proceedings for such
redemption except as to a holder (A) to whom notice was not mailed or (B) whose
notice was defective. An affidavit of the Warrant Agent or the Secretary or
Assistant Secretary of the Company that notice of redemption has been mailed
shall, in the absence of fraud, be prima facie evidence of the facts stated
therein.
(d) Any right to exercise a Warrant shall terminate at 5:00 p.m.
(Denver, Colorado time) on the Redemption Date. The redemption price payable to
the Registered Holders shall be mailed to such persons at their addresses of
record.
(e) The Company shall as soon as practicable after the Redemption Date,
and in any event within 15 months thereafter, make "generally available to its
security holders" (within the meaning of Rule 158 under the Securities Act) an
earnings statement (which need not be audited) complying with Section 11(a) of
the Securities Act and covering a period of at least 12 consecutive months
beginning after the Redemption Date.
SECTION 10. FRACTIONAL WARRANTS AND FRACTIONAL SHARES. The Company
shall not be required to issue any Warrant Certificate evidencing a fraction of
a Warrant or to issue fractions of shares of securities on the exercise of the
Warrants, and any fractional interest in a Warrant alone shall be of no value
whatsoever. By accepting a Warrant Certificate, the holder thereof expressly
waives any right to receive a Warrant Certificate evidencing any fraction of a
Warrant, to receive any fractional share of securities upon exercise of a
Warrant, or to receive any value whatsoever upon exercise of a fractional
interest in a Warrant.
SECTION 11. WARRANT HOLDERS NOT DEEMED STOCKHOLDERS. No holder of
Warrants, as such, shall be entitled to vote or to receive dividends or be
deemed the holder of Common Stock that may at any time be issuable upon exercise
of such Warrants for any purpose whatsoever, nor shall anything contained herein
be construed to confer upon the holder of Warrants, as such, any of the rights
of a stockholder of the Company or any right to vote for, or receive notice as a
stockholder in respect of, the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action (whether upon any recapitalization, issue or
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger or transfer or otherwise) or any other matter, or
to receive notice of meetings, or to receive dividends or subscription rights,
until such
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Holder shall have exercised such Warrants and been issued shares of Common Stock
in accordance with the provisions hereof.
SECTION 12. RIGHTS OF ACTION. All rights of action with respect to this
Agreement are vested in the respective Registered Holders of the Warrants, and
any Registered Holder of a Warrant, without consent of the Warrant Agent or of
the holder of any other Warrant, may, in his own behalf and for his own benefit,
enforce against the Company his right to exercise his Warrants for the purchase
of shares of Common Stock in the manner provided in the Warrant Certificates and
this Agreement.
SECTION 13. AGREEMENT OF WARRANT HOLDERS. Every holder of a Warrant, by
his acceptance thereof, consents and agrees with the Company, the Warrant Agent
and every other holder of a Warrant that:
(a) The Warrants are transferable only on the registry books of the
Warrant Agent by the Registered Holder thereof in person or by his attorney duly
authorized in writing and only if the Warrant Certificates representing such
Warrants are surrendered the office of the Warrant Agent, duly endorsed or
accompanied a proper instrument of transfer satisfactory to the Warrant Agent
and the Company in their sole discretion, together with payment of any
applicable transfer taxes; and
(b) The Company and the Warrant Agent may deem and treat the person in
whose name the Warrant Certificate is registered as the holder and as the
absolute, true and lawful owner of the Warrants represented thereby for all
purposes, and neither the Company nor the Warrant Agent shall be affected by any
notice or knowledge to the contrary, except as otherwise expressly provided in
Section 6.
SECTION 14. CANCELLATION OF WARRANT CERTIFICATES. If the Company shall
purchase or acquire any Warrant or Warrants, the Warrant Certificate or Warrant
Certificates evidencing the same shall thereupon be delivered to the Warrant
Agent and canceled by it and retired. The Warrant Agent shall also cancel
Warrant Certificates following exercise of any or all of the Warrants
represented thereby or delivered to it for transfer, split-up, combination or
exchange.
SECTION 15. CONCERNING THE WARRANT AGENT.
(a) The Warrant Agent shall act hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder, be deemed to make any
representations as to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any securities or other
property delivered upon exercise of any Warrant or whether any securities issued
upon exercise of any Warrant are fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of Warrant Certificates to make or cause to be made
any adjustment of the Warrant Price provided in this Agreement, or to determine
whether any fact exists which may require any
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such adjustments, or with respect to the nature or extent of any such
adjustment, when made, or with respect to the method employed in making the
same. The Warrant Agent shall not (i) be liable for any recital or statement of
facts contained herein or for any action taken, suffered or omitted by it in
reliance on any Warrant Certificate or other document of instrument believed by
it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations contained in this
Agreement or in any Warrant Certificate, or (iii) be liable for any act or
omission in connection with this Agreement except for its own negligence or
willful misconduct.
(c) The Warrant Agent may at any time consult with counsel satisfactory
to it and shall incur no liability or responsibility for any action taken,
suffered or omitted by it in good faith in accordance with the opinion or advice
of such counsel.
(d) Any notice, statement, instruction, request, direction, order or
demand of the Company shall be sufficiently evidenced by an instrument signed by
the Chairman of the Board, the President, any Vice President, the Secretary or
the Treasurer of the Company (unless other evidence in respect thereof is herein
specifically prescribed). The Warrant Agent shall not be liable for any action
taken, suffered or omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it to be genuine.
(e) The Company shall pay the Warrant Agent reasonable compensation for
its services hereunder and to reimburse it for its reasonable expenses
hereunder. The Company shall further indemnify the Warrant Agent and hold it
harmless against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or omitted by the Warrant
Agent in the execution of its duties and powers hereunder except losses,
expenses and liabilities arising as a result of the Warrant Agent's negligence
or willful misconduct. In no case shall the Warrant Agent be liable for special,
indirect, incidental or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Warrants Agent has been
advised of the possibility of such loss or damage.
(f) The Warrant Agent may resign its duties and be discharged from all
further duties and liabilities hereunder (except liabilities arising as a result
of the Warrant Agent's own negligence or willful misconduct), after giving 30
days prior written notice to the Company. At least 15 days prior to the date
such resignation is to become effective, the Warrant Agent shall cause a copy of
such notice of resignation to be mailed to the Registered Holder of each Warrant
Certificate at the Company's expense. Upon such resignation, or any inability of
the Warrant Agent to act as such hereunder, the Company shall appoint a new
warrant agent in writing. If the Company shall fail to make such appointment
within a period of fifteen (15) days after it has been notified in writing of
such resignation by the resigning Warrant Agent, then the Registered Holder of
any Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new warrant agent. Any new warrant agent, whether appointed by
the Company or by such a court shall be a bank or trust company having a capital
and surplus as shown by its last published report to its stockholders, of not
less than $100,000,000, or a stock transfer company. After acceptance in writing
of such appointment by the new warrant agent is received by the Company, such
new warrant agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the Warrant Agent,
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without any further assurance, conveyance, act or deed; but if for any reason it
shall be necessary or expedient to execute and deliver any further assurance,
conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning Warrant
Agent. Not later than the effective date of any such appointment the Company
shall file notice thereof with the resigning Warrant Agent and shall forthwith
cause a copy of such notice to be mailed to the Registered Holder of each
Warrant Certificate.
(g) Any Company into which the Warrant Agent or any new warrant agent
may be converted or merged, or any Company resulting from any consolidation to
which the Warrant Agent or any new warrant agent shall be a party, or any
Company succeeding to the trust business of the Warrant Agent or any new warrant
agent shall be a successor warrant agent under this Agreement without any
further act, provided that such Company is eligible for appointment as successor
to the warrant Agent under the provisions of the preceding paragraph. Any such
successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed to the Company and to the Registered Holder of each Warrant
Certificate.
(h) The Warrant Agent, its subsidiaries and affiliates, and any of its
or their officers or directors, may buy and hold or sell Warrants or other
securities of the Company and otherwise deal with the Company in the same manner
and to the same extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
SECTION 16. MODIFICATION OF AGREEMENT. The Warrant Agent and the
Company may by supplemental agreement make any changes or corrections in this
Agreement (i) that they shall deem appropriate to cure any ambiguity or to
correct any defective or inconsistent provision or manifest mistake or error
herein contained, or (ii) that they may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Warrant Certificates;
provided, however, that this Agreement shall not otherwise be modified,
supplemented or altered in any respect except with the consent in writing of the
Registered Holders of Warrant Certificates representing not less than a majority
of the Warrants then outstanding; and provided, further, that no change in the
number or nature of the securities purchasable upon the exercise of any Warrant,
and a charge that increases the Warrant Price therefor, and no acceleration of
the Warrant Expiration Date of any Warrant, shall be made without the consent in
writing of the Registered Holder of the Warrant Certificate representing such
Warrant, other than such changes as are specifically prescribed or permitted by
this Agreement as originally executed.
SECTION 17. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered or mailed first class registered or certified mail, postage
prepaid as follows: if to the Registered Holder of a Warrant Certificate, at the
address of such holder as shown on the registry books maintained by the Warrant
Agent; if to the Company, at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary, or at such other address as may have been furnished to the
Warrant Agent in writing by the Company; or if to the Warrant Agent, at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
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SECTION 18. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws.
SECTION 19. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company and the Warrant Agent and their respective
successors and assigns, and the Registered Holders from time to time of the
Warrant Certificates. Nothing in this Agreement is intended or shall be
construed to confer upon any other person any right, remedy or claim, in equity
or at law, or to impose upon any other person any duty, liability or obligation.
SECTION 20. FURTHER INSTRUMENTS. The parties shall execute and deliver
any and all such other instruments and shall take any and all such other actions
as may be reasonable or necessary to carry out the intention of this Agreement.
SECTION 21. SEVERABILITY. If any provision of this Agreement shall be
held, declared or pronounced void, voidable, invalid, unenforceable or
inoperative for any reason by any court of competent jurisdiction, government
authority or otherwise, such holding, declaration or pronouncement shall not
affect adversely any other provision of this Agreement, which shall otherwise
remain in full force and effect and be enforced in accordance with its terms,
and the effect of such holding, declaration or pronouncement shall be limited to
the territory or jurisdiction in which made.
SECTION 22. WAIVER. All the rights and remedies of any party under this
Agreement are cumulative and not exclusive of any other rights and remedies as
provided by law. No delay or failure on the part of any party in the exercise of
any right or remedy arising from a breach of this Agreement shall operate as a
waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party where required hereunder to any act or
occurrence shall not be deemed to be a consent to any other action or
occurrence.
SECTION 23. ASSIGNABILITY. This Agreement may not be assigned by any
party hereto except by the express written consent of the other party, which
consent shall be obtained in compliance with the other provisions of this
Agreement.
SECTION 24. TERMINATION. This Agreement shall terminate at the close of
business on the Warrant Expiration Date or such earlier date upon which all
Warrants have been exercised, except that the Warrant Agent shall account to the
Company for cash held by it and the provisions of Section 15 shall survive such
termination.
SECTION 25. INTEGRATION. This Agreement embodies the entire agreement
and understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.
SECTION 26. HEADINGS. The headings of this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning thereof.
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SECTION 27. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agency
Agreement to be duly executed as of the date first above written.
COMPANY:
▇▇▇▇▇▇ NATURAL GAS SERVICES, INC.
By:
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W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
WARRANT AGENT:
AMERICAN SECURITIES TRANSFER &
TRUST, INC.
By:
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Authorized Officer
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