EXHIBIT 4.4
THE REPRESENTATIVE'S OPTION EVIDENCED AND REPRESENTED BY THIS CERTIFICATE (THE
"REPRESENTATIVE'S OPTION") AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE
"OPTION SHARES") HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF CERTAIN STATES
UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES. HOWEVER, NEITHER THE
REPRESENTATIVE'S OPTION NOR THE UNDERLYING COMMON STOCK MAY BE SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (i) A POST-EFFECTIVE
AMENDMENT TO SUCH REGISTRATION STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT
UNDER SUCH ACT, OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND UNDER
THE APPLICABLE BLUE SKY LAWS.
THIS REPRESENTATIVE'S OPTION MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS REPRESENTATIVE'S OPTION, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
REPRESENTATIVE'S OPTION EXCEPT AS OTHERWISE PROVIDED HEREIN.
NATURAL GAS SERVICES GROUP, INC.
REPRESENTATIVE'S OPTION FOR THE PURCHASE OF COMMON STOCK
NO. UW-001 165,000 REPRESENTATIVE'S OPTIONS
THIS CERTIFIES that, for receipt in hand of $50 and other value
received, NEIDIGER, TUCKER, BRUNER, INC. (the "Holder"), is entitled to
subscribe for and purchase from NATURAL GAS SERVICES GROUP, INC., a Colorado
corporation (the "Company"), upon the terms and conditions set forth herein, at
any time, or from time to time, after _________, 2003, and before 5:00 p.m.
Colorado time on __________, 2007 (the "Exercise Period"), 165,000 shares of
Common Stock (the "Option Shares"), at a price of $_________ per Option Share
(the "Exercise Price"), or 125% of the offering price of Common Stock to be sold
by the Company in a public offering under Registration Statement Form SB-2, No.
333-88314 (the "Public Offering") at or prior to the date hereof.
The term the "Holder" as used herein shall include any transferee to
whom this Representative's Option has been transferred in accordance with the
terms of this Representative's Option. As used herein the term "this
Representative's Option" shall mean and include this Representative's Option and
any Representative's Option or Representative's Options hereafter issued as a
consequence of the exercise or transfer of this Representative's
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Option in whole or in part, and the term "Common Stock" shall mean and include
the Company's Common Stock with ordinary voting power, which class at the date
hereof is publicly traded.
1. This Representative's Option may not be sold, transferred, assigned,
pledged or hypothecated until ________, 2003 (one year after the effective date
of the registration statement on which it is initially registered) except that
it may be transferred, in whole or in part, (i) to one or more officers or
partners of the Holder (or the officers or partners of any such partner); (ii)
to a member of the underwriting syndicate and/or its officers or partners; (iii)
by reason of reorganization of the Company; or (iv) by operation of law. After
_________, 2003, this Representative's Option may be sold, transferred, assigned
or hypothecated in accordance with applicable law.
2. (a) This Representative's Option may be exercised during the
Exercise Period as to the whole or any lesser number of Option Shares,
by the surrender of this Representative's Option (with the election
attached hereto duly executed) to the Company at its office at 2911
South County Road 1260, Midland, Texas 79706, or such other place as is
designated in writing by the Company, together with a certified or bank
cashier's check payable to the order of the Company in an amount equal
to the Exercise Price multiplied by the number of Option Shares for
which this Representative's Option is being exercised.
(b) Upon written request of the Holder, and in lieu of payment
for the Option Shares by check in accordance with paragraph 2(a)
hereof, the Holder may exercise the Representative's Option (or any
portion thereof) for and receive the number of Option Shares equal to a
fraction, the numerator of which equals (i) the amount by which the
Current Market Price of the Common Stock for the ten (10) trading days
preceding the date of exercise exceeds the Exercise Price per Share,
multiplied by (ii) the number of Option Shares to be purchased; the
denominator of which equals the Current Market Price.
(c) For the purposes of any computation under this
Representative's Option, the "Current Market Price" at any date shall
be the closing price of the Common Stock on
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the business day next preceding the event requiring an adjustment
hereunder. If the principal trading market for such securities is an
exchange, the closing price shall be the reported last sale price on
such exchange on such day provided if trading of such Common Stock is
listed on any consolidated tape, the closing price shall be the
reported last sale price set forth on such consolidated tape. If the
principal trading market for such securities is the over-the-counter
market, the closing price shall be the last reported sale price on such
date as set forth by The Nasdaq Stock Market, Inc., or, if the security
is not quoted on such market, the average closing bid and asked prices
as set forth in the National Quotation Bureau pink sheet or the
Electronic Bulletin Board System for such day. Notwithstanding the
foregoing, if there is no reported last sale price or average closing
bid and asked prices, as the case may be, on a date prior to the event
requiring an adjustment hereunder, then the current market price shall
be determined as of the latest date prior to such day for which such
last sale price or average closing bid and asked price is available.
3. Upon each exercise of this Representative's Option, the Holder shall
be deemed to be the holder of record of the Option Shares issuable upon such
exercise, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing such Option Shares shall not then have been
actually delivered to the Holder. As soon as practicable after each such
exercise of this Representative's Option, the Company shall issue and deliver to
the Holder a certificate or certificates for the Option Shares issuable upon
such exercise, registered in the name of the Holder or its designee. If this
Representative's Option should be exercised in part only, the Company shall,
upon surrender of this Representative's Option for cancellation, execute and
deliver a new Representative's Option evidencing the right of the Holder to
purchase the balance of the Option Shares (or portions thereof) subject to
purchase hereunder.
4. The Representative's Option shall be registered in a
Representative's Option Register as they are issued. The Company shall be
entitled to treat the registered holder of any Representative's Option on the
Representative's Option Register 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 Representative's Option on the part of any other person. The
Representative's Option shall be transferable only on the books of the Company
upon delivery thereof duly endorsed by the
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Holder or by his 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, executor, administrator, guardian or other legal
representative, duly authenticated evidence of his or its authority shall be
produced. Upon any registration of transfer, the Company shall deliver a new
Representative's Option or Representative's Options to the person entitled
thereto. The Representative's Option may be exchanged, at the option of the
Holder thereof, for another Representative's Option, or other Representative's
Option of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Option Shares (or portions
thereof) upon surrender to the Company or its duly authorized agent.
Notwithstanding the foregoing, the Company shall have no obligation to cause
Representative's Option to be transferred on its books to any person if, in the
opinion of counsel to the Company, such transfer does not comply with the
provisions of the Securities Act of 1933, as amended (the "Act"), or applicable
state blue sky laws and the rules and regulations thereunder.
5. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of this Representative's Option, such number of shares of Common
Stock as shall, from time to time, be sufficient therefor. The Company covenants
that all Option Shares issuable upon exercise of this Representative's Option
shall be validly issued, fully paid, nonassessable, and free of preemptive
rights.
6. (a) If the Company shall at any time subdivide its outstanding
Common Stock by recapitalization, reclassification or split-up thereof,
the number of Option Shares subject to this Representative's Option
immediately prior to such subdivision shall be proportionately
increased, and if the Company shall at any time combine the outstanding
Common Stock by recapitalization, reclassification or combination
thereof, the number of Option Shares subject to this Representative's
Option immediately prior to such combination shall be proportionately
decreased. Any corresponding adjustment to the Exercise Price shall
become effective at the close of business on the record date for such
subdivision or combination.
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(b) If the Company after the date hereof shall distribute to
the holders of its Common Stock any securities or other assets (other
than a distribution of Common Stock or a cash distribution made as a
dividend payable out of earnings or out of any earned surplus legally
available for dividends under the laws of the jurisdiction of
incorporation of the Company), the Board of Directors shall be required
to make such equitable adjustment in the Exercise Price in effect
immediately prior to the record date of such distribution as may be
necessary to preserve the rights substantially proportionate to those
enjoyed hereunder by the Holder immediately prior to such distribution.
Any such adjustment made in good faith by the Board of Directors shall
be final and binding upon the Holder and shall become effective as of
the record date for such distribution.
(c) No adjustment in the number of Option Shares subject to
this Representative's Option shall be required unless such adjustment
would require an increase or decrease in such number of Option Shares
of at least 1% of the then adjusted number of Option Shares issuable
upon exercise of this Representative's Option, provided, however, that
any adjustments which by reason of the foregoing are not required at
the time to be made shall be carried forward and taken into account and
included in determining the amount of any subsequent adjustment; and
provided further, however, that in case the Company shall at any time
subdivide or combine the outstanding Common Stock or issue any
additional Common Stock as a dividend, said percentage shall forthwith
be proportionately increased in the case of a combination or decreased
in the case of a subdivision or dividend of Common Stock so as to
appropriately reflect the same. If the Company shall make a record of
the holders of its Common Stock for the purpose of entitling them to
receive any dividend or distribution and legally abandon its plan to
pay or deliver such dividend or distribution then no adjustment in the
number of Option Shares subject to this Representative's Option shall
be required by reason of the making of such record.
(d) Whenever the number of Option Shares purchasable upon the
exercise of this Representative's Option is adjusted as provided
herein, the Exercise Price shall be adjusted (to the nearest one tenth
of a cent) by respectively multiplying such Exercise Price immediately
prior to such adjustment by a fraction, the numerator of which shall be
the number of Option Shares purchasable upon the exercise of this
Representative's
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Option immediately prior to such adjustment, and the denominator of
which shall be the number of Option Shares purchasable immediately
thereafter.
(e) In case of any reclassification of the outstanding Common
Stock (other than a change covered by (a) hereof or which solely
affects the par value of such Common Stock) or in the case of any
merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding Common
Stock), or in the case of any sale or conveyance to another corporation
of the property of the Company as an entirety or substantially as an
entirety in connection with which the Company is dissolved, the Holder
of this Representative's Option shall have the right thereafter (until
the expiration of the right of exercise of this Representative's
Option) to receive upon the exercise hereof, for the same aggregate
Exercise Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, by a holder of the number of Option Shares obtainable upon
the exercise of this Representative's Option immediately prior to such
event; and if any reclassification also results in a change in Common
Stock covered by (a) above, then such adjustment shall be made pursuant
to both this paragraph (e) and paragraph (a). The provisions of this
paragraph (e) shall similarly apply to successive re-classifications,
or capital reorganizations, mergers or consolidations, sales or other
transfers.
If the Company after the date hereof shall issue or agree to issue
Common Stock, Options or Convertible Securities, other than as described herein,
and such issuance or agreement would in the opinion of the Board of Directors of
the Company materially affect the rights of the Holders of the Representative's
Option, the Exercise Price and the number of Option Shares purchasable upon
exercise of the Representative's Option shall be adjusted in such matter, if
any, and at such time as the Board of Directors of the Company, in good faith,
may determine to be equitable in the circumstances. The minutes or unanimous
consent approving such action shall set forth the Board of Director's
determination as to whether an adjustment is warranted and the manner of such
adjustment. In the absence of such determination, any Holder may request in
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writing that the Board of Directors make such determination. Any such
determination made in good faith by the Board of Directors shall be final and
binding upon the Holders. If the Board fails, however, to make such
determination within sixty (60) days after such request, such failure shall be
deemed a determination that an adjustment is required.
(i) Upon occurrence of each event requiring an adjustment of
the Exercise Price and of the number of Option Shares purchasable upon
exercise of this Representative's Option in accordance with, and as
required by, the terms hereof, the Company shall forthwith employ a
firm of certified public accountants (who may be the regular
accountants for the Company) who shall compute the adjusted Exercise
Price and the adjusted number of Option Shares purchasable at such
adjusted Exercise Price by reason of such event in accordance herewith.
The Company shall give to each Holder of the Representative's Option a
copy of such computation which shall be conclusive and shall be binding
upon such Holders unless contested by Holders by written notice to the
Company within thirty (30) days after receipt thereof.
(ii) In case the Company after the date hereof shall propose
(A) to pay any dividend payable in stock to the holders of its Common
Stock or to make any other distribution (other than cash dividends) to
the holders of its Common Stock or to grant rights to subscribe to or
purchase any additional shares of any class or any other rights or
options, (B) to effect any reclassification involving merely the
subdivision or combination of outstanding Common Stock, or (C) any
capital reorganization or any consolidation or merger, or any sale,
transfer or other disposition of its property, assets and business
substantially as an entirety, or the liquidation, dissolution or
winding up of the Company, then in each such case, the Company shall
obtain the computation described above and if an adjustment to the
Exercise Price is required, the Company shall notify the Holders of the
Representative's Option of such proposed action, which shall specify
the record date for any such action or if no record date is established
with respect thereto, the date on which such action shall occur or
commence, or the date of participation therein by the holders of Common
Stock if any such date is to be fixed, and shall also set forth such
facts with respect thereto as shall be reasonably necessary to indicate
the effect of such action on the Exercise Price and the number, or
kind, or class
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of shares or other securities or property obtainable upon exercise of
this Representative's Option after giving effect to any adjustment
which will be required as a result of such action. Such notice shall be
given at least twenty (20) days prior to the record date for
determining holders of the Common Stock for purposes of any such
action, and in the case of any action for which a record date is not
established then such notice shall be mailed at least twenty (20) days
prior to the taking of such proposed action.
(iii) Failure to file any certificate or notice or to give any
notice, or any defect in any certificate or notice, shall not effect
the legality or validity of the adjustment in the Exercise Price or in
the number, or kind, or class of shares or other securities or property
obtainable upon exercise of the Representative's Option or of any
transaction giving rise thereto.
(f) The Company shall not be required to issue fractional
Option Shares upon any exercise of the Representative's Option. As to
any final fraction of a Share which the Holder of a Representative's
Option would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final fraction
in an amount equal to the same fraction of the current market price of
a share of such stock on the business day preceding the day of
exercise. The Holder of a Representative's Option, by his acceptance of
a Representative's Option, expressly waives any right to receive any
fractional Option Shares.
(g) Regardless of any adjustments pursuant to this section in
the Exercise Price or in the number, or kind, or class of shares or
other securities or other property obtainable upon exercise of a
Representative's Option, a Representative's Option may continue to
express the Exercise Price and the number of Option Shares obtainable
upon exercise at the same price and number of Option Shares as are
stated herein.
(h) The number of Option Shares, the Exercise Price and all
other terms and provisions of the Company's agreement with the Holder
of this Representative's Option shall be determined exclusively
pursuant to the provisions hereof.
(i) The above provisions of this section 6 shall similarly
apply to successive transactions which require adjustments.
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(j) Notwithstanding any other language to the contrary herein,
(i) the anti-dilution terms of this Representative's Option will not be
enforced so as to provide the Holder the right to receive, or for the
accrual of, cash dividends prior to the exercise of this
Representative's Option, and (ii) the anti-dilution terms of this
Representative's Option will not be enforced in such a manner as to
provide the Holder with disproportionate rights, privileges and
economic benefits not provided to purchasers of the Common Stock in the
Public Offering.
7. The issuance of any Option Shares or other securities upon the
exercise of this Representative's Option and the delivery of certificates or
other instruments representing such securities, or other securities, shall be
made without charge to the Holder for any tax or other charge in respect of such
issuance. The Company shall not, however, be required to pay any tax which may
be payable in respect of any transfer involved in the issue and delivery of any
certificate in a name other than that of the Holder and the Company shall not be
required to issue or deliver any such certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
8. (a) If, at any time after _____________, 2003 (one year after the
Effective Date of the Registration Statement), and ending ____________,
2008 (six years after the Effective Date of the Registration
Statement), the Company shall file a registration statement (other than
on Form S-4, Form S-8, or any successor form) with the Securities and
Exchange Commission (the "Commission") while Option Shares are
available for purchase upon exercise of this Representative's Option or
while any Option Shares (collectively, the "Representative's Option and
the underlying Option Shares, the "Representative's Securities") are
outstanding, the Company shall, on one occasion only, give the Holder
and all the then holders of such Representative's Securities at least
30 days prior written notice of the filing of such registration
statement. If requested by the Holder or by any such holder in writing
within 20 days after receipt of any such notice, the Company shall, at
the Company's sole expense (other than the fees and disbursements of
counsel for the Holder or such holder and the underwriting discounts
and non-accountable expenses, if any, payable in respect of the
securities sold by the Holder
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or any such holder), register or qualify the Option Shares of the
Holder or any such holders who shall have made such request
concurrently with the registration of such other securities, all to the
extent requisite to permit the public offering and sale of the Option
Shares requested to be registered, and will use its best efforts
through its officers, directors, auditors and counsel to cause such
registration statement to become effective as promptly as practicable.
Notwithstanding the foregoing, if the managing underwriter of any such
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Option 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 for its own account,
then the Holder or any such holder who shall have requested
registration of his or its Option Shares shall delay the offering and
sale of such Option Shares (or the portions thereof so designated by
such managing underwriter) for such period, not to exceed 90 days, as
the managing underwriter shall request, provided that no such delay
shall be required as to any Option Shares if any securities of the
Company are included in such registration statement for the account of
any person other than the Company and the Holder unless the securities
included in such registration statement for such other person shall
have been reduced pro rata to the reduction of the Option Shares which
were requested to be included in such registration.
(b) If at any time after __________, 2003 (one year after the
Effective Date of the Registration Statement), and before ___________,
2007 (five years after the Effective Date of the Registration
Statement), the Company shall receive a written request from holders of
Representative's Securities who, in the aggregate, own (or upon
exercise of all Option Shares will own) a majority of the total number
of Option Shares, the Company shall, as promptly as practicable,
prepare and file with the Commission a registration statement
sufficient to permit the public offering and sale of the Option Shares,
and will use its best efforts through its officers, directors, auditors
and counsel to cause such registration statement to become effective as
promptly as practicable; provided, however, that the Company shall only
be obligated to file and obtain effectiveness of one such registration
statement for which all expenses incurred in connection with such
registration (other than the fees and disbursements of counsel for the
Holder or such
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holders and underwriting discounts and nonaccountable expenses, if any,
payable in respect of the Option Shares sold by the Holder or any such
holder) shall be borne by the Company.
(c) In the event of a registration pursuant to the provisions
of this paragraph 8, the Company shall use its best efforts to cause
the Option Shares so requested to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the
Holder or such holders may reasonably request; provided, however, that
the Company shall not be required to qualify to do business in any
state by reason of this paragraph 8(c) in which it is not otherwise
required to qualify to do business and provided further, that the
Company has no obligation to qualify the Option Shares where such
qualification would cause any unreasonable delay or expenditure by the
Company.
(d) The Company shall keep effective any registration or
qualification contemplated by this paragraph 8 and shall from time to
time amend or supplement each applicable registration statement,
preliminary prospectus, final prospectus, application, document and
communication for such period of time as shall be required to permit
the Holder or such holders to complete the offer and sale of the Option
Shares covered thereby. The Company shall in no event be required to
keep any such registration or qualification in effect for a period in
excess of nine months from the date on which the Holder and such
holders are first free to sell such Option Shares; provided, however,
that if the Company is required to keep any such registration or
qualification in effect with respect to securities other than the
Option Shares beyond such period, the Company shall keep such
registration or qualification in effect as it relates to the Option
Shares for so long as such registration or qualification remains or is
required to remain in effect in respect of such other securities.
(e) In the event of a registration pursuant to the provisions
of this paragraph 8, the Company shall furnish to the Holder and to
each such holder such reasonable number of copies of the registration
statement and of each amendment and supplement thereto (in each case,
including all exhibits), such reasonable number of copies of each
prospectus contained in such registration statement and each supplement
or amendment thereto
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(including each preliminary prospectus), all of which shall conform to
the requirements of the Act and the rules and regulations thereunder,
and such other documents as the Holder or such holders may reasonably
request in order to facilitate the disposition of the Option Shares
included in such registration.
(f) In the event of a registration pursuant to the provisions
of this paragraph 8, the Company shall furnish the Holder and each
holder of any Option Shares so registered with an opinion of its
counsel to the effect that (i) the registration statement has become
effective under the Act and no order suspending the effectiveness of
the registration statement, preventing or suspending the use of the
registration statement, any preliminary prospectus, any final
prospectus, or any amendment or supplement thereto has been issued, nor
to such counsel's actual knowledge has the Securities and Exchange
Commission or any securities or blue sky authority of any jurisdiction
instituted or threatened to institute any proceedings with respect to
such an order and (ii) the registration statement and each prospectus
forming a part thereof (including each preliminary prospectus), and any
amendment or supplement thereto, complies as to form with the Act and
the rules and regulations thereunder. Such counsel shall also provide a
Blue Sky Memorandum setting forth the jurisdictions in which the Option
Shares have been registered or qualified for sale pursuant to the
provisions of paragraph 8(c).
(g) The Company agrees that until all the Option Shares have
been sold under a registration statement or pursuant to Rule 144 under
the Act, or until the Option Shares may be sold under Rule 144 (k), it
shall keep current in filing all reports, statements and other
materials required to be filed with the Commission to permit holders of
the Option Shares to sell such securities under Rule 144.
(h) The Holder and any holders who propose to register their
Option Shares under the Act, shall execute and deliver to the Company a
selling stockholder questionnaire on a form to be provided by the
Company.
(i) The Company shall not be required by the terms hereof to
file a Registration Statement if, in the opinion of counsel to the
holders of the Option Shares and counsel for the Company (or, should
they not agree, in the opinion of another counsel
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experienced in securities law matters acceptable to counsel for the
holders of Option Shares and the Company), the proposed public offering
or other transfer as to which such Registration Statement is requested
to be filed is exempt from applicable federal and state securities
laws, rules, regulations and would result in unaffiliated purchasers or
transferees obtaining securities that are not "restricted securities"
as that term is defined in Rule 144 under the Act.
9. (a) Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Holder, any holder of any of the
Representative's Securities, their officers, directors, partners,
employees, agents and counsel, and each person, if any, who controls
any such person within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all loss, liability, charge, claim,
damage and expense whatsoever (which shall include, for all purposes of
this Section 9, but not be limited to, attorneys' fees and any and all
expense whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), as and when incurred, arising out of, based upon, or in
connection with (i) any untrue statement or alleged untrue statement of
a material fact contained (A) in any registration statement,
preliminary prospectus or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, or
(B) in any application or other document or communication (in this
Section 9 collectively called an "application") executed by or on
behalf of the Company or based upon written information furnished by or
on behalf of the Company filed in any jurisdiction in order to register
or qualify any of the Option Shares under the securities or blue sky
laws thereof or filed with the Commission or any securities exchange;
or any omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance upon
and in conformity with written information furnished to the Company
with respect to the Holder or any holder of any of the Representative's
Securities by or on behalf of such person expressly for inclusion in
any registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any
application, as the case
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may be, or (ii) any breach of any representation, warranty, covenant or
agreement of the Company contained in this Representative's Option. The
foregoing agreement to indemnify shall be in addition to any liability
the Company may otherwise have, including liabilities arising under
this Representative's Option. If any action is brought against the
Holder or any holder of any of the Representative's Securities or any
of its officers, directors, partners, employees, agents or counsel, or
any controlling persons of such person (an "indemnified party") in
respect of which indemnity may be sought against the Company pursuant
to the foregoing paragraph, such indemnified party or parties shall
promptly notify the Company in writing of the institution of such
action (but the failure so to notify shall not relieve the Company from
any liability it may otherwise have to Holder or any holder of any of
the Representative's Securities) and the Company shall promptly assume
the defense of such action, including the employment of counsel
(reasonably satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel
shall have been authorized in writing by the Company in connection with
the defense of such action or the Company shall not have promptly
employed counsel reasonably satisfactory to such indemnified party or
parties to have charge of the defense of such action or such
indemnified party or parties shall have reasonably concluded that there
may be one or more legal defenses available to it or them or to other
indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses
shall be borne by the Company and the Company shall not have the right
to direct the defense of such action on behalf of the indemnified party
or parties. Anything in this paragraph to the contrary notwithstanding,
the Company shall not be liable for any settlement of any such claim or
action effected without its written consent.
(b) The Holder and each holder agrees to indemnify and hold
harmless the Company, each director of the Company, each officer of the
Company who shall have signed any registration statement covering the
Option Shares held by the Holder and each holder and each other person,
if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, to the same extent as the
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foregoing indemnity from the Company to the Holder and each holder in
paragraph 9(a), but only with respect to statements or omissions, if
any, made in any registration statement, preliminary prospectus, or
final prospectus (as from time to time amended and supplemented), or
any amendment or supplement thereto, or in any application, in reliance
upon and in conformity with written information furnished to the
Company with respect to the Holder and each holder by or on behalf of
the Holder and each holder expressly for inclusion in any such
registration statement, preliminary prospectus, or final prospectus, or
any amendment or supplement thereto, or in any application, as the case
may be. If any action shall be brought against the Company or any other
person so indemnified based on any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, and in respect of which
indemnity may be sought against the Holder and each holder pursuant to
this paragraph 9(b), the Holder and each holder shall have the rights
and duties given to the Company, and the Company and each other person
so indemnified shall have the rights and duties given to the
indemnified parties, by the provisions of paragraph 9(a).
(c) To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to
paragraph 9(a) or 9(b) (subject to the limitations thereof) but it is
found in a final judicial determination, not subject to further appeal,
that such indemnification may not be enforced in such case, even though
this Agreement expressly provides for indemnification in such case, or
(ii) any indemnified or indemnifying party seeks contribution under the
Act, the Exchange Act or otherwise because the indemnification provided
for in this Section 9 is for any reason held to be unenforceable by the
Company and the Holder and any holder, then the Company (including for
this purpose any contribution made by or on behalf of any director of
the Company, any officer of the Company who signed any such
registration statement and any controlling person of the Company), as
one entity, and the Holder and any holder of any of the Option Shares
included in such registration in the aggregate (including for this
purpose any contribution by or on behalf of the Holder or any holder),
as a second entity, shall contribute to the losses, liabilities,
claims, damages and expenses whatsoever to which any of them may be
subject, on the basis of relevant equitable considerations such as the
relative fault of the Company and the Holder or any such holder in
connection with
15
the facts which resulted in such losses, liabilities, claims, damages
and expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission, shall be
determined by, among other things, whether such statement, alleged
statement, omission or alleged omission relates to information supplied
by the Company, by the Holder or by any holder of Option Shares
included in such registration, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement, alleged statement, omission or alleged omission. The
Company and the Holder agree that it would be unjust and inequitable if
the respective obligations of the Company and the Holder for
contribution were determined by pro rata or per capita allocation of
the aggregate losses, liabilities, claims, damages and expenses (even
if the Holder and the other indemnified parties were treated as one
entity for such purpose) or by any other method of allocation that does
not reflect the equitable considerations referred to in this paragraph
9(c). No person guilty of a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who is not guilty of such fraudulent misrepresentation.
For purposes of this paragraph 9(c), each person, if any, who controls
the Holder or any holder of any of the Representative's Securities
within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and each officer, director, partner, employee, agent and
counsel of each such person, shall have the same rights to contribution
as such person and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed any such
registration statement, and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
provisions of this paragraph 9(c). Anything in this paragraph 9(c) to
the contrary notwithstanding, no party shall be liable for contribution
with respect to the settlement of any claim or action effected without
its written consent. This paragraph 9(c) is intended to supersede any
right to contribution under the Act, the Exchange Act or otherwise.
10. Unless the Option Shares have been registered or an exemption from
such registration is available, the Option Shares issued upon exercise of this
Representative's Option shall be subject to a stop transfer order and the
certificate or certificates evidencing any such Option Shares shall bear the
following legend or a legend substantially similar thereto:
16
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, NOR HAVE THEY BEEN REGISTERED UNDER THE SECURITIES ("BLUE SKY")
LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
PLEDGED, OR HYPOTHECATED UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND UNDER THE APPLICABLE STATE SECURITIES
("BLUE SKY") LAWS OR UNLESS THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND LAWS IS ESTABLISHED TO THE SATISFACTION
OF THE COMPANY, WHICH MAY NECESSITATE A WRITTEN OPINION OF SELLER'S
COUNSEL SATISFACTORY TO COMPANY COUNSEL.
11. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Representative's Option (and upon
surrender of any Representative's Option if mutilated), and upon reimbursement
of the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Representative's Option of like date, tenor
and denomination.
12. The Holder of any Representative's Option shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Representative's Option.
13. This Representative's Option shall be construed in accordance with
the laws of the State of Colorado, without giving effect to conflict of laws.
Dated: , 2002
----------------------------
NATURAL GAS SERVICES GROUP, INC.
By:
------------------------------------
Wayne L. Vinson, President
[SEAL]
17
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the attached Representative's Option.)
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________ Representative's Option to
purchase __________ shares of Common Stock of Natural Gas Services Group, Inc.
(the "Company"), together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ____________________________ attorney
to transfer such Representative's Option on the books of the Company, with full
power of substitution.
Dated:
--------------------
Signature:
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Signature Guaranteed:
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.
ELECTION TO EXERCISE
(To be executed by the holder if such holder desires to
exercise the attached Representative's Option)
The undersigned hereby exercises his or its rights to subscribe for
__________ shares of Common Stock covered by the within Representative's Option
(each as defined in the within Representative's Option) and tenders payment
herewith in the amount of $__________ in accordance with the terms thereof, and
requests that certificates for such Common Stock be issued in the name of, and
delivered to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print Name, Address and Social Security or Tax Identification Number)
and, if such number of shares of Common Stock (or portions thereof) shall not be
all the Common Stock covered by the within Representative's Option, that a new
Representative's Option for the balance of the Representative's Option covered
by the within Representative's Option be registered in the name of, and
delivered to, the undersigned at the address stated below.
Name:
---------------------------------------------------------------------------
(Print)
Address:
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- ------------------------------------------
(Signature)
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.