[DRAFT 11/12/98]
PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT made and entered into as of November __, 1998, by
and between Van Moer Xxxxxxxx and Company, a Luxembourg company (the
"Purchaser") and Penn Octane Corporation, a Delaware corporation (the
"Company").
WHEREAS, the Company wishes to sell and the Purchaser wishes to purchase
(i) 250,000 shares (the "Shares") of common stock, par value $.01 per share, of
the Company ("Common Stock"), and (ii) a warrant, exercisable until November 13,
2000 at $1.25 per share of Common Stock (subject to adjustment), to purchase
125,000 shares (the "Warrant Shares") of Common Stock substantially in the form
of Exhibit 1 hereto (the "Warrant"; the Shares and the Warrant being herein
collectively referred to as the "Securities"); and
WHEREAS, the Company and the Purchaser desire to enter into a Registration
Rights Agreement with respect to the Shares and the Warrant Shares,
substantially in the form annexed as Exhibit 2 hereto (the "Registration Rights
Agreement"), all on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the agreements and obligations herein
contained, the Purchaser and the Company hereby agree as follows:
1. Purchase and Sale of the Securities. Subject to the terms and conditions
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set forth in this Agreement, the Company agrees to sell to the Purchaser, and
the Purchaser agrees to purchase from the Company, the Securities for a purchase
price equal to Two Hundred Fifty Thousand ($250,000.00) Dollars.
2. The Closing. The closing (the "Closing") of the purchase and sale of the
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Securities shall take place on November 13, 1998 at 10:00 A.M. local time at the
offices of the Company in Redwood City, California, or at such other time and
place as the Company and the Purchaser shall agree. At the Closing, the
Purchaser shall deliver to the Company payment for the Securities being
purchased in immediately available funds and the Company shall deliver the
Shares and the Warrant to the Purchaser.
3. Registration Rights. The Purchaser shall have such registration rights
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with respect to the Share and the Warrant Shares as are set forth in the
Registration Rights Agreement.
4. Representations and Warranties of the Company, As of the Closing, the
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Company represents and warrants that:
(a) the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has the
requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;
(b) the execution, delivery and performance of this Agreement, and the
sale and delivery of the Securities have been duly authorized by all
necessary corporate action on the part of the Company and do not violate
any covenant contained in any agreement to which the Company is a party;
and
(c) the Warrant Shares, when issued upon exercise of the Warrant and
payment therefor, will be legally and validly issued, fully paid and
nonassessable.
5. Representations and Warranties of the Purchaser. The Purchaser
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represents and warrants as follows:
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(a) General:
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(i) The Purchaser has all requisite authority to enter into this
Agreement and to perform all of the obligations required to be
performed by it hereunder.
(ii) Neither the Company nor any person acting on behalf of the
Company has offered or sold the Securities to the Purchaser by means
of any form of general solicitation or general advertising. The
Purchaser has not received, paid or given, directly or indirectly, any
commission or remuneration for or on account of any sale, or the
solicitation of any sale, of the Securities.
(b) Information Concerning the Company:
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(i) The Purchaser is familiar with the business and financial
condition, properties, operations and prospects of the Company.
(ii) The Purchaser has been given full access to all material
information concerning the condition, properties, operations and
prospects of the Company. The Purchaser and his advisors (if any) have
had an opportunity to ask questions of, and to receive information
from, the Company and persons acting on its behalf concerning the
terms and conditions of the Purchaser's investment in the Securities,
and to obtain any additional information necessary to verify the
accuracy of the information and data received by the Purchaser. The
Purchaser is satisfied that there is no material information
concerning the condition, properties, operations and prospects of the
Company of which Purchaser is unaware.
(iii) The Purchaser has made, either alone or together with his
advisors (if any), such independent investigation of the Company, its
management, and related matters as the Purchaser deems to be, or the
Purchaser's advisors (if any) have advised to be, necessary or
advisable in connection with this investment; and the Purchaser and
his advisors (if any) have received all information and data which the
Purchaser and his advisors (if any) believe to be necessary in order
to reach an informed decision as to the advisability of investing in
the Securities.
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(iv) The Purchaser understands that all the Purchaser's
representations and warranties contained in this Agreement will be
deemed to have been reaffirmed and confirmed as of the Closing.
(v) The Purchaser understands that the purchase of the Securities
involves various risks, including the risk that it is unlikely that
any market will exist for any resale of the Warrant and that resale of
the Shares, the Warrant and the Warrant Shares will be restricted as
herein provided.
(c) Status of Purchaser:
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(i) The Purchaser either alone or with Purchaser's advisors (if
any) has such knowledge, skill and experience in business, financial
and investment matters as to be capable of evaluating the merits and
risks of an investment in the Securities. To the extent that the
Purchaser has deemed it appropriate to do so, the Purchaser has
retained at Purchaser's own expense, and relied upon, appropriate
professional advice regarding the investment, tax and legal merits and
consequences of this Agreement and owning the Shares, the Warrant and
Warrant Shares, as the case may be.
(d) Restrictions on Transfer or Sale
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(i) The Purchaser is acquiring the Securities and any shares of
Common Stock purchased upon exercise of the Warrant solely for its own
account, for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Shares, the Warrant
or such shares of Common Stock. The Purchaser understands that neither
the Shares, the Warrant nor such underlying Common Stock have been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state (collectively
referred to as "State Securities Laws") by reason of specific
exemptions under the provisions thereof which depend in part upon the
investment intent of the Purchaser and of the other representations
made by the Purchaser in this Agreement. The Purchaser understands
that the Company is relying upon the representations and agreements
contained in this Agreement (and any supplemental information) for the
purpose of determining whether this transaction meets the requirements
for such exemptions.
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(ii) The Purchaser understands that the Shares, the Warrant and
such underlying Common Stock are "restricted securities" under
applicable federal securities laws and that the Securities Act and the
rules of the Securities and Exchange Commission (the "Commission")
provide in substance that the Purchaser may dispose of such securities
or any of them only pursuant to an effective registration statement
under the Securities Act or an exemption therefrom, and understands
that the Company has no obligations or intentions to register any of
such securities thereunder, or to take any other action so as to
permit sales pursuant to the Securities Act, except as set forth in
the Registration Rights Agreement. Accordingly, the Purchaser
understands that under the Commission's rules, unless disposed of
pursuant to an effective registration statement under the Securities
Act, the Purchaser may dispose of the Note, Warrants and underlying
Common Stock only in accordance with the provisions of Rule 144 under
the Securities Act, to the extent available, or in "private
placements" which are exempt from registration under the Securities
Act, in which event the transferee will acquire "restricted
securities" subject to the same limitations as in the hands of the
Purchaser. As a consequence, absent such an effective registration
statement under the Securities Act, the Purchaser understands that it
may be required to bear the economic risks of the investment in the
Securities (and the underlying Common Stock) for an indefinite period
of time.
(iii) The Purchaser agrees that (a) it will not sell, assign,
pledge, give, transfer, of otherwise dispose of the Shares, the
Warrant or such underlying Common Stock or any interest in any thereof
or therein, or make any offer or attempt to do any of the foregoing,
except pursuant to registration of such securities under the
Securities Act and any applicable State Securities Laws or in a
transaction which, in the opinion of counsel for the Purchaser
satisfactory to the Company (which requirement may be waived by the
Company upon advice of counsel), is exempt from the registration
provisions of the Securities Act and any applicable State Securities
Laws; (b) the Shares, the Warrant and any certificate(s) representing
shares of Common Stock issued upon exercise of the Warrant may bear a
legend making reference to the foregoing restrictions; and (c) the
Company and any transfer agent for shares of its
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Common Stock shall not be required to give effect to any purported
transfer of any of such securities except upon compliance with the
foregoing restrictions.
(iv) In no event shall any sale, assignment, pledge or transfer
of the Shares, the Warrant or such underlying Common Stock by the
Purchaser to a transferee give rise to rights of any such transferee
under the Registration Rights Agreement.
6. Conditions to Obligations of Purchaser and the Company. The obligations
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of the Purchaser to purchase and pay for the Securities specified herein and of
the Company to sell and deliver such Securities are subject to the satisfaction
at or prior to the Closing of the following conditions precedent:
(a) The representations and warranties of the Company contained in
Section 4 hereof and of the Purchaser contained in Section 5 hereof shall
be true and correct on and as of the Closing in all respects with the same
effect as though representations and warranties had been made on and as of
the Closing.
(b) The Company and the Purchaser shall each have received a
certificate from an executive officer of the other party to the effect that
its representations and warranties are still valid.
(c) The Company and the Purchaser shall each have executed and
delivered the Registration Rights Agreement.
7. Fee. In connection with the purchase and sale of the Securities, Win
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Securities, as placement agent for the Company, shall receive at the Closing a
fee from the Company equal to $25,000 plus reimbursement of expenses, not to
exceed $7,500.
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8. Waiver, Amendment. Neither this Agreement nor any provisions hereof
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shall be modified, changed, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
9. Assignability. Neither this Agreement nor any right, remedy, obligation
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or liability arising hereunder or by reason hereof shall be assignable by either
the Company or the Purchaser without the prior written consent of the other
party, which consent shall not be unreasonably withheld.
10. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the law of the State of New York, regardless of the law that
might be applied under principles of conflicts of law.
11. Section and Other Headings. The section and other headings contained in
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this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
12. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
13. Notices. All notices and other communications provided for herein shall
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be in writing and shall be deemed to have been duly given if delivered
personally or by facsimile (with proof of receipt) or sent by registered or
certified mail, return receipt requested, postage prepaid:
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(a) If to the Company, to it at the following address:
Penn Octane Corporation
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx,
President
with a copy to:
Coudert Brothers
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
(b) If to the Purchaser, at the following address:
Van Moer, Xxxxxxxx & Company
Xxxx. Xxxxxxx 000
0000 Xxxxxxxx
Xxxxxxx
Attn: Phillippe de Cock
with a copy to:
______________________
______________________
______________________
______________________
or at such other address as either party shall have specified by notice in
writing to the other.
14. Binding Effect. The provisions of this Agreement shall be binding upon
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and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.
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IN WITNESS WHEREOF, the Company and the undersigned have executed this
Agreement as of this ___ day of November, 1998.
VAN MOER XXXXXXXX & COMPANY
By:
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Name: Xxxxxxx Xxxxxxxx
Title:
PENN OCTANE CORPORATION
By:
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Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
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EXHIBIT 1
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NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE.
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE HEREOF MAY BE SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF REGISTRATION OR QUALIFICATION OR AN EXEMPTION
THEREFROM UNDER APPLICABLE LAW.
COMMON STOCK PURCHASE WARRANT
Void after November 13, 2000
Warrant to Purchase 125,000 Shares
of Common Stock, $.01 par value
of Penn Octane Corporation
PENN OCTANE CORPORATION (POCC)
This is to Certify That, FOR VALUE RECEIVED,
Van Moer Xxxxxxxx & Company
or registered assign(s) (herein referred to as the "Holder") is entitled to
purchase, subject to the provisions hereof, from PENN OCTANE CORPORATION, a
Delaware corporation (the "Company"), but not later than 5:00 p.m., California
time, on November __, 2000 (or, if such date is not a Business Day in Redwood
City, California, then on the next succeeding day which shall be a Business
Day), 125,000 shares of Common Stock, $.01 par value, of the Company (the
"Common Stock") at an exercise price of $1.25 per share, subject to adjustment
as to number of shares and purchase price as set forth in Section 6 below. The
exercise price of a share of Common Stock in effect at any time and as adjusted
from time to time is hereinafter sometimes referred to as the "Exercise Price".
For purposes of this Warrant, a "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in New York, New York,
or in Redwood City, California, are authorized by law or regulation to close.
The shares of Common Stock issuable upon exercise of the Warrants are sometimes
herein called the "Warrant Stock."
15. Exercise of Warrant. This Warrant may be exercised in whole or in part
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at any time and from time to time by presentation and surrender hereof to the
Company at its principal office with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Exercise Price in immediately
available funds for the number of shares specified in such form. If this Warrant
is exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the right of the
Holder to purchase the balance of the shares purchasable hereunder. Upon receipt
by the Company of this Warrant at the office of the Company, in proper form for
exercise, accompanied by payment of the Exercise Price, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable upon
such exercise, notwithstanding that certificates representing such shares of
Common Stock shall not then be actually delivered to the Holder. The issuance of
certificates for shares of Common Stock upon the exercise of this
Warrant shall be made without charge to the Holder for any issuance tax in
respect thereof (with the exception of any federal or state income taxes
applicable thereto), all such taxes to be paid by the Company, it being
understood however that the Holder shall be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the Holder. The Company will at no
time close its transfer books against the transfer of this Warrant or the
issuance of any shares of Common Stock issuable upon the exercise of this
Warrant in any manner which interferes with the timely exercise of this Warrant.
16. Reservation of Shares; Stock Fully Paid. The Company agrees that at all
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times there shall be authorized and reserved for issuance upon exercise of this
Warrant such number of shares of its Common Stock as shall be required for
issuance or delivery upon exercise of this Warrant. All shares which may be
issued upon exercise hereof will, upon issuance, and receipt of payment
therefor, be duly authorized, validly issued, fully paid and non-assessable.
17. Fractional Shares. This Warrant shall not be exercisable in such manner
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as to require the issuance of fractional shares. If, as a result of adjustment
in the Exercise Price or the number of shares of Common Stock to be received
upon exercise of this Warrant, fractional shares would be issuable, no such
fractional shares shall be issued. In lieu thereof, the Company shall pay the
Holder an amount in cash equal to such fraction multiplied by the Fair Market
Value of a share of Common Stock. The term "Fair Market Value" shall mean, as of
a particular date, the market price on such date.
For purposes of this Warrant, the market price on any day shall be the
last sale price on such day on the NASDAQ Stock Market, or, if the Common Stock
is not then listed or admitted to trading on the NASDAQ Stock Market, on such
other principal stock exchange on which such stock is then listed or admitted
to trading, or, if no sale takes place on such day on any such exchange, the
average of the closing bid and asked prices on such day as officially quoted on
any such exchange, or, if the Common Stock is not then listed or admitted to
trading on any stock exchange, the average of the reported closing bid and asked
prices on such day in the over-the-counter market as quoted on the National
Association of Securities Dealers Automated Quotation System or, if not so
quoted, then as furnished by any member of the National Association of
Securities Dealers, Inc. selected by the Company. If there shall be no
meaningful over-the-counter market, then Fair Market Value shall be such amount,
not less than book value, as may be determined by the Board of Directors of the
Company.
18. Exchange or Assignment of Warrant. This Warrant is exchangeable without
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expense (other than applicable transfer taxes) at the option of the Holder, upon
presentation and surrender hereof to the Company for any other Warrants of
different denominations entitling the holder thereof to purchase in the
aggregate the same number of shares of Common Stock purchasable hereunder.
Subject to the provisions of Section 11 below and any restriction on transfer
applicable hereto pursuant to the securities laws of the United States or any
State, upon surrender of this Warrant to the Company with an assignment form
duly executed, and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment, and this Warrant shall promptly be
cancelled. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation hereof at the principal office of the
Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged, and the term "Holder" as used herein includes any holder
of any Warrant into which this Warrant may be divided or for which this Warrant
may be exchanged.
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19. Rights of the Holder. The Holder shall not, by virtue hereof, be
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entitled to any rights of a stockholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.
20. Adjustment of Exercise Price and Number of Shares. The number and kind
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of securities purchasable upon the exercise or exchange of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
A. Adjustment for Change in Capital Stock. If at any time after the date
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hereof, the Company:
1. pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
2. subdivides its outstanding shares of Common Stock into a greater
number of shares;
3. combines its outstanding shares of Common Stock into a smaller
number of shares;
4. makes a distribution on its Common Stock in shares of its capital
stock other than Common Stock; or
5. issues by reclassification of its Common Stock any shares of its
capital stock;
then the Exercise Price in effect immediately prior to such action shall be
adjusted so that the Holder may receive, upon exercise or exchange of this
Warrant and payment of the same aggregate consideration, the number of shares of
capital stock of the Company which the Holder would have owned immediately
following such action if the Holder had exercised or exchanged the Warrant
immediately prior to such action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
B. Adjustment for Other Distributions. If at any time after the date
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hereof, the Company distributes to all holders of its Common Stock any of its
assets or debt securities, the Exercise Price following the record date shall be
adjusted in accordance with the following formula:
E' = E x M-F
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M
where: E' = the adjusted Exercise Price.
E = the Exercise Price immediately prior to the adjustment.
M = the current market price (as defined in (e) below) per
share of Common Stock on the record date of the
distribution.
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F = the aggregate fair market value (as conclusively determined
by the Board of Directors of the Company) on the record
date of the assets or debt securities to be distributed
divided by the number of outstanding shares of Common
Stock.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of shareholders entitled to receive the distribution. In the
event that such distribution is not actually made, the Exercise Price shall
again be adjusted to the Exercise Price as determined without giving effect to
the calculation provided hereby. In no event shall the Exercise Price be
adjusted to an amount less than zero.
This subsection does not apply to cash dividends or cash distributions paid
out of consolidated current or retained earnings as shown on the books of the
Company and paid in the ordinary course of business.
C. Deferral of Issuance or Payment. In any case in which an event covered
-------------------------------
by this Section 6 shall require that an adjustment in the Exercise Price be made
effective as of a record date, the Company may elect to defer until the
occurrence of such event by (i) issuing to the Holder, if this Warrant is
exercised after such record date, the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock or other capital stock of the Company, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment, and (ii) paying to the Holder by check any amount in lieu of the
issuance of fractional shares pursuant to Section 3.
D. When No Adjustment Required. No adjustment need be made for a change in
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the par value or no par value of the Common Stock.
E. Statement of Adjustments. Whenever the Exercise Price and number of
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shares of Common Stock purchasable hereunder is required to be adjusted as
provided herein, the Company shall promptly prepare a certificate signed by its
President or any Vice President and its Treasurer or Assistant Treasurer,
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated
(including a description hereunder), and the Exercise Price and number of shares
of Common Stock purchasable hereunder after giving effect to such adjustment,
and shall promptly cause copies of such certificates to be mailed to the Holder.
F. No Adjustment Upon Exercise of Warrants. No adjustments shall be made
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under any Section herein in connection with the issuance of Warrant Stock upon
exercise or exchange of the Warrants.
G. No adjustment for Small Amounts. Anything herein to the contrary
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notwithstanding, no adjustment of the Exercise Price shall be made if the amount
of such adjustment shall be less than $.05 per share, but in such case, any
adjustment that would otherwise be required then to be made shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustment so carried forward, shall amount
to $.05 per share or more.
H. Common Stock Defined. Whenever reference is made in Section 6(a) to the
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issue of shares of Common Stock, the term "Common Stock" shall include any
equity securities of any class of the Company hereinafter authorized which shall
not be limited to a fixed sum or percentage in respect of the right of the
holders thereof to participate in dividends or distributions of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
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Subject to the provisions of Section 7 hereof, however, shares issuable upon
exercise or exchange hereof shall include only shares of the class designated as
Common Stock of the Company as of the date hereof or shares of any class or
classes resulting from any reclassification or reclassifications thereof or as a
result of any corporate reorganization as provided for in Section 7 hereof.
7. Notice to Warrant Holders. So long as this Warrant shall be outstanding,
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(i) if the Company shall pay any dividend or make any distribution upon its
Common Stock, or (ii) if the Company shall offer to the holders of Common Stock
for subscription or purchase by them any shares of stock or securities of any
class or any other rights, or (iii) if any capital reorganization of the
Company, reclassification of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company, or voluntary or involuntary
dissolution or liquidation of the Company shall be effected, then, in any such
case, the Company shall cause to be mailed to the Holder, at least thirty (30)
days prior to the date specified in (x) or (y) below, as the case may be, a
notice containing a brief description of the proposed action and stating the
date on which (x) a record is to be taken for the purpose of such dividend,
distribution or rights, or (y) such reclassification, reorganization,
consolidation, merger, conveyance, dissolution or liquidation is to take place
and the date, if any is to be fixed, as of which the holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution or liquidation.
8. Certain Obligations of the Company. The Company agrees that it will not
----------------------------------
increase the par value of the shares of Warrant Stock issuable upon exercise of
this Warrant above the prevailing and currently applicable Exercise Price
hereunder, and that before taking any action that would cause an adjustment
reducing the prevailing and current applicable Exercise Price hereunder below
the then par value of the Warrant Stock at the time issuable upon exercise of
this Warrant, the Company will take such corporate action, as in the opinion of
its counsel, may be necessary in order that the Company may validly issue fully
paid, nonassessable shares of such Warrant Stock. The Company will maintain an
office or agency (which shall initially be the Company's principal office in
Redwood City, California) where presentations and demands to or upon the Company
in respect of this Warrant may be made and will give notice in writing to the
registered holders of the then outstanding Warrants, at their addresses as shown
on the books of the Company, of each change of location thereof.
9. Repurchase Right. Notwithstanding any other provisions of this Warrant,
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the Company may, in the event that, after the date six months after the date
hereof, the closing bid price, as reported on the NASDAQ SmallCap Market or such
other exchange on which the Company's Common Stock may then be quoted, of the
Company's Common Stock is greater than or equal to 150% of the Exercise Price
for five consecutive trading days, upon not less than five (5) days' notice in
writing to the Holder, repurchase all or any portion of this Warrant at a
purchase price equal to $.10 per share of Common Stock covered hereby, such
purchase price to be proportionally adjusted each time the Exercise Price is
adjusted pursuant to Section 6 hereof. During such five (5) day period, the
Holder may exercise such Warrant in accordance with the terms hereof. The
closing on such repurchase shall occur on the date and at the time set forth in
such notice at the office of the Company in Redwood City, California or at such
other place as shall be agreed upon by the Company and the Holder. At the
Closing, the Company shall deliver to the Holder an amount equal to the purchase
price in immediately available funds and the Holder will deliver this Warrant to
the Company for cancellation. To the extent any repurchase hereunder is of less
than all of the rights represented by this Warrant, the Company will deliver to
the Holder a new Warrant covering the rights not so purchased.
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10. Determination by Board of Directors. All determinations by the Board of
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Directors of the Company under the provisions of this Warrant will be made in
good faith with due regard to the interest of the Holder and in accordance with
sound financial practices.
11. Notice. All notices to the Holder shall be in writing, and all notices
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and certificates given to the Holder shall be sent registered or certified mail,
return receipt requested, to such Holder at his address appearing on the records
of the Company.
12. Replacement of Lost, Stolen, Destroyed or Mutilated Warrants. Upon
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receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction, upon delivery of any indemnity bond in such reasonable
amount as the Company may determine in the case of any such mutilation, upon the
surrender of such Warrant for cancellation, the Company at its expense, will
execute and deliver, in lieu of such lost, stolen, destroyed or mutilated
Warrant, a new Warrant of like tenor.
13. Number and Gender. Whenever the singular number is used herein, the
-----------------
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
14. Applicable Law. This Warrant shall be governed by, and construed in
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accordance with, the laws of the State of New York, without regard to its
conflict of laws principles.
PENN OCTANE CORPORATION
By:
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
Dated: November ___, 1998
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PURCHASE FORM
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Dated __________ , ____
The undersigned hereby irrevocably elects to exercise the within
Warrant to purchase ___________ shares of Common Stock and hereby makes payment
of in payment of the exercise price thereof.
Signature______________________________
7
