Exhibit
A

 




THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANS-FERRED WITHOUT AN EFFECTIVE REGIS-TRATION THEREOF UNDER SUCH ACT OR
PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL, REASON-ABLY SATISFACTORY TO THE
COR-PORATION AND ITS COUN-SEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.




REVOCABLE
WARRANT TO PURCHASE SHARES

OF COMMON
STOCK OF NATURAL GAS SYSTEMS, INC







Initial
Number of Shares:  300,000

Exercise
Price:                    
$0.75 per
share

Date of
Grant:                    
January
___, 2005

Expiration
Date:       January
___, 2010




THIS
CERTIFIES THAT, Prospect Energy Corporation, a Maryland corporation, or any
person or entity to whom the inter-est in this Revocable Warrant is lawfully
transferred (“Holder”) is entitled to purchase the above number (as adjust-ed
pursuant to Section 4 hereof) of fully paid and non-assessable shares of the
Common Stock (the “Shares”) of Natural Gas Systems, Inc., a Nevada corporation
(the “Company), having an Exercise Price as set forth above, subject to the
provisions and upon the terms and condi-tions set forth herein and in the
Revocable Warrant Agreement dated January __, 2005 (“Revocable Warrant
Agreement”). The exercise price, as adjusted from time to time as provided
herein, is referred to as the “Exercise Price.”




NOTWITHSTANDING
ANYTING TO THE CONTRARY, THIS REVOCABLE WARRANT IS SUBJECT TO REVOCATION WITHOUT
CONSIDERATION BY THE COMPANY UNDER CERTAIN CONDITIONS DEFINED IN THE REVOCABLE
WARRANT AGREEMENT.




1. Term. Subject
to the revocation provisions of Section 3 of the Revocable Warrant Agreement,
the purchase right represented by this Revocable Warrant is exer-cisable, in
whole or in part, at any time commencing on the March 15, 2006 and ending on the
Expiration Date, after which time the Revocable Warrant shall be
void.




2. Method
of Exercise; Payment; Issuance of New Revocable Warrant. Subject
to Section 1 hereof, the right to purchase Shares repre-sented by this Revocable
Warrant may be exercised by Holder, in whole or in part, for the total number of
Shares remaining available for exercise by the surrender of this Revocable
Warrant (with the notice of exercise form attached hereto as Exhibit A duly
executed) at the principal office of the Company and by the payment to the
Company, by check made payable to the Company drawn on a United States bank and
for United States funds, or by delivery to the Company of evidence of
cancellation of indebtedness of the Company to such Holder, of an amount equal
to the then appli-cable Exercise Price per share multiplied by the number of
Shares then being purchased or by net exercise pursuant to Section 6 hereof. In
the event of any exercise of the purchase right represented by this Revocable
Warrant, certificates for the Shares so purchased shall be promptly delivered to
Holder and, unless this Revocable Warrant has been fully exercised or has
expired, a new Revocable Warrant representing the portion of the Shares, if any,
with respect to which this Revocable Warrant shall not then have been exer-cised
shall also be promptly delivered to Holder.























3. Exercise
Price. The
Exercise Price at which this Revocable Warrant may be exercised shall be the
Exercise Price, as adjusted from time to time pursuant to Section 4
hereof.




4. Adjustment
of Number of Shares. The
number of
shares and/or class of capital stock purchasable upon exercise of this Revocable
Warrant are subject to adjustment as provided in Section 9 of the Revocable
Warrant Agreement.




5. Transferability
and Negotiability of Revocable Warrant. This
Revocable Warrant may not be transferred or assigned in whole or in part without
compliance with applicable federal and state securities laws by the transferor
and the transferee (includ-ing, without limitation, the delivery of investment
represen-tation letters and legal opinions reasonably satisfactory to the
Company, if reasonably requested by the Com-pany). Subject to the provisi-ons of
this Section 5, title to this Revocable Warrant may be transferred in the
same manner as a negotiable instrument transferable by endorsement and
delivery.




6. Net
Exercise. In lieu
of exercising this Revocable Warrant for cash, the Holder may elect to exchange
this Revocable Warrant for Shares equal to the value of this Revocable Warrant
by surrender of this Revocable Warrant, together with notice of such election,
at the principal office of the Company, in which event the Company shall issue
to the holder a number of Shares computed using the following
formula:




X =
Y
(A-B)

A

Where:




X= the
number of Shares to be issued to the holder.

Y= the
number of Shares to be purchased under this Revocable Warrant.

A= value
per share of one Share determined in accordance with Section 2 of the Revocable
Warrant Agreement.

B= the
Exercise Price (as adjusted).




7. Registration
Rights. Upon
exercise of this Revocable Warrant , the Holder shall have and be entitled to
exercise, together with all other holders of registrable securities possessing
“piggy back” registration rights under that certain Registration Rights
Agreement, of even date herewith and attached hereto as Exhibit
C, between
the Company and the parties who have executed the counterpart signature pages
thereto or are otherwise bound thereby (the “Registration Rights Agreement”),
the rights of registration granted under the Registration Rights Agreement (with
respect to the Shares of Common Stock issuable upon exercise of this Revocable
Warrant ). By its receipt of this Revocable Warrant , Holder agrees to be bound
by the Registration Rights Agreement.










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8. Miscellaneous. The
Company cove-nants that it will at all times reserve and keep available, solely
for the purpose of issue upon the exercise hereof, a sufficient number of Shares
to permit the exer-cise hereof in full. Such Shares, when issued in compliance
with the provisions of this Revocable Warrant and the Company’s Certificate of
Incorporation, will be duly authorized, validly issued, fully paid and
non-assessable. No Holder of this Revocable Warrant, as such, shall, prior to
the exercise of this Revocable Warrant, be entitled to vote or receive dividends
or be deemed to be a stockholder of the Company for any purpose, nor shall
anything contained in this Revocable Warrant be construed to confer upon Holder,
as such, any rights of a stockholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Revocable Warrant and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reason-ably satisfactory in
form and amount to the Company or, in the case of any such mutila-tion, upon
surrender and cancellation of such Revocable Warrant, the Company at its expense
will execute and deliver, in lieu thereof, a new Revocable Warrant of like date
and tenor. The terms and provisions of this Revocable Warrant shall inure to the
bene-fit of, and be binding upon, the Company and the Holder hereof and their
respec-tive successors and as-signs. This Revocable Warrant shall be governed by
and construed under the laws of the State of Nevada.










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IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date and year first written above.

 





	
       Holder: 

      _____________________________________________________________
	 	 	 Company:
Natural Gas Systems, a Nevada
    Corporation
	 	 	 	 
		 	 	
		 	 	
	By:
      _____________________________

Name:
      ___________________________	 	 	By:
      _____________________________

Name:
      ___________________________



 

     








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NOTICE
OF EXERCISE





TO: NATURAL
GAS SYSTEMS, INC.







1. The
undersigned hereby elects to purchase _________ shares of the Common Stock of
NATURAL GAS SYSTEMS, INC. pursuant to the terms of the attached Revocable
Warrant, and tenders herewith payment of the purchase price of such shares in
full, together with all applicable transfer taxes, if any.




2. The
undersigned hereby elects to purchase __________ shares of the Common Stock of
NATURAL GAS SYSTEMS, INC. pursuant to the terms of the attached Revocable
Warrant on a net exercise basis in accordance with Section 6.




3. Please
issue a certificate or certificates repre-senting said shares of the Common
Stock in the name of the under-signed or in such other name as is specified
below:








	
       
	 
      Name:________________________________

      

      Tax
      ID:___________________

      


       

      Address:________________________________

             
      ________________________________

      
             
      ________________________________

             
      ________________________________

             
      ________________________________


       

      Signed:__________________________________

      


      Date:___________________




 

 










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