UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
COLORADO WYOMING RESERVE COMPANY
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
(Title of Class of Securities)
628652109
(CUSIP Number)
Kim M. Fuerst With copies to:
President and Patricia M. Mitchell, Esq.
Chief Executive Officer Davis, Graham & Stubbs LLP
751 Horizon Court, Suite 205 370 17th Street, Suite 4700
Grand Junction, Colorado 81506 Denver, Colorado 80202
(303) 296-1908 (303) 892-9400
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
FEBRUARY 22, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box o.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 8 pages
<PAGE>
CUSIP No. 628652109 SCHEDULE 13D Page 2 of 8 Pages
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trinity Petroleum Management, LLC IRS # 84-1347168
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - (See Items 3 and 4)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [ ]
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Colorado
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 225,000 (See Item 5.)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON
WITH 9 SOLE DISPOSITIVE POWER
225,0000 (See Item 5.)
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
225,000 (See Item 5.)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 8.6%, based upon 2,417,694 shares of Common Stock
outstanding as of the date hereof, and giving effect to the additional
200,000 shares to be issued as described in Item 5.
14 TYPE OF REPORTING PERSON*
00 - Limited Liability Company
Page 2 of 8 pages
<PAGE>
CUSIP No. 628652109 SCHEDULE 13D Page 3 of 8 Pages
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. Samuel Butler
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
00 - (See Item 5.)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [ ]
TO ITEMS 2(d) or 2(e)
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 200,000 (See Item 5.)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 225,000 (See Item 5.)
WITH
9 SOLE DISPOSITIVE POWER
200,000 (See Item 5.)
10 SHARED DISPOSITIVE POWER
225,000 (See Item 5.)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
425,000 (See Item 5.)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 15.0%, based upon 2,417,694 shares of Common Stock
outstanding as of the date hereof, and giving effect to the additional
400,000 shares to be issued as described in Item 5.
14 TYPE OF REPORTING PERSON*
IN
Page 3 of 8 pages
<PAGE>
Colorado Wyoming Reserve Company Page 4 of 8 Pages
SCHEDULE 13D March 3, 1998
ITEM 1. SECURITY AND ISSUER.
Shares of Common Stock, par value $.01 per share (the "Shares") of:
Colorado Wyoming Reserve Company
751 Horizon Court
Suite 205
Grand Junction, Colorado 81506
(303) 296-1908
The names and addresses of the principal executive officers of the Company
are as follows:
NAME TITLE ADDRESS
Kim M. Fuerst President, Treasurer, 751 Horizon Court, Ste. 205
CEO & CFO Grand Junction, CO 81506
Faisal Chaudhary Secretary 151 Toby Lane
Anaheim Hills, CA 92807
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) Trinity Petroleum Management, LLC, a Colorado limited liability
company ("Trinity") Principle Business: Oil and Gas Property
Management Principle Business Office: 1801 Broadway, Suite 600,
Denver, Colorado 80202.
(d) J. Samuel Butler ("Mr. Butler"), the sole manager and majority owner
of Trinity, has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Mr. Butler has not, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction which resulted in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Mr. Butler is a United States citizen.
--------------------------------
(a) J. Samuel Butler
(b) 1801 Broadway, Suite 600, Denver, Colorado 80202
(c) Sole Manager of Trinity; Director of Issuer; President of ST Oil
Company, a privately-held Nevada corporation.
(d) Mr. Butler has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Mr. Butler has not, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction which resulted in a judgment, decree or final order
<PAGE>
Colorado Wyoming Reserve Company Page 5 of 8 Pages
SCHEDULE 13D March 3, 1998
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws. (f) Mr. Butler is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
This Schedule 13D is being filed to report the acquisition of more than
five percent of the Common Stock of the Company by each of Trinity and Mr.
Butler. Trinity received a warrant for the purchase of 100,000 shares of Common
Stock, an option for the purchase of 100,000 shares of Common Stock, and 25,000
restricted shares of the Company's Common Stock, all as partial compensation for
administrative services provided to the Company. Mr. Butler was granted an
option to purchase 200,000 shares of the Company's Common Stock in connection
with his service as a member of the Board of Directors of the Company.
ITEM 4. PURPOSE OF TRANSACTION.
On March 31, 1997, Trinity was issued a warrant to purchase 100,000
shares of the Company's Common Stock as partial compensation for administrative
services provided by Trinity to the Company pursuant to an Administrative
Services Agreement dated March 15, 1997. On January 22, 1998, Trinity was
granted an option to purchase 100,000 shares of the Company's Common Stock, and
was issued 25,000 shares of restricted Common Stock, as partial compensation for
additional administrative services provided to the Company in connection with a
merger transaction undertaken by the Company. The stock option granted on
January 22, 1998 had a three-month vesting period and, on February 22, 1998,
became exercisable within sixty days. Additional warrants or stock options may
be granted by the Board of Directors to Trinity in the future as compensation
for its administrative services.
On October 18, 1996, Mr. Butler was granted an option to purchase up to
200,000 shares of Common Stock in connection with his services as a member of
the board of directors of the Company. Mr. Butler is the sole manager and
majority owner of Trinity, and therefore, is the beneficial owner of the
warrants, options and shares of Common Stock held by Trinity. All of the
above-referenced options and warrants are presently (or will be within sixty
days hereof) exercisable.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) Trinity beneficially owns 225,000 Shares, which includes a warrant
to purchase 100,000 Shares, presently exercisable at $1.00 per share;
a stock option to purchase 100,000 Shares, exercisable on April 22,
1998 at $1.50 per share; and 25,000 restricted Shares. Trinity's
beneficial ownership represents approximately 8.6% of the Company's
Shares. Trinity, through its sole manager, Mr. Butler, has sole voting
and dispositive power over such Shares.
(c) Trinity has not been involved in any Share transactions during the
last sixty days.
<PAGE>
Colorado Wyoming Reserve Company Page 6 of 8 Pages
SCHEDULE 13D March 3, 1998
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale
of, any Shares.
(e) Trinity is the beneficial owner of more than 5% of the Company's
Shares.
- --------------------------
a)-(b) Mr. Butler beneficially owns 425,000 Shares, which includes
director stock options to purchase 200,000 Shares, presently
exercisable at $1.00 per share; and the Shares held by Trinity as
described above. Mr. Butler's beneficial ownership (including the
Trinity holdings) represents approximately 15.0% of the Company's
Shares. Mr. Butler has sole voting and dispositive power over stock
options to purchase 200,000 Shares, and shares voting and dispositive
power with Trinity over the warrant and option to purchase 200,000
Shares and the 25,000 restricted Shares.
(c) Mr. Butler has not been involved in any Share transactions during the
last sixty days.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale
of, any Shares.
(e) Mr. Butler is the beneficial owner of more than 5% of the Company's
Shares.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or relationships
between Trinity or Mr. Butler and any other person with respect to any
securities of the Company other than the following:
As between Trinity and the Company: The Administrative Services Agreement,
dated March 15, 1997, the Warrant dated March 31, 1997 and a Non-Statutory Stock
Option Agreement dated February 6, 1998.
As between Mr. Butler and the Company: a Non-Statutory Stock Option
Agreement dated October 18, 1996.
As between Mr. Butler and Trinity: Joint Filing Agreement, dated March 3,
1998, as required by Rule 13d-1(f) of the Securities Exchange Act of 1934, as
amended.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A -- Joint Filing Agreement, dated March 3, 1998, by and
between Trinity Petroleum Management, LLC and J. Samuel
Butler, as required by Rule 13d-1(f) of the Securities
Exchange Act of 1934, as amended.
Exhibit B -- Administrative Services Agreement, dated as of March
15, 1997, between Trinity and the Company.
<PAGE>
Colorado Wyoming Reserve Company Page 7 of 8 Pages
SCHEDULE 13D March 3, 1998
Exhibit C -- Warrant, dated as of March 31, 1997, between Trinity
and the Company.
Exhibit D -- Non-Statutory Stock Option Agreement, dated February
6, 1998, between Trinity and the Company.
Exhibit E -- Non-Statutory Stock Option Agreement, dated as of
October 18, 1996, between Mr. Butler and the Company.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated March 3, 1998 /s/J. Samuel Butler
-------------------------------------
J. Samuel Butler, Individually
Director
TRINITY PETROLEUM MANAGEMENT, LLC
By: /s/J. Samuel Butler
----------------------------------
J. Samuel Butler, Manager
<PAGE>
Colorado Wyoming Reserve Company Page 8 of 8 Pages
SCHEDULE 13D March 3, 1998
EXHIBIT INDEX TO SCHEDULE 13D
Exhibit A Joint Filing Agreement, dated March 3, 1998, by and between
Trinity Petroleum Management, LLC and J. Samuel Butler,
individually.
Exhibit B Administrative Services Agreement, dated as of March 15,
1997, between Trinity and the Company.
Exhibit C Warrant, dated as of March 31, 1997, between Trinity and the
Company.
Exhibit D Non-Statutory Stock Option Agreement, dated February 6,
1998, between Trinity and the Company.
Exhibit E Non-Statutory Stock Option Agreement, dated October 18, 1996,
between Mr. Butler and the Company.
EXHIBIT A
JOINT FILING AGREEMENT
Each of the undersigned hereby affirms that it is individually eligible to
use Schedule 13D, and agrees that this Schedule 13D is filed on its behalf.
Dated this 3rd day of March, 1998.
TRINITY PETROLEUM MANAGEMENT, LLC
By: /S/J. SAMUEL BUTLER
--------------------------------------------
Name: J. Samuel Butler
Title: Manager
/S/J. SAMUEL BUTLER
- -----------------------------------------------
Name: J. Samuel Butler, Individually
Position: Director
AGREEMENT FOR ADMINISTRATIVE SERVICES
THIS AGREEMENT FOR ADMINISTRATIVE SERVICES ("Agreement") is made the
15th day of March, 1997, by and between TRINITY PETROLEUM MANAGEMENT, LLC,
a Nevada limited liability company, 1801 Broadway, Suite 600, Denver, CO 80202
("Trinity"), and MYSTIQUE DEVELOPMENTS, INC., a Wyoming corporation, 1820 South
Elena Avenue, Redondo Beach, California 90277 ("Mystique").
RECITALS
Mystique desires to retain the services of Trinity to manage certain
oil and gas properties, and Trinity desires to provide the services under the
terms hereinafter set forth.
NOW THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the parties agree as
follows:
ARTICLE I.
RETENTION OF SERVICES
1.1 SERVICES RETAINED. Mystique agrees to retain Trinity to perform
certain functions relating to the management of oil and gas properties located
in the United States and Canada (the "Properties"). Said functions include
accounting services (such as rental and royalty payments, disbursement of
revenues to co-owners of oil and gas leases, and the preparation of monthly
financial statements), computer support, contract and lease administration, and
day-to-day operations.
ARTICLE II.
DUTIES OF TRINITY
2.1 PERFORMANCE OF SERVICES. Trinity shall undertake to perform the
services described in Article I, above, on behalf of Mystique. In performing the
services set forth in this Agreement, Trinity shall be subject to the
supervision and control of Mystique's officers and its Board of Directors. In no
event shall Trinity incur any obligation or enter into any transaction on behalf
of Mystique without the prior approval of an officer or the Board of Directors
of Mystique. All work shall be performed in accordance with applicable laws and
industry standards of diligence and care.
2.2 INDEPENDENT CONTRACTOR. Trinity is and shall be an independent
contractor in the performance of this Agreement and is solely responsible for
all of it's employees, including labor costs and expenses arising in connection
with them. Trinity shall have no responsibility for any expense or obligation of
Mystique under this Agreement.
<PAGE>
ARTICLE III.
TERM
3.1 TERM. The term of this Agreement shall be for a period of six
months commencing on the date hereof, and shall continue thereafter on a
month-to-month basis, terminable upon 30 days prior written notice by either
party.
ARTICLE IV.
COMPENSATION
4.1 COMPENSATION FOR SERVICES. As compensation for services rendered,
Mystique shall pay to Trinity a fee of $2,000 per month, payable on the first
day of each month; provided, however, that the fee for the month of March 1997
shall be pro-rated and shall by paid by Mystique to Trinity on the date hereof.
4.2 THIRD-PARTY Expenses. The compensation described in Section 4.1,
above, does not include third-party expenses of Mystique that are paid by
Trinity which may include, without limitation, annual audit fees and expenses,
annual independent reservoir engineering fees and expenses, annual tax
preparation fees and expenses, legal fees, insurance and bonding expenses and
other miscellaneous expenses. Trinity shall obtain Mystique's approval prior to
incurring and paying such expenses on behalf of Mystique.
ARTICLE V.
INDEMNITY
5.1 INDEMNITY.
A) Mystique hereby agrees to indemnify and hold harmless
Trinity, its directors, officers, employees, agents, consultants and
representatives, to the fullest extent permitted by law, from and against all
losses, claims, damages, liabilities, costs and expenses (including without
limitation attorneys fees and costs of litigation) which (1) are related to or
arise out of (a) actions taken or omitted to be taken by Mystique; or (b)
actions taken or omitted by an indemnified person pursuant to this Agreement; or
(2) are otherwise related to or arise out of Trinity's activities on behalf of
Mystique under this Agreement, and Mystique will reimburse Trinity and any other
person indemnified hereunder for all expenses (including attorney's fees and
costs of litigation) as they are incurred by Trinity or such other indemnified
persons in connection with investigating, preparing or defending any such action
or claim, in connection with pending or threatened litigation in which Trinity
or any other indemnified person is or may be a party; provided however, Mystique
shall not be responsible for any losses, claims, damages, liabilities, costs or
expenses pursuant to
<PAGE>
this Paragraph 5.1 (A) which are finally and judicially determined to have
resulted primarily from the bad faith, gross negligence or willful misconduct of
Trinity or its directors, officers, employees, agents, consultants and
representatives.
B) Trinity hereby agrees to indemnify and hold harmless Mystique, its
directors, officers, employees, agents and representatives, to the fullest
extent permitted by law, from and against all losses, claims, damages,
liabilities, costs and expenses (including without limitation attorney's fees
and costs of litigation) which (1) are related to compensation or any other
claim of Trinity employees, contractors or consultants retained to perform the
services hereunder; or (2) are finally and judicially determined to have
resulted primarily from the bad faith, gross negligence or willful misconduct of
Trinity or its directors, officers, employees, agents, consultants and
representatives.
ARTICLE VI.
MISCELLANEOUS
6.1 ENTIRE AGREEMENT. This Agreement represents the entire agreement of
the parties with respect to the transactions contemplated hereby and may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties.
6.2 COMPLIANCE WITH LAW. Trinity shall obtain such authorizations,
licenses, permits and other governmental or regulatory agency approvals as are
required for the performance of this Agreement by Trinity, and Mystique shall
incur no liability arising from Trinity's possession, or lack of possession, of
such requisite governmental authorizations and approvals, except that Mystique
shall reimburse Trinity for applicable third-party expenses as described in
Section 4.2 herein.
6.3 DOCUMENTS AND OTHER PROPERTY. Upon termination of this Agreement as
set forth herein, Trinity will deliver to Mystique all documents, data, and
property of any nature pertaining to the performance of the services hereunder
and will not, without the prior written consent of Mystique, retain any
documents, data or property of any description belonging to Mystique or any
reproduction or any description containing or pertaining to any proprietary
information.
6.4 ASSIGNMENT. No party may assign any of its rights or obligations
under this Agreement without the prior written consent of the other party.
6.5 BINDING AGREEMENT. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by Mystique and Trinity and their
respective successors and permitted assigns.
6.6 NOTICES. Unless otherwise amended in writing, all notices
required or permitted
<PAGE>
hereunder shall be in writing and shall be deemed to have been given when
deposited in the United States mail, postage prepaid and addressed as follows:
If to Trinity: Trinity Petroleum Management LLC
1801 Broadway, Suite 600
Denver, CO 80202
Attn: J. Samuel Butler
If to Mystique: Mystique Developments, Inc.
1820 South Elena Avenue
Redondo Beach, CA 90277
Attn: Kim Fuerst
6.7 COLORADO LAW. This Agreement shall be governed by and construed
in accordance with Colorado law.
6.8 SEVERABILITY. The determination that any term or provision hereof
is invalid or unenforceable shall not affect or invalidate the remaining terms
and provisions of this Agreement.
6.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
shall constitute but one Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
TRINITY PETROLEUM MANAGEMENT, LLC
/s/ J. SAMUEL BUTLER
-----------------------------------
J. Samuel Butler
President
MYSTIQUE DEVELOPMENTS, INC.
/s/ KIM FUERST
-----------------------------------
Kim Fuerst
President
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS IN
ACCORDANCE WITH SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.
No. of Shares of Common Stock: 100,000 Warrant No.
----
WARRANT
to Purchase
Common Stock, $.01 Par Value
of
Mystique Developments, Inc.
a Wyoming corporation
THIS IS TO CERTIFY THAT for value received, Trinity Petroleum Management, LLC
("Trinity"), or its registered assigns, is entitled to purchase from Mystique
Developments, Inc., a Wyoming corporation (hereinbelow called the "Issuer" or
the "Company"), on or after the dates specified herein, but not later than 5:00
p.m. Denver time, on March 31, 2002 (the "Expiration Date"), 100,000 shares of
the Company's Common Stock, in whole or in part, at a purchase price of $1.00
per share of Common Stock, all on the terms and conditions hereinbelow provided.
Section 1. CERTAIN DEFINITIONS. As used in this Warrant, unless the
context otherwise requires:
"COMMON STOCK" shall mean the Issuer's authorized Common Stock, par
value $0.01 per share.
"COMMON STOCK WARRANTS" OR "WARRANT" shall mean this Warrant for the
purchase of up to 100,000 shares, in the aggregate, of Common Stock, and all
additional or new warrants issued upon division or combination of, or in
substitution for, this Warrant. All such additional or new warrants shall at all
times be identical as to terms and conditions and date, except as to the number
of shares of Common Stock for which they may be exercised.
<PAGE>
"EXERCISE PRICE" shall mean the purchase price of $1.00 per share of
Common Stock, as adjusted from time to time pursuant to Section 3 hereof.
"MARKETABLE SECURITIES" shall mean securities registered under the
Securities Act of 1933 (the "Securities Act") and, if such securities are held
by an affiliate of the Issuer, which are permitted to be sold under Rule 144 in
a single ninety-day period.
"WARRANT STOCK" shall mean the shares of Common Stock purchasable by
the holder of a Warrant upon the exercise of such Warrant.
Section 2. EXERCISE OF WARRANT. This Warrant may be exercised in
whole or in part on or after March 31, 1997 and ending on the Expiration Date.
The holder of this Warrant may exercise this Warrant, in whole or in
part by delivering to the Issuer at its office maintained for such purpose
pursuant to Section 14 (i) a written notice of such holder's election to
exercise this Warrant, which notice shall specify the number of shares of Common
Stock to be purchased, (ii) this Warrant and (iii) a sum equal to the aggregate
of the Exercise Price for such shares of Common Stock, in immediately available
funds.
Such notice shall be in the form of the Subscription Form set out at
the end of this Warrant. Upon delivery thereof, the Issuer shall cause to be
executed and delivered to such holder within ten business days, a certificate or
certificates representing the aggregate number of fully-paid and nonassessable
shares of Common Stock issuable upon such exercise.
Subject to the restrictions in Sections 10 and 11, the stock
certificate or certificates for Warrant Stock so delivered shall be in such
denominations as may be specified in said notice and shall be registered in the
name of such holder or such other name or names as shall be designated in said
notice. Such certificate or certificates shall be deemed to have been issued and
such holder or any other person so designated to be named therein shall be
deemed to have become a holder of record of such shares, including to the extent
permitted by law the right to vote such shares or to consent or to receive
notice as a shareholder, as of the time said notice is delivered to the Issuer
as aforesaid. If this Warrant shall have been exercised only in part, the Issuer
shall, at the time of delivery of said certificate or certificates, deliver to
such holder a new Warrant dated the date it is issued, evidencing the rights of
such holder to purchase the remaining shares of Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of such holder, appropriate notation may be made on
this Warrant and the Warrant shall be returned to such holder.
The Issuer shall pay all expenses, taxes and other charges payable in
connection with the preparation, issue and delivery of stock certificates under
this SECTION 2.
All shares of Common Stock issuable upon the exercise of this Warrant
in accordance with the terms hereof shall be validly issued, fully paid and
nonassessable, and
-2-
<PAGE>
free from all liens and other encumbrances thereon, other than liens or other
encumbrances created by the holder hereof.
The Issuer will not close its books in any manner which interferes
with the timely exercise of this Warrant. The Issuer will from time to time take
all such action as may be necessary to assure that the par value per share of
the unissued Common Stock acquirable upon exercise of this Warrant is at all
times equal to or less than the Exercise Price then in effect.
In no event shall any fractional share of Common Stock of the Issuer
be issued upon any exercise of this Warrant. If, upon exercise of this Warrant
as an entirety, the registered holder would, except as provided in this
paragraph, be entitled to receive a fractional share of Common Stock, then the
Company shall issue the next higher number of full shares of Common Stock,
issuing a full share with respect to such fractional share.
In the event that a holder's employment with Trinity is terminated
(otherwise than by reason of death), the Warrant shall be exercisable (TO THE
EXTENT THAT THE HOLDER SHALL HAVE BEEN ENTITLED TO DO SO AT THE TERMINATION OF
HIS EMPLOYMENT) at any time prior to the expiration of the period of three
months after such termination, but no later than the Expiration Date, in any
event. Nothing in this Warrant shall confer upon the holder any right to be
continued in the employ of Trinity or any subsidiary or interfere in any way
with the right of Trinity or any such subsidiary to terminate or otherwise
modify the terms of the holder's employment; provided, however, that a change in
the holder's duties or position shall not affect holder's Warrant so long as the
holder is still an employee of Trinity or any subsidiary.
In the event of the holder's death, any unexercised portion of the
Warrant shall be exercisable (TO THE EXTENT THAT THE HOLDER SHALL HAVE BEEN
ENTITLED TO DO SO AT THE TIME OF HIS DEATH) at any time prior to the expiration
of the period of three months after his death but no later than the Expiration
Date, in any event, and only by such person or persons to whom the holder's
rights shall have passed under the holder's will or by the laws of descent and
distribution.
Section 3. ADJUSTMENT OF EXERCISE PRICE AND WARRANT STOCK. If the
Issuer shall at any time prior to the Expiration Date subdivide its outstanding
Common Stock, by split-up or otherwise, or combine its outstanding Common Stock,
or issue additional shares of its Common Stock in payment of a stock dividend in
respect of its Common Stock, the number of shares of Warrant Stock then issuable
on the exercise of the unexercised portion of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock dividend, or
proportionately decreased in the case of a combination, and the Exercise Price
then applicable to shares covered by the unexercised portion of this Warrant
shall forthwith be proportionately decreased in the case of a subdivision or
stock dividend, or proportionately increased in the case of a combination.
Whenever the Exercise Price is adjusted as herein provided, the Issuer shall
promptly deliver to the registered holder of this Warrant a certificate of its
principal financial officer setting forth the Exercise Price after such
adjustment and a brief statement of the facts requiring such adjustment.
-3-
<PAGE>
Section 4. DIVISION AND COMBINATION. This Warrant may, subject to
Sections 10 and 11, be divided by or combined with other Warrants upon
presentation at the office of the Issuer, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the holder hereof or his agent or attorney. The Issuer shall pay all
expenses, taxes and other charges incurred by the Issuer in the performance of
its obligations in connection with the preparation, issuance and delivery of
Warrants under this Section 4. The Issuer agrees to maintain at its office,
books for the registration of the Warrants.
Section 5. RECLASSIFICATION, ETC. In case of any reclassification or
change of the outstanding Common Stock of the Issuer (other than as a result of
a subdivision, combination or stock dividend), or in case of any consolidation
of the Issuer with, or merger of the Issuer into, another corporation or other
business organization (other than a consolidation or merger in which the Issuer
is the continuing corporation and which does not result in any reclassification
or change of the outstanding Common Stock of the Issuer), at any time prior to
the Expiration Date, then, as a condition of such reclassification,
reorganization, change, consolidation or merger, lawful provision shall be made,
and duly executed documents evidencing the same from the Issuer or its successor
shall be delivered to the registered holder of this Warrant, so that the
registered holder of this Warrant shall have the right prior to the expiration
of this Warrant to purchase, at a total price not to exceed that payable upon
the exercise of the unexercised portion of this Warrant, the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, reorganization, change, consolidation or merger by a holder of
the number of shares of Common Stock of the Issuer which might have been
purchased by the registered holder of this Warrant immediately prior to such
reclassification, reorganization, change, consolidation or merger, and in any
such case appropriate provisions shall be made with respect to the rights and
interest of the registered holder of this Warrant to the end that the provisions
hereof (including without limitation, provisions for the adjustment of the
Exercise Price and of the number of shares purchasable upon exercise of this
Warrant) shall thereafter be applicable in relation to any shares of stock and
other securities and property thereafter deliverable upon exercise hereof.
Notwithstanding the foregoing, if pursuant to the terms of such consolidation or
merger, the consideration to be received by the holders of Common Stock of the
Issuer is cash and/or Marketable Securities, this Warrant shall expire to the
extent unexercised on the closing of such merger or consolidation.
Section 6. CERTAIN NOTICES. If at any time prior to the expiration or
exercise of this Warrant, the Issuer shall pay any dividend or make any
distribution upon its Common Stock or shall make any subdivision or combination
of or other change in its Common Stock, the Company shall cause notice thereof
to be mailed, first class, postage prepaid, to the registered holder of this
Warrant at least ten days prior to the date as of which holders of Common Stock
who shall participate in such dividend, distribution, subdivision, combination
or other change are to be determined. Such notice shall also specify the time as
of which holders of Common Stock who shall participate in such event are to be
determined. The Company shall also provide to the registered holder of this
Warrant at least ten days prior written notice of the closing of the sale of
shares of Common Stock in an underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as
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<PAGE>
amended. Failure to give any such notice, or any defect therein, shall not
affect the legality or validity of any such event.
Section 7. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION
WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY. The Issuer shall at all times
reserve and keep available for issuance upon the exercise of Warrants such
number of its authorized but unissued shares of Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants.
Section 8. STOCK AND WARRANT BOOKS. The Issuer will not at any
time, except upon dissolution, liquidation or winding up, close its stock books
or Warrant books so as to result in preventing or delaying the exercise of any
Warrant.
Section 9. NO VOTING RIGHTS. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a shareholder of the
Issuer.
Section 10. TRANSFER. This Warrant is transferable in whole or
in part, at the office or agency of the Issuer at which this Warrant is
exercisable, by the registered holder hereof in person or by duly authorized
attorney, upon surrender of this Warrant together with the assignment hereof
properly endorsed, and promptly thereafter a new warrant shall be issued and
delivered by the Issuer, registered in the name of the assignee. Until
registration of transfer hereof on the books of the Issuer, the Issuer may treat
the registered holder hereof as the owner hereof for all purposes.
Section 11. INVESTMENT REPRESENTATIONS; RESTRICTIONS ON TRANSFER OF
WARRANT AND WARRANT STOCK. The holder represents and agrees that: (i) the
Warrant shall not be exercisable unless the purchase of Warrant Stock is
pursuant to an applicable effective registration statement under the Securities
Act of 1933, as amended (the "Act"), or unless in the opinion of counsel for the
Company, the proposed purchase of such Warrant Stock would be exempt from the
registration requirements of the Act, and from the qualification requirements of
any applicable state securities law; (ii) if the Warrant Stock is not issued
pursuant to an applicable effective registration statement under the Act, upon
exercise of the Warrant, holder will acquire the Warrant Stock for its own
account for investment and not with any intent or view to any distribution,
resale or other disposition of the Warrant Stock; (iii) it will not sell or
transfer the Warrant or the Warrant Stock, unless such are registered under the
Act, except in a transaction that is exempt from registration under the Act; and
(iv) if the Warrant Stock is not issued pursuant to an applicable effective
registration statement under the Act, each certificate issued to represent any
of the Warrant Stock shall bear a legend calling attention to the foregoing
restrictions and agreements. The Company may require, as a condition of the
exercise of the Warrant, that the Holder sign such further representations and
agreements as it reasonably determines to be necessary or appropriate to assure
and to evidence compliance with the requirements of the Act.
Section 12. LOSS, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt
of evidence satisfactory to the Issuer of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity and/or
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<PAGE>
security satisfactory to the Issuer or, in the case of any such mutilation, upon
surrender and cancellation of such Warrant, the Issuer will make and deliver, in
lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like
tenor and representing the right to purchase the same aggregate number of shares
of Common Stock.
Section 13. AMENDMENTS. The terms of this Warrant may be amended, and
the observance of any term herein may be waived, but only with the written
consent of the Issuer as authorized by its Board of Directors and the holder of
this Warrant or the holders of Common Stock Warrants then exercisable for a
majority of the shares of Common Stock issuable upon exercise of all of the then
outstanding Common Stock Warrants.
Section 14. OFFICE OF THE ISSUER. So long as any of the Warrants
remain outstanding, the Issuer shall maintain an office in California where the
Warrants may be presented for exercise, transfer, division or combination as in
this Warrant provided. Such office shall be at 1820 South Elena Avenue, Suite B,
Redondo Beach, CA 90277, unless and until the Issuer shall designate and
maintain some other office for such purposes and deliver written notice thereof
to the holders of all outstanding Warrants.
Section 15. NOTICES GENERALLY. Any notice, demand or delivery pursuant
to the provisions hereof shall be sufficiently delivered or made if sent by
first class mail, postage prepaid, addressed to any holder of a Warrant at its
last known address appearing on the books of the Issuer, or, except as herein
otherwise expressly provided, to the Issuer at its principal executive office at
the address set forth in SECTION 14, or such other address as shall have been
furnished to the party giving or making such notice, demand or delivery.
Section 16. SUCCESSORS AND ASSIGNS. This Warrant shall bind and inure
to the benefit of and be enforceable by the parties hereto and their respective
successors and heirs, and, without limiting the generality of the foregoing,
shall inure to the benefit of and be enforceable by each person who shall from
time to time be a holder of any of the Warrants.
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<PAGE>
Section 17. GOVERNING LAW. This Warrant shall be governed by and
construed in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the Issuer has caused this Warrant to be signed in
its name by its President or a Vice President and attested by its Secretary or
an Assistant Secretary.
Dated: March 31, 1997.
MYSTIQUE DEVELOPMENTS, INC., a
Wyoming corporation
By: /s/ KIM FUERST
--------------------------------
Kim Fuerst, President
ATTEST:
- --------------------------------
Name:
Title:
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<PAGE>
SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases shares of the Common Stock of Mystique
-------
Developments, Inc., a Wyoming corporation, and herewith makes payment therefor
(by check in the amount of $ ), all at the price and on the terms and
-----------
conditions specified in this Warrant, and requests that a certificate or
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to whose address is and, if such
-------------------------------
shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and date
for the balance of the Common Stock issuable hereunder be delivered to the
undersigned.
Dated:
--------------------------------------------
(Signature of Registered Owner)
--------------------------------------------
(Street Address)
--------------------------------------------
(City) (State) (Zip Code)
NOTICE: The signature to this subscription must correspond with the
name as written upon the face of the within Warrant in
every particular, without alteration or enlargement or any
change whatever.
The signature to this subscription must be guaranteed by a
bank or trust company or by a firm having membership on the
New York Stock Exchange.
<PAGE>
FORM OF ASSIGNMENT
For value received hereby sells,
------------------------------
assigns and transfers unto
- ------------------------------------------------------------------------------
Please print or typewrite name and address of assignee
- -----------------------------------------------------------------------------
the within Warrant, and does hereby irrevocably constitute and appoint
attorney to transfer the within
- ------------------- --------------------------
Warrant on the books of the within named Company with full power of substitution
in the premises.
Dated:
------------------------------
- ------------------------------------------
In the presence of:
- ---------------------------------
COLORADO WYOMING RESERVE COMPANY
NON-STATUTORY STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of the 6th day of February, 1998, by and
between COLORADO WYOMING RESERVE COMPANY (formerly Mystique Developments, Inc.),
a Wyoming corporation (the "Company") whose address is 1820 South Elena Avenue,
Suite B, Redondo Beach, California 90277 and TRINITY PETROLEUM MANAGEMENT LLC
(the "Optionee"), whose address is 1801 Broadway, Suite 600, Denver, CO 80202
(together, the "Parties").
RECITALS
A. As of February 6, 1998, the board of directors of the Company
ratified a previous grant of a non-statutory stock option to Optionee, a
consultant to the Company, as an incentive for Optionee to create growth in the
value of the Company.
B. The Option was granted pursuant to the terms of the Company's Equity
Incentive Plan, and Optionee desires to obtain such option grant subject to such
terms, and the terms and conditions herein set forth.
IT IS THEREFORE agreed by and between the Parties, for and in
consideration of the premises and the mutual covenants herein contained and for
other good and valuable consideration, as follows:
1. GRANT. The Company hereby confirms and acknowledges that it has
granted to the Optionee on January 22, 1998, an option to purchase 100,000
shares of common stock, $.01 par value ("Common Stock"), of the Company (the
"Option") upon the terms and conditions herein set forth.
2. EXERCISE PRICE. The purchase price of the shares of Common Stock
which may be purchased pursuant to the Option (the "Shares") is $1.50 per share,
which the Board has determined to be the fair market value as of January 22,
1998.
3. TERM. The Option shall continue for ten years after the date of grant
set forth in Paragraph 1 unless sooner terminated or modified under the
provisions of this Agreement, and shall automatically expire at 12:00 a.m. on
the tenth anniversary of such date of grant.
4. NUMBER OF SHARES AND VESTING. The Option shall be vested in its
entirety on April 22, 1998, and may be exercised by the Optionee to purchase all
or a portion of the total number of shares of Common Stock specified in
Paragraph 1 at any time thereafter prior to the expiration or termination of the
Option.
<PAGE>
5. TERMINATION OF OPTION. If the Optionee does not fulfill the terms of
his engagement with the Company, the Option shall terminate upon the Company's
written notice of non-performance to the Optionee.
6. TRANSFERABILITY. The Option is not transferable by the Optionee
except by will or pursuant to the laws of descent and distribution, and is
exercisable during the Optionee's lifetime only by the Optionee or, in the event
of disability or incapacity, by the Optionee's guardian or legal representative.
7. NOTICE OF EXERCISE. The Option may be exercised in whole or in part
by delivering to the Company written notice of exercise, together with payment
in full for the Common Stock being purchased upon such exercise.
8. ISSUANCE OF STOCK CERTIFICATES. The Company will, upon receipt of
such notice and payment, issue or cause to be issued to the Optionee (or to his
personal representative or other person entitled thereto) a stock certificate
for the number of shares purchased thereby.
9. TAXES. The Optionee hereby agrees that he is responsible for payment
of the appropriate amount of federal, state and local taxes attributable to the
Optionee's exercise of the Option.
10. SECURITIES LAWS. Neither this Option nor the shares of Common Stock
have been registered under the Securities Act of 1933, as amended (the "Act") or
under any blue sky or other state securities laws. Optionee therefore represents
and agrees that: (I) the Option shall not be exercisable unless the purchase of
shares upon the exercise of the Option is pursuant to an applicable effective
registration statement under the Act, or unless in the opinion of counsel for
the Company, the proposed purchase of such shares would be exempt from the
registration requirements of the Act and from the qualification requirements of
any state securities law; (ii) upon exercise of the Option, he will acquire the
shares for his own account for investment and not with an intent or view to any
distribution, resale or other disposition of the shares; (iii) he will not sell
or transfer the shares, unless they are registered under the Act, except in a
transaction that is exempt from registration under the Act, and each certificate
issued to represent any of the shares shall bear a legend calling attention to
the foregoing restrictions and agreements. The Company may require, as a
condition of the exercise of the Option, that the Optionee sign such further
representations and agreements as it reasonably determines to be necessary or
appropriate to assure and to evidence compliance with the requirements of the
Act.
11. NO STOCKHOLDER RIGHTS. The Optionee shall have no rights as a
stockholder with respect to the shares which may be purchased pursuant to the
Option until such shares are issued to the Optionee.
12. GOVERNING LAW. THIS AGREEMENT IS ENTERED INTO AND SHALL BE GOVERNED
BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO.
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<PAGE>
IN WITNESS WHEREOF, the parties have hereunto affixed their signatures
in acknowledgment and acceptance of the above terms and conditions on the date
first above mentioned.
COLORADO WYOMING RESERVE COMPANY
By: /S/KIM M. FUERST
--------------------------------
Title: President
-----------------------------
OPTIONEE
TRINITY PETROLEUM MANAGEMENT LLC
By: /S/J. SAMUEL BUTLER
--------------------------------
Title: Manager
-----------------------------
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OPTION AGREEMENT
(NON-STATUTORY STOCK OPTION)
THIS AGREEMENT is made effective as of October 18, 1996, by and between
MYSTIQUE DEVELOPMENTS, INC. (the "Company") whose address is 1820 South Elena
Avenue, Suite B, Redondo Beach, California 90277 and J. SAMUEL BUTLER (the
"Optionee") whose address is 1801 Broadway, Suite 600, Denver, Colorado 80202.
RECITALS:
A. As of October 18,1996, the board of directors of the Company approved a
resolution granting stock options to all directors of the Company in order to
attract and retain exceptional people to serve on the board of directors.
B. The resolution authorizes the granting of options to purchase 200,000
shares of the Company's common stock, $.01 par value per share, to the Optionee,
as a director of the Company.
C. The Optionee is desirous of obtaining such stock option on the terms and
conditions herein contained.
IT IS THEREFORE agreed by and between the parties, for and in consideration
of the premises and the mutual covenants herein contained and for other good and
valuable consideration, as follows:
1. THE OPTION. The Company hereby confirms and acknowledges that it has
granted to the Optionee an option to purchase Two Hundred Thousand (200,000)
shares of common stock, $.01 par value, of the Company (the "Shares") upon the
terms and conditions herein set forth (the "Option"). The date of grant is
October 18, 1996.
2. PURCHASE PRICE. The Purchase Price of the Shares which may be purchased
pursuant to the Option is $1.00 per share.
3. OPTION TERM. The Option shall continue for ten years after the date of
grant set forth in paragraph 1 unless sooner terminated or modified under the
provisions of this Agreement, and shall automatically expire at 12:00 a.m. on
the tenth anniversary of such date of grant.
4. NUMBER OF SHARES UNDER OPTION. The Option is immediately vested, and may
be exercised by the Optionee to purchase all or a portion of the total number of
Shares specified in paragraph 1 at any time prior to the expiration or
termination of the Option.
<PAGE>
5. NOTICE OF EXERCISE. The Option may be exercised in whole or in part by
delivering to the Company written notice of exercise, together with payment in
full for the Shares being purchased upon such exercise.
6. ISSUANCE OF STOCK CERTIFICATES. The Company will, upon receipt of such
notice and payment, issue or cause to be issued to the Optionee (or to his
personal representative or other person entitled thereto) a stock certificate
for the number of Shares purchased thereby.
7. TAXES. The Optionee hereby agrees he is responsible for payment of the
appropriate amount of federal, state and local taxes attributable to the
Optionee's exercise of the Option..
8. SECURITIES LAWS. Neither this Option nor the Shares have been registered
under the Securities Act of 1933, as amended (the "Act"), or under any blue sky
or other state securities laws. Optionee therefore represents and agrees that:
(i) the Option shall not be exercisable unless the purchase of Shares upon the
exercise of the Option is pursuant to an applicable effective registration
statement under the Act, or unless in the opinion of counsel for the Company,
the proposed purchase of such Shares would be exempt from the registration
requirements of the Act, and from the qualification requirements of any state
securities law; (ii) upon exercise of the Option, he will acquire the Shares for
his own account for investment and not with any intent or view to any
distribution, resale or other disposition of the Shares; (iii) he will not sell
or transfer the Shares, unless they are registered under the Act, except in a
transaction that is exempt from registration under the Act, and each certificate
issued to represent any of the Shares shall bear a legend calling attention to
the foregoing restrictions and agreements. The Company may require, as a
condition of the exercise of the Option, that the Optionee sign such further
representations and agreements as it reasonably determines to be necessary or
appropriate to assure and to evidence compliance with the requirements of the
Act.
9. NO RIGHTS IN SHARES UNTIL ISSUED. The Optionee shall have no rights as a
stockholder with respect to the Shares which may be purchased pursuant to the
Option until such Shares are issued to the Optionee.
10. GOVERNING LAW. THIS AGREEMENT IS ENTERED INTO AND SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO.
11. AMENDMENT. The terms and conditions contained herein may be amended
from time to time by mutual agreement between the Optionee and the Board of
Directors.
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<PAGE>
IN WITNESS WHEREOF, the parties have hereunto affixed their signatures in
acknowledgment and acceptance of the above terms and conditions on the date
first above mentioned.
MYSTIQUE DEVELOPMENTS, INC.
By: /S/KIM M. FUERST
-------------------------------------
Title:
----------------------------------
OPTIONEE
/S/J. SAMUEL BUTLER
----------------------------------------
J. Samuel Butler, Director
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