UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
COLORADO WYOMING RESERVE COMPANY
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(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
c/o Trinity Petroleum Management LLC 370 17th Street, Suite 4700
1801 Broadway, Suite 600 Denver, Colorado 80202
Denver, Colorado 80202 (303) 892-9400
(303) 296-1908
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
December 4, 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 |_|.
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>
CUSIP No. 628652109 SCHEDULE 13D Page 2 of 7 Pages
-------------- --- ---
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James E. Moore Revocable Trust U/D/T dated July 28, 1994, James E.
Moore, Trustee
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF (See ITEMS 3 and 4)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 7 SOLE VOTING POWER
SHARES ----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 200,000 (See Item 5)
EACH ----------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
200,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
200,000 (See Item 5.)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* |_|
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 7.6 percent, based upon 2,491,694 shares of Common Stock
outstanding as of the date hereof, and giving effect to the 130,000
shares issuable upon exercise of warrants as further described herein.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
00 (Trust)
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<PAGE>
CUSIP No. 628652109 SCHEDULE 13D Page 3 of 7 Pages
-------------- --- ---
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
James E. Moore
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF - (See Items 3 and 4)
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES ----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 200,000 (See Item 5)
EACH ----------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON ----------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
200,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
200,000 (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 7.6 percent, based upon 2,491,694 shares of Common Stock
outstanding as of the date hereof, and giving effect to the 130,000
shares issuable upon exercise of warrants as further described herein.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
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<PAGE>
Colorado Wyoming Reserve Company Page 4 of 7 Pages
AMENDMENT NO. 2 TO SCHEDULE 13D December 8, 1998
ITEM 1. SECURITY AND ISSUER.
Shares of Common Stock, par value $.01 per share (the "Shares" or
"Common Stock") of:
Colorado Wyoming Reserve Company
c/o Trinity Petroleum Management, LLC
1801 Broadway, Suite 600
Denver, Colorado 80202
(303) 296-1908
The names and addresses of the principal executive officers of the
Company are as follows:
<TABLE>
<CAPTION>
Name Title Address
---- ----- -------
<S> <C> <C>
Kim M. Fuerst President, Treasurer, 1801 Broadway, Ste 600
CEO & CFO Denver, CO 80202
Faisal Chaudhary Secretary 151 Toby Lane
Anaheim Hills, CA 92807
</TABLE>
ITEM 2. IDENTITY AND BACKGROUND.
(a) James E. Moore Revocable Trust u/d/t July 28, 1994, James E.
Moore, Trustee (the "Trust") James E. Moore, individually
(b) 7827 Berger Avenue, Playa del Rey, California 90293
(c) Retired Investment Advisor; Trustee of James E. Moore Revocable
Trust
(d) Mr. Moore has not, during the last five years, been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Mr. Moore 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. Moore is a United States citizen. The situs of the Trust is
California.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On December 4, 1998, the Board of Directors of the Company approved an
agreement with the Trust to extend the repayment date for a bridge loan from the
Trust to the Company from November 30, 1998 to January 15, 1999. As partial
consideration for such extension, the Trust received a warrant for the purchase
of up to 100,000 shares of Common Stock, immediately exercisable at a price per
share of the lower of (a) $1.00 or (b) the lowest price per share of Common
Stock or Common Stock equivalent issued by the Company in any offering of its
securities occurring prior to April 1, 1999 (the "Warrant"). The Trust used
Trust funds for the purchase price of $100.00.
<PAGE>
Colorado Wyoming Reserve Company Page 5 of 7 Pages
AMENDMENT NO. 2 TO SCHEDULE 13D December 8, 1998
ITEM 4. PURPOSE OF TRANSACTION.
The Trust entered into a loan agreement with the Company, dated as of
August 25, 1998 (the "Loan Agreement"), pursuant to which the Trust loaned an
original principal sum of $120,000.00 to the Company. The original loan
repayment date was October 31, 1998 (the "Due Date"), which was thereafter
extended to November 30, 1998. On December 4, 1998, the Company's Board of
Directors authorized its President and Chief Executive Officer to execute a
letter agreement to further extend the Due Date to January 15, 1999 (the
"Extension Letter"). As partial consideration for its agreement to extend the
Due Date, the Trust received the Warrant for a purchase price of $100.00.
Pursuant to the Warrant Agreement, dated as of December 4, 1998, the Trust is
entitled to purchase up to 100,000 shares of restricted Common Stock at the
initial exercise price per share of the lower of (a) $1.00 or (b) the lowest
price per share of Common Stock or Common Stock equivalent issued by the Company
in any offering of its securities occurring prior to April 1, 1999.
The Extension Letter also provides for (a) the appointment of an
additional person selected by the Trust to serve on the Company's Board of
Directors and (b) the repricing of warrants previously issued to the Trust in
connection with the Loan Agreement from $1.00 per share (ownership of which was
originally reported in Schedule 13D filed effective September 15, 1998, and
amended in Amendment Number 1 to Schedule 13D filed effective December 2, 1998)
to an exercise price per share of the lower of (a) $1.00 or (b) the lowest price
per share of Common Stock or Common Stock equivalent issued by the Company in
any offering of its securities occurring prior to April 1, 1999.
Mr. Moore's beneficial equity ownership in the Company results solely
from his position as settlor and trustee of the above-referenced Trust.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) The Trust is the beneficial owner of 200,000 shares of
Common Stock, which includes a previously-issued warrant to
purchase 30,000 Shares, presently exercisable at $1.00 per share,
and the Warrant to purchase 100,000 Shares, presently exercisable
at $1.00 per share described above. The Trust's beneficial
ownership represents approximately 7.6 percent of the Company's
Common Stock. Mr. Moore may be deemed to share voting and
dispositive power over such Shares with the Trust, for which he
is sole Trustee.
(c) Other than receipt of the Warrant described in Item 4, neither
Mr. Moore individually, nor the Trust, have been involved in any
Share transactions since the filing of Amendment No. 1 to
Schedule 13D, effective December 2, 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) As of December 4, 1998, the Trust is the beneficial owner of more
than 5 percent of the Company's Shares. Mr. Moore, individually,
is the indirect beneficial owner of more than 5 percent of the
Company's Shares due solely to his position as Trustee for the
Trust.
<PAGE>
Colorado Wyoming Reserve Company Page 6 of 7 Pages
AMENDMENT NO. 2 TO SCHEDULE 13D December 8, 1998
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
There are no contracts, arrangements, understandings or relationships
between the Trust or Mr. Moore and any other person with respect to any
securities of the Company, other than the Warrant Agreement described above and
the Joint Filing Agreement, dated December 8, 1998, as required by Rule 13d-1(f)
of the Securities Exchange Act of 1934, as amended.
ITEM 7. MATERIAL TO BE FILED AS AN EXHIBIT.
Exhibit A - Warrant Agreement, dated as of December 4, 1998,
between the Company and the Trust.
Exhibit B - Joint Filing Agreement, dated December 8, 1998,
by and between James E. Moore and The James E.
Moore Revocable Trust U/D/T dated July 28, 1994,
James E.
Moore, Trustee.
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: December 8, 1998 /s/ JAMES E. MOORE
-------------------------------------------
James E. Moore, Individually
JAMES E. MOORE REVOCABLE TRUST U/D/T
DATED JULY 28, 1994
By: /s/ JAMES E. MOORE
----------------------------------------
James E. Moore, Trustee
<PAGE>
Colorado Wyoming Reserve Company Page 7 of 7 Pages
AMENDMENT NO. 2 TO SCHEDULE 13D December 8, 1998
EXHIBIT INDEX TO SCHEDULE 13D
Exhibit A Warrant Agreement, dated as of December 4, 1998, between the
Company and the Trust.
Exhibit B Joint Filing Agreement, dated December 8, 1998, by and between
James E. Moore and The James E. Moore Revocable Trust U/D/T dated
July 28, 1994, James E. Moore, Trustee.
COLORADO WYOMING RESERVE COMPANY
and
JAMES E. MOORE REVOCABLE TRUST U/D/T DATED JULY 28, 1994
WARRANT AGREEMENT
Dated as of December 4, 1998
<PAGE>
WARRANT AGREEMENT dated as of December 4, 1998 between COLORADO
WYOMING RESERVE COMPANY, a Wyoming corporation (the "Company"), and JAMES E.
MOORE |X|REVOCABLE TRUST U/D/T DATED JULY 28, 1994 (the "Holder").
WHEREAS, the Company proposes to sell Common Stock Purchase
Warrants, as hereinafter described (the "Warrants"), for $0.001, to purchase up
to an aggregate of 100,000 shares of Common Stock, par value $0.01 per share
(the "Common Stock"), of the Company (the Common Stock issuable on exercise of
the Warrants being referred to herein as the "Warrant Shares"), each Warrant
entitling the holder thereof to purchase one Warrant Share.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration and the payment by Holder of $100.00, receipt of
which is hereby acknowledge by the Company, and the mutual agreements herein set
forth, the parties hereto agree as follows:
SECTION 1. WARRANT CERTIFICATES. The certificates evidencing the
Warrants (the "Warrant Certificates") to be delivered pursuant to this Agreement
shall be in registered form only and shall be substantially in the form set
forth in Exhibit A attached hereto.
SECTION 2. EXECUTION OF WARRANT CERTIFICATES. Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board or its President or a Vice President and by its Secretary or an Assistant
Secretary under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of the present or any
future Chairman of the Board, President, Vice President, Secretary or Assistant
Secretary and may be imprinted or otherwise reproduced on the Warrant
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Vice President, Secretary or Assistant Secretary, notwithstanding the fact that
at the time the Warrant Certificates shall be countersigned and delivered or
disposed of he shall have ceased to hold such office. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Warrant Certificates.
Any Warrant Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Company to sign such Warrant Certificate,
although at the date of the execution of this Warrant Agreement any such person
was not such officer.
SECTION 3. REGISTRATION. The Company shall number and register
the Warrant Certificates in a register as they are issued by the Company. The
Company may deem and treat the registered holder(s) of the Warrant Certificates
as the absolute owner(s) thereof (notwithstanding any notation of ownership or
other writing thereon made by anyone), for all purposes, and the Company shall
not be affected by any notice to the contrary.
SECTION 4. REGISTRATION OF TRANSFERS AND EXCHANGES. The Company
shall from time to time register the transfer of any outstanding Warrant
Certificates upon the records to be maintained by it
<PAGE>
for that purpose, upon surrender thereof accompanied (if so required by it) by a
written instrument or instruments of transfer duly executed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee(s) and the surrendered
Warrant Certificate shall be canceled by the Company. Canceled Warrant
Certificates shall thereafter be disposed of in a manner satisfactory to the
Company.
The Holder agrees that each certificate representing Warrant
Shares will bear the following legend:
"The securities evidenced or constituted hereby have
been acquired for investment and have not been
registered under the Securities Act of 1933, as
amended. Such securities may not be sold, transferred,
pledged or hypothecated unless the registration
provisions of said Act have been complied with or
unless the Company has received an opinion of counsel
reasonably satisfactory to the Company that such
registration is not required."
Warrant Certificates may be exchanged at the option of the
holder(s) thereof, when surrendered to the Company at its office for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange shall be canceled by the Company.
SECTION 5. TERMS OF WARRANTS, EXERCISE OF WARRANTS. Subject to the terms
of this Agreement, the Warrant holder shall have the right, which may be
exercised commencing at the opening of business on December 4, 1998 and until 5:
00 p.m., Pacific time on December 3, 2008 to receive from the Company the number
of fully paid and nonassessable Warrant Shares which the Warrant holder may at
the time be entitled to receive on exercise of such Warrants and payment of the
Exercise Price then in effect for such Warrant Shares. In the alternative, the
Warrant holder may exercise its right, during the Exercise Period, to receive
Warrant Shares on a net basis, such that, without the exchange of any funds, the
Warrant holder receives that number of Warrant Shares otherwise issuable (or
payable) upon exercise of its Warrants less that number of Warrant Shares having
an aggregate fair market value (as defined below) at the time of exercise equal
to the aggregate Exercise Price that would otherwise have been paid by the
Warrant holder. For purposes of the foregoing sentence, "fair market value" of
the Warrant Shares shall mean (i) if the Common Stock is in the over-the-counter
market and not in The Nasdaq National Market nor on any national securities
exchange, the average of the per share closing bid price on the 30 consecutive
trading days immediately preceding the date in question, as reported by The
Nasdaq Small Cap Market (or an equivalent generally accepted reporting service
if quotations are not reported on The Nasdaq Small Cap Market), or (ii) if the
Common Stock is traded in The Nasdaq National Market or on a national securities
exchange, the average for the 30 consecutive trading days immediately preceding
the date in question of the daily per share closing prices in The Nasdaq
National Market or on the principal stock exchange on which it is listed, as the
case may be. For purposes of clause (i) above, if trading in the Common Stock is
not reported by The Nasdaq Small Cap Market, the applicable bid price referred
to in said clause shall be
2
<PAGE>
the lowest bid price as reported on the OTC Electronic Bulletin Board of the
National Association of Securities Dealers, Inc. or, if not reported thereon, as
reported in the "pink sheets" published by National Quotation Bureau,
Incorporated, and, if such securities are not so reported, shall be the price of
a share of Common Stock determined by the Company's Board of Directors in good
faith. The closing price referred to in clause (ii) above shall be the last
reported sale price or, in case no such reported sale takes place on such day,
the average of the reported closing bid and asked prices, in either case in The
Nasdaq National Market or on the national securities exchange on which the
Common Stock is then listed.. Each Warrant not exercised prior to 5:00 p.m.,
Pacific time, on December 3, 2008 shall become void and all rights thereunder
and all rights in respect thereof under this agreement shall cease as of such
time. No adjustments as to dividends will be made upon exercise of the Warrants.
A Warrant may be exercised upon surrender to the Company at its
principal office of the certificate or certificates evidencing the Warrants to
be exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, and upon payment to the Company of the exercise price (the
'Exercise Price") which is set forth in the form of Warrant Certificate attached
hereto as Exhibit A as adjusted as herein provided, for the number of Warrant
Shares in respect of which such Warrants are then exercised. Payment of the
aggregate Exercise Price shall be made (i) in cash or by certified or official
bank check payable to the order of the Company, or (ii) in the manner provided
in the first paragraph of this Section 5.
Upon such surrender of Warrants and payment of the Exercise Price
the Company shall issue and cause to be delivered with all reasonable dispatch
to or upon the written order of the Warrant holder and in such name or names as
the holder may designate, a certificate or certificates for the number of full
Warrant Shares issuable upon the exercise of such Warrants together with cash as
provided in Section 11; PROVIDED, HOWEVER, that if any consolidation, merger or
lease or sale of assets is proposed to be effected by the Company as described
in subsection (m) of Section 10 hereof, or a tender offer or an exchange offer
for shares of Common Stock of the Company shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence together
with cash as provided in Section 11. Such certificate or certificates shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Warrant Shares as of
the date of the surrender of such Warrants and payment of the Exercise Price.
The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part and, in the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new certificate evidencing the remaining Warrant
or Warrants will be issued pursuant to the provisions of this Section.
All Warrant Certificates surrendered upon exercise of Warrants
shall be canceled by the Company. Such canceled Warrant Certificates shall then
be disposed of by the Company.
3
<PAGE>
SECTION 6. PAYMENT OF TAXES. The Company will pay all documentary
stamp taxes attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; PROVIDED, HOWEVER, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue of any Warrant Certificates or any certificates for Warrant Shares
in a name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 7. MUTILATED OR MISSING WARRANT CERTIFICATES. In case any
of the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of such Warrant Certificate and indemnity, if
requested, also satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
SECTION 8. RESERVATION OF WARRANT SHARES. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Common Stock or its authorized and
issued Common Stock held in its treasury, for the purpose of enabling it to
satisfy any obligation to issue Warrant Shares upon exercise of Warrants, the
maximum number of shares of Common Stock which may then be deliverable upon the
exercise of all outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common
Stock (the "Transfer Agent") and every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 11. The Company
will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto, transmitted to each holder pursuant to Section 12
hereof.
Before taking any action which would cause an adjustment pursuant
to Section 10 hereof to reduce the Exercise Price below the then par value (if
any) of the Warrant Shares, the Company will take any corporate action which
may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
4
<PAGE>
The Company covenants that all Warrant Shares which may be issued
upon exercise of Warrants will, upon issue, be fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issue thereof.
SECTION 9. OBTAINING STOCK EXCHANGE LISTINGS. The Company will
from time to time take all action which may be necessary so that the Warrant
Shares, immediately upon their issuance upon the exercise of Warrants, will be
listed on the principal securities exchanges and markets within the United
States of America, if any, on which other shares of Common Stock are then
listed.
SECTION 10. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES ISSUABLE. The Exercise Price and the number of Warrant Shares issuable
upon the exercise of each Warrant are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 10. For purposes of
this Section 10, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
(a) ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
If 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 proportionately adjusted so
that the holder of any Warrant thereafter exercised may receive the
aggregate number and kind of shares of capital stock of the Company
which he would have owned immediately following such action if such
Warrant had been exercised 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.
5
<PAGE>
If after an adjustment a holder of a Warrant upon exercise of it
may receive shares of two or more classes of capital stock of the Company, the
Company shall determine the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) ADJUSTMENT FOR RIGHTS ISSUE.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60 days
after the record date mentioned below to purchase shares of Common Stock at a
price per share less than the current market price per share on that record
date, the Exercise Price shall be adjusted in accordance with the formula:
O + N X P
-----
E' = E x M
----------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) ADJUSTMENT FOR OTHER DISTRIBUTIONS.
6
<PAGE>
If the Company distributes to all holders of its Common Stock any
of its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company, the Exercise Price shall
be adjusted in accordance with the formula:
E' = E x M - F
-------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of Common
Stock. The Board of Directors shall determine the fair market
value.
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 stockholders entitled to receive the distribution.
This subsection (c) 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 prepared in accordance with generally accepted
accounting principles. Also, this subsection does not apply to rights, options
or warrants referred to in subsection (b) of this Section 10.
(d) ADJUSTMENT FOR COMMON STOCK ISSUE.
If the Company issues shares of Common Stock for a consideration
per share less than the current market price per share on the date the Company
fixes the offering price of such additional shares, the Exercise Price shall be
adjusted in accordance with the formula:
P
-
E' = E x O + M
-------
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
7
<PAGE>
O = the number of shares outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the issuance of such
additional shares.
M = the current market price per share on the date of issuance of
such additional shares.
A = the number of shares outstanding immediately after the issuance
of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (b)
and (c) of this Section 10,
(2) the exercise of Warrants, or the conversion or
exchange of other securities convertible or exchangeable for Common
Stock,
(3) Common Stock issued to the Company's employees under
bona fide employee benefit plans adopted by the Board of Directors and
approved by the holders of Common Stock when required by law, if such
Common Stock would otherwise be covered by this subsection (d) (but only
to the extent that the aggregate number of shares excluded hereby and
issued after the date of this Warrant Agreement shall not exceed 5% of
the Common Stock outstanding at the time of the adoption of each such
plan, exclusive of antidilution adjustments thereunder),
(4) Common Stock upon the exercise of rights or warrants
issued to the holders of Common Stock,
(5) Common Stock issued to shareholders of any person
which merges into the Company in proportion to their stock holdings of
such person immediately prior to such merger, upon such merger,
(6) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting or
(7) Common Stock issued in a bona fide private placement
through a placement agent which is a member firm of the National
Association of Securities Dealers, Inc. (except to the extent that any
discount from the current market price attributable to restrictions on
transferability of the Common Stock, as determined in good faith by the
Board of Directors and described in a Board resolution which shall be
filed with the Trustee, shall exceed 20%).
8
<PAGE>
(e) ADJUSTMENT FOR CONVERTIBLE SECURITIES ISSUE.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 10) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the current market price per share on the date of issuance
of such securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-
E' = E x O + M
-------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior to the
issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current market price per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to:
(1) convertible securities issued to shareholders of any
person which merges into the Company, or with a subsidiary of the
Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
9
<PAGE>
(2) convertible securities issued in a bona fide public
offering pursuant to a firm commitment underwriting, or
(3) convertible securities issued in a bona fide private
placement through a placement agent which is a member firm of the
National Association of Securities Dealers, Inc. (except to the extent
that any discount from the current market price attributable to
restrictions on transferability of Common Stock issuable upon
conversion, as determined in good faith by the Board of Directors and
described in a Board resolution which shall be filed with the Trustee,
shall exceed 20% of the then current market price).
(f) CURRENT MARKET PRICE.
In subsections (b), (c), (d) and (e) of this Section 10 the
current market price per share of Common Stock on any date shall be the fair
market value per Warrant Share as determined in accordance with the first
paragraph of Section 5 of this Agreement.
(g) CONSIDERATION RECEIVED.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 10, the following shall
apply:
(1) in the case of the issuance of shares of Common Stock
for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions,
discounts or other expenses incurred by the Company for any underwriting
of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock
for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive, and described in a Board resolution, a copy of
which shall be mailed to each holder; and
(3) in the case of the issuance of securities convertible
into or exchangeable for shares, the aggregate consideration received
therefor shall be deemed to be the consideration received by the Company
for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Company upon the conversion
or exchange thereof (the consideration in each case to be determined in
the same manner as provided in clauses (1) and (2) of this subsection).
(h) WHEN DE MINIMIS ADJUSTMENT MAY BE DEFERRED.
10
<PAGE>
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment.
All calculations under this Section shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(i) WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (d) or (e) of this Section 10 if Warrant holders are
to participate in the transaction on a basis and with notice that the Board of
Directors determines to be fair and appropriate in light of the basis and notice
on which holders of Common Stock participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no
par value of the Common Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(j) NOTICE OF ADJUSTMENT.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 12 hereof.
(k) VOLUNTARY REDUCTION.
The Company from time to time may reduce the Exercise Price by
any amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; PROVIDED, HOWEVER, that in no event
may the Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company shall mail the notice at
least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period it will be in
effect.
A reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of subsections (a), (b), (c),
(d) and (e) of this Section 10.
11
<PAGE>
(l) NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to subsections (a), (b), (c),
(d) or (e) of this Section 10 and if the Company does not arrange for
Warrant holders to participate pursuant to subsection (i) of this
Section 10;
(2) the Company takes any action that would require a
supplemental Warrant Agreement pursuant to subsection (m) of this
Section 10; or
(3) there is a liquidation or dissolution of the Company,
the Company shall mail to Warrant holders a notice stating the proposed
record date for a dividend or distribution or the proposed effective
date of a subdivision, combination, reclassification, consolidation,
merger, transfer, lease, liquidation or dissolution. The Company shall
mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the
transaction.
(m) REORGANIZATION OF COMPANY.
If the Company consolidates or merges with or into, or transfers
or leases all or substantially all its assets to, any person, upon consummation
of such transaction the Warrants shall automatically become exercisable for the
kind and amount of securities, cash or other assets which the holder of a
Warrant would have owned immediately after the consolidation, merger, transfer
or lease if the holder had exercised the Warrant immediately before the
effective date of the transaction. Concurrently with the consummation of such
transaction, the corporation formed by or surviving any such consolidation or
merger if other than the Company, or the person to which such sale or conveyance
shall have been made, shall enter into a supplemental Warrant Agreement so
providing and further providing for adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this Section.
The successor Company shall mail to Warrant holders a notice describing the
supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (m) applies, subsections (a), (b), (c), (d)
and (e) of this Section 10 do not apply.
(n) WHEN ISSUANCE OR PAYMENT MAY BE DEFERRED.
In any case in which this Section 10 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the
12
<PAGE>
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 11; PROVIDED, HOWEVER, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional Warrant Shares, other capital stock and cash
upon the occurrence of the event requiring such adjustment.
(o) ADJUSTMENT IN NUMBER OF SHARES.
Upon each adjustment of the Exercise Price pursuant to this
Section 10, each Warrant outstanding prior to the making of the adjustment in
the Exercise Price shall thereafter evidence the right to receive upon payment
of the adjusted Exercise Price that number of shares of Common Stock (calculated
to the nearest hundredth) obtained from the following formula:
N' = N x E
------
E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise of
a Warrant by payment of the adjusted Exercise Price.
N = the number or Warrant Shares previously issuable upon exercise
of a Warrant by payment of the Exercise Price prior to
adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(p) FORM OF WARRANTS.
Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 11. FRACTIONAL INTERESTS. The Company shall not be
required to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 11,
be issuable on the exercise of any Warrants (or specified portion thereof), the
13
<PAGE>
Company shall pay an amount in cash equal to the Exercise Price on the day
immediately preceding the date the Warrant is presented for exercise, multiplied
by such fraction.
SECTION 12. NOTICES TO WARRANT HOLDERS. Upon any adjustment of
the Exercise Price pursuant to Section 10, the Company shall promptly thereafter
(i) cause to be given to each of the registered holders of the Warrant
Certificates at his address appearing on the Warrant register a certificate of a
firm of independent public accountants of recognized standing selected by the
Board of Directors of the Company (who may be the regular auditors of the
Company) setting forth the Exercise Price after such adjustment and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculations are based and setting forth the number of Warrant Shares (or
portion thereof) issuable after such adjustment in the Exercise Price, upon
exercise of a Warrant and payment of the adjusted Exercise Price, which
certificate shall be conclusive evidence of the correctness of the matters set
forth therein, by first-class mail, postage prepaid. Where appropriate, such
notice may be given in advance and included as a part of the notice required to
be mailed under the other provisions of this Section 12.
In case:
(a) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for or
purchase shares of Common Stock or of any other subscription rights or warrants;
or
(b) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in shares of Common Stock or
distributions referred to in subsection (a) of Section 10 hereof); or
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the Company is required, or
of the conveyance or transfer of the properties and assets of the Company
substantially as an entirety, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or a tender offer or exchange offer for
shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company proposes to take any action (other than
actions of the character described in Section 10(a)) which would require an
adjustment of the Exercise Price pursuant to Section 10; then the Company shall
cause to be given to each of the registered holders of the Warrant Certificates
at his address appearing on the Warrant register, at least 20 days (or 10 days
in any case specified in clauses (a) or (b) above) prior to the applicable
record date hereinafter specified, or promptly in the case of events for which
there is no record date, by first-class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of record of shares of Common Stock
to be entitled to receive any such rights,
14
<PAGE>
options, warrants or distribution are to be determined, or (ii) the initial
expiration date set forth in any tender offer or exchange offer for shares of
Common Stock, or (iii) the date on which any such consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up is expected to
become effective or consummated, and the date as of which it is expected that
holders of record of shares of Common Stock shall be entitled to exchange such
shares for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, dissolution,
liquidation or winding up. The failure to give the notice required by this
Section 12 or any defect therein shall not affect the legality or validity of
any distribution, right, option, warrant, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 13. NOTICES TO COMPANY. Any notice or demand authorized
by this Agreement to be given or made by the Company or by the registered holder
of any Warrant Certificate to or on the Company shall be sufficiently given or
made when and if deposited in the mail, first class or registered, postage
prepaid, addressed (until another address is filed in writing by the Company),
as follows:
COLORADO WYOMING RESERVE COMPANY
751 Horizon Court, Suite 205
Grand Junction, Colorado 81506
In case the Company shall fail to maintain such office or agency
or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Transfer Agent.
SECTION 14. SUPPLEMENTS AND AMENDMENTS. The Company and the
Warrant holders may from time to time supplement or amend this Agreement with
the approval of all holders of Warrant Certificates.
SECTION 15. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors and assigns hereunder.
SECTION 16. TERMINATION. This Agreement shall terminate at 5:00
p.m., Pacific time on December 3, 2008. Notwithstanding the foregoing, this
Agreement will terminate on any earlier date if all Warrants have been
exercised.
SECTION 17. GOVERNING LAW; JURISDICTION AND VENUE. This Agreement
and each Warrant Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Colorado and for all purposes shall be
construed in accordance with the internal laws of said State, PROVIDED,
15
<PAGE>
HOWEVER, that if, as a result of the Company's incorporation in the State of
Wyoming, the laws of that State should govern a particular issue, the internal
laws of the State of Wyoming shall govern that issue.
All judicial proceedings arising out of or relating to this
Agreement and each Warrant Certificate issued hereunder may be brought in any
state or federal court of competent jurisdiction in the State of California, and
by execution and delivery of this Agreement, the Company accepts for itself
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non convenience and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement or
any Warrant Certificate issued hereunder.
SECTION 18. TRANSFERABILITY AND NONNEGOTIABILITY OF WARRANT. The
Warrants may not be transferred or assigned in whole or in part without
compliance with all applicable federal and state securities laws by the
transferor and the transferee. Subject to compliance with such laws, title to
the Warrants may be transferred by endorsement (by the Holder executing the
Assignment Form annexed to the Warrant Certificate) and delivery in the same
manner as a negotiable instrument transferable by endorsement and delivery.
SECTION 19. EXCHANGE OF WARRANT UPON A TRANSFER. On surrender of
the Warrant Certificate for exchange, properly endorsed on the Assignment Form
and subject to the provisions of this Agreement with respect to compliance with
applicable securities laws and with the limitations on assignments and transfers
and contained in Section 18, the Company at its expense shall issue to or on the
order of the Holder a new Warrant Certificate of like tenor, in the name of the
Holder or as the Holder may direct, for the number of shares issuable upon
exercise hereof.
SECTION 20. COMPLIANCE WITH SECURITIES LAWS. The Holder agrees
that the Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Common Stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the federal or any state
securities laws. Prior to any proposed transfer of this Warrant, the holder
thereof shall give written notice to the Company of its intention to effect such
transfer. Each such notice shall describe the manner of the proposed transfer
and, if requested by the Company, shall be accompanied by an opinion of counsel
satisfactory to the Company (it being agreed that Freshman, Marantz, Orlanski,
Cooper & Klein, a law corporation, shall be satisfactory) to the effect that the
proposed transfer may be effected without registration under the Securities Act,
whereupon the holder shall be entitled to transfer this Warrant in accordance
with the terms of its notice; provided, however, that no such opinion of counsel
shall be required for a transfer to one or more partners of the transferor (in
the case of a transferor that is a partnership) or to an affiliated corporation
(in the case of a transferor that is a corporation). Each Warrant transferred as
above provided shall bear the legend set forth at the beginning of the form
Warrant Certificate annexed hereto as Exhibit A.
SECTION 21. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Holder and the registered holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Holder and the
registered holders of the Warrant Certificates.
16
<PAGE>
SECTION 22. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, as of the day and year first above written.
COLORADO WYOMING RESERVE COMPANY
By: /s/ KIM M. FUERST
-----------------------------------------
Kim M. Fuerst
Title: President
JAMES E. MOORE REVOCABLE TRUST U/D/T DATED
JULY 28, 1994,
By: /s/ JAMES E. MOORE
-----------------------------------------
JAMES E. MOORE, Trustee
17
<PAGE>
EXHIBIT A
[Form of Warrant Certificate]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. SAID SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT.
EXERCISABLE ON OR BEFORE DECEMBER 3, 2008
No. _____ 100,000 Warrants
Warrant Certificate
COLORADO WYOMING RESERVE COMPANY
This Warrant Certificate certifies that JAMES E. MOORE REVOCABLE
TRUST U/D/T DATED JULY 28, 1994, or registered assigns, is the registered holder
of Warrants expiring December 3, 2008 (the "Warrants") to purchase Common Stock,
par value $0.01 per share (the "Common Stock"), of COLORADO WYOMING RESERVE
COMPANY, a Wyoming corporation (the "Company"). Each Warrant entitles the holder
upon exercise to receive from the Company on or before 5:00 p.m. Pacific Time on
December 3, 2008, one fully paid and nonassessable share of Common Stock (a
"Warrant Share") at the initial exercise price (the "Exercise Price") of the
lower of (a) $1.00 or (b) the lowest price per share of common stock or price
per share common stock equivalent issued by the Company in any offering of its
securities occurring prior to April 1, 1999, payable in lawful money of the
United States of America upon surrender of this Warrant Certificate and payment
of the Exercise Price at the office of the Company, but only subject to the
conditions set forth herein and in the Warrant Agreement referred to herein.
Notwithstanding the foregoing, Warrants may be exercised without the exchange of
funds pursuant to the net exercise provisions of Section 5 of the Warrant
Agreement. The Exercise Price and number of Warrant Shares issuable upon
exercise of the Warrants are subject to adjustment upon the occurrence of
certain events set forth in the Warrant Agreement. As used herein, "price per
share of common stock equivalent" shall mean the effective price per share of
common stock issuable upon exercise of any warrant or other right to purchase
common stock or issuable upon conversion of any security convertible into common
stock, as the case may be.
No Warrant may be exercised after 5:00 p.m., Pacific Time on
December 3, 2008, and to the extent not exercised by such time such Warrants
shall become void.
A-1
<PAGE>
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of Colorado, PROVIDED, HOWEVER,
that if, as a result of the Company's incorporation in the State of Wyoming, the
laws of that State should govern a particular issue, the internal laws of the
State of Wyoming shall govern that issue.
All judicial proceedings arising out of or relating to this
Warrant Certificate may be brought in any state or federal court of competent
jurisdiction in the State of California, and by execution and delivery of this
Agreement, the Company accepts for itself generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non convenience and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Warrant Certificate.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring December 3, 2008 entitling the holder
on exercise to receive shares of Common Stock, par value $0.01 per share, of the
Company (the "Common Stock"), and are issued or to be issued pursuant to a
Warrant Agreement dated as of December 4,1998 (the "Warrant Agreement"), duly
executed and delivered by the Company to James E. Moore (the "Holder"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company, the
Holder and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder and any transferee of the registered Holder) of the
Warrants. A copy of the Warrant Agreement may be obtained by the holder hereof
upon written request to the Company.
Warrants may be exercised at any time on or before December 3,
2008. The holder of Warrants evidenced by this Warrant Certificate may exercise
them by surrendering this Warrant Certificate, with the form of election to
purchase set forth hereon properly completed and executed, together with payment
of the Exercise Price in cash at the office of the Company. In the event that
upon any exercise of Warrants evidenced hereby the number of Warrants exercised
shall be less than the total number of Warrants evidenced hereby, there shall be
issued to the holder hereof or his assignee a new Warrant Certificate evidencing
the number of Warrants not exercised. No adjustment shall be made for any
dividends on any Common Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
A-2
<PAGE>
Warrant Certificates, when surrendered at the office of the
Company by the registered holder thereof may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Company a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company may deem and treat the registered holder(s) thereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary. Neither the Warrants nor this Warrant Certificate entitles any holder
hereof to any rights of a stockholder of the Company.
IN WITNESS WHEREOF, COLORADO WYOMING RESERVE COMPANY has
caused this Warrant Certificate to be signed by its President and by its
Secretary, and has caused its corporate seal to be affixed hereunto or imprinted
hereon.
Dated: December 4, 1998
COLORADO WYOMING RESERVE COMPANY
By
------------------------------------------
President
A-3
<PAGE>
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _ shares of Common
--------
Stock and herewith tenders payment for such shares to the order of COLORADO
WYOMING RESERVE COMPANY in the amount of $ in accordance with the terms
-------
hereof, unless the holder is exercising Warrants pursuant to the net exercise
provisions of Section 5 of the Warrant Agreement. The undersigned requests that
a certificate for such shares be registered in the name of ,
---------------
whose address is
------------------------------------------------------------
and that such shares be delivered to whose address
-------------------------
is . If said number of shares
--------------------------------------------------
is less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of , whose
----------------------
address is and that such Warrant
-----------------------------------------------
Certificate be delivered to , whose address
-------------------------------------
is .
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Signature:
Date:
A-4
EXHIBIT B
JOINT FILING AGREEMENT
Each of the undersigned hereby affirms that it is individually eligible
to use Schedule 13D, and agrees that this Amendment No. 2 to Schedule 13D is
filed on its behalf.
Dated this 8th day of December, 1998.
/s/ JAMES E. MOORE
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James E. Moore, Individually
JAMES E. MOORE REVOCABLE TRUST,
U/D/T/ DATED JULY 28, 1994
By: /s/ JAMES E. MOORE
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James E. Moore, Trustee
