FORELAND CORPORATION
(A NEVADA CORPORATION)
WARRANT FOR THE PURCHASE OF
54,700 SHARES OF COMMON STOCK, PAR VALUE $0.001
THIS WARRANT WILL BE VOID
AFTER 11:59 P.M. MOUNTAIN TIME ON MARCH 25, 2001
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
OR TO U.S. PERSONS UNLESS THE SECURITIES ARE REGISTERED UNDER THE
SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT IS AVAILABLE. IF ISSUED TO U.S. PERSONS, THE SECURITIES
ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT, HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
This certifies that, for value received, FIRST GENEVA HOLDINGS, INC., or
registered assigns (the "Holder"), is entitled to subscribe for, purchase, and
receive 54,700 fully paid and nonassessable shares (the "Warrant Shares") of
common stock, par value $0.001 (the "Common Stock"), of Foreland Corporation, a
Nevada corporation (the "Company"), at the price of the lesser of (i) U.S. $1.50
per Warrant Share, or (ii) 75% of the closing bid price of the Common Stock of
the Company as reported by Nasdaq for the trading day immediately preceding the
date of exercise (the "Exercise Price"), at any time or from time to time after
April 30, 1996, and on or before 11:59 p.m. mountain time on March 25, 2001 (the
"Exercise Period"), on presentation and surrender of this Warrant with the
purchase form attached hereto, duly executed, at the principal office of the
Company at 12596 West Bayaud, Suite 300, Lakewood, Colorado 80228-2019, and by
paying in full and in lawful money of the United States of America by cash or
cashier's check, the Exercise Price for the Warrant Shares as to which this
Warrant is exercised, on all the terms and conditions hereinafter set forth.
The number of Warrant Shares to be received on exercise of this Warrant and the
Exercise Price may be adjusted on the occurrence of such events as described
herein. If the subscription rights represented hereby are not exercised by
11:59 p.m. mountain time on March 25, 2001, this Warrant shall automatically
become void and of no further force or effect, and all rights represented hereby
shall cease and expire.
Subject to the terms set forth herein, this Warrant may be exercised by the
Holder in whole or in part by execution of the form of exercise attached hereto
and payment of the Exercise Price in the manner described above.
1. Exercise of Warrants. On the exercise of all or any portion of this
Warrant in the manner provided above, the Holder exercising the same shall be
deemed to have become a holder of record of the Warrant Shares for all purposes,
and certificates for the securities so purchased shall be delivered to the
Holder within a reasonable time, but in no event longer than ten days after this
Warrant shall have been exercised as set forth above. If this Warrant shall be
exercised in respect to only a part of the Warrant Shares covered hereby, the
Holder shall be entitled to receive a similar Warrant of like tenor and date
covering the number of Warrant Shares with respect to which this Warrant shall
not have been exercised.
2. Limitation on Transfer. Subject to the restrictions set forth in
paragraph 6 hereof, this Warrant is transferable at the offices of the Company.
In the event this Warrant is assigned in the manner provided herein, the
Company, upon request and upon surrender of this Warrant by the Holder at the
principal office of the Company accompanied by payment of all transfer taxes, if
any, payable in connection therewith, shall transfer this Warrant on the books
of the Company. If the assignment is in whole, the Company shall execute and
deliver a new Warrant or Warrants of like tenor to this Warrant to the
appropriate assignee expressly evidencing the right to purchase the aggregate
number of shares of Common Stock purchasable hereunder; and if the assignment is
in part, the Company shall execute and deliver to the appropriate assignee a new
Warrant or Warrants of like tenor expressly evidencing the right to purchase the
portion of the aggregate number of Warrant Shares as shall be contemplated by
any such agreement, and shall concurrently execute and deliver to the Holder a
new Warrant of like tenor to this Warrant evidencing the right to purchase the
remaining portion of the Warrant Shares purchasable hereunder which have not
been transferred to the assignee.
3. Exchange of Warrants. This Warrant is exchangeable, on the
presentation and surrender hereof by the Holder at the office of the Company,
for a new Warrant or Warrants of like tenor representing in the aggregate the
right to subscribe for and purchase the number of Warrant Shares which may be
subscribed for and purchased hereunder.
4. Fully Paid Shares. The Company covenants and agrees that the Warrant
Shares which may be issued on the exercise of the rights represented by this
Warrant will be, when issued, fully paid and nonassessable and free from all
taxes, liens, and charges with respect to the issue thereof. The Company
further covenants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will have authorized
and reserved a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant.
5. Antidilution Provisions. The Warrant Price and number of Warrant
Shares purchasable pursuant to this Warrant may be subject to adjustment from
time to time as follows:
(a) If the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend in shares,
the Warrant Price in effect immediately prior to such record date shall be
proportionately decreased, such adjustment to become effective immediately
after the opening of business on the day following such record date.
(b) If the Company shall subdivide the outstanding shares of Common
Stock into a greater number of shares, combine the outstanding shares of
Common Stock into a smaller number of shares, or issue by reclassification
any of its shares, the Warrant Price in effect immediately prior thereto
shall be adjusted so that the Holder of this Warrant thereafter surrendered
for exercise shall be entitled to receive, after the occurrence of any of
the events described, the number of Warrant Shares to which the Holder
would have been entitled had such Warrant been exercised immediately prior
to the occurrence of such event. Such adjustment shall become effective
immediately after the opening of business on the day following the date on
which such subdivision, combination, or reclassification, as the case may
be, becomes effective.
(c) If any capital reorganization or reclassification of the
Company's Common Stock, or consolidation or merger of the Company with
another corporation or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, or assets with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful
adequate provisions shall be made whereby the Holder of this Warrant shall
thereafter have the right to acquire and receive on exercise hereof such
shares of stock, securities, or assets as would have been issuable or
payable (as part of the reorganization, reclassification, consolidation,
merger, or sale) with respect to or in exchange for such number of
outstanding shares of Common Stock of the Company as would have been
received on exercise of this Warrant immediately before such
reorganization, reclassification, consolidation, merger, or sale.
In any such case, appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the
end that the provisions hereof shall thereafter be applicable in relation
to any shares of stock, securities, or assets thereafter deliverable on the
exercise of this Warrant. In the event of a merger or consolidation of the
Company with or into another corporation or the sale of all or
substantially all of its assets which results in the issuance of a number
of shares of common stock of the surviving or purchasing corporation
greater or less than the number of shares of Common Stock of the Company
outstanding immediately prior to such merger, consolidation, or purchase
are issuable to holders of Common Stock of the Company, then the Warrant
Price in effect immediately prior to such merger, consolidation, or
purchase shall be adjusted in the same manner as though there was a
subdivision or combination of the outstanding shares of Common Stock of the
Company. The Company will not effect any such consolidation, merger, or
sale unless prior to the consummation thereof the successor corporation
resulting from such consolidation or merger or the corporation purchasing
such assets shall assume by written instrument mailed or delivered to the
Holder hereof at its last address appearing on the books of the Company,
the obligation to deliver to such Holder such shares of stock, securities,
or assets as, in accordance with the foregoing provisions, such Holder may
be entitled to acquire on exercise of this Warrant.
(d) If: (i) the Company shall take a record of the holders of its
shares of Common Stock for the purpose of entitling them to receive a
dividend payable otherwise than in cash, or any other distribution in
respect of the shares of Common Stock (including cash), pursuant to,
without limitation, any spin-off, split-off, or distribution of the
Company's assets; or (ii) the Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling them to subscribe
for or purchase any shares of any class or to receive any other rights; or
(iii) in the event of any classification, reclassification, or other
reorganization of the shares which the Company is authorized to issue,
consolidation or merger of the Company with or into another corporation, or
conveyance of all or substantially all of the assets of the Company; or
(iv) in the event of the voluntary or involuntary dissolution, liquidation,
or winding up of the Company; then, and in any such case, the Company shall
mail to the Holder of this Warrant, at least 30 days prior thereto, a
notice stating the date or expected date on which a record is to be taken
for the purpose of such dividend, distribution or rights, or the date on
which such classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation, or winding up, as the case
may be, is to occur. Such notice shall also specify the date or expected
date, if any is to be fixed, as of which holders of shares of Common Stock
of record shall be entitled to participate in such dividend, distribution,
or rights, or shall be entitled to exchange their shares of Common Stock
for securities or other property deliverable upon such classification,
reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation, or winding up, as the case may be.
(e) If the Company, at any time while this Warrant shall remain
unexpired and unexercised, shall sell all or substantially all of its
property, dissolve, liquidate, or wind up its affairs, the Holder of this
Warrant may thereafter receive upon exercise hereof, in lieu of each share
of Common Stock of the Company which it would have been entitled to
receive, the same kind and amount of any securities or assets as may be
issuable, distributable, or payable upon any such sale, dissolution,
liquidation, or winding up with respect to each share of Common Stock of
the Company.
(f) If the Company, at any time while this Warrant shall remain
unexpired and unexercised, sells shares of Common Stock, excluding shares
issued on the exercise of options and warrants issued and outstanding as of
the date hereof, at a price lower than the Exercise Price provided herein,
as the same may from time to time be adjusted pursuant to this section 5,
then the Exercise Price of these Warrants shall be reduced automatically to
such lower price at which the Company has sold Common Stock.
(g) No fraction of a share shall be issued on exercise, but, in lieu
thereof, the Company, notwithstanding any other provision hereof, may pay
therefor in cash at the fair value of any such fractional share at the time
of exercise.
6. Disposition of Warrants or Warrant Shares. The registered owner of
this Warrant, by acceptance hereof, agrees for himself and any subsequent
owner(s) that, before any disposition is made of any Warrant Shares, the
owner(s) shall give written notice to the Company describing briefly the manner
of any such proposed disposition. No such disposition shall be made unless and
until:
(a) the Company has received an opinion from counsel for the owner(s)
of the Warrant Shares stating that no registration under the Securities Act
is required with respect to such disposition; or
(b) a registration statement or post-effective amendment to a
registration statement under the Securities Act has been filed by the
Company and made effective by the Commission covering such proposed
disposition, and the disposition has been registered or qualified or is
exempt therefrom under the state having jurisdiction over such disposition.
7. Registration of Warrant Shares. Within 90 days after the date hereof,
the Company shall file a registration statement under the Securities Act to
register the Warrant Shares (but not the Warrants) for issuance and delivery to
the Holder on the exercise of this Warrant, shall utilize its best efforts to
cause such registration statement to become effective, and shall maintain the
effectiveness of such registration statement for the unexpired term of the
Exercise Period, unless the Company's legal counsel is of the opinion that
registration is not required in order to dispose of the Warrant Shares. The
Holder(s) shall cooperate with the Company and shall furnish such information as
the Company may request in connection with any such registration statement
hereunder, on which the Company shall be entitled to rely.
8. Governing Law. This agreement shall be construed under and be
governed by the laws of the state of Nevada.
9. Notices. All notices, demands, requests, or other communications
required or authorized hereunder shall be deemed given sufficiently if in
writing and if personally delivered; if sent by facsimile transmission,
confirmed with a written copy thereof sent by second day express delivery or
registered mail, return receipt requested and postage prepaid; if sent by
registered mail or certified mail, return receipt requested and postage prepaid;
or if sent by second day express delivery:
If to the Holder, to: First Geneva Holdings, Inc.
Attn:
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Telecopy No.: ( )
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If to the Company, to: Foreland Corporation
Attn: N. Thomas Steele
Union Terrace Office Bldg.
12596 West Bayaud
Suite 300
Lakewood, Colorado 80228-2019
Telecopy No.: (303) 988-3234
or other such addresses and facsimile numbers as shall be furnished by any party
in the manner for giving notices hereunder, and any such notice, demand,
request, or other communication shall be deemed to have been given as of the
date so delivered or sent by facsimile transmission, three days after the date
so mailed, or two days after the date so sent by second day delivery.
10. Loss, Theft, Destruction, or Mutilation. Upon receipt by the Company
of reasonable evidence of the ownership of and the loss, theft, destruction, or
mutilation of this Warrant, the Company will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
11. Taxes. The Company will pay all taxes in respect of the issue of this
Warrant or the Warrant Shares issuable upon exercise thereof, except transfer
taxes pursuant to an assignment of this Warrant made under Section 2 hereof.
DATED this 18th day of March, 1996.
FORELAND CORPORATION
By /s/ N. Thomas Steele
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N. Thomas Steele, President
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY UPON ASSIGNMENT OF WARRANT)
TO: Foreland Corporation
Attn: President
12596 West Bayaud, Suite 300
Lakewood, Colorado 80228-2019
FOR VALUE RECEIVED, does hereby sell,
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assign, and transfer unto the right to
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purchase shares of common stock of FORELAND CORPORATION
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(the "Company"), evidenced by the attached Warrant, and does hereby irrevocably
constitute and appoint attorney to transfer
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such right on the books of the Company with full power of substitution in the
premises.
DATED this day of , 19 .
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Signature:
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Signature Guaranteed:
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NOTICE: The signature to the form of assignment must correspond with the name
as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
FORM OF PURCHASE
(TO BE SIGNED ONLY UPON EXERCISE OF WARRANT)
TO: Foreland Corporation
Attn: President
12596 West Bayaud, Suite 300
Lakewood, Colorado 80228-2019
The undersigned, the owner of the attached Warrant, hereby irrevocably
elects to exercise the purchase rights represented by the Warrant for, and to
purchase thereunder, shares of the common stock of FORELAND
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CORPORATION and herewith makes payment of U.S. $ therefor (at
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the rate of U.S. $ per share of common stock). Please issue the
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shares of common stock as to which this Warrant is exercised in accordance with
the enclosed instructions and, if the Warrant is being exercised with respect to
less than all of the shares to which it pertains, prepare and deliver a new
Warrant of like tenor for the balance of the shares of common stock purchasable
under the attached Warrant.
DATED this day of , 19 .
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Signature:
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Signature Guaranteed:
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NOTICE: The signature to the form of assignment must correspond with the name
as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.