AMENDMENT NO. 1
TO
REGISTRATION RIGHTS AGREEMENT
AND
PROMISSORY NOTE
THIS AMENDMENT NO 1. TO REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE (this
"Amendment") is made and entered into as of December 4, 1998 by and between
COLORADO WYOMING RESERVE COMPANY a Wyoming corporation, having its principal
place of business in Grand Junction, Colorado (the "Company"), and XXXXX X.
XXXXX REVOCABLE TRUST U/D/T DATED JULY 28, 1994, a trust with the trustee and
beneficiary residing in Playa del Rey, California (the "Investor").
RECITALS:
A. Contemporaneously with the execution and delivery hereof, the Investor is
extending repayment of its loan to the Company in the principal amount of
$120,000, as evidenced by that certain promissory note in favor of Investor
dated August 25, 1998 in the original principal sum of One Hundred Twenty
Thousand Dollars ($120,000.00) (the "Note"), until January 15, 1999 (the
"Extension") and purchasing from the Company, and the Company is selling to the
Investor, the December Warrants (as defined below).
B. In connection with the Extension, the Investor and the Company desire to
amend that certain Registration Rights Agreement entered into between the
Company and the Investor as of August 25, 1998 (the "Registration Rights
Agreement") to extend the registration rights and obligations with respect to
the Common Stock (as defined in Section 1 of the Registration Rights Agreement)
underlying the December Warrants.
NOW, THEREFORE, it is agreed:
1. The Registration Rights Agreement shall be amended as follows:
a. The following provisions shall be added to Section 1.1 of the
Registration Rights Agreement:
"December Warrant Agreement" shall mean that certain Warrant
Agreement dated December 4, 1998 by and between the Company and the
Investor and governing the December Warrants.
"December Warrants" shall mean the Warrants issued by the Company
pursuant to the December Warrant Agreement.
b. The following provisions of Section 1.1 of the Registration Rights
Agreement shall amended and shall replace the corresponding
provisions of Section 1.1 of the Registration Rights Agreement:
"Registrable Securities" shall mean (i) shares of Common Stock now
owned or hereafter acquired by the Investor from the Company, (ii) any
shares of Common Stock issued or then issuable upon complete or partial
exercise of the Warrants or the December
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Warrants, and (iii) any shares of Common Stock issued as a dividend or
other distribution with respect to or in exchange for or in replacement of
the shares referenced in (i) and (ii) above, provided, however, that
Registrable Securities shall not include any shares of Common Stock which
have previously been registered or which have been sold to the public.
"Warrant Agreement" shall mean that certain Warrant Agreement dated
August 25, 1998 by and between the Company and the Investor and governing
the Warrants.
"Warrants" shall mean the Warrants issued by the Company pursuant to
the Warrant Agreement.
3. The first sentence of Section 2.1 (a) of the Registration Rights
Agreement shall be amended to read:
If the Company shall receive from the Holders of at least 50% of the
Registrable Securities at any time (the "Demand Date") not earlier than
December 31, 1998, a written request that the Company effect any
registration with respect to the resale of all or a part of the
Registrable Securities then, if the Commission has not prior to the Demand
Date declared effective a shelf registration statement pursuant to Rule
415 with respect to all of the Registrable Securities (a "Shelf
Registration Statement") which is effective as of the Demand Date, the
Company will, as soon as practicable, use its best efforts to effect such
registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws, and appropriate compliance with the Securities Act)
and as would permit or facilitate the resale and distribution of all or
such portion of such Registrable Securities as are specified in such
request.
4. Article III of the Registration Rights Agreement shall be amended
and restated to read:
III
TRANSFER OF SHARES
If, at any time, the Holder sells or otherwise transfers the
Warrants or the December Warrants, or if, after the expiration of the
period provided in Section 2.11 hereof, the Holder sells or otherwise
transfers shares of Common Stock, then, in connection therewith, the
Holder shall also be deemed to automatically transfer or assign the rights
to cause the Company to register the Registrable Securities so transferred
under Section 2 hereof, provided that the Company is given written notice
prior to or at the time of such transfer or assignment, stating the name
and address of the transferee or assignee. The Company shall not be
obligated to register securities of any such transferee or assignee unless
such transferee or assignee performs the obligations of a Holder under
this Agreement.
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2. The second paragraph of the Note shall be amended to read as follows:
The unpaid principal and accrued interest shall be payable in full on the
earlier of (i) the receipt by the Borrower of any proceeds from public or
private sale of any its capital stock or other securities or (ii) January
15, 1999 (the "Due Date").
3. The Company acknowledges that Investor has transferred 120,000 of the
150,000 Warrants issued to Investor under the Warrant Agreement to certain
transferees ("the Transferees") and that Investor has also transferred to
the Transferees the registration rights applicable to such transferred
Warrants. The Company and Investor agree that the registration rights
conferred by the Registration Rights Agreement have been transferred in
compliance with Section 3 of the Registration Rights Agreement and the
Company waives any defect with respect to such transfer.
4. The Company represents and warrants to Investor that (a) the execution,
delivery and performance of this Amendment are within its powers, have been
duly authorized and are not in contravention with any law, with the
Company's charter or bylaws, or any undertaking to which it is a party or
by which it is bound; (b) this Amendment is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms; (c) after giving effect to the amendments herein contained
and except as set forth in the last sentence of paragraph 5 of this
Amendment, each of the representations and warrants of the Company in that
certain Loan Agreement dated as of August 25, 1998 between the Company and
Investor (the "Loan Agreement") are true and correct on and as of the date
hereof with the same force and effect as if made on and as of the date
hereof; and (d) except as set forth in the last sentence of paragraph 5 of
this Amendment, no Event of Default (as defined in the Loan Agreement)
exists or has occurred and is continuing as of the date hereof.
5. Investor represents and warrants to the Company that each of the
representations and warranties it made to the Company in Article VI of the
Loan Agreement with respect to the Warrants and the Warrant Shares are true
and correct on and as of the date hereof with the same force and effect as
if made on and as of the date hereof with respect to the December Warrants
and the shares of Common Stock underlying the December Warrants. The
Investor acknowledges that it is aware that the Company has not complied
with its filing requirements under the Securities Exchange Act of 1934 in
that the Company has not, as of the date hereof, filed (a) its annual
report on Form 10-KSB for the fiscal year ended June 30, 1998, or (b) its
quarterly report on Form 10-QSB for the period ended September 30, 1998.
6. The Company agrees to pay, and to indemnify and hold Investor harmless for
the payment of, all costs and expenses arising in connection with this
Amendment, including the reasonable fees of counsel to Investor in
connection with preparing this Amendment and the related amendment.
7. The Company acknowledges and agrees that Investor has fully performed all
of its obligations under the Loan Agreement and all documents executed in
connection therewith and all actions which have been taken by Investor have
been reasonable and appropriate under the circumstances and within its
rights under the Loan Agreement and the Note and in that certain "Mortgage,
Deed of Trust, Security Agreement and Financing Statement" dated as of
August 25, 1998 between the Company, as Borrower, and Investor, as Lender.
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8. Except as expressly amended hereby, the Company agrees that the Note and
the Registration Rights Agreement and all other documents and agreements
executed by the Company in connection with the Loan Agreement in favor of
Investor are ratified and confirmed and shall remain in full force and
effect, enforceable against the Company in accordance with their respective
terms, and that it has no set off, counterclaim or defense with respect to
any of the foregoing.
9. Terms used but not defined herein shall have the respective meanings
ascribed thereto in the Loan Agreement or December Warrant Agreement, as
the case may be.
10. This Amendment may be signed in any number of counterparts with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
11. This Amendment 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, 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.
12. All judicial proceedings arising out of or relating to this Amendment 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 Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE effective as of the day and
year first above written.
COLORADO WYOMING RESERVE COMPANY
By: /s/Xxx X. Xxxxxx
-------------------------------------------
Xxx X. Xxxxxx
Title: President
XXXXX X. XXXXX REVOCABLE TRUST U/D/T
DATED JULY 28, 1994
By: /s/Xxxxx X. Xxxxx
-------------------------------------------
Xxxxx X. Xxxxx , Trustee
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