Foreland Corporation
and
Atlas Stock Transfer Corporation
as Warrant Agent
Warrant Agreement
Dated as of January 1, 1997
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this "Agreement") is entered into as of the 1st day
of January, 1997, by and between FORELAND CORPORATION, a Nevada corporation (the
"Company"), and ATLAS STOCK TRANSFER CORPORATION, a securities transfer agency
incorporated under the laws of the state of Utah, as warrant agent (the "Warrant
Agent").
Premises
A. The Company is conducting a public offering pursuant to a registration
statement on form S-2 (the "Registration Statement"), filed under the Securities
Act of 1933, as amended (the "Securities Act"), of various securities, including
up to 414,000 redeemable common stock purchase warrants (the "N Warrants"). The
N Warrants are offered hereby to those persons who are holders of record of the
Company's common stock purchase warrants that expired on December 31, 1996 (the
"L Warrants"), at the rate of one N Warrant for each three L Warrants held (to
give effect to a 3-to-1 reverse stock split of the Common Stock effective June
15, 1996). Each N Warrant entitles the holder to purchase one share of common
stock, par value $0.001 per share (the "Common Stock"), of the Company at any
time through December 31, 1998, at a purchase price of $12.00 per share. This
Agreement governs the N Warrants, including the issuance, exercise, and
redemption of such N Warrants, and the rights and obligations of the holders
thereof. The shares of Common Stock issuable on exercise of the N Warrants are
collectively referred to herein as the "Warrant Shares."
B. The Company desires the Warrant Agent to act on behalf of the Company,
and the Warrant Agent is willing to act in connection with the issuance,
division, transfer, exchange, and exercise of the N Warrants.
Agreement
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the N Warrants and the respective rights and obligations
thereunder of the Company and the registered owners and the N Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as follows:
1. Appointment of Warrant Agent. The Company hereby appoints the Warrant
Agent to act as agent for the Company in accordance with the instructions set
forth hereinafter in this Agreement, and the Warrant Agent hereby accepts such
appointment.
2. Transferability and Form of N Warrant.
2.1 Registration. The N Warrants shall be designated by class and
numbered and shall be registered in registers as they are issued. The
Company and the Warrant Agent shall be entitled to treat the Holder of any
N Warrant as the owner in fact thereof for all purposes and shall not be
bound to recognize any equitable or other claim to or interest in such N
Warrant on the part of any other person, and shall not be liable for any
registration or transfer of N Warrants which are registered or to be
registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge that a fiduciary or nominee is committing a
breach of trust in requesting such registration or transfer, or with
knowledge of such facts that the Warrant Agent participation therein
amounts to bad faith.
2.2 Transfer. N Warrants shall be transferable only on the books of
the Company maintained at the principal office of the Warrant Agent in the
city of Salt Lake City, state of Utah, on delivery thereof duly endorsed by
the Holder or by his duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment, or authority to
transfer. In all cases of transfer by an attorney, the original letter of
attorney, duly approved, or an official copy thereof, duly certified, shall
be deposited and remain with the Warrant Agent. In case of transfer by
executors, administrators, guardians, or other legal representatives, duly
authenticated evidence of their authority shall be produced, and may be
required to be deposited and remain with the Warrant Agent in its
discretion. On any registration of transfer, the Warrant Agent shall
countersign and deliver a new N Warrant or N Warrants to the person
entitled thereto.
2.3 Form of N Warrants. N Warrants, including the form of election to
purchase shares, shall be represented by certificates in substantially the
form set forth as Exhibit "A", which is attached hereto and incorporated
herein by reference. The price per Share and the number of Warrant Shares
issuable on exercise of N Warrants are subject to adjustment on the
occurrence of certain events, all as hereinafter provided. The N Warrants
shall be executed on behalf of the Company by the manual or facsimile
signature of the present or any future president or vice-president of the
Company, under its corporate seal, affixed or in facsimile, attested by the
manual or facsimile signature of the present or any future secretary or
assistant secretary of the Company. N Warrants shall be dated as of the
date of countersignature thereof by the Warrant Agent either on initial
issuance or on division, exchange, substitution, or transfer.
3. Countersignature of N Warrants. The N Warrants shall be countersigned
by the Warrant Agent (or any successor to the Warrant Agent then acting as
warrant agent under this Agreement) and shall not be valid for any purpose
unless so countersigned. N Warrants may be countersigned by the Warrant Agent
(or by its successor as warrant agent) and may be delivered by the Warrant
Agent, notwithstanding that the persons whose manual or facsimile signatures
appearing thereon as proper officers of the Company shall have ceased to be such
officers at the time of such countersignature, issuance, or delivery. The
Warrant Agent shall, on written instructions of the president or the secretary
of the Company, countersign, issue, and deliver N Warrants entitling the Holders
thereof to purchase not in excess of 414,000 Warrant Shares.
4. Exchange of N Warrants. The N Warrants may be exchanged for another N
Warrant or L Warrants of the same class entitling the Holder thereof to purchase
a like aggregate number of Warrant Shares as the N Warrant surrendered then
entitle the Holder to purchase. Any Holder of a Warrant desiring to exchange N
Warrants shall make such request in writing delivered to the Warrant Agent, and
shall surrender, properly endorsed, the N Warrants to be so exchanged.
Thereupon, the Warrant Agent shall countersign and deliver to the person
entitled thereto an N Warrant of the same class as so requested.
5. Term of N Warrants; Exercise of N Warrants. Each Holder of the N
Warrants shall have the right, which may be exercised for a period commencing on
the effective date of the Registration Statement, and ending at 11:59 p.m.
Mountain Time, on December 31, 1998, subject to earlier termination of called
for redemption as provided herein, to purchase from the Company one fully paid
and nonassessable Warrant Share for each N Warrant held at the warrant price as
set forth in sections 9 and 10 hereof (the "Warrant Price"), subject to the
conditions set forth in this Agreement. If the N Warrant is not exercised
during the exercise period set forth herein, it shall expire.
The Warrant Shares shall be issuable on exercise of the N Warrants on
surrender to the Company at the principal office of the Warrant Agent in Salt
Lake City, Utah, with the form of election to purchase on the reverse thereof
duly completed and signed, and on payment to the Warrant Agent for the account
of the Company of the Warrant Price for the number of Warrant Shares then
exercised. Payment of the Warrant Price shall be made in cash or by cashier's
check or by collection of checks or drafts. Subject to subsections 5.1 and 5.2
of this section, on such surrender of N Warrants and payment of the Warrant
Price as aforesaid, the Company shall issue and cause to be delivered with all
reasonable dispatch to or on the written order of the Holder and in such name or
names as the Holder may designate, a certificate or certificates for the number
of full Warrant Shares so purchased on the exercise of such N Warrants. No
fractional Warrant Shares shall be issuable on such surrender. 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 N Warrants and payment of
the Warrant Price, as aforesaid; provided, however, that if, at the date of
surrender of such N Warrants and payment of such Warrant Price, the transfer
books for the Warrant Shares on the exercise of such N Warrants shall be closed,
the certificates for the Warrant Shares in respect of which such N Warrants are
then exercised shall be issuable as of the date on which such books shall next
be opened (whether before of after expiration of the exercise period) and until
such date the Company shall be under no duty to deliver any certificate for such
Warrant Shares; provided further, however, that the transfer books of record,
unless otherwise required by law, shall not be closed at any one time for a
period longer than 60 days. The right of purchase represented by the N Warrants
shall be exercisable, at the election of the Holder thereof, either in full or
from time to time in part and, in the event that any N Warrant is exercised in
respect of less than all of the Warrant Shares specified therein at any time
prior to the date of expiration of the N Warrants, a new N Warrant or N Warrants
of the same class will be issued for the remaining number of Warrant Shares, and
the Warrant Agent is hereby irrevocably authorized to countersign and to deliver
the required new N Warrants pursuant to the provisions of this section and of
section 3 hereof. The Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with N Warrants duly executed on behalf of the Company
for such purpose.
5.1 The N Warrants may not be exercised by the Holders in the absence
of a current registration statement under the Securities Act and
registration or qualification under applicable state securities laws
pertaining to the Warrant Shares. The Company shall use its best efforts
to maintain the effectiveness of its current registration statement filed
pursuant to the Securities Act to register the Warrant Shares issuable on
exercise of the N Warrants.
5.2 In connection with the Registration Statement under this section,
the Company covenants and agrees to take all necessary action which may be
required in qualifying or registering the Warrant Shares and N Warrants
included in a registration statement or post-effective amendment for the
offer and sale under the securities or blue sky laws of such state as
requested by the Holders; provided, that the Company shall not be obligated
to execute or file any general consent to service of process or to qualify
as a foreign corporation to do business under the laws of any such
jurisdiction. Holders who reside in any state where the Company xxxxxx,
with the exercise of reasonable diligence and without consenting to general
service of process, obtain qualification for the exercise of the N Warrants
and the issuance of the Warrant Shares may not, as a result thereof, be
able to exercise their N Warrants, and the Company is under no obligation
to make such exercise possible in such circumstances. In the event that
the company determines to proceed with the qualification of the exercise of
the N Warrants and the issuance of the Warrant Shares under the securities
laws of a particular state, then the exercise of the N Warrants shall not
be effective and the Warrant Shares shall not be issued until such
qualification become effective. The costs of obtaining such state
qualification shall be borne by the Company.
5.3 The Company shall promptly notify the Warrant Agent of the date
on which the effectiveness of the Registrations Statement or the
qualification or registration of the Warrant Shares under the securities
laws of any state shall terminate. The Company shall not issue any Warrant
Shares with respect to any N Warrant surrendered for exercise unless such N
Warrants are surrendered and received by the Warrant Agent during a period
that a registration statement is effective. Furthermore, the Company shall
not issue any Warrant Shares on the exercise of any N Warrants received
from a Holder who is a resident of a state with respect to which the
Warrant Shares issuable on exercise of the N Warrants are not qualified or
registered.
6. Payment of Taxes. The Company will pay all documentary stamp taxes,
if any, attributable to the initial issuance of Warrant Shares issuable on the
exercise of the N Warrants; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect to the issuance
or delivery of any N Warrants or certificates for Warrant Shares involving a
transfer of record or beneficial ownership.
7. Mutilated or Missing N Warrants. In case any certificate representing
the N Warrants is mutilated, lost, stolen, or destroyed, the Company may at its
discretion issue and the Warrant Agent shall countersign and deliver in exchange
and substitution for and on cancellation of the mutilated N Warrant, or in lieu
of and substitution for the N Warrant lost, stolen, or destroyed, a new warrant
of like class and tenor and representing an equivalent right or interest, but
only on receipt of evidence satisfactory to the Company and the Warrant Agent of
such loss, theft, or destruction of such N Warrant and indemnity, if requested,
also satisfactory to them. Applicants for such substitute N Warrants shall also
comply with such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
8. Reservation of Warrant Shares; Redemption of N Warrants.
8.1 Reservation of Warrant Shares. There have been reserved, and the
Company shall at all times keep reserved, out of the authorized and
unissued shares of Common Stock, a number of shares sufficient to provide
for the exercise of the rights of purchase represented by the outstanding N
Warrants, assuming exercise of all N Warrants. The transfer agent for the
Warrant Shares and every subsequent transfer agent for any Warrant Shares
issuable on 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 and unissued Warrant Shares as shall be requisite for such
purpose. The Company will keep a copy of this Agreement on file with the
transfer agent for the Warrant Shares and with every subsequent transfer
agent for any Warrant Shares of the Company's capital stock issuable on the
exercise of the rights of purchase represented by the N Warrants. The
Warrant Agent is hereby irrevocably authorized to requisition from time to
time from such transfer agent stock certificates required to honor
outstanding N Warrants on exercise thereof in accordance with the terms of
this Agreement. The Company will supply such transfer agent with duly
executed stock certificates for such purpose and will provide or otherwise
make available any cash which may be payable as provided in section 11
hereof. All N Warrants surrendered in the exercise of the rights thereby
evidenced shall be canceled by the Warrant Agent and shall thereafter be
delivered to the Company. Promptly after the date of expiration of the N
Warrants, the Warrant Agent shall certify to the Company the total
aggregate amount of N Warrants then outstanding, and thereafter no Warrant
Shares shall be subject to reservation in respect of such N Warrants.
8.2 Redemption of N Warrants by the Company. The N Warrants are
subject to redemption by the Company at a price of $0.10 per N Warrant on
30 days written notice to the Holders if the average closing bid price for
the Common Stock as reported on Nasdaq is at least equal to the Warrant
Price for 20 consecutive trading days ending within 10 days preceding the
date of the notice of redemption or, if not quoted on Nasdaq or listed on
an exchange, as reported on the Electronic Bulletin Board maintained by the
NASD or, if not on the Electronic Bulletin Board, any other reliable medium
of quotation. N Warrants may be exercised during the 30 day period after
such notice of redemption has been given but, if not exercised, shall
thereafter be redeemed. A registration statement and state qualifications
as required by subsections 5.1 through 5.3 must be effective prior to the
notice of redemption.
8.3 Redemption Procedure. Redemption of the N Warrants pursuant to
the provisions of subsection 8.2 shall be made in the following manner:
(a) The Company shall notify the Warrant Agent of its intention
to redeem the N Warrants at a price of $0.10 per N Warrant. On receipt
of such notice, the Warrant Agent shall promptly notify the Company of
the number of N Warrants outstanding as of the most recent practicable
date. Within five business days following the receipt of such
information from the Warrant Agent, the Company and the Warrant Agent
shall jointly establish a bank account at a bank acceptable to both
the Company and the Warrant Agent (the "Redemption Account") in which
the Company shall from time to time deposit the funds as may be
required during the redemption period to redeem the number of N
Warrants that have been tendered for redemption.
(b) The Company shall prepare a notice of redemption and cause
it to be delivered to the Holders in the manner provided in section 18
hereto.
(c) Such notice shall state that the N Warrants will be
automatically redeemed 30 days from the date of such notice unless
earlier exercised in accordance with their terms. Each Holder of the
N Warrants subject to redemption remaining unexercised after the
expiration of the 30 day period shall be required to tender the
redeemed N Warrants, duly endorsed, to the Warrant Agent in exchange
for payment of the redemption price. On such surrender of redeemed N
Warrants, a check drawn on the Redemption Account shall be issued and
delivered with all reasonable dispatch to, or on the written order of,
the Holder and in such name or names as the Holder may designate.
From and after the expiration of the 30 day period, the N Warrants
subject to redemption shall be of no further force and effect, and
shall represent only the interest of the Holder in the funds deposited
in the Redemption Account for redemption of such N Warrants.
(d) The Warrant Agent shall periodically, but not less
frequently than monthly, provide to the Company an accounting of the N
Warrants tendered for redemption and the funds disbursed from the
Redemption Account pursuant thereto. The Redemption Account shall be
closed 120 days following the expiration of the 30 day notice period
specified in paragraph (c) of this subsection 8.3, and all funds
remaining in said account will be returned to the Company, together
with a complete accounting of the N Warrants redeemed and a list of
all such N Warrants remaining unexercised and not returned to the
Company for redemption. Any N Warrants received by the Warrant Agent
subsequent to closing the Redemption Account will be promptly
delivered to the Company. The Company shall pay all costs associated
with establishing and maintaining the Redemption Account, including
the costs of issuing any checks.
8.4 Cancellation of N Warrants. In the event the Company shall
acquire N Warrants, the same shall thereupon be delivered to the Warrant
Agent and be canceled by it and retired. The Warrant Agent shall cancel
any N Warrant surrendered for exchange, substitution, transfer, or exercise
in whole or in part.
9. Warrant Price. The exercise price to acquire Warrant Shares issuable
on exercise of the N Warrants shall be $12.00 per share (the "Warrant Price").
The Warrant Price shall be subject to adjustment pursuant to section 10 hereof.
10. Adjustment of Warrant Price and Number of Warrant Shares.
10.1 Adjustments. The number of Warrant Shares issuable on the
exercise of each N Warrant and the Warrant Price shall be subject to
adjustment as follows:
(a) In case the Company shall (i) pay a dividend in Common Stock
or securities convertible into Common Stock or make a distribution in
Common Stock or securities convertible into Common Stock, (ii)
subdivide its outstanding Common Stock, (iii) combine its outstanding
Common Stock into a smaller number of shares, or (iv) issue by
reclassification of its Common Stock other securities of the Company,
the number of Warrant Shares issuable on exercise of each N Warrant
immediately prior thereto shall be adjusted so that the Holder of each
N Warrant shall be entitled to receive on exercise the kind and number
of Warrant Shares of the Company which he would have owned or have
been entitled to receive after the happening of any of the events
described above, had such N Warrant been exercised immediately prior
to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this paragraph (a) shall
become effective immediately after the effective date of such event
retroactive to the record date for such event.
(b) No adjustment in the number of Warrant Shares issuable
hereunder shall be required unless such adjustment would require an
increase or decrease of at least 1% in the number of Warrant Shares
issuable on the exercise of each N Warrant; provided, however, that
any adjustments which by reason of this paragraph (b) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment.
(c) Whenever the number of Warrant Shares issuable on the
exercise of each N Warrant is adjusted, as herein provided, the
Warrant Price payable on exercise of each N Warrant shall be adjusted
by multiplying such Warrant Price immediately prior to such adjustment
by a fraction, the numerator of which shall be the number of Warrant
Shares issuable on the exercise of each N Warrant immediately prior to
such adjustment and the denominator of which shall be the number of
Warrant Shares so issuable immediately thereafter.
(d) Whenever the number of Warrant Shares issuable on the
exercise of each N Warrant or the Warrant Price is adjusted, as herein
provided, the Company shall cause the Warrant Agent to promptly mail
by first class mail, postage prepaid, to each Holder of N Warrants
notice of such adjustment or adjustments and shall deliver to the
Warrant Agent a certificate of a firm of independent accountants
selected by the board of directors of the Company (which may be the
regular accountants employed by the Company) setting forth the number
of Warrant Shares issuable on the exercise of each N Warrant and the
Warrant Price after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such certificate, in
the absence of manifest error, shall be conclusive evidence of the
correctness of adjustment. The Warrant Agent shall be under no duty
or responsibility with respect to any such certificate, except to
exhibit the same, from time to time, to any Holder of N Warrants
desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or
responsibility to any Holders of N Warrants to determine whether any
facts exist which may require any adjustment of the Warrant Prices or
the number of Warrant Shares issuable or other securities purchasable
or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such
adjustment.
(e) For the purpose of this subsection 10.1, the term "Common
Stock" shall mean (i) the class of stock designated as the common
stock of the Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or reclassifications
of such shares consisting solely of changes in par value, or from par
value to no par value, or from no par value to par value. In the
event that at any time, as a result of an adjustment made pursuant to
paragraph (a) above, the Holders of N Warrants shall become entitled
to purchase any securities of the Company other than Warrant Shares,
thereafter the number of such other securities so purchasable on
exercise of each N Warrant and the Warrant Price of such securities
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in paragraphs (a) through (d),
inclusive, above, and the provisions of section 5 and subsections 10.2
through 10.5, inclusive, with respect to the Warrant Shares shall
apply on like terms to any such other securities.
10.2 No Adjustments for Dividends. Except as in subsection 10.1, no
adjustment in respect of any dividends shall be made during the term of the
N Warrants or on the exercise of N Warrants
10.3 No Adjustment in Certain Cases. No adjustments shall be made:
(a) In connection with the issuance of any Warrant Shares on the
exercise of the N Warrants;
(b) In connection with the issuance or conversion of shares of
preferred stock of the Company (except for a dividend or distribution
by the Company with respect to Common Stock of preferred stock
convertible into Common Stock).
(c) In connection with the issuance of additional Warrant Shares
or other securities on account of the anti-dilution provisions
contained in or relating to the N Warrants:
(d) In connection with the purchase or other acquisition by the
Company of any shares of Common Stock, preferred stock, evidences of
its indebtedness or assets, or rights, options, warrants, or
convertible securities containing the right to subscribe for or
purchase Common Stock; or
(e) In connection with the sale or exchange by the Company of
any shares of Common Stock, preferred stock, evidences of its
indebtedness or assets; or rights, options, warrants, or convertible
securities containing the right to subscribe for or purchase Common
Stock.
10.4 Preservation of Purchase Rights on Reclassification, Consolidation,
Etc. In case of any consolidation of the Company with or merger of the Company
into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrant Agent an agreement that each Holder of an
N Warrant shall have the right thereafter on payment of the Warrant Price in
effect immediately prior to such action to purchase on exercise of each N
Warrant the kind and amount of Warrant Shares and other securities and property
which he would have owned or have been entitled to receive after the happening
of such consolidation, merger, sale, or conveyance had such N Warrant been
exercised immediately prior to such action. The Company shall mail by first
class mail, postage prepaid, to the Holder of each N Warrant notice of the
execution of any such agreement. Such agreement shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this section 10. The provisions of this subsection 10.4 shall
similarly apply to successive consolidations, mergers, sales, or conveyances.
The Warrant Agent shall be under no duty or responsibility to determine the
correctness of any provisions contained in any such agreement relating either to
the kind or amount of Warrant Shares of stock or other securities or property
receivable on exercise of N Warrants or with respect to the method employed and
provided therein for any adjustments.
10.5 Statement on N Warrants. Irrespective of any adjustments in the
Warrant Price or the number or kind of Warrant Shares purchasable on the
exercise of the N Warrants, N Warrants theretofore or hereafter issued may
continue to express the same price and number and kind of Warrant Shares as are
stated in the N Warrants initially issuable pursuant to this Agreement.
11. Fractional Interests. The Company shall not be required to issue
fractional Warrant Shares on the exercise of N Warrants. If more than one N
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 on the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares represented by the N Warrants so presented. If any fraction of a
share would, except for the provisions of this section 11, be issuable on the
exercise of any N Warrant (or specified portion thereof), the Company shall pay
an amount in cash equal to the current value of such fraction computed on the
basis of (i) the highest closing bid price of the Common Stock, as reported by
Nasdaq on the last business day prior to the date of exercise, (ii) the last
reported sale price of the Common Stock on the national stock exchange on which
the Common Stock is listed on the last business day prior to the date of
exercise on which such a sale shall have been effected, if the Common Stock is
listed on such an exchange, or (iii) if not quoted on Nasdaq or listed on an
exchange, as reported on the Electronic Bulletin Board maintained by the NASD
or, if not on the Electronic Bulletin Board, any other reliable medium of
quotation.
12. No Right as Shareholders; Notices to N Warrant Holders. Nothing
contained in this Agreement or in the N Warrants shall be construed as
conferring on the Holders or their transferees the right to vote or to receive
dividends or to consent to or to receive notice as shareholders in respect of
the meeting of shareholders for the election of directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
13. Disposition of Proceeds on Exercise of N Warrants; Inspection of
Warrant Agreement. The Warrant Agent shall account promptly to the Company with
respect to N Warrants exercised and concurrently pay to the Company all moneys
received by the Warrant Agent for the purchase of the Company's Warrant Shares
through the exercise of such N Warrants. The Warrant Agent shall keep copies of
this Agreement and any notices given or received hereunder available for
inspection by Holders of N Warrants during normal business hours at its
principal office in the city of Salt Lake City, state of Utah. The Company
shall supply the Warrant Agent from time to time with such numbers of copies of
this Agreement as the Warrant Agent may request.
14. Merger or Consolidation or Change of Name of Warrant Agent. Any
corporation into which the Warrant Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Warrant Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of section 16 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
N Warrants shall have been countersigned but not delivered, any such successor
to the Warrant Agent may adopt the countersignature of the original Warrant
Agent and deliver such N Warrants so countersigned, and in case at that time any
of the N Warrants shall not have been countersigned, any successor to the
Warrant Agent may countersign such N Warrants either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent, and in
all such cases, the N Warrant shall have the full force provided in the N
Warrants and in this Agreement.
In case at any time the name of the Warrant Agent shall be changed and at
such time any of the N Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignature under its prior name and
deliver N Warrants so countersigned, and in case at that time any of the N
Warrants shall not have been countersigned, the Warrant Agent may countersign
such N Warrants either in its prior name or in its changed name, and in all such
cases such N Warrants shall have the full force provided in the N Warrants and
in this Agreement.
15. Concerning the Warrant Agent. The Warrant Agent undertakes the duties
and obligations imposed by this Agreement on the following terms and conditions,
by all of which the Company and the Holders of N Warrants, by their acceptance
thereof shall be bound:
15.1 The statements contained herein and in the N Warrants shall be
taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the N
Warrants except as herein otherwise provided.
15.2 The Warrant Agent shall not be responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or
in the N Warrants to be complied with by the Company.
15.3 The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys, agents or employees, and the Warrant Agent
shall not be answerable or accountable for any act of any such attorneys,
agents, or employees or for any loss to the Company resulting from such
act, except for the negligence or bad faith of such attorneys, agents, or
employees; provided, reasonable care shall have been exercised in the
selection and continued employment thereof.
15.4 The Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel for the Company), and the Warrant
Agent shall incur no liability or responsibility to the Company or to any
Holder of any Warrant in respect of any action taken, suffered, or omitted
by it hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
15.5 Whenever in the performance of its duties under this Agreement
the Warrant Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the president or a vice-
president or the treasurer or the secretary of the Company and delivered to
the Warrant Agent, and such certificate shall be full authorization to the
Warrant Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance on such certificate.
15.6 The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
execution of its duties under the terms of this Agreement, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges, and other
charges of any kind and nature incurred by the Warrant Agent in the
execution of its duties under the terms of this Agreement, and to indemnify
the Warrant Agent and save it harmless against any and all liabilities,
including judgments, costs and counsel fees, for anything done or omitted
by the Warrant Agent in the execution of its duties under the terms of this
Agreement, except as a result of the Warrant Agent's negligence or bad
faith.
15.7 The Warrant Agent shall be under no obligation to institute any
action, suit, or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more Holders of N Warrants
shall furnish the Warrant Agent with reasonable security and indemnity for
any costs and expenses which may be incurred, but this provision shall not
affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any of the N
Warrants may be enforced by the Warrant Agent without the possession of any
of the N Warrants or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit, or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant
Agent, and any recovery of judgment shall be for the ratable benefit of the
Holders of the N Warrants, as their respective rights or interests may
appear.
15.8 The Warrant Agent and any stockholder, director, officer, or
employee of the Warrant Agent may buy, sell, or deal in any of the N
Warrants or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to or otherwise act as fully and freely as
though it were not Warrant Agent under this Agreement. Nothing herein
shall preclude the Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
15.9 The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions hereof. The Warrant
Agent shall not be liable for anything which it may do or refrain from
doing in connection with this Agreement, except for its own negligence or
bad faith.
15.10 The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder of any N Warrant for any
action taken in reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document, or instrument reasonably believed by
it to be genuine and to have been signed, sent, or presented by the proper
party or parties.
15.11 The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in respect
of the validity or execution of any N Warrant (except its countersignature
thereof), nor shall the Warrant Agent by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation
of any Warrant Shares (or other stock) to be issued pursuant to this
Agreement or any N Warrant or as to whether any Warrant Shares (or other
stock) will when issued be validly issued, fully paid, and nonassessable or
as to the Warrant Price, or the number or kind or amount of Warrant Shares
or other securities or other property issuable on exercise of any N
Warrant.
15.12 The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the chairman of the board or the president or a vice-president or the
secretary or the treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
16. Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company. If the Warrant Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by the Holder of an N Warrant (who shall with
such notice submit his N Warrant for inspection by the Company), then the Holder
of any N Warrant may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Any successor warrant agent,
whether appointed by the Company or such a court, shall be a bank, trust
company, or securities transfer agency, in good standing, incorporated under the
laws of the states of Delaware, Nevada, or Utah, or of the United States of
America. After appointment the successor warrant agent shall be vested with the
same powers, rights, duties, and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; but the former Warrant Agent
shall deliver and transfer to the successor warrant agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act, or deed necessary for the purpose. Failure to file any notice
provided for in this section 16, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Warrant
Agent or the appointment of the successor warrant agent, as the case may be. In
the event of such resignation or removal, the successor warrant agent shall
mail, first class, to each Holder, written notice of such removal or resignation
and the name and address of such successor warrant agent.
17. Identity of Transfer Agent. Forthwith on the appointment of any
subsequent Transfer Agent for the Company's Warrant Shares, or any other shares
of the Company's capital stock issuable on the exercise of the rights of
purchase represented by the N Warrants, the Company will file with the Warrant
Agent a statement setting forth the name and address of such Transfer Agent.
18. Notices. Any notice pursuant to this Agreement by the Company or by
the Holder of any N Warrant to the Warrant Agent, or by the Warrant Agent or by
the Holder of any N Warrant to the Company, shall be in writing and shall be
deemed to have been duly given if delivered or mailed certified mail, return
receipt requested (a) if to the Company, to Foreland Corporation, Union Terrace
Office Bldg., 00000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000-0000, and
(b) if to the Warrant Agent, to Atlas Stock Transfer Corporation, 0000 Xxxxx
Xxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000. Each party hereto may from time to
time change the address to which notices to it are to be delivered or mailed
hereunder by notice in writing to the other party.
Any notice mailed pursuant to this Agreement by the Company or the Warrant
Agent to the Holders of N Warrants shall be in writing and shall be deemed to
have been duly given if mailed, postage prepaid, to such Holders at their
respective addresses as reflected on the books of the Warrant Agent.
19. Supplements and Amendments. The Company and the Warrant Agent may
from time to time supplement or amend this Agreement, without the approval of
any Holders of N Warrants, in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable and which shall not be inconsistent with the
provision of the N Warrants and which shall not adversely affect the interests
of the Holders of the N Warrants. In this regard, but not by way of limitation,
establishing an earlier date of exercise without a change in the expiration date
of the N Warrants set forth in section 5 or extending the period for exercise
without a change in the date on which the N Warrants are first exercisable set
forth in section 5 shall not be deemed to adversely affect the interests of the
Holders. As such, the board of directors of the Company and the Warrant Agent
may at their discretion extend the exercise periods for the N Warrants.
20. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
21. Merger or Consolidation of the Company. The Company will not merge or
consolidate with or into any other corporation unless the corporation resulting
from such merger or consolidation (if not the Company) shall expressly assume,
by supplemental agreement satisfactory in form to the Warrant Agent and executed
and delivered to the Warrant Agent, the due and punctual performance and
observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
22. Applicable Law. This Agreement and each Warrant issued hereunder
shall be deemed to be a contract made under the laws of the state of Nevada and
for all purposes shall be construed in accordance with the laws of said state.
23. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Warrant Agent, and the Holders of the N Warrants 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 Warrant Agent, and the Holders of the
N Warrants.
24. 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.
25. Captions. The captions of the sections and subsections of this
Agreement have been inserted for convenience only and shall have no substantive
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
FORELAND CORPORATION
By: /s/ N. Xxxxxx Xxxxxx
N. Xxxxxx Xxxxxx, President
ATLAS STOCK TRANSFER CORPORATION, as
Warrant Agent
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
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