AS THE CORPORATION IS NOT A REPORTING ISSUER IN ANY JURISDICTION OF CANADA,
UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY IN CANADA AND MAY HAVE TO HOLD THE SECURITY
FOR AN INDEFINITE PERIOD.
NEITHER THESE WARRANTS NOR THE COMMON SHARES ISSUABLE UPON EXERCISE THEREOF HAVE
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"U.S. SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THESE WARRANTS MAY NOT BE EXERCISED WITHIN THE UNITED STATES OR BY OR ON
BEHALF OF A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES
ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
U.S. SECURITIES ACT, AND EXEMPTIONS FROM APPLICABLE STATE SECURITIES LAWS, IN
EACH CASE AFTER PROVIDING AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY
TO THE CORPORATION TO SUCH EFFECT.
NEITHER THESE WARRANTS NOR THE COMMON SHARES ISSUABLE UPON EXERCISE THEREOF MAY
BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF
EXCEPT: (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S.
SECURITIES ACT; (B) IN A TRANSACTION OUTSIDE THE UNITED STATES MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT OR (C) IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND, IN
EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. PRIOR TO THE
COMPLETION OF ANY SUCH TRANSACTION PURSUANT TO THE FOREGOING CLAUSES (B) OR (C),
THE TRANSFEROR SHALL DELIVER TO THE CORPORATION A WRITTEN OPINION OF COUNSEL OR
OTHER EVIDENCE SATISFACTORY TO THE CORPORATION TO THE EFFECT THAT SUCH
TRANSACTION IS IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF ALL
APPLICABLE UNITED STATES FEDERAL AND STATE SECURITIES LAWS. HEDGING TRANSACTIONS
WITH RESPECT TO THESE WARRANTS AND THE COMMON SHARES ISSUABLE UPON EXERCISE
THEREOF ARE PROHIBITED UNLESS THEY ARE CONDUCTED IN COMPLIANCE WITH THE U.S.
SECURITIES ACT.
This warrant certificate is void if not exercised on or before 5:00 p.m.
(Edmonton time) on October 11, 2008.
WARRANT CERTIFICATE
DEEP WELL OIL & GAS, INC.
(Incorporated under the laws of the State of Nevada
and extra-provincially registered in the Province of
Alberta, Canada)
- --------------------------------------------------------------------------------
WARRANT CERTIFICATE
- --------------------------------------------------------------------------------
NO. (Certificate)
- --------------------------------------------------------------------------------
(Warrant) WARRANTS, each entitling the holder to acquire one Common Share
for each Warrant represented hereby
- --------------------------------------------------------------------------------
THIS IS TO CERTIFY THAT, FOR VALUE RECEIVED
(Name)
(Address)
(hereinafter referred to as the "holder" or the "Warrantholder") is entitled to
acquire for each Warrant represented hereby, in the manner and subject to the
restrictions and adjustments set forth herein, at any time and from time to time
until 5:00 p.m. (Edmonton time) (the "Time of Expiry") on the Expiry Date (as
hereinafter defined), one fully paid and non-assessable common share ("Common
Share") of DEEP WELL OIL & GAS, INC. (the "Corporation"), at the Exercise Price
(as hereinafter defined), subject to adjustment as herein provided.
These Warrants may only be exercised at the principal office of the Corporation
at 510 Royal Bank Building, 10117 Jasper Avenue, Edmonton, Alberta, T5J 1W8, or
such other office as the Corporation may advise the holder in writing. These
Warrants are issued subject to the terms and conditions appended hereto as
Schedule "A".
IN WITNESS WHEREOF, the Corporation has caused this Warrant Certificate to be
executed by a duly authorized officer.
DATED this 11th day of October, 2005.
DEEP WELL OIL & GAS, INC.
Per:
--------------------------------
(See terms and conditions attached hereto)
SCHEDULE "A"
TERMS AND CONDITIONS FOR WARRANT
ARTICLE 1
INTERPRETATION
1.1 Definitions
In these Terms and Conditions, unless there is something in the subject
matter or context inconsistent therewith:
(a) "Common Shares" means the common shares in the capital of the Corporation;
(b) "Corporation" means Deep Well Oil & Gas, Inc.;
(c) "Current Market Price" of the Common Shares at any date means the simple
average of the closing price per share for the Common Shares for any 10
consecutive trading days selected by the Corporation commencing not more
than 45 trading days before such date on the stock exchange on which the
Common Shares are listed or, if such Common Shares are not listed on a
stock exchange, such over-the-counter market on which the Common Shares
are quoted or trade (provided that if on any day in such period no closing
price per share for the Common Shares is reported on by such exchange or
over-the-counter market for such day, the average of the reported closing
bid and asked prices on such exchange or over-the-counter market on such
day shall be deemed to be the closing price per share for the Common
Shares for such day) of if the Common Shares are not listed or quoted on
any stock exchange or over-the-counter market, a price determined by the
board of directors of the Corporation acting reasonably;
(d) "Dividend Paid in the Ordinary Course" means a dividend declared payable
on the Common Shares in any four consecutive quarters of the Corporation,
whether in (1) cash, (2) securities of the Corporation, including rights,
options or warrants (other than rights, options or warrants referred to in
subsection 4.2(b)) to purchase any securities of the Corporation or
property or other assets of the Corporation, or (3) property or other
assets of the Corporation, to the extent that the amount or value of such
dividend together with the amount or value of all other dividends
theretofore paid during such financial year (any such securities, property
or other assets so distributed to be valued at the fair market value of
such securities, property or other assets, as the case may be, as
determined by the Corporation, which determination shall be conclusive,
provided that, for the purposes of this definition, the fair market value
of any Common Share distributed by way of dividend shall be conclusively
determined by reference to the Current Market Price per Common Share on
the date prior to the declaration of such dividend) does not exceed the
greater of:
(i) 150% of the aggregate amount and/or value of dividends declared
payable by the Corporation on the Common Shares in the period of
four consecutive financial quarters ended immediately prior to
the first day of such financial year; and
2
(ii) 100% of the consolidated net income of the Corporation before
extraordinary items (but after dividends payable on all shares
ranking prior to or on a parity with respect to the payment of
dividends with the Common Shares) in respect of the period of
four consecutive financial quarters ended immediately prior to
the first day of the current financial quarter (such consolidated
net income, extraordinary items and dividends to be shown in the
audited consolidated financial statements of the Corporation for
such period of four consecutive financial quarters or if there
are no audited consolidated financial statements for such period,
computed in accordance with generally accepted accounting
principles, consistent with those applied in the preparation of
the most recent audited consolidated financial statements of the
Corporation);
(e) "Exercise Price" means the price of US$0.60 per Common Share (subject to
adjustment in certain events);
(f) "Expiry Date" means the 11th day of October, 2008;
(g) "herein", "hereby" and similar expressions refer to these Terms and
Conditions as the same may be amended or modified from time to time; and
the expression "Article" and "Section" followed by a number refer to the
specified Article or Section of these Terms and Conditions;
(h) "person" means an individual, corporation, partnership, trustee or any
unincorporated organization and words importing persons have a similar
meaning;
(i) "Time of Expiry" means 5:00 p.m. (Edmonton time) on the Expiry Date;
(j) "Warrant" means the warrant to acquire Common Shares evidenced by the
Warrant Certificate issued to the holder; and
(k) "Warrant Certificate" means the certificate to which these Terms and
Conditions are attached.
1.2 Gender
Words importing the singular number include the plural and vice versa and
words importing the masculine gender include the feminine and neuter genders.
1.3 Interpretation Not Affected by Headings
The division of these Terms and Conditions into Articles, Sections and
Subsections and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation thereof.
3
1.4 Applicable Law
The terms hereof and of the Warrant shall be construed in accordance with
the laws of the Province of Alberta and the laws of Canada applicable thereto.
ARTICLE 2
ISSUE OF WARRANT
2.1 Issue of Warrants
That number of Warrants set out on the Warrant Certificate are hereby
created and authorized to be issued.
2.2 Additional Warrants
Subject to any other written agreement between the Corporation and the
Warrantholder, the Corporation may at any time and from time to time undertake
further equity or debt financing and may issue additional securities of any kind
including Common Shares, warrants or grant options or similar rights to purchase
Common Shares to any person.
2.3 Issue in Substitution for Lost Warrants
If the Warrant Certificate becomes mutilated, lost, destroyed or stolen:
(a) the Corporation shall, subject to subsection 2.3(b) hereof, issue and
deliver a new Warrant Certificate of like date and tenor as the one
mutilated, lost, destroyed or stolen, in exchange for and in place of and
upon cancellation of such mutilated, lost, destroyed or stolen Warrant
Certificate; and
(b) the holder shall bear the cost of the issue of a new Warrant Certificate
hereunder and in the case of the mutilation, loss, destruction or theft of
the Warrant Certificate, shall, as a condition precedent to the issuance
of a new Warrant Certificate, furnish to the Corporation such evidence of
mutilation, loss, destruction, or theft as shall be satisfactory to the
Corporation in its sole discretion and, if required by the Corporation, an
indemnity in an amount and form satisfactory to the Corporation, in its
discretion, and shall pay the reasonable charges of the Corporation in
connection therewith.
2.4 Warrantholder Not a Shareholder
The Warrant Certificate shall not constitute the holder a shareholder of
the Corporation, nor entitle it to any right or interest in respect thereof
except as may be expressly provided in the Warrant Certificate. The Corporation
may deem and treat the holder of the Warrant Certificate as the absolute owner
thereof for all purposes and the Corporation shall not be affected by any notice
to the contrary.
4
2.5 Register of Warrants
At all times while Warrants are outstanding, the Corporation shall
maintain a register of all holders of Warrants on which shall be entered the
names, latest known addresses of all holders and if available, the telecopier
numbers of such holders and particulars of the Warrants held by them and a
register of transfers in which shall be entered the particulars of all transfers
of Warrants, such registers to be kept by and at the office of the Corporation.
2.6 Transfer
Warrants may only be transferred on the register of the Corporation by the
holder thereof or its legal representatives or its attorney duly appointed by an
instrument in writing in form and execution satisfactory to the Corporation in
accordance with applicable laws. The Warrants and the Common Shares issuable
thereunder are and may continue to be subject to resale restrictions and hold
periods, and holders should consult their legal advisors in respect of the same.
Such transfer will be effected upon surrender to the Corporation of this Warrant
Certificate for cancellation and the duly completed and executed Transfer Form
attached hereto as Appendix 1 and upon compliance, to the reasonable
satisfaction of the Corporation, with:
(a) the conditions herein;
(b) such reasonable requirements as the Corporation may require; and
(c) all applicable securities legislation and requirements of regulatory
authorities and all stock exchanges upon which the Common Shares are
listed from time to time, as applicable.
ARTICLE 3
EXERCISE OF THE WARRANT
3.1 No Registration under U.S. Securities Act
The Warrants may not be exercised within the United States, or by or on
behalf of a "U.S. Person" (as defined in Regulation S under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act")), nor will
certificates representing Common Shares issuable upon exercise of the Warrants
be delivered in the United States, except pursuant to an exemption from the
registration requirements of the U.S. Securities Act and exemptions from
applicable state securities laws. Any person who proposes to exercise a Warrant
shall provide to the Corporation, as contemplated in Appendix 2, either (i)
written certification that the Warrant is not being exercised within the United
States or by or on behalf of a U.S. Person, (ii) a written opinion of counsel or
other evidence satisfactory to the Corporation to the effect that the issuance
of Common Shares upon exercise of such Warrant is not required to be registered
under the U.S. Securities Act and applicable state securities laws or (iii)
written confirmation by the person exercising the Warrant that it is the
original purchaser thereof and reaffirming, as of the date of such exercise, the
representations, warranties made by it in the subscription agreement pursuant to
which it purchased the Warrant. Common Shares issuable upon exercise of Warrants
by a person in the United States or by or on behalf of a U.S. Person may, if so
determined by the Corporation in its sole discretion, bear a legend restricting
transfer.
5
3.2 Method of Exercise of The Warrant
The holder may exercise the right hereby conferred on the holder to
acquire Common Shares (subject to the provisions of this Article 3) by:
(a) duly completing and executing the Warrant Exercise Form attached hereto as
Appendix 2; and
(b) certifying that the holder or (if different) the recipient of the Common
Shares to be issued upon exercise of the Warrant either: (i) is not (a) a
"U.S. Person", (b) exercising the Warrant(s) on behalf of a "U.S. Person",
and (c) in the United States at the time that the Warrant(s) are exercised
and did not execute or deliver the Warrant Exercise Form in the United
States; or (ii) at or prior to the time of such exercise, has delivered to
the Corporation a written opinion of counsel or other evidence
satisfactory to the Corporation to the effect that the issuance of Common
Shares upon such exercise is not required to be registered under the U.S.
Securities Act and applicable state securities laws; or (iii) is the
original purchaser of the Warrants and confirms as of the date of such
exercise, the representations, warranties and agreements made by it in the
subscription agreement pursuant to which the Warrant was purchased by it;
and
(c) surrendering this certificate, together with the holder's certified cheque
or a bank draft, money order or wire transfer in the full amount of the
total aggregate Exercise Price of the Common Shares being purchased,
together with the duly completed and executed Warrant Exercise Form, to
the Corporation at its offices,
at any time up until the Time of Expiry. This Warrant Certificate shall be
deemed to be surrendered only upon personal delivery thereof to, or if sent by
mail or other means of transmission, upon actual receipt thereof by, the
Corporation at its offices.
3.3 Effect of Exercise of the Warrant
(a) Upon surrender and payment as aforesaid the Common Shares so subscribed
for shall be issued as fully paid and non-assessable shares, free from all
liens, charges and encumbrances and the holder shall become the holder of
record of such Common Shares on the date of such surrender and payment;
(b) Within ten (10) business days after surrender and payment as aforesaid,
the Corporation shall forthwith cause the issuance of and mail to the
holder a certificate for the Common Shares purchased as aforesaid;
(c) Notwithstanding anything herein contained including any adjustment
provided for in Article 4, the Corporation shall not be required, upon the
exercise of any Warrants, to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares. Any
fractional Common Shares that would otherwise be issuable upon the
exercise of Warrants shall be cancelled by the Corporation without
compensation to the holder thereof; and
6
(d) Notwithstanding anything herein contained, no Common Shares will be issued
pursuant to the exercise of any Warrant if the issuance of such Common
Shares would constitute a violation of the securities laws of any
applicable jurisdiction or the requirements of any applicable stock
exchange, and without limiting the generality of the foregoing, in the
event that any of the Warrants are exercised prior to expiry of any hold
period or other resale restriction placed thereon by such laws or
requirements, the certificates evidencing the Common Shares thereby issued
will bear such legend as is required under applicable securities laws and
that, in the opinion of legal counsel to the Corporation, is necessary in
order to avoid a violation of any such laws or requirements.
3.4 Subscription for Less than Entitlement
The holder may subscribe for and purchase a number of Common Shares less
than the number which it is entitled to purchase pursuant to the surrendered
Warrant Certificate. In the event of any purchase of a number of Common Shares
less than the number which can be purchased pursuant to the Warrant Certificate,
the Corporation shall forthwith issue and deliver to the holder a new Warrant
Certificate containing the same terms and conditions as disclosed herein to
purchase that number of Common Shares with respect to which such partial
exercise did not apply.
3.5 Resale Restrictions
As the Corporation is not a reporting issuer in any jurisdiction of
Canada, unless permitted under Canadian securities legislation, the holder of
this security must not trade the security in Canada and may have to hold the
security for an indefinite period.
3.6 Expiration of the Warrant
After the Time of Expiry, all rights hereunder shall wholly cease and
terminate and the Warrant Certificate and the Warrants shall be void and of no
further force and effect.
ARTICLE 4
ADJUSTMENTS
4.1 Adjustment of Number of Common Shares
The acquisition rights in effect at any date attaching to the Warrants
shall be subject to adjustment from time to time as follows:
(a) If and whenever at any time after the date hereof and prior to the Time of
Expiry, any adjustment in the Exercise Price or in the calculation thereof
pursuant to Section 4.2 shall occur as a result of:
7
(i) an event referred to in subsection 4.2(a);
(ii) the fixing by the Corporation of a record date for an event referred
to in subsection 4.2(b); or
(iii) the fixing by the Corporation of a record date for an event referred
to in subsection 4.2(c) if such event constitutes the issue or
distribution to the holders of all or substantially all of its
outstanding Common Shares of:
(A) Common Shares, or
(B) securities exchangeable for or convertible into Common
Shares at less than the Current Market Price of the
Common Shares on such record date, or
(C) rights, options or warrants to acquire Common Shares at
an exercise, exchange or conversion price per Common
Share less than the Current Market Price of the Common
Shares on such record date,
the number of Common Shares obtainable upon the subsequent
exercise of the Warrant shall be adjusted simultaneously with the
adjustment in the Exercise Price pursuant to Section 4.2 by
multiplying the number of Common Shares theretofore obtainable on
the exercise thereof immediately prior to such adjustment by a
fraction of which the numerator shall be the total number of
Common Shares outstanding immediately after such date and the
denominator shall be the total number of Common Shares
outstanding immediately prior to such date. To the extent that
any adjustment in subscription rights occurs pursuant to this
subsection 4.1(a) as a result of the distribution of securities
convertible into or exchangeable for Common Shares referred to in
subsection 4.2(a) or as a result of the fixing by the Corporation
of a record date for the distribution of rights, options or
warrants referred to in subsection 4.2(b), the number of Common
Shares purchasable upon exercise of a Warrant shall be readjusted
immediately after the expiration of any relevant exchange,
conversion or exercise right to the number of Common Shares which
would be purchasable based upon the number of Common Shares
actually issued and remaining issuable immediately after such
expiration, and shall be further readjusted in such manner upon
expiration of any further such right. To the extent that any such
adjustment in subscription rights occurs pursuant to this
subsection 4.1(a) as a result of the fixing by the Corporation of
a record date for the distribution referred to in subsection
4.2(c) of rights, options or warrants or exchangeable or
convertible securities, the number of Common Shares purchasable
upon exercise of a Warrant shall be readjusted immediately after
the expiration of any relevant exchange, conversion or exercise
right to the number which would be purchasable pursuant to this
subsection 4.1(a) if the fair market value of such rights,
options or warrants or other exchangeable or convertible
securities had been determined for the purposes of the adjustment
pursuant to this subsection 4.1(a) on the basis of the number of
Common Shares issued and remaining issuable immediately after
such expiration, and shall be further readjusted in such manner
upon expiration of any further right.
8
(b) If and whenever at any time after the date hereof and prior to the Time of
Expiry there is a reclassification of the Common Shares or a capital
reorganization of the Corporation other than as described in subsection
4.2(a) or a consolidation, amalgamation or merger of the Corporation
(including, without limitation, by way of plan of arrangement) with or
into any other body corporate, trust, partnership or other entity, or a
sale or conveyance of the property and assets of the Corporation as an
entirety or substantially as an entirety to any other body corporate,
trust, partnership or other entity, any Warrantholder who has not
exercised his right of acquisition prior to the effective date of such
reclassification, reorganization, consolidation, amalgamation, merger,
sale or conveyance, upon the exercise of such right thereafter, shall be
entitled to receive and shall accept, in lieu of the number of Common
Shares then sought to be acquired by it, the kind and number of shares or
other securities or property of the Corporation or of the body corporate,
trust, partnership or other entity resulting from such reclassification,
reorganization, consolidation, amalgamation or merger, or to which such
sale or conveyance may be made, as the case may be, that such holder would
have been entitled to receive as a result of such reclassification,
reorganization, consolidation, amalgamation, merger, sale or conveyance,
if, on the record date or the effective date thereof, as the case may be,
the Warrantholder had been the registered holder of the number of Common
Shares to which the holder was theretofore entitled upon exercise. If
determined appropriate by the board of directors of the Corporation to
give effect to or to evidence the provisions of this subsection 4.1(b),
the Corporation, its successor, or such purchasing body corporate,
partnership, trust or other entity, as the case may be, shall prior to or
contemporaneously with any such reclassification, reorganization,
consolidation, amalgamation, merger, sale or conveyance, enter into an
agreement or new Warrant Certificate which shall provide, to the extent
possible, for the application of the provisions set forth in this Warrant
Certificate with respect to the rights and interests thereafter of the
Warrantholder to the end that the provisions set forth in this Warrant
shall thereafter correspondingly be made applicable, as nearly as may
reasonably be, with respect to any shares, other securities or property to
which a Warrantholder is entitled on the exercise of its acquisition
rights thereafter and upon entering into such new Warrant Certificate or
agreement, the Corporation shall cease to have any obligations (including
the obligation to issue any Common Shares) hereunder and the holder shall
cease to have any rights hereunder. Any Warrant Certificate or agreement
entered into pursuant to the provisions of this subsection 4.1(b) shall be
an agreement entered into pursuant to the provisions of Article 6. Any
Warrant Certificate or agreement entered into between the Corporation, any
successor to the Corporation or such purchasing body corporate,
partnership, trust or other entity shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
provided in this Article 4 and which shall apply to successive
reclassifications, reorganizations, consolidations, amalgamations,
mergers, sales or conveyances.
9
4.2 Adjustment of Exercise Price
The Exercise Price in effect at any date attaching to the Warrants shall
be subject to adjustment from time to time as follows:
(a) If and whenever after the date hereof and at any time prior to the Time of
Expiry, the Corporation shall:
(i) subdivide, divide or change its outstanding Common Shares into a
greater number of Common Shares;
(ii) consolidate, reduce or combine its outstanding Common Shares into a
lesser number of Common Shares;
(iii) make any distribution, other than by way of Dividend Paid in the
Ordinary Course, to the holders of all or substantially all of the
outstanding Common Shares payable in Common Shares;
the Exercise Price in effect on the effective date of such events referred
to in subsections 4.2(a)(i), 4.2(a)(ii), or 4.2(a)(iii) shall be adjusted
to equal the price determined by multiplying the Exercise Price in effect
immediately prior to such effective date by a fraction of which the
numerator shall be the total number of Common Shares outstanding
immediately prior to such date and the denominator shall be the total
number of Common Shares immediately after such date. Such adjustment shall
be made successively whenever any event referred to in this subsection
4.2(a) shall occur.
(b) If and whenever at any time after the date hereof, the Corporation shall
fix a record date which is prior to the Time of Expiry for the issue of
rights, options or warrants to all or substantially all the holders of
outstanding Common Shares under which such holders are entitled during a
period expiring not more than sixty (60) days after the record date for
such issue to subscribe for or purchase Common Shares, or securities
convertible into or exchangeable for Common Shares, at a price per Common
Share or having a conversion or exchange price per Common Share less than
the Current Market Price per Common Share on such record date, the
Exercise Price shall be adjusted immediately after such record date so
that it shall equal the price determined by multiplying the Exercise Price
in effect on such record date by a fraction of which the numerator shall
be the total number of Common Shares outstanding on such record date plus
a number of Common Shares equal to the number arrived at by dividing the
aggregate price of the total number of additional Common Shares offered
for subscription or purchase, or the aggregate conversion or exchange
price of the convertible securities so offered, by such Current Market
Price per Common Share, and of which the denominator shall be the total
number of Common Shares outstanding on such record date plus the total
number of additional Common Shares offered for subscription or purchase
(or into which the convertible securities so offered are convertible or
exchangeable). If by the terms of the rights, options or warrants referred
to in this subsection 4.2(b), there is more than one purchase, conversion
or exchange price per Common Share, the aggregate price of the total
number of additional Common Shares offered for subscription or purchase,
or the aggregate conversion or exchange price of the convertible
securities so offered, shall be calculated for purposes of the adjustment
on the basis of the lowest purchase, conversion or exchange price per
Common Share, as the case may be. Any Common Shares owned by or held for
the account of the Corporation or any subsidiary of the Corporation shall
be deemed not to be outstanding for the purpose of any such computation.
To the extent that any adjustment in Exercise Price occurs pursuant to
this subsection 4.2(b) as a result of the fixing by the Corporation of a
record date for the distribution of rights, options or warrants referred
to in this subsection 4.2(b), the Exercise Price shall be readjusted
immediately after the expiration of any relevant exchange, conversion or
exercise right to the Exercise Price which would then be in effect based
upon the number of Common Shares actually issued and remaining issuable
after such expiration, and shall be further readjusted in such manner upon
expiration of any further such right.
10
(c) If and whenever at any time prior to the Time of Expiry, the Corporation
shall fix a record date which is prior to the Time of Expiry for the issue
or distribution to all or substantially all the holders of its outstanding
Common Shares of:
(i) shares of any class other than Common Shares (excluding Dividends
Paid in the Ordinary Course);
(ii) rights, options or warrants (excluding those referred to in
subsection 4.2(b));
(iii) evidences of its indebtedness; or
(iv) any other property or assets (excluding Dividends Paid in the
Ordinary Course);
then, and in each such case, the Exercise Price shall be adjusted
immediately after such record date so that it shall equal the price
determined by multiplying the Exercise Price in effect on such record date
by a fraction, of which the numerator shall be the total number of Common
Shares outstanding on such record date multiplied by the Current Market
Price on such record date, less the aggregate fair market value (as
determined by the Corporation, which determination shall be conclusive) of
such shares, rights, options, warrants, evidences of indebtedness or
assets so issued or distributed, and of which the denominator shall be the
total number of Common Shares outstanding on such record date multiplied
by such Current Market Price, and any Common Shares owned by or held for
the account of the Corporation or any subsidiary of the Corporation shall
be deemed not to be outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed, and to the extent that such distribution is not so made, the
Exercise Price shall then be readjusted to the Exercise Price which would
then be in effect if such record date had not been fixed or to the
Exercise Price which would then be in effect based upon such shares,
rights, options, warrants, evidences of indebtedness or assets actually
distributed, as the case may be.
11
4.3 General Adjustments
(a) If necessary, appropriate adjustments shall be made in the application of
the provisions set forth in this Article 4 with respect to the rights and
interests thereafter of the holders of Warrants to the end that the
provisions set forth in this Article 4 shall thereafter correspondingly be
made applicable as nearly as may reasonably be possible in relation to any
shares or other securities or property thereafter deliverable upon the
exercise of any Warrant. Any such adjustments shall be made by and set
forth in an amendment to this Warrant Certificate hereto approved by the
directors of the Corporation and shall for all purposes conclusively be
deemed to be an appropriate adjustment.
(b) If any case in which this Article 4 shall require that an adjustment shall
become effective immediately after a record date for an event referred to
herein, the Corporation may defer, until the occurrence of such event,
issuing to the holder of any Warrant exercised after such event the
additional Common Shares issuable upon such conversion by reason of the
adjustment required by such event before giving effect to such adjustment;
provided, however, that the Corporation shall deliver to such holder an
appropriate instrument evidencing such holder's right to receive such
additional Common Shares upon the occurrence of the event requiring such
adjustment and the right to receive any distributions made on such
additional Common Shares declared in favour of holders of record of Common
Shares on and after the relevant date of exercise or such later date as
such holder would, but for the provisions of this subsection 4.3(b), have
become the holder of record of such additional Common Shares as a result
of the exercise of the Warrants.
(c) No adjustment in the Exercise Price or in the number of shares to be
issued pursuant to the exercise of the Warrants shall be required unless
such adjustment would result in a change of at least 1% in the Exercise
Price then in effect or unless the number of shares to be issued would
change by at least 1/100th of a share, provided, however, that any
adjustments which, except for the provisions of this subsection 4.3(c)
would otherwise have been required to be made, shall be carried forward
and taken into account in any subsequent adjustment.
(d) The adjustments provided for in this Article 4 in the Exercise Price and
in the number and classes of shares which are to be received on the
exercise of Warrants are cumulative. After any adjustment pursuant to this
Section, the term "Common Shares" where used in this Warrant shall be
interpreted to mean the shares or other securities or property of the
Corporation which, as a result of all prior adjustments pursuant to this
Section, the Warrantholder is entitled to receive upon the exercise of his
Warrant, and the number of Common Shares indicated in any subscription
made pursuant to a Warrant shall be interpreted to mean the number and
kind of securities or property which, as a result of all prior adjustments
pursuant to this Article 4, a Warrantholder is entitled to receive upon
the full exercise of a Warrant entitling the holder thereof to purchase
the number of Common Shares so indicated.
(e) All securities and property which a Warrantholder is at the time in
question entitled to receive on the full exercise of his Warrant, whether
or not as a result of adjustments made pursuant to this Section, shall,
for the purposes of the interpretation of this Warrant be deemed to be
securities and property which such Warrantholder is entitled to purchase
pursuant to such Warrant.
12
4.4 Notice of Adjustment
Whenever the number of Common Shares purchasable upon the exercise of each
Warrant or the Exercise Price of such Common Shares is adjusted, as herein
provided, the Corporation shall promptly send to the Warrantholder by first
class mail, postage prepaid, notice of such adjustment or adjustments.
ARTICLE 5
COVENANTS BY THE CORPORATION
5.1 Covenants by the Corporation
The Corporation hereby covenants and agrees as follows:
(a) it will at all times maintain its corporate existence and will carry on
its business as currently carried on;
(b) it will reserve and there will remain unissued out of its authorized
capital a sufficient number of Common Shares to satisfy the rights of
acquisition provided for in the Warrant Certificate; and
(c) all Common Shares issued upon exercise of the right to purchase provided
for herein shall, upon payment of the Exercise Price therefor, be issued
as fully paid and non-assessable shares.
ARTICLE 6
MERGER AND SUCCESSORS
6.1 Corporation May Consolidate, etc. on Certain Terms
Nothing herein contained shall prevent any consolidation, reorganization,
amalgamation, arrangement or merger of the Corporation with or into any other
body corporate, trust, partnership or other entity, or a conveyance or transfer
of all or substantially all the properties and assets of the Corporation as an
entirety or substantially as an entirety to any other body corporate, trust,
partnership or other entity lawfully entitled to acquire and operate same,
provided, however, that the other body corporate, trust, partnership or other
entity formed by such reorganization, consolidation, amalgamation, arrangement
or merger or which acquires by conveyance or transfer all or substantially all
the properties and assets of the Corporation shall, simultaneously with such
reorganization, consolidation, amalgamation, arrangement, merger, conveyance or
transfer, assume the due and punctual performance and observance of all the
covenants and conditions hereof to be performed or observed by the Corporation.
13
6.2 Successor Corporation Substituted
In case the Corporation, pursuant to Section 6.1, shall be reorganized,
consolidated, amalgamated, arranged, or merged with or into any other body
corporate, trust, partnership or other entity, or shall convey or transfer all
or substantially all of its properties and assets as an entirety or
substantially as an entirety to any other body corporate, trust, partnership or
other entity, the successor formed by such reorganization, consolidation,
amalgamation, arrangement or merger or into which the Corporation shall have
been reorganized, consolidated, amalgamated, arranged or merged or which shall
have received a conveyance or transfer as aforesaid, shall succeed to and be
substituted for the Corporation hereunder and such changes in phraseology and
form (but not in substance) may be made in the Warrant Certificate and herein as
may be appropriate in view of such reorganization, consolidation, amalgamation,
arrangement, merger, conveyance or transfer.
14
APPENDIX 1
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TRANSFER FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
_____________________________________, __________________ Warrants of Deep Well
Oil & Gas, Inc. registered in the name of the undersigned on the records of Deep
Well Oil & Gas, Inc. represented by the Warrant Certificate attached hereto and
irrevocably appoints Deep Well Oil & Gas, Inc. the attorney of the undersigned
to transfer the said securities on the books or register with full power of
substitution.
DATED the ______ day of ________________, 200__.
Signature Guaranteed Signature of Holder
Instructions:
1. The signature of the Holder must be the signature of the person appearing
on the face of this Certificate.
2. If the Transfer Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person acting
in a judiciary or representative capacity, the certificate must be
accompanied by evidence of authority to sign satisfactory to the
Corporation.
3. The signature on the Transfer Form must be guaranteed by an authorized
officer of a chartered bank, trust Corporation or an investment dealer who
is a member of a recognized stock exchange.
4. Warrants shall only be transferable in accordance with applicable laws.
The Warrants and the Common Shares issuable thereunder are subject to
resale restrictions and hold periods which will prevent the Holder, except
in very limited circumstances from trading such securities. Holders should
consult their legal advisors in this regard.
APPENDIX 2
WARRANT EXERCISE FORM
TO: Deep Well Oil & Gas, Inc.
The undersigned holder of the within Warrant(s) hereby subscribes for
_______________ Common Shares of Deep Well Oil & Gas, Inc. (the "Corporation")
(or such number of Common Shares or other securities or property to which such
exercise entitles the undersigned in lieu thereof or in addition thereto under
the provisions of the Warrant Certificate) pursuant to the within Warrant(s) at
US$0.60 per share (or the adjusted dollar amount per share at which the
undersigned is entitled to purchase such shares under the provisions of the
Warrant(s) subscribed for above) prior to 5:00 p.m. (Edmonton time) on the
Expiry Date on the terms specified in the said Warrant Certificate, which
certificate is surrendered to the Corporation and which will, upon the issuance
of the Common Shares referred to above and the issuance of a new Warrant for any
outstanding rights of the surrendered Warrant, be null and void. The undersigned
also encloses herewith a certified cheque, bank draft or money order or has
transmitted good same day funds by wire or other similar transfer, in lawful
money of the United States, payable to or to the order of Deep Well Oil & Gas,
Inc. in payment of the exercise price.
In order to exercise any Warrants represented by this certificate, the person
exercising Warrant(s) must check one of the following:
[PLEASE CHECK ONE]
|_| The undersigned holder (i) at the time of exercise of these Warrants is
not in the United States; (ii) is not a "U.S. person" as defined in
Regulation S under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act"), and is not exercising these Warrants on
behalf of a "U.S. person"; and (iii) did not execute or deliver this
Warrant Exercise Form in the United States; or
|_| The undersigned certifies that an exemption from registration under the
U.S. Securities Act and any applicable state securities laws is available,
and attached hereto is an opinion of counsel to such effect, it being
understood that any opinion of counsel tendered in connection with the
exercise of these Warrants must be in form and substance satisfactory to
the Corporation; or
|_| The undersigned certifies that the undersigned is the original purchaser
of the Warrant(s) being exercised and confirms as of the date hereof, the
representations, warranties and agreements made by the undersigned in the
subscription agreement pursuant to which such Warrant(s) was acquired by
it.
The undersigned directs that the said Common Shares hereby exercised, be issued
and delivered as follows:
Name in full Address(es) (Include Postal Code) # of Common Shares
- --------------------------- ---------------------------------- ------------------
(Please print full name in which certificates are to be issued. If any of the
securities are to be issued to a person or persons other than the undersigned,
the undersigned holder must pay to the Corporation all requisite taxes or other
governmental charges.)
DATED this day of , 200 .
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Witness Signature of Warrantholder (or its
representative if not an individual).
Print name and address of Warrantholder in full
Name: Address:
------------------------------ ------------------------
Title of person signing on behalf of holder (if subscriber is not an
individual):
______________________________________
- ------------------------------------
Signature Guaranteed
1. If the Warrant Exercise Form indicates that Common Shares are to be issued
to a person or persons other than the registered holder of the
certificate, the signature of such holder of the Warrant Exercise Form
must be guaranteed by an authorized officer of a chartered bank, trust
corporation or an investment dealer who is a member of a recognized stock
exchange.
2. If the Warrant Exercise Form is signed by a trustee, executor,
administrator, curator, guardian, attorney, officer of a corporation or
any person acting in a judiciary or representative capacity, the
certificate must be accompanied by evidence of authority to sign
satisfactory to the Corporation.
3. If the registered Holder exercises its right to receive Common Shares
prior to expiry of any hold period or other resale restriction placed on
the Warrants by the securities laws of any applicable jurisdiction or the
requirements of any applicable stock exchange, the certificates evidencing
the Common Shares thereby issued will bear such legend as is required
under applicable securities laws and that, in the opinion of legal counsel
to the Corporation, be necessary in order to avoid a violation of any such
laws or requirements.