EXHIBIT A
FORM OF WARRANT
THE WARRANTS AND UNDERLYING SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT"), AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144
UNDER THE ACT. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY. UNLESS PERMITTED UNDER CANADIAN
SECURITIES LEGISLATION, CANADIAN HOLDERS OF THE WARRANTS AND THE UNDERLYING
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE MUST NOT TRADE THE
SECURITIES BEFORE THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE LATER OF (A)
THE ISSUE DATE OF THIS WARRANT AND (B) THE DATE THE COMPANY BECAME A REPORTING
ISSUER IN ANY PROVINCE OR TERRITORY OF CANADA.
Warrant Certificate No. 2005- __
WARRANT TO PURCHASE ________ SHARES
VOID AFTER 5:00 P.M., MOUNTAIN TIME, ON DECEMBER _____, 2007
CANWEST PETROLEUM CORPORATION
WARRANT AGREEMENT AND CERTIFICATE
This certifies that, for value received, __________________________,
the registered holder hereof (the "Warrantholder" or "Holder") is entitled to
purchase from CanWest Petroleum Corporation, a Colorado corporation (the
"Company") with its principal office located at, 206-475 Howe Street,
Vancouver, B.C. Canada V6C-2B3, at any time before 5:00 P.M., Mountain Time,
on the date set forth above, which date is the date two years following the
initial issuance date of this Warrant (the "Termination Date") at the
purchase price of $2.00 USD per share (the "Exercise Price"), the number of
Shares of the Company's Common Stock (the "Shares") set forth above. The
number of Shares purchasable upon exercise of this Warrant and the Exercise
Price per Share shall be subject to adjustment from time to time as set forth
in Section 3 below. This Warrant is one in a series of Warrants being issued
in the same offering, and is issued pursuant to that certain Subscription
Agreement dated December ____, 2005 between the Company and the Warrantholder.
Section 1. Transfer or Exchange of Warrant.
(a) The Company shall be entitled to treat the registered owner of any
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 Warrant on the
part of any other person, and shall not be liable for any registration of
transfer of 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 of transfer, or with such knowledge of such facts that its
participation therein amounts to gross negligence or bad faith.
(b) This Warrant may not be sold, transferred, assigned or hypothecated
except pursuant to all applicable federal and state securities laws.
(c) A Warrant shall be transferable only on the books of the Company upon
delivery of this Warrant Certificate duly endorsed by the Warrantholder or by
his duly authorized attorney or representative, or accompanied by proper
evidence of succession, assignment or authority to transfer. Upon any
registration of transfer, the Company shall deliver a new Warrant Certificate to
the persons entitled thereto.
Section 2. Term of Warrants; Exercise of Warrants.
(a) Subject to the terms of this Agreement and Certificate, the
Warrantholder shall have the right, which may be exercised commencing upon
issuance and ending at 5:00 p.m. Mountain Time on the Termination Date, to
purchase from the Company the number of Shares which the Warrantholder may at
that time be entitled to purchase on exercise of this Warrant.
(b) A Warrant shall be exercised by surrender to the Company, at its
principal office, of this Certificate evidencing the Warrant to be exercised,
together with the form of election to purchase attached hereto as Exhibit A duly
filled in and signed, and payment to the Company of the Exercise Price for the
number of Shares in respect of which such Warrant is then exercised. Payment of
the aggregate Exercise Price shall be made in cash or certified funds.
Section 3. Cashless Exercise.
(a) If a Registration Statement (as defined in the Subscription Agreement)
("Registration Statement") is effective and the Holder may sell its shares of
Common Stock upon exercise hereof pursuant to the Registration Statement and, if
the Holder is a resident of Canada, the Company has been a reporting issuer for
at least four months preceding the exercise hereof, this Warrant may be
exercisable in whole or in part for cash only as set forth in Section 2 above.
If no such Registration Statement is available during the time that such
Registration Statement is required to be effective pursuant to the terms of the
Subscription Agreement (and, if the Holder is a resident of Canada, the Company
has not been a reporting issuer for at least four months preceding the exercise
hereof), then payment upon exercise may be made at the option of the Holder
either in (i) cash, wire transfer or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Purchase Price,
(ii) by delivery of Common Stock issuable upon exercise of the Warrants in
accordance with Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per the terms of this
Warrant) and the holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.
(b) If the Fair Market Value of one share of Common Stock is greater than
the Purchase Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
cancelled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Subscription Form in which event the Company
shall issue to the holder a number of shares of Common Stock computed using the
following formula:
X=Y (A-B)
-------
A
Where X= the number of shares of Common Stock to be issued to the holder
Y= the number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being
exercised (at the date of such calculation)
A= the Fair Market Value of one share of the Company's
Common Stock (at the date of such calculation)
B= Purchase Price (as adjusted to the date of such
calculation)
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(c) The Holder may employ the cashless exercise feature described in
Section b) above only while no Registration Statement is available.
For purposes of Rule 144 promulgated under the 1933 Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Subscription
Agreement.
Section 4. Subject to Section 3 hereof, upon surrender of a Warrant Certificate
and payment of the Exercise Price as aforesaid, the Company shall issue and
cause to be delivered with all reasonable dispatch, to or upon the written order
of the Warrantholder exercising such Warrant and in such name or names as such
Warrantholder may designate, certificates for the number of Shares so purchased
upon the exercise of such Warrant. 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 Shares as of the date
of receipt by the Company of such Warrant Certificate and payment of the
Exercise Price. The rights of purchase represented by the Warrants shall be
exercisable, at the election of the Warrantholders thereof, either in full or
from time to time in part and, in the event that a Warrant Certificate is
exercised to purchase less than all of the Shares purchasable on such exercise
at any time prior to the Termination Date, a new Warrant Certificate evidencing
the remaining Warrant or Warrants will be issued.
Section 5. The Warrantholder will pay all documentary stamp taxes, if any,
attributable to the initial issuance of the Shares upon the exercise of
Warrants.
Section 6. Adjustment of Exercise Price and Shares.
(a) If there is any change in the number of shares of outstanding Common
Stock through the declaration of stock dividends, or through a recapitalization
resulting in stock splits or combinations or exchanges of such shares, the
number of shares of Common Stock underlying the Warrants, and the exercise price
per share of the outstanding Warrants, shall be proportionately adjusted by the
Board to reflect any increase or decrease in the number of issued shares of
Common Stock; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.
(b) In the event of the proposed dissolution or liquidation of the
Company, or any corporate separation or division, including, but not limited to,
split-up, split-off or spin-off, or a merger or consolidation of the Company
with another corporation, the Board may provide that each Warrantholder shall
have the right to exercise such Warrant (at its then current Exercise Price)
solely for the kind and amount of shares of stock and other securities,
property, cash or any combination thereof receivable upon such dissolution,
liquidation, corporate separation or division, or merger or consolidation by a
holder of the number of shares of Common Stock for which such Warrant might have
been exercised immediately prior to such dissolution, liquidation, corporate
separation or division, or merger or consolidation; or, in the alternative the
Board may provide that the Warrants shall terminate as of a date fixed by the
Board; provided, however, that not less than 30 days' written notice of the date
so fixed shall be given to each Warrantholder, who shall have the right, during
the period of 30 days preceding such termination, to exercise the Warrant as to
all or any part of the shares of Common Stock covered thereby.
(c) The preceding paragraph shall not apply to a merger or consolidation
in which the Company is the surviving corporation and shares of Common Stock are
not converted into or exchanged for stock, securities of any other corporation,
cash or any other thing of value. Notwithstanding the preceding sentence, in
case of any consolidation or merger of another corporation into the Company in
which the Company is the surviving corporation and in which there is a
reclassification or change (including a change to the right to receive cash or
other property) of the shares of Common Stock (excluding a change in par value,
or from no par value to par value, or any change as a result of a subdivision or
combination, but including any change in such shares into two or more classes or
series of shares), the Board may provide that the holder of this Warrant shall
have the right to exercise such Warrant solely for the kind and amount of shares
of stock and other securities (including those of any new direct or indirect
Parent of the Company), property, cash or any combination thereof receivable
upon such reclassification, change, consolidation or merger by the holder of the
number of shares of Common Stock for which such Warrant might have been
exercised.
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(d) In the event of a change in the Common Stock of the Company as
presently constituted into the same number of shares with a par value, the
shares resulting from any such change shall be deemed to be the Common Stock of
the Company within the meaning of this agreement.
(e) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
(f) Except as expressly provided herein, the Warrantholder shall have no
rights by reason of any subdivision or consolidation of shares of stock of any
class, or the payment of any stock dividend or any other increase or decrease in
the number of shares of stock of any class, or by reason of any dissolution,
liquidation, merger, or consolidation or spin-off of assets or stock of another
corporation; and any issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Common Stock subject to this Warrant. The grant of this
Warrant shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structures, or to merge or consolidate, or to dissolve, liquidate, or
sell or transfer all or any part of its business or assets.
Section 7. Mutilated or Missing Warrant Certificates. In case any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company shall, at
the request of the holder of such Certificate, issue and deliver, in exchange
and substitution for and upon cancellation of the mutilated Certificate, or in
lieu of and substitution for the Certificate, lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent right or
interest; but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of such Warrant Certificate and indemnity, if
requested, also satisfactory to the Company. An applicant for such a substitute
Warrant Certificate shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company may prescribe.
Section 8. Reservation of Shares of Common Stock. There has been reserved, and
the Company shall at all times keep reserved so long as any of the Warrants
remain outstanding, out of its authorized Common Stock a number of shares of
Common Stock sufficient to provide for the exercise of the rights of purchase
represented by the outstanding Warrants and the underlying securities.
Section 9. No Fractional Shares. The Company shall not be required to issue
fractional shares or scrip representing fractional shares upon the exercise of
the Warrants. As to any final fraction of a Share which the Warrantholder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to the same
fraction of the market price of a share of Common Stock on the business day
preceding the day of exercise.
Section 10. Transfer and Exercise to Comply With the Securities Act of 1933. The
Warrants may not be transferred or exercised except in a transaction exempt from
registration under the Act. The Warrants held by Canadian residents may not be
transferred except in accordance with the provisions of National Instrument
45-102 promulgated by the Canadian Securities Administrators or any applicable
successor instrument in force at the time of such transfer.
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Section 11. Notices. Any notice pursuant to this Agreement by the Company or by
the Warrantholders shall be in writing and shall be deemed to have been duly
given if delivered or mailed certified mail, return receipt requested to the
Company or the Warrantholder at the addresses set forth above. 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 accordance herewith to the other
party.
Section 12. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrantholders shall bind and inure to the
benefit of their respective successors and assigns.
Section 13. Applicable Law. This Warrant Agreement and Certificate and any
replacement Certificate issued hereunder shall be governed by the laws of the
State of Colorado.
ISSUE DATE: ___________, 2005 CANWEST PETROLEUM CORPORATION
By:
-------------------------------
Thornton Donaldson, President
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Exhibit A
PURCHASE FORM
Dated _______________, ____
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant Certificate to the extent of purchasing __________
Shares of CANWEST PETROLEUM CORPORATION and hereby makes payment of $2.00 USD
per Share in payment of the exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name:
________________________________________________________________________________
(please type or print in block letters)
Address:
________________________________________________________________________________
Signature______________________________________________________
Dated: ___________________,______
- --------------------------------------------------------------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________, hereby sells, assigns
and transfers unto
Name:
________________________________________________________________________________
(Please type or print in block letters)
Address:
________________________________________________________________________________
the right to purchase Shares of CANWEST PETROLEUM CORPORATION represented by
this Warrant Certificate to the extent of _________ Shares as to which such
right is exercisable and does hereby irrevocably constitute and appoint CANWEST
PETROLEUM CORPORATION to transfer the same on the books of the Company with full
power of substitution in the premises.
__________________________________
Signature
Dated: ___________________,______
Notice: The signature of this assignment must correspond with the name as it
appears upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatever.
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