THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED...
Exhibit
4.3
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR
TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
IS
AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.
WARRANT
TO
PURCHASE COMMON STOCK
OF
DEEP
WELL
OIL & GAS, INC.
|
Original
Issue Date: Xxxxx 00, 0000
|
Xxxxxxx
No. __
|
THIS
CERTIFIES that_____________________________________ or any subsequent holder
hereof (the “Holder”),
has
the right to purchase from DEEP WELL OIL & GAS, INC., a Nevada corporation
(the “Company”),
up to
________ fully paid and nonassessable shares of the Company’s common stock, par
value $0.001 per share (the “Common
Stock”),
subject to adjustment as provided herein, at a price per share equal to the
Exercise Price (as defined below), at any time and from time to time beginning
on the date on which this Warrant is originally issued (the “Issue
Date”)
and
ending at 6:00 p.m., eastern time, on the date that is the fifth (5th)
anniversary of the Issue Date (or, if such date is not a Business Day, on the
Business Day immediately following such date) (the “Expiration
Date”).
This
Warrant is issued pursuant to a Securities Purchase Agreement, dated as of
March
10, 2005 (the “Securities
Purchase Agreement”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Securities Purchase Agreement.
1. Exercise.
(a)
Right
to Exercise; Exercise Price.
The
Holder shall have the right to exercise this Warrant at any time and from time
to time during the period beginning on the Issue Date and ending on the
Expiration Date as to all or any part of the shares of Common Stock covered
hereby (the “Warrant
Shares”).
The
“Exercise
Price”
for
each Warrant Share purchased by the Holder upon the exercise of this Warrant
shall be equal to forty cent ($0.40), subject to adjustment for the events
specified in Section
6
below.
(b)
Exercise
Notice.
In
order to exercise this Warrant, the Holder shall send to the Company by
facsimile transmission, at any time prior to 6:00 p.m., eastern time, on the
Business Day on which the Holder wishes to effect such exercise (the
“Exercise
Date”),
(i) a
notice of exercise in substantially the form attached hereto as Exhibit A (the
“Exercise
Notice”),
and
(ii) a copy of the original Warrant, and, in the case of a Cash Exercise (as
defined below), the Holder shall pay the Exercise Price to the Company by wire
transfer of immediately available funds. The
Exercise Notice shall state the name or names in which the shares of Common
Stock that are issuable on such exercise shall be issued. In
the
case of a dispute between the Company and the Holder as to the calculation
of
the Exercise Price or the number of Warrant Shares issuable hereunder
(including, without limitation, the calculation of any adjustment pursuant
to
Section
6
below),
the Company shall issue to the Holder the number of Warrant Shares that are
not
disputed within the time periods specified in Section
2
below
and shall submit the disputed calculations to a certified public accounting
firm
of national reputation (other than the Company’s regularly retained accountants)
within two (2) Business Days following the date on which the Holder’s Exercise
Notice is delivered to the Company. The Company shall cause such accountant
to
calculate the Exercise Price and/or the number of Warrant Shares issuable
hereunder and to notify the Company and the Holder of the results in writing
no
later than three (3) Business Days following the day on which such accountant
received the disputed calculations (the “Dispute
Procedure”).
Such
accountant’s calculation shall be deemed conclusive absent manifest error. The
fees of any such accountant shall be borne by the party whose calculations
were
most at variance with those of such accountant.
(c)
Holder
of Record.
The
Holder shall, for all purposes, be deemed to have become the holder of record
of
the Warrant Shares specified in an Exercise Notice on the Exercise Date
specified therein, irrespective of the date of delivery of such Warrant Shares.
Except as specifically provided herein, nothing in this Warrant shall be
construed as conferring upon the Holder hereof any rights as a stockholder
of
the Company prior to the Exercise Date.
(d)
Cancellation
of Warrant.
This
Warrant shall be canceled upon its exercise in full and, if this Warrant is
exercised in part, the Company shall, at the time that it delivers Warrant
Shares to the Holder pursuant to such exercise as provided herein, issue a
new
warrant, and deliver to the Holder a certificate representing such new warrant,
with terms identical in all respects to this Warrant (except that such new
warrant shall be exercisable into the number of shares of Common Stock with
respect to which this Warrant shall remain unexercised); provided,
however,
that
the Holder shall be entitled to exercise all or any portion of such new warrant
at any time following the time at which this Warrant is exercised, regardless
of
whether the Company has actually issued such new warrant or delivered to the
Holder a certificate therefor.
2. Delivery
of Warrant Shares Upon Exercise.
Upon
receipt of a fax copy of an Exercise Notice pursuant to Section
1
above,
the Company shall, (A) in the case of a Cash Exercise, no later than the close
of business on the later to occur of (i) the third (3rd) Business Day following
the Exercise Date specified in such Exercise Notice and (ii) such later date
on
which the Company shall have received payment of the Exercise Price, (B) in
the
case of a Cashless Exercise (as defined below), no later than the close of
business on the third (3rd) Business Day following the Exercise Date specified
in such Exercise Notice, and (C) with respect to Warrant Shares that are the
subject of a Dispute Procedure, the close of business on the third (3rd)
Business Day following the determination made pursuant to Section
1(b)
(each of
the dates specified in (A), (B) or (C) being referred to as a “Delivery
Date”),
issue
and deliver or caused to be delivered to the Holder the number of Warrant Shares
as shall be determined as provided herein. The Company shall effect delivery
of
Warrant Shares to the Holder, as long as the Company’s designated transfer agent
(the “Transfer
Agent”)
participates in the Depository Trust Company (“DTC”)
Fast
Automated Securities Transfer program (“FAST”)
and no
restrictive legend is required pursuant to the terms of this Warrant or the
Securities Purchase Agreement, by crediting the account of the Holder or its
nominee at DTC (as specified in the applicable Exercise Notice) with the number
of Warrant Shares required to be delivered, no later than the close of business
on such Delivery Date. In the event that the Transfer Agent is not a participant
in FAST or if the Holder so specifies in a Exercise Notice or otherwise in
writing on or before the Exercise Date, the Company shall effect delivery of
Warrant Shares by delivering to the Holder or its nominee physical certificates
representing such Warrant Shares, no later than the close of business on such
Delivery Date. Warrant Shares delivered to the Holder shall not contain any
restrictive legend unless such legend is required pursuant to the terms of
the
Securities Purchase Agreement.
-2-
3. Failure
to Deliver Warrant Shares.
(a) In
the
event that the Company fails for any reason to deliver to the Holder the number
of Warrant Shares specified in the applicable Exercise Notice on or before
the
Delivery Date therefor (an “Exercise
Default”),
the
Company shall pay to the Holder payments (“Exercise
Default Payments”)
in the
amount of (i) (N/365) multiplied
by
(ii)
the
aggregate Exercise Price of the Warrant Shares which are the subject of such
Exercise
Default
multiplied
by
(iii)
the lower of twelve percent (12%) per annum and the maximum rate permitted
by
applicable law (the “Default
Interest Rate”),
where
“N” equals the number of days elapsed between the original Delivery Date of such
Warrant Shares and the date on which all of such Warrant Shares are issued
and
delivered to the Holder. Cash amounts payable hereunder shall be paid on or
before the fifth (5th) Business Day of each calendar month following the
calendar month in which such amount has accrued.
(b) In
the
event of an Exercise Default, the Holder may, upon written notice to the Company
(an “Exercise
Default Notice”),
regain on the date of such notice the rights of the Holder under the exercised
portion of this Warrant that is the subject of such Exercise
Default. In
the
event of such Exercise Default and delivery of an Exercise Default Notice,
the
Holder shall retain all of the Holder’s rights and remedies with respect to the
Company’s failure to deliver such Warrant Shares (including without limitation
the right to receive the cash payments specified in Section
3(a)
above).
(c)
The
Holder’s rights and remedies hereunder are cumulative, and no right or remedy is
exclusive of any other. In addition to the amounts specified herein, the Holder
shall have the right to pursue all other remedies available to it at law or
in
equity (including, without limitation, a decree of specific performance and/or
injunctive relief). Nothing herein shall limit the Holder’s right to pursue
actual damages for the Company’s failure to issue and deliver Warrant Shares on
the applicable Delivery Date (including, without limitation, damages relating
to
any purchase of Common Stock by the Holder to make delivery on a sale effected
in anticipation of receiving Warrant Shares upon exercise, such damages to
be in
an amount equal to (A) the aggregate amount paid by the Holder for the Common
Stock so purchased minus
(B) the
aggregate amount of net proceeds, if any, received by the Holder from the sale
of the Warrant Shares issued by the Company pursuant to such
exercise).
-3-
4. Exercise
Limitations.
In
no
event shall a Holder be permitted to exercise
this Warrant, or part hereof, if, upon such exercise, the number of shares
of
Common Stock beneficially owned by the Holder (other than shares which would
otherwise be deemed beneficially owned except for being subject to a limitation
on conversion or exercise analogous to the limitation contained in this
Section
4),
would
exceed 4.99% of the number of shares of Common Stock then issued and
outstanding. As used herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules thereunder. To the extent that the limitation contained
in this Section
4 applies,
the submission of an Exercise Notice by the Holder shall be deemed to be the
Holder’s representation that this Warrant is exercisable pursuant to the terms
hereof and the Company shall be entitled to rely on such representation without
making any further inquiry as to whether this Section
4
applies.
Nothing contained herein shall be deemed to restrict the right of a Holder
to
exercise this Warrant, or part thereof, at such time as such exercise will
not
violate the provisions of this Section
4.
This
Section
4
may not
be amended unless such amendment is approved by the holders of a majority of
the
Common Stock then outstanding; provided,
however,
that
the
limitations contained in this Section
4
shall
cease to apply (x) upon sixty (60) days’ prior written notice from the Holder to
the Company, or (y) immediately upon written notice from the Holder to the
Company at any time after the public announcement or other disclosure of a
Major
Transaction (as defined below) or a Change of Control. For purposes hereof,
“Change
of Control”
means
the existence or occurrence of any of the following: (a) the sale, conveyance
or
disposition of all or substantially all of the assets of the Company; (b) the
effectuation of a transaction or series of transactions in which more than
fifty
percent (50%) of the voting power of the Company is disposed of; (c) the
consolidation, merger or other business combination of the Company with or
into
any other entity, immediately following which the prior stockholders of the
Company fail to own, directly or indirectly, at least fifty percent (50%) of
the
surviving entity; (d) a transaction or series of transactions in which any
Person or group acquires more than fifty percent (50%) of the voting equity
of
the Company; and (e) the individuals serving on the Board of Directors as of
the
Closing Date do not at any time constitute at least a majority of the Board
of
Directors of the Company.
5.
Payment
of the Exercise Price; Cashless Exercise.
The
Holder may pay the Exercise Price in either of the following forms or, at the
election of Holder, a combination thereof:
(a) through
a
cash exercise (a “Cash
Exercise”)
by
delivering immediately available funds, or
(b) if,
for
any reason, an effective Registration Statement is not available for the resale
of all of the Warrant Shares issuable hereunder at the time an Exercise Notice
is delivered to the Company, through a cashless exercise (a “Cashless
Exercise”),
as
hereinafter provided. The Holder may effect a Cashless Exercise by surrendering
this Warrant to the Company and noting on the Exercise Notice that the Holder
wishes to effect a Cashless Exercise, upon which the Company shall issue to
the
Holder the number of Warrant Shares determined as follows:
-4-
|
X
=
Y x (A-B)/A
|
|
|
where:
|
X
=
the number of Warrant Shares to be issued to the
Holder;
|
|
Y
=
the number of Warrant Shares with respect to which this Warrant is
being
exercised;
|
|
|
A
=
the Market Price as of the Exercise Date; and
|
|
|
B
=
the Exercise Price.
|
For
purposes of Rule 144, it is intended 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 required by Rule
144 shall be deemed to have been commenced, on the Issue Date.
6. Anti-Dilution
Adjustments; Distributions; Other Events.
The
Exercise Price and the number of Warrant Shares issuable hereunder shall be
subject to adjustment from time to time as provided in this Section
6.
In the
event that any adjustment of the Exercise Price required herein results in
a
fraction of a cent, the Exercise Price shall be rounded up or down to the
nearest one hundredth of a cent.
(a) Subdivision
or Combination of Common Stock.
If the
Company, at any time after the Issue Date, subdivides (by any stock split,
stock
dividend, recapitalization, reorganization, reclassification or otherwise)
the
outstanding shares of Common Stock into a greater number of shares, then
effective upon the close of business on the record date for effecting such
subdivision, the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company, at any time after the Issue
Date, combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the outstanding shares of Common Stock into
a
smaller number of shares, then, effective upon the close of business on the
record date for effecting such combination, the Exercise Price in effect
immediately prior to such combination will be proportionally
increased.
(b)
Distributions.
If, at
any time after the Issue Date, the Company declares or makes any distribution
of
cash or any other assets (or rights to acquire such assets) to holders of Common
Stock, as a partial liquidating dividend or otherwise, including without
limitation any dividend or distribution to the Company’s stockholders in shares
(or rights to acquire shares) of capital stock of a subsidiary) (a “Distribution”),
the
Company shall deliver written notice of such Distribution (a “Distribution
Notice”)
to the
Holder at least thirty (30) days prior to the earlier to occur of (i) the record
date for determining stockholders entitled to such Distribution (the
“Record
Date”)
and
(ii) the date on which such Distribution is made (the “Distribution
Date”)
(the
earlier of such dates being referred to as the “Determination
Date”).
Within ten (10) days following receipt of a Distribution Notice, the Holder
shall notify the Company whether the Holder has elected (A) to receive, upon
any
exercise of this Warrant after the Determination Date, the same amount and
type
of assets being distributed in such Distribution as though the Holder were,
on
the Determination Date, a holder of a number of shares of Common Stock into
which this Warrant is exercisable as of such Determination Date (such number
of
shares to be determined at the Exercise Price then in effect and without giving
effect to any limitations on such exercise) or (B) upon any exercise of this
Warrant on or after the Determination Date, to reduce the Exercise Price
applicable to such exercise by reducing the Exercise Price in effect on the
Business Day immediately preceding the Determination Date by an amount equal
to
the fair market value of the assets to be distributed divided by the number
of
shares of Common Stock as to which such Distribution is to be made, such fair
market value to be reasonably determined in good faith by the Company’s Board of
Directors. If the Holder does not notify the Company of its election pursuant
to
the preceding sentence on or before the tenth (10th)
day
following receipt of a Distribution Notice delivered in accordance with this
paragraph (b), the Holder shall be deemed to have elected clause (A) of the
preceding sentence; and if the Company does not deliver a Distribution Notice
within the time frames specified above, the Holder shall have the right to
choose either clause (A) or clause (B) of the preceding sentence at any time
following the date on which Holder’s receives notice or otherwise becomes aware
of the Distribution.
-5-
(c) Dilutive
Issuances.
If, at
any time after the Issue Date, the Company issues or sells, or in accordance
with paragraph (d) below, is deemed to have issued or sold, any shares of Common
Stock for a price per share less than the Exercise Price on the date of such
issuance or sale (a “Dilutive
Issuance”),
then
the Exercise Price shall be adjusted to equal such lower price. No adjustment
shall be made pursuant hereto if such adjustment would result in an increase
in
the Exercise Price.
(d) Effect
On Exercise Price Of Certain Events.
For
purposes of determining the adjusted Exercise Price under paragraph (c) above,
the following will be applicable:
(A) Issuance
Of Purchase Rights.
If the
Company issues or sells any Purchase Rights, whether or not immediately
exercisable, and the price per share for which Common Stock is issuable upon
the
exercise of such Purchase Rights (and the price of any conversion of Convertible
Securities, if applicable) is less than the Exercise Price in effect on the
date
of issuance or sale of such Purchase Rights, then the maximum total number
of
shares of Common Stock issuable upon the exercise of all such Purchase Rights
(assuming full conversion, exercise or exchange of Convertible Securities,
if
applicable) shall, as of the date of the issuance or sale of such Purchase
Rights, be deemed to be outstanding and to have been issued and sold by the
Company for such price per share. For purposes of the preceding sentence, the
“price per share for which Common Stock is issuable upon the exercise of such
Purchase Rights” shall be determined by dividing (x) the total amount, if any,
received or receivable by the Company as consideration for the issuance or
sale
of all such Purchase Rights, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Purchase Rights, plus,
in the
case of Convertible Securities issuable upon the exercise of such Purchase
Rights, the minimum aggregate amount of additional consideration payable upon
the conversion, exercise or exchange thereof (determined in accordance with
the
calculation method set forth in subparagraph (B) below) at the time such
Convertible Securities first become convertible, exercisable or exchangeable,
by
(y) the maximum total number of shares of Common Stock issuable upon the
exercise of all such Purchase Rights (assuming full conversion, exercise or
exchange of Convertible Securities, if applicable). No further adjustment to
the
Exercise Price shall be made upon the actual issuance of such Common Stock
upon
the exercise of such Purchase Rights or upon the conversion, exercise or
exchange of Convertible Securities issuable upon exercise of such Purchase
Rights.
-6-
(B) Issuance
Of Convertible Securities.
If the
Company issues or sells any Convertible Securities, whether or not immediately
convertible, exercisable or exchangeable, and the price per share for which
Common Stock is issuable upon such conversion, exercise or exchange is less
than
the Exercise Price in effect on the date of issuance or sale of such Convertible
Securities, then the maximum total number of shares of Common Stock issuable
upon the conversion, exercise or exchange of all such Convertible Securities
shall, as of the date of the issuance or sale of such Convertible Securities,
be
deemed to be outstanding and to have been issued and sold by the Company for
such price per share. If the Convertible Securities so issued or sold do not
have a fluctuating conversion or exercise price or exchange ratio, then for
the
purposes of the immediately preceding sentence, the “price per share for which
Common Stock is issuable upon such conversion, exercise or exchange” shall be
determined by dividing (x) the total amount, if any, received or receivable
by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration,
if
any, payable to the Company upon the conversion, exercise or exchange thereof
(determined in accordance with the calculation method set forth in this
subparagraph (B)), by (y) the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such Convertible
Securities. If the Convertible Securities so issued or sold have a fluctuating
conversion or exercise price or exchange ratio (a “Variable
Rate Convertible Security”),
then
for purposes of the first sentence of this subparagraph (B), the “price per
share for which Common Stock is issuable upon such conversion, exercise or
exchange” shall be deemed to be the lowest price per share which would be
applicable (assuming all holding period and other conditions to any discounts
contained in such Variable Rate Convertible Security have been satisfied) if
the
conversion price of such Variable Rate Convertible Security on the date of
issuance or sale thereof were seventy-five percent (75%) of the actual
conversion price on such date (the “Assumed
Variable Market Price”),
and,
further, if the conversion price of such Variable Rate Convertible Security
at
any time or times thereafter is less than or equal to the Assumed Variable
Market Price last used for making any adjustment under this paragraph (c) with
respect to any Variable Rate Convertible Security, the Exercise Price in effect
at such time shall be readjusted to equal the Exercise Price which would have
resulted if the Assumed Variable Market Price at the time of issuance of the
Variable Rate Convertible Security had been seventy-five percent (75%) of the
actual conversion price of such Variable Rate Convertible Security existing
at
the time of the adjustment required by this sentence; provided,
however,
that if
the conversion or exercise price or exchange ratio of a Convertible Security
may
fluctuate solely as a result of provisions designed to protect against dilution,
such Convertible Security shall not be deemed to be a Variable Rate Convertible
Security. No further adjustment to the Exercise Price shall be made upon the
actual issuance of such Common Stock upon conversion, exercise or exchange
of
such Convertible Securities.
-7-
(C) Change
In Option Price Or Conversion Rate.
If,
following an adjustment to the Exercise Price upon the issuance of Purchase
Rights or Convertible Securities pursuant to a Dilutive Issuance, there is
a
change at any time in (x) the amount of additional consideration payable to
the
Company upon the exercise of any Purchase Rights; (y) the amount of additional
consideration, if any, payable to the Company upon the conversion, exercise
or
exchange of any Convertible Securities; or (z) the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for Common Stock
(in each such case, other than under or by reason of provisions designed to
protect against dilution), then in any such case, the Exercise Price in effect
at the time of such change shall be readjusted to the Exercise Price which
would
have been in effect at such time had such Purchase Rights or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion, exercise or exchange rate, as the case may be, at the
time initially issued or sold.
(D) Calculation
Of Consideration Received.
If any
Common Stock, Purchase Rights or Convertible Securities are issued or sold
for
cash, the consideration received therefor will be the amount received by the
Company therefore. In case any Common Stock, Purchase Rights or Convertible
Securities are issued or sold for a consideration part or all of which shall
be
other than cash, including in the case of a strategic or similar arrangement
in
which the other entity will provide services to the Company, purchase services
from the Company or otherwise provide intangible consideration to the Company,
the amount of the consideration other than cash received by the Company
(including the net present value of the consideration expected by the Company
for the provided or purchased services) shall be the fair market value of such
consideration, except where such consideration consists of publicly traded
securities, in which case the amount of consideration received by the Company
will be the Market Price thereof on the date of receipt. In case any Common
Stock, Purchase Rights or Convertible Securities are issued in connection with
any merger or consolidation in which the Company is the surviving corporation,
the amount of consideration therefor will be deemed to be the fair market value
of such portion of the net assets and business of the non-surviving corporation
as is attributable to such Common Stock, Purchase Rights or Convertible
Securities, as the case may be. The independent members of the Company’s Board
of Directors shall calculate reasonably and in good faith, using standard
commercial valuation methods appropriate for valuing such assets, the fair
market value of any consideration other than cash or securities.
(E) Issuances
Without Consideration Pursuant to Existing Securities.
If the
Company issues (or becomes obligated to issue) shares of Common Stock pursuant
to any anti-dilution or similar adjustments (other than as a result of stock
splits, stock dividends and the like) contained in any Convertible Securities
or
Purchase Rights outstanding as of the date hereof, then all shares of Common
Stock so issued shall be deemed to have been issued for no consideration.
-8-
(e) Exceptions
To Adjustment Of Exercise Price. Notwithstanding the foregoing, no adjustment
to
the Exercise Price shall be made pursuant to paragraph (c) above upon the
issuance of any Excluded Securities. For purposes hereof, “Excluded Securities”
means (I) securities purchased under the Securities Purchase Agreement; (II)
securities issued upon exercise of the Warrants; (III) shares of Common Stock
issuable or issued to (x) employees, consultants or directors from time to
time
upon the exercise of options, in such case granted or to be granted in the
discretion of the Board of Directors pursuant to one or more stock option plans
or restricted stock plans in effect as of the Issue Date or adopted after the
Issue Date by the independent members of the Board of Directors with
substantially the same terms as such plans in effect as of the Issue Date,
or
(y) vendors pursuant to warrants to purchase Common Stock that are outstanding
on the date hereof or issued hereafter, provided such issuances are approved
by
the Board of Directors; (IV) shares of Common Stock issued in connection with
a
commercial lending transaction with a federally-insured financial institution
that is approved by the independent members of the Board of Directors,
provided
that the
fair market value of such shares does not exceed ten percent (10%) of the amount
borrowed; (V) shares of Common Stock issued in connection with any stock split,
stock dividend or recapitalization of the Company; (VI) shares of Common Stock
issued in connection with the acquisition by the Company of any corporation
or
other entity
occurring after the Effective Date, provided
that a
fairness opinion with respect to such acquisition is rendered by an investment
bank of national recognition; (VII) shares of Common Stock issued in connection
with any Convertible Securities or Purchase Rights outstanding on the date
hereof and disclosed in a schedule to the Securities Purchase Agreement; and
(VIII) shares issued to Persons with whom the Company is entering into a joint
venture, strategic alliance or other commercial relationship in connection
with
the operation of the Company’s business
and not
in connection with a transaction the purpose of which is to raise equity
capital.
(f) Notice
Of Adjustments.
Upon
the occurrence of one or more adjustments or readjustments of the Exercise
Price
pursuant to paragraph (c) above or any change in the number or type of stock,
securities and/or other property issuable upon exercise of this Warrant, the
Company, at its expense, shall promptly compute such adjustment or readjustment
or change and prepare and furnish to the Holder a notice (an “Adjustment
Notice”)
setting forth such adjustment or readjustment or change and showing in detail
the facts upon which such adjustment or readjustment or change is based, and,
on
or before the time that it delivers an Adjustment Notice, publicly disclose
the
contents thereof. The failure of the Company to deliver an Adjustment Notice
shall not affect the validity of any such adjustment.
(g)
Major
Transactions.
In the
event of a merger, consolidation, business combination, tender offer, exchange
of shares, recapitalization, reorganization, redemption or other similar event,
as a result of which shares of Common Stock shall be changed into the same
or a
different number of shares of the same or another class or classes of stock
or
securities or other assets of the Company or another entity or the Company
shall
sell all or substantially all of its assets (each of the foregoing being a
“Major
Transaction”),
the
Company will give the Holder at least twenty (20) Trading Days written notice
prior to the earlier of (x) the closing or effectiveness of such Major
Transaction and (y) the record date for the receipt of such shares of stock
or
securities or other assets. In the event of a Major Transaction, the Holder
shall be permitted to either (i) require the Company to repurchase this Warrant
for an amount to the value of this Warrant calculated pursuant to the
Black-Scholes pricing model or (ii) exercise this Warrant in whole or in part
at
any time prior to the record date for the receipt of such consideration and
shall be entitled to receive, for each share of Common Stock issuable to Holder
upon such exercise, the same per share consideration payable to the other
holders of Common Stock in connection with such Major Transaction. If and to
the
extent that the Holder retains any portion of this Warrant following such record
date, the Company will cause the surviving or, in the event of a sale of assets,
purchasing entity, as a condition precedent to such Major Transaction, to assume
the obligations of the Company under this Warrant, with such adjustments to
the
Exercise Price and the securities covered hereby as may be necessary in order
to
preserve the economic benefits of this Warrant to the Holder.
-9-
(h)
Adjustments;
Additional Shares, Securities or Assets.
In the
event that at any time, as a result of an adjustment made pursuant to this
Section
6,
the
Holder of this Warrant shall, upon exercise of this Warrant, become entitled
to
receive securities or assets (other than Common Stock) then, wherever
appropriate, all references herein to shares of Common Stock shall be deemed
to
refer to and include such shares and/or other securities or assets; and
thereafter the number of such shares and/or other securities or assets shall
be
subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section
6.
Any
adjustment made herein that results in a decrease in the Exercise Price shall
also effect a proportional increase in the number of shares of Common Stock
into
which this Warrant is exercisable.
7. Fractional
Interests.
No
fractional shares or scrip representing fractional shares shall be issuable
upon
the exercise of this Warrant, but on exercise of this Warrant, the Holder hereof
may purchase only a whole number of shares of Common Stock. If, on exercise
of
this Warrant, the Holder hereof would be entitled to a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, the
Company shall, in lieu of issuing any such fractional share, pay to the Holder
an amount in cash equal to the product resulting from multiplying such fraction
by the Market Price as of the Exercise Date.
8. Transfer
of this Warrant.
The
Holder may sell, transfer, assign, pledge or otherwise dispose of this Warrant,
in whole or in part, as long as such sale or other disposition is made pursuant
to an effective registration statement or an exemption from the registration
requirements of the Securities Act. Upon such transfer or other disposition
(other than a pledge), the Holder shall deliver this Warrant to the Company
together with a written notice to the Company, substantially in the form of
the
Transfer Notice attached hereto as Exhibit B (the “Transfer
Notice”),
indicating the person or persons to whom this Warrant shall be transferred
and,
if less than all of this Warrant is transferred, the number of Warrant Shares
to
be covered by the part of this Warrant to be transferred to each such person.
Within three (3) Business Days of receiving a Transfer Notice and the original
of this Warrant, the Company shall deliver to the each transferee designated
by
the Holder a Warrant or Warrants of like tenor and terms for the appropriate
number of Warrant Shares and, if less than all this Warrant is transferred,
shall deliver to the Holder a Warrant for the remaining number of Warrant
Shares.
9. Benefits
of this Warrant.
This
Warrant shall be for the sole and exclusive benefit of the Holder of this
Warrant and nothing in this Warrant shall be construed to confer upon any person
other than the Holder of this Warrant any legal or equitable right, remedy
or
claim hereunder.
-10-
10. Loss,
theft, destruction or mutilation of Warrant.
Upon
receipt by the Company of evidence of the loss, theft, destruction or mutilation
of this Warrant, and (in the case of loss, theft or destruction) of indemnity
reasonably satisfactory to the Company, and upon surrender of this Warrant,
if
mutilated, the Company shall execute and deliver a new Warrant of like tenor
and
date.
11. Notice
or Demands.
Any
notice, demand or request required or permitted to be given by the Company
or
the Holder pursuant to the terms of this Warrant shall be in writing and shall
be deemed delivered (i) when delivered personally or by verifiable facsimile
transmission, unless such delivery is made on a day that is not a Business
Day,
in which case such delivery will be deemed to be made on the next succeeding
Business Day, (ii) on the next Business Day after timely delivery to an
overnight courier and (iii) on the Business Day actually received if deposited
in the U.S. mail (certified or registered mail, return receipt requested,
postage prepaid), addressed as follows:
If
to
the Company:
Deep
Well
Oil & Gas,
Inc.
Suite
510
Royal Bank Building
00000
Xxxxxx Xxxxxx XX
Xxxxxxxx,
XX X0X 0X0
Attn:
Chief
Financial Officer
Tel: (000)
000-0000
Fax:
(000)
000-0000
with
a copy (which
shall not constitute notice) to:
Xxxxxx
& Xxxxxxx LLP
Xxxxx
0000, 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx
X.X. X0X 0X0
Attn: Xx.
Xxx
X. Xxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
and
if to
the Holder, to such address as the Holder shall have furnished to the Company
in
writing.
12. Applicable
Law.
This
Warrant is issued under and shall for all purposes be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within the State of New York.
-11-
13. Amendments.
No
amendment, modification or other change to, or waiver of any provision of,
this
Warrant may be made unless such amendment, modification or change is (A) set
forth in writing and is signed by the Company and the Holder and (B) agreed
to
in writing by the holders of at least two-thirds (2/3) of the number of shares
into which the Warrants are exercisable (without regard to any limitation
contained herein on such exercise), it being understood that upon the
satisfaction of the conditions described in (A) and (B) above, each Warrant
(including any Warrant held by the Holder who did not execute the agreement
specified in (B) above) shall be deemed to incorporate any amendment,
modification, change or waiver effected thereby as of the effective date
thereof.
14. Entire
Agreement.
This
Warrant and the other Transaction Documents constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Warrant and the other
Transaction Documents supersede all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof and
thereof.
15. Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
[Signature
Page to Follow]
-12-
IN
WITNESS WHEREOF, the Company has duly executed and delivered this Warrant #25
as
of the Original Issue Date.
| DEEP WELL OIL & GAS, INC. | |
|
By:
|
|
|
Name:
Xx. Xxxxx X. Xxxxxx
|
|
|
Title:
President and Chief Executive Officer
|
|
EXHIBIT
A to WARRANT
EXERCISE
NOTICE
The
undersigned Holder hereby irrevocably exercises the right to purchase
of the
shares of Common Stock (“Warrant
Shares”)
of
DEEP WELL OIL & GAS, INC. evidenced
by the attached Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.
1.
Form
of
Exercise Price. The Holder intends that payment of the Exercise Price shall
be
made as:
______
a
Cash
Exercise
with
respect to _________________ Warrant Shares; and/or
______
a
Cashless
Exercise
with
respect to _________________ Warrant Shares, as permitted by Section
5(b)
of the
attached Warrant.
2.
Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise
with
respect to some or all of the Warrant Shares to be issued pursuant hereto,
the
Holder shall pay the sum of $________________ to the Company in accordance
with
the terms of the Warrant.
| Date: | |
|
Name
of Registered Holder
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
-14-
EXHIBIT
B to WARRANT
TRANSFER
NOTICE
FOR
VALUE
RECEIVED, the undersigned Holder of the attached Warrant hereby sells, assigns
and transfers unto the person or persons named below the right to purchase
shares
of
the Common Stock of DEEP WELL OIL & GAS, INC. evidenced by the attached
Warrant.
| Date: | |
|
Name
of Registered Holder
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
| Transferee Name and Address: | |
|
|
|
|
|
|
-15-
