FORM OF WARRANT
AGREEMENT
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 OR THE LAWS OF ANY STATE. SUCH SECURITIES
AND ANY SECURITIES ISSUED HEREUNDER MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE, WITH SUCH EXEMPTION TO BE ESTABLISHED BY THE HOLDER
TO THE SATISFACTION OF THE COMPANY.
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W-1
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[
], 2006
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[
] Warrants
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RANCHER ENERGY CORP.
WARRANT CERTIFICATE
This warrant
certificate (“Warrant Certificate”) certifies that for
value received [ ] (the
“Holder”) is the owner of the number of warrants
(“Warrants”) specified above, each of which entitles
the Holder thereof to purchase, at any time on or before the
Expiration Date (hereinafter defined), one fully paid and
non-assessable share of Common Stock, $0.00001 par value
(“Stock”), of Rancher Energy Corp., a Nevada
corporation (the “Company”).
1.
Warrant; Purchase
Price
Each Warrant
shall entitle the Holder to purchase one share of Stock of the
Company and the purchase price payable upon exercise of the
Warrants shall initially be U.S. $0.75 per share of Stock between
the date hereof and [ ], 2007 and U.S.
$1.00 per share of Stock between [ ], 2007 and
[ ], 2008, subject to adjustment as
hereinafter provided (the “Purchase Price”) and subject
to the right of the Company to redeem such Warrants for no
consideration upon 30 days notice. The Purchase Price and number of
shares of Stock issuable upon exercise of each Warrant are subject
to adjustment as provided in Article 6.
2.
Exercise; Expiration
Date
2.1
The Warrants are exercisable, at
the option of the Holder, at any time after issuance and at or
before 5:00 p.m. Denver time on the Expiration Date, upon surrender
of this Warrant Certificate to the Company together with a duly
completed Notice of Exercise, in the form attached hereto as
Exhibit A, and payment of an amount equal to the Purchase Price
times the number of Warrants to be exercised. In the case of
exercise of less than all the Warrants represented by this Warrant
Certificate, the Company shall cancel the Warrant Certificate upon
the surrender thereof and shall execute and deliver a new Warrant
Certificate for the balance of such Warrants.
2.2
The term “Expiration
Date” shall mean 5:00 p.m. Denver time on
[ ], 2008, or if such date shall in the
State of Colorado be a holiday or a day on which banks are
authorized to close, then 5:00 p.m. Denver time the next following
date which in the State of Colorado is not a holiday in a day on
which banks are authorized to close.
FORM OF WARRANT
AGREEMENT
3.
Registration and Transfer on
Company Books
3.1
The Company shall maintain books
for the registration and transfer of the Warrants and the
registration and transfer of the shares of Stock issued upon
exercise of the Warrants. The Company may appoint an agent for the
purpose of maintaining the register referred to in this Section
3.1, issuing the Stock then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or
an of the foregoing.
3.2
Prior to due presentment for
registration of transfer of this Warrant Certificate, or the shares
of Stock issued upon exercise of the Warrants, the Company may deem
and treat the registered Holder as the absolute owner
thereof.
3.3
Neither this Warrant Certificate,
nor the Warrants represented hereby, may be sold, assigned, pledged
or otherwise transferred voluntarily by the Holder without the
consent of the Company.
4.
Reservation of
Shares
The Company
covenants that it will at all times reserve and keep available out
of its authorized Stock, solely for the purpose of issue upon
exercise of the Warrants, such number of shares of Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The
Company covenants that all shares of Stock which shall be issuable
upon exercise of the Warrants shall be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and
charges.
5.
Loss or Mutilation
Upon receipt by
the Company of reasonable evidence of the ownership of and the
loss, theft, destruction or mutilation of any Warrant Certificate
and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company, or, in the case of
mutilation, upon surrender and cancellation of the mutilated
Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of
Warrants.
6.
Adjustment of Purchase Price and
Number of Shares Deliverable
6.1
The number of shares of Stock or
other security purchasable upon the exercise of each Warrant (such
shares being referred to in this Section 6 as the “Warrant
Shares”) and the Purchase Price with respect to the Warrant
Shares shall be subject to adjustment as follows:
(a)
In case the Company shall (i)
declare a dividend or make a distribution on its Stock payable in
shares of its capital stock, (ii) subdivide its outstanding shares
of Stock, through stock split or otherwise, (iii) combine its
outstanding shares of Stock, into a smaller number of shares of
Stock, or (iv) issue by reclassification of its of Stock (including
any reclassification in connection with a consolidation or merger
in which the Company is the continuing corporation) other
securities of the Company, the number and/or nature of W
