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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.
1
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 c
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