WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK OF TRUE NORTH ENERGY CORPORATION (A Nevada corporation)
Exhibit
4.1
NEITHER
THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
ANY STATE SECURITIES LAW. IN ADDITION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED
OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE REGISTRATION STATEMENT
COVERING THE SECURITIES UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS,
(ii) THE COMPANY FIRST RECEIVES AN OPINION FROM AN ATTORNEY, REASONABLY
ACCEPTABLE TO THE COMPANY, STATING THAT THE PROPOSED TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE ACT AND UNDER ALL APPLICABLE STATE SECURITIES LAWS,
OR
(iii) THE TRANSFER IS MADE PURSUANT TO RULE 144 PROMULGATED UNDER THE
ACT.
300,000
shares of Common Stock
Dated:
September 19, 2007
WARRANT
FOR THE PURCHASE OF
SHARES
OF COMMON STOCK
OF
TRUE
NORTH ENERGY CORPORATION
(A
Nevada
corporation)
FOR
VALUE
RECEIVED, True North Energy Corporation ("Company"), hereby certifies that
ENERGY CAPITAL SOLUTIONS, LP, with an address at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or his, her or its registered assigns ("Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company,
at
any time or from time to time during the three-year period commencing on
September 19, 2007 and expiring on September 18, 2012, up to three hundred
thousand (300,000) shares of common stock of the Company ("Common Stock"),
at a
purchase price of $0.48 per share. The number of shares of Common Stock
purchasable upon exercise of this Warrant, and the purchase price per share,
each as adjusted from time to time pursuant to the provisions of this Warrant,
are hereinafter referred to as the "Warrant Shares" and the "Exercise Price,"
respectively.
1.Exercise
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1.1.
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Procedure
for Exercise.
This Warrant may be exercised by the Holder, in whole or in part,
by the
surrender of this Warrant (with the Notice of Exercise Form attached
hereto duly executed by such Holder) at the principal office of the
Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, in lawful money of the United States,
of
an amount equal to the then applicable Exercise Price multiplied
by the
number of Warrant Shares then being purchased upon such
exercise.
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1.2.
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Date
of Exercise.
Each exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company. At such time,
the
person or persons in whose name or names any certificates for Warrant
Shares shall be issuable upon such exercise shall be deemed to have
become
the holder or holders of record of the Warrant Shares represented
by such
certificates.
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1.3.
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Issuance
of Certificate.
As soon as practicable after the exercise of the purchase right
represented by this Warrant, the Company at its expense will use
its best
efforts to cause to be issued in the name of, and delivered to, the
Holder, or, subject to the terms and conditions hereof, to such other
individual or entity as such Holder (upon payment by such Holder
of any
applicable transfer taxes) may
direct:
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(i)
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a
certificate or certificates for the number of full shares of Warrant
Shares to which such Holder shall be entitled upon such exercise
(subject
to Section 3 hereof), and
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(ii)
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in
case such exercise is in part only, a new warrant or warrants (dated
the
date hereof) of like tenor, stating on the face or faces thereof
the
number of shares currently stated on the face of this Warrant minus
the
number of such shares purchased by the Holder upon such exercise
as
provided in subsection 1.1 above.
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2.Adjustments.
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2.1.
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Split,
Subdivision or Combination of Shares.
If the outstanding shares of the Company's Common Stock at any time
while
this Warrant remains outstanding and unexpired shall be subdivided
or
split into a greater number of shares, or a dividend in Common Stock
shall
be paid in respect of Common Stock, the Exercise Price in effect
immediately prior to such subdivision or at the record date of such
dividend shall, simultaneously with the effectiveness of such subdivision
or split or immediately after the record date of such dividend (as
the
case may be), shall be proportionately decreased. If the outstanding
shares of Common Stock shall be combined or reverse-split into a
smaller
number of shares, the Exercise Price in effect immediately prior
to such
combination or reverse split shall, simultaneously with the effectiveness
of such combination or reverse split, be proportionately increased.
When
any adjustment is required to be made in the Exercise Price, the
number of
shares of Warrant Shares purchasable upon the exercise of this Warrant
shall be changed to the number determined by dividing (i) an amount
equal
to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Exercise
Price in
effect immediately prior to such adjustment, by (ii) the Exercise
Price in
effect immediately after such
adjustment.
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2.2.
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Reclassification
Reorganization, Consolidation or Merger.
In the case of any reclassification of the Common Stock (other than
a
change in par value or a subdivision or combination as provided for
in
subsection 2.1 above), or any reorganization, consolidation or merger
of
the Company with or into another corporation (other than a merger
or
reorganization with respect to which the Company is the continuing
corporation and which does not result in any reclassification of
the
Common Stock), or a transfer of all or substantially all of the assets
of
the Company, or the payment of a liquidating distribution then, as
part of
any such reorganization, reclassification, consolidation, merger,
sale or
liquidating distribution, lawful provision shall be made so that
the
Holder of this Warrant shall have the right thereafter to receive
upon the
exercise hereof, the kind and amount of shares of stock or other
securities or property which such Holder would have been entitled
to
receive if, immediately prior to any such reorganization,
reclassification, consolidation, merger, sale or liquidating distribution,
as the case may be, such Holder had held the number of shares of
Common
Stock which were then purchasable upon the exercise of this Warrant.
In
any such case, appropriate adjustment (as reasonably determined by
the
Board of Directors of the Company) shall be made in the application
of the
provisions set forth herein with respect to the rights and interests
thereafter of the Holder of this Warrant such that the provisions
set
forth in this Section 2 (including provisions with respect to the
Exercise
Price) shall thereafter be applicable, as nearly as is reasonably
practicable, in relation to any shares of stock or other securities
or
property thereafter deliverable upon the exercise of this
Warrant.
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2.3.
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Price
Adjustment.
No adjustment in the per share Exercise Price shall be required unless
such adjustment would require an increase or decrease in the Exercise
Price of at least $0.01; provided, however, that any adjustments
which by
reason of this paragraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 2 shall be made to the nearest cent
or to
the nearest 1/100th of a share, as the case may
be.
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2.4.
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No
Impairment.
The Company will not, by amendment of its Articles of Incorporation
or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the
terms
to be observed or performed hereunder by the Company but will at
all times
in good faith assist in the carrying out of all the provisions of
this
Section 2 and in the taking of all such actions as may be necessary
or
appropriate in order to protect against impairment of the rights
of the
Holder of this Warrant to adjustments in the Exercise
Price.
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2.5.
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Notice
of Adjustment.
Upon any adjustment of the Exercise Price or extension of the Warrant
exercise period, the Company shall forthwith give written notice
thereto
to the Holder of this Warrant describing the event requiring the
adjustment, stating the adjusted Exercise Price and the adjusted
number of
shares purchasable upon the exercise hereof resulting from such event,
and
setting forth in reasonable detail the method of calculation and
the facts
upon which such calculation is
based.
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3. Fractional
Shares.
The
Company shall not be required to issue fractions of shares of Common Stock
upon
exercise. If any fractions of a share would, but for this Section 3, be issuable
upon any exercise, in lieu of such fractional share the Company shall round
up
or down to the nearest whole number.
4. Limitation
on Sales.
Each
holder of this Warrant acknowledges that this Warrant and the Warrant Shares,
as
of the date of original issuance of this Warrant, have not been registered
under
the Securities Act of 1933, as amended ("Act"), and agrees not to sell, pledge,
distribute, offer for sale, transfer or otherwise dispose of this Warrant or
any
Warrant Shares issued upon its exercise in the absence of (a) an effective
registration statement under the Act as to this Warrant or such Warrant Shares
or (b) an opinion of counsel, reasonably acceptable to the Company, that such
registration and qualification are not required. Absent prior registration,
the
Warrant Shares issued upon exercise thereof shall be imprinted with a legend
in
substantially the following form:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS, AND
MAY
NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT COVERING THE SHARES UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS, (ii) THE COMPANY FIRST RECEIVES AN OPINION FROM AN
ATTORNEY, REASONABLY ACCEPTABLE TO THE COMPANY, STATING THAT THE PROPOSED
TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND UNDER ALL APPLICABLE
STATE SECURITIES LAWS, OR (iii) THE TRANSFER IS MADE PURSUANT TO RULE 144
PROMULGATED UNDER THE ACT.
5. Notices
of Record Date.
In
case: (i) the Company shall take a record of the holders of its Common Stock
(or
other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase
any
shares of any class or any other securities, or to receive any other right,
or
(ii) of any capital reorganization of the Company, any reclassification of
the
capital stock of the Company, any consolidation or merger of the Company with
or
into another corporation (other than a consolidation or merger in which the
Company is the surviving entity), or any transfer of all or substantially all
of
the assets of the Company, or (iii) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then, and in each such case, the
Company will mail or cause to be mailed to the Holder of this Warrant a notice
specifying, as the case may be, (i) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, or (ii) the effective
date on which such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, and the
time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such other stock or securities at the time deliverable upon the exercise of
this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
ten
(10) days prior to the record date or effective date for the event specified
in
such notice, provided that the failure to mail such notice shall not affect
the
legality or validity of any such action.
6. Reservation
of Stock.
The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant, such shares of Common Stock and
other stock, securities and property, as from time to time shall be issuable
upon the exercise of this Warrant.
7. Replacement
of Warrants.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company
will
issue, in lieu thereof, a new Warrant of like tenor.
8. Piggyback
Registration Rights.
The
Warrant Shares shall have piggyback registration rights. Such piggyback
registration rights shall be identical, in all material respects, to the
piggyback registration rights presently applicable to other Company securities
containing piggyback registration rights, except those granted with respect
to
securities held by our senior lenders, Valens Offshore SPV II, Corp. and Valens
US SPV I, LLC (collectively the “Senior Lenders”). The piggyback registration
rights granted hereunder and all of our other outstanding piggyback registration
rights are subject to registration rights granted to our Senior Lenders in
our
September 18, 2007 Registration Rights Agreements with such Senior
Lenders.
9Transfers,
etc.
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9.1.
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Warrant
Register.
The Company will maintain a register containing the names and addresses
of
the Holders of this Warrant. Any Holder may change its, his or her
address
as shown on the warrant register by written notice to the Company
requesting such change.
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9.2.
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Holder.
Until any transfer of this Warrant is made in the warrant register,
the
Company may treat the Holder of this Warrant as the absolute owner
hereof
for all purposes; provided, however, that if and when this Warrant
is
properly assigned in blank, the Company may (but shall not be obligated
to) treat the bearer hereof as the absolute owner hereof for all
purposes,
notwithstanding any notice to the
contrary.
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10. No
Rights as Stockholder.
Until
the exercise of this Warrant, the Holder of this Warrant shall not have or
exercise any rights by virtue hereof as a stockholder of the
Company.
11. Successors.
The
rights and obligations of the parties to this Warrant will inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors, assigns, pledgees, transferees and purchasers.
12. Change
or Waiver.
Any
term of this Warrant may be changed or waived only by an instrument in writing
signed by the party against which enforcement of the change or waiver is
sought.
13. Headings.
The
headings in this Warrant are for purposes of reference only and shall not limit
or otherwise affect the meaning of any provision of this Warrant.
14. Governing
Law.
This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York. Each party hereby expressly agrees to the jurisdiction of
the
courts of the State of New York and hereby waives any claim or defense of
inconvenient forum.
15. Mailing
of Notices, etc.
All
notices and other communications under this Warrant (except payment) shall
be in
writing and shall be sufficiently given if sent to the Holder or the Company,
as
the case may be, by hand delivery, private overnight courier, with
acknowledgment of receipt, or by registered or certified mail, return receipt
requested, as follows:
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Holder:
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To
Holder's address on page 1 of this Warrant
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Attention:
Name of Holder
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The
Company:
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To
the Company's Principal Executive Offices
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Attention:
President
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or
to
such other address as any of them, by notice to the others may designate from
time to time. Time shall be counted to, or from, as the case may be, the
delivery in person or by overnight courier or five (5) business days after
mailing.
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TRUE
NORTH ENERGY CORPORATION
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By:
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/s/
▇▇▇▇ Folnovic
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Name:
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▇▇▇▇
Folnovic
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Title:
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President
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NOTICE
OF EXERCISE
TO:
True
North Energy Corporation
1. The
undersigned hereby elects to purchase ________ shares of the True North Energy
Corporation, pursuant to terms of the attached Warrant, and tenders herewith
payment of the Exercise Price of such shares in full, together with all
applicable transfer taxes, if any.
2. Please
issue a certificate or certificates representing said shares of the Common
Stock
in the name of the undersigned or in such other name as is specified
below:
3. The
undersigned represents that it will sell the shares of Common Stock pursuant
to
an effective Registration Statement under the Securities Act of 1933, as
amended, or an exemption from registration thereunder.
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(Name)
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(Address)
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(Taxpayer
Identification Number)
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By:
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Title:
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Date:
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