exv4w2



 





Exhibit 4.2







UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE
SECURITY BEFORE NOVEMBER 4, 2007









WITHOUT PRIOR WRITTEN APPROVAL OF THE TSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE
SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE COMMON SHARES FOR
WHICH THIS SECURITY IS EXERCISABLE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED
ON OR THROUGH THE FACILITIES OF THE TSX VENTURE EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE
BENEFIT OF A CANADIAN RESIDENT UNTIL NOVEMBER 4, 2007









THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE CORPORATION THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO THE CORPORATION, (B) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, IN EACH
CASE IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES OR (C) IN ANY
OTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LEGISLATION, AND THE SELLER FURNISHES TO THE CORPORATION AN OPINION OF
COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION TO SUCH
EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON STOCK EXCHANGES IN CANADA.






THE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF

NO VALUE IF NOT EXERCISED PRIOR TO 4:00 P.M. (CALGARY TIME) ON JULY 3, 2012.




WARRANT CERTIFICATE




AUSAM ENERGY CORPORATION

(Existing under the laws of the Province of Alberta)




	 	 	 	 	 	 	 	 	 
	 	WARRANT CERTIFICATE NO. JUL07 — 001

	 	 	 	 	 	22,305,496 WARRANTS entitling the
holder to acquire, subject to
adjustment, one (1) Common Share for
each whole Warrant represented
hereby.	 
	 	 	 	 	 





THIS IS TO CERTIFY THAT:




THE HUFF ENERGY FUND, L.P.



(the “Warrantholder”) is entitled to acquire, for each Warrant represented hereby, in the manner
and subject to the restrictions and adjustments set forth in the “Terms and Conditions of Warrants
of Ausam Energy Corporation” appended as a Schedule hereto (the “Terms and Conditions”) and forming
a part hereof, at any time and from time to time until the Expiry Time (as defined in the Terms and
Conditions), one (1) fully paid and non-assessable common share (“Common Share”) in the capital of
Ausam Energy Corporation (the “Corporation”), upon payment to the Corporation of CDN$0.60 per
Common Share, subject to adjustment in certain events or circumstances.



The Warrants represented by this certificate may only be exercised at the principal office of the
Corporation 1430, 1122 — 4th Street S.W. Calgary, Alberta T2R 1M1 upon surrender of this
certificate with the Subscription Form printed on the reverse side hereof duly completed and
executed, and cash or a certified cheque or bank draft payable to or to the order of the
Corporation, at par in Calgary, Alberta in immediately available funds, for the full amount of the
purchase price of the Common Shares so subscribed for.



The Warrants represented by this certificate are subject to the Terms and Conditions appended as a
Schedule hereto.



IN WITNESS WHEREOF, the Corporation has caused this certificate to be executed by a duly authorized
director or officer.




DATED this 3rd day of July,2007.




	 	 	 	 	 
	 	AUSAM ENERGY CORPORATION

 	 
	 	Per:  	 	 
	 	 	Mark Avery 	 
	 	 	President and CEO 	 
	 



IMPORTANT: SEE “TERMS AND CONDITIONS OF WARRANTS OF

AUSAM ENERGY CORPORATION” ATTACHED AS A SCHEDULE HERETO










 




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(reverse side of Warrant Certificate)








SUBSCRIPTION FORM



TO: AUSAM ENERGY CORPORATION



The undersigned holder of the within Warrants hereby irrevocably subscribes for _________ Common Shares (or such adjusted
number of Common Shares or other securities to which such subscription entitles the undersigned in lieu thereof) in
accordance with and subject to the provisions of this Warrant Certificate at the subscription price of CDN$0.60 per
common share for each one (1) Warrant exercised hereby, and encloses herewith cash or a certified cheque or bank draft
payable to or to the order of AUSAM ENERGY CORPORATION (or other corporation that assumes the Warrant obligations pursuant
to the terms hereof under Section 4.4) for the full subscription price for the Common Shares so subscribed for.



The Common Shares hereby subscribed for are to be issued as follows:




	 	 	 
	Name:
	 	 
	 

	 	 

	 
	 	 
	Address in full:
	 	 
	 

	 	 

	 
	 	 
	 

	 	 






Note: If further nominees are intended, please attach (and initial) a schedule providing these particulars.



DATED this                      day of                                         , 20___.






	 	 	 	 	 	 	 
	 

Signature Guaranteed

	 	  
	 	 

Signature of Warrantholder (to be the same as the name
that appears on the face of this Warrant Certificate)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

Name of Warrantholder (please print)	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

Address of Warrantholder (please print)
	 	 













TRANSFER FORM



FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to                                                           
   of
                                                             (print name and address of assignee),            
          Warrants of AUSAM ENERGY CORPORATION registered in
the name of the undersigned represented by the within Warrant Certificate.



DATED this                      day of                                         , 20___.






	 	 	 	 	 	 	 
	 

Signature Guaranteed

	 	 
	 	 

Signature of Warrantholder (to be the same as the name
that appears on the face of this Warrant Certificate)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

Name of Warrantholder (please print)	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 

Address of Warrantholder (please print)	 	 






Instructions:





1. If the Subscription Form indicates that Common Shares are to be issued to a person or persons
other than the registered holder of the Warrant Certificate, the signature of such Warrantholder
on the Subscription Form must be guaranteed by an authorized officer of a chartered bank,
trust company or an investment dealer who is a member of a recognized stock exchange, and the
Warrantholder must pay any applicable transfer taxes or fees.




2. If the Subscription Form or Transfer Form is signed by a trustee, exercise, administrator,
curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or
representative capacity, the Warrant Certificate must be accompanied by evidence of authority to
sign satisfactory to the Corporation.




3. Warrants shall only be transferable in accordance with applicable securities laws and the
policies of the TSX Venture Exchange.








 



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SCHEDULE TO WARRANT CERTIFICATE




TERMS AND CONDITIONS OF WARRANTS

OF AUSAM ENERGY CORPORATION



Terms and Conditions attached to the Warrants issued by Ausam Energy Corporation and dated the
3rd day of July, 2007.




ARTICLE 1

INTERPRETATION




1.1 Definitions



In these Terms and Conditions, unless there is something in the subject matter or context
inconsistent therewith:





	(a)	 	“Board of Directors” means the board of directors of the Corporation;






	(b)	 	“business day” means a day other than a Saturday, Sunday or a statutory or civic holiday in
the Province of Alberta;
	 
	(c)	 	“Common Shares” means the common shares in the capital of the Corporation;
	 
	(d)	 	“Corporation” means Ausam Energy Corporation and its successors and assigns;






	(e)	 	“Exercise Price” means the price of CDN$0.60 per Common Share or such lesser price as may be
determined in accordance with Section 5.2, subject to adjustment in accordance with Article 4
hereof and foreign exchange conversion in accordance with Article 2 hereof;






	(f)	 	“Expiry Time” means 4:00 p.m. (Calgary time) on July 3, 2012, or such other time as may be
determined in accordance with Section 2.1(b);






	(g)	 	“herein”, “hereby” and similar expressions refer to these Terms and Conditions, as the same
may be amended, supplemented or modified from time to time; and the expression “Article”,
“Section” and “subsection” followed by a number refer to the specified Article, Section or
subsection of these Terms and Conditions;






	(h)	 	“Person” means an individual, partnership, corporation, body corporate, trust or other
business or legal entity or any duly constituted government of or in Canada or the United
States and any minister, department, commission, board, bureau, agency, authority,
instrumentality or court and the like of any such government;






	(i)	 	“Purchase Price” shall mean, for any exercise of Warrants, the aggregate consideration
payable to the Corporation by the Warrantholder pursuant to Section 2.2 hereof, in an amount
equal to the product of the Exercise Price applicable as at the date of exercise multiplied by
the number of Warrants so exercised at such time;






	(j)	 	“United States” means the United States of America, its territories and possession, any state
of the United States and the District of Columbia;
	 
	(k)	 	“Warrantholder” means the registered holder of the Warrants;






	(l)	 	“Warrants” means the warrants to acquire Common Shares evidenced by the Warrant Certificate;
and
	 
	(m)	 	“Warrant Certificate” means the certificate to which these Terms and Conditions are attached.





1.2 Interpretation Not Affected by Headings



The division of these Terms and Conditions into Articles, Sections and subsections, and the
insertion of headings, are for convenience of reference only and shall not affect the construction
or interpretation hereof.










 



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1.3 Applicable Law



These Terms and Conditions shall be construed in accordance with and the rights and obligations of
the Warrantholder and the Corporation hereunder shall be governed by, the laws of the State of New
York without regard to principles of conflicts of law. The Warrantholder attorns to the
non-exclusive jurisdiction of the courts of the State of New York in respect of all matters and
disputes arising hereunder.




1.4 Currency



All references to currency herein shall be to lawful money of the Canada, unless otherwise stated.




1.5 Gender and Number



Unless herein otherwise expressly provided or unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing gender include all
genders.




1.6 Day not a Business Day



In the event that any day on or before which any action is required to be taken hereunder is not a
business day, then such action shall be required to be taken at or before the requisite time on the
next succeeding day that is a business day.




1.7 Time of the Essence



Time shall be of the essence hereof.




ARTICLE 2

VESTING AND EXERCISE OF WARRANTS




2.1 Vesting and Expiry



The Warrants shall be fully vested as at the time of their issuance and all Warrants shall expire
at the Expiry Time.



In addition, notwithstanding any other provision hereof, some of the Warrants may be cancelled
pursuant to Section 3(d)(iii) of the Subscription Agreement dated June 29, 2007 between the
Corporation, Noram Resources, Inc. and The Huff Energy Fund L.P. Upon such cancellation all rights
hereunder pertaining to the Warrants that are cancelled shall wholly cease and terminate.




2.2 Method of Exercise



The right to purchase Common Shares hereunder may be exercised prior to the Expiry Time, by the
Warrantholder delivering to the Corporation at its principal office: (i) the Warrant Certificate
with the subscription form printed on the reverse side thereof duly completed and executed; and
(ii) cash or a certified cheque or bank draft payable to or to the order of the Corporation, at par
in Calgary, Alberta in immediately available funds, for the full amount of the Purchase Price, in
lawful money of Canada. The Warrant Certificate and payment shall be deemed to be delivered only
upon actual receipt of same by the Corporation.



Where the 30-day average of the number of Common Shares traded on a United States exchange is
greater than the 30-day average of the number of Common Shares traded on a Canadian exchange, the
Exercise Price shall thereafter be paid in lawful money of the United States and the Exercise Price
shall be converted to lawful money of the United States at a rate of 0.9340 United States dollars
for each Canadian dollar;




2.3 Effect of Exercise



Upon delivery and payment as set forth in Section 2.2 above, the Common Shares so subscribed for
shall be issued as fully paid and non-assessable shares in the capital of the Corporation and the
Warrantholder will become the holder of record of such Common Shares effective as of the date of
such delivery and payment, and within five (5) business days thereafter the Corporation will cause
a certificate evidencing the appropriate number of Common Shares so purchased to be issued and
delivered to the Warrantholder, at the address provided by the Warrantholder in the subscription
form.










 



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2.4 Partial Exercise



The Warrantholder may subscribe for and purchase a number of Common Shares less than the total
number of Common Shares that the Warrantholder is entitled to purchase hereunder, in which event
the Corporation shall cause, without charge therefor, a certificate representing the balance of the
Warrants not exercised by the Warrantholder to be issued and delivered to the Warrantholder at the
address set forth in the delivery instructions provided by the Warrantholder in the subscription
form printed on the reverse side of the Warrant Certificate; provided, however, that no fewer than
one hundred (100) Warrants may be exercised by the Warrantholder at any one time, unless at the
time of exercise the number of Warrants held by the Warrantholder is less than one hundred (100),
in which case the Warrantholder may exercise such lesser number of Warrants.




2.5 Expiration



At the Expiry Time, all rights hereunder shall wholly cease and terminate and the Warrants shall be
void and of no value or effect whatsoever.




2.6 Fractional Interests



The Corporation shall not be required to issue fractional Common Shares or script representing
fractional shares on the exercise of any Warrants nor shall any compensation be made for such
fractional shares, if any. If more than one Warrant shall be presented by the Warrantholder for
exercise at the same time, the number of full Common Shares issuable upon the exercise thereof will
be computed on the basis of the aggregate number of Common Shares purchasable on exercise of the
Warrants so presented.




2.7 Successors



This Warrant Certificate will enure to the benefit of and be binding upon the Warrantholder and the
Corporation and their respective successors and assigns.




ARTICLE 3

GENERAL




3.1 Reservation of Sufficient Common Shares



For so long as the Warrants remain outstanding, the Corporation shall reserve and keep available
for issue upon the exercise of the Warrants such number of authorized but unissued Common Shares or
other shares in the capital of the Corporation as will be required to satisfy its obligations to
issue Common Shares upon the exercise of the Warrants.




3.2 Covenants, Representations and Warranties of the Corporation



The Corporation hereby covenants, represents and warrants that, so long as any Warrants remain
outstanding:





	(a)	 	it is authorized to create and issue the Warrants and that it will cause the Common Shares
from time to time subscribed for and purchased in the manner provided in this Warrant
Certificate to be duly issued and delivered in accordance with the terms hereof;






	(b)	 	all Common Shares that are issued upon the exercise of the Warrants, upon payment of the
Purchase Price, shall be and be deemed to be fully paid and non-assessable Common Shares and
free from all taxes, liens, charges, encumbrances or other security interests with respect to
the issue thereof;






	(c)	 	this Warrant Certificate is a valid and enforceable obligation of the Corporation,
enforceable in accordance with the provisions of this Warrant Certificate;
	 
	(d)	 	it will use its best efforts to maintain its corporate existence;






	(e)	 	it will use its best efforts to ensure that all Common Shares of the Corporation outstanding
or issuable from time to time continue to be listed and posted for trading on the TSX Venture
Exchange, the Toronto Stock Exchange, the American Stock and Options Exchange or such other
exchange satisfactory to the Board of Directors of the










 



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	 	 	Corporation and holders of 66 2/3% of the principal amount of the 9% convertible senior
secured debentures of the Corporation due July 3, 2012;






	(f)	 	it will make all requisite filings under applicable Canadian securities legislation including
those necessary to remain a reporting issuer not in default in Alberta; and






	(g)	 	it will duly perform and carry out all of the acts or things to be done by it as provided
herein.





3.3 Additional Securities



Nothing contained herein shall be construed as preventing the Corporation from making any
distribution of or otherwise issuing to any Person, at any time and from time to time, additional
Common Shares or securities convertible into Common Shares for such consideration and on such terms
as may be approved by the Board of Directors in its sole discretion, acting reasonably.




3.4 Lost, Stolen, Destroyed or Mutilated Warrant Certificates



Upon receipt of evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of any Warrant Certificate and, in the case of loss, theft or destruction, upon receipt
of indemnity or security in an amount and form satisfactory to the Corporation, or, in the case of
mutilation, upon surrender and cancellation of such Warrant Certificate, the Corporation will make
and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate (containing the same terms and conditions as this Warrant Certificate) and
representing the same number of Warrants. The Warrantholder shall pay the reasonable charges of
the Corporation in connection with any such replacement.




3.5 Warrantholder Not a Shareholder



The Warrants represented hereby shall not constitute the Warrantholder a shareholder of the
Corporation, nor entitle the Warrantholder to any right or interest (including, without limitation,
any voting rights or rights to receive dividends or other distributions) as a shareholder of the
Corporation. For greater certainty, the Warrants represented hereby shall not entitle the
Warrantholder to any voting rights whatsoever in the affairs of the Corporation except as required
by law.




3.6 Notice to Regulatory Authorities



The Corporation will give written notice of the issuance of any Common Shares pursuant to the
exercise of Warrants, in such detail and timeframe as may be required, to each stock exchange,
securities commission or similar regulatory authority in Canada or in any other jurisdiction having
jurisdiction in respect of such issuance.




3.7 Legends



If, at the time of the exercise of the Warrants, the Common Shares acquired thereby are subject to
trading restrictions under applicable securities legislation or the policies of the TSX Venture
Exchange or other stock exchange, the Corporation may, on the advice of counsel, endorse the
certificates representing such Common Shares to such effect.




3.8 Transfer Taxes



The Corporation shall pay any and all transfer taxes (if any) that may be payable in respect of the
issuance or delivery of Common Shares upon the exercise of the Warrants; provided, however, that
the Corporation shall not be required to pay any such tax or taxes that may be payable in respect
of the issuance or delivery of any certificates for Common Shares issued upon the exercise of the
Warrants in the name of a Person or Persons other than the Warrantholder.




ARTICLE 4

ADJUSTMENTS




4.1 Adjustment of Subscription Rights



The number of Common Shares that a Warrantholder may purchase upon the proper exercise of a
Warrant, or the property that a Warrantholder may receive in lieu thereof, shall be subject to
adjustment from time to time as set forth in this Article 4 with respect to any fact or event
described herein occurring after the date hereof but prior to the Expiry Time. Notwithstanding








 



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anything contained in this Article 4, any adjustment made pursuant to any provision of this Article
4 shall be made without duplication of an adjustment otherwise required by and made pursuant to
another provision of this Article 4 on account of the same facts or events.




4.2 Share Dividends, Subdivisions or Consolidations



If, at any time after the date hereof but prior to the Expiry Time, the Corporation shall:





	(a)	 	subdivide, redivide or change the outstanding Common Shares into a larger number of Common
Shares;






	(b)	 	reduce, combine or consolidate the outstanding Common Shares into a smaller number of Common
Shares; or






	(c)	 	make any distribution payable in Common Shares or other securities to the holders of all or
substantially all of the outstanding Common Shares including by way of stock dividend,




(any of such events referred to in paragraphs (a), (b) or (c) above being an “Adjustment Event”),
then the number of Common Shares purchasable upon the exercise of any Warrants shall be adjusted
immediately so that the Warrantholder shall thereafter be entitled to receive upon such exercise,
and shall be required to accept as consideration for the Purchase Price paid to the Corporation in
connection with such exercise, in lieu of the number of Common Shares (the “Pre-Adjustment Shares”)
that such Warrantholder would have received had the Warrantholder exercised such Warrants prior to
the effective date of the Adjustment Event, the number of Common Shares that such Warrantholder
would have been entitled to receive as a result of such Adjustment Event if, on the effective date
thereof, the Warrantholder had been the registered holder of the Pre-Adjustment Shares. Any
adjustment made pursuant to this subsection shall become effective immediately after the effective
date of the Adjustment Event and shall be retroactive to the record date, if any, on which the
holders of the Common Shares are determined for the purposes of the Adjustment Event.




4.3 Minimum Adjustment



No adjustment in the number of Common Shares purchasable upon the exercise of a Warrant shall be
required under Section 4.2 above unless such adjustment would require an increase or decrease of at
least one percent (1%) in the number of Common Shares purchasable upon the exercise of each
Warrant; provided, however, that any adjustments which by reason of this Section 4.3 are not
required to be made shall be carried forward and taken into account in any subsequent adjustment.
All calculations made in this regard shall be made to the nearest one-hundredth of a Common Share.




4.4 Reorganization



If, at any time after the date hereof but prior to the Expiry Time, the Corporation shall:





	(a)	 	reclassify, change or reorganize the Common Shares then outstanding into other shares or
securities of the Corporation or any affiliate or associate of the Corporation; or






	(b)	 	merge, amalgamate or consolidate into another Person (including by way of plan of
arrangement); or






	(c)	 	sell or convey its property or assets as an entirety or substantially as an entirety to any
Person;




(any of such events referred to in paragraphs (a), (b) or (c) above being a “Reorganization”), and
pursuant to the terms of such Reorganization, securities of the Corporation, an affiliate or
associate of the Corporation or of a successor Person are to be received by or distributed to the
holders of Common Shares, then the Corporation shall use its best efforts to provide that a
Warrantholder shall thereafter have the right to receive, upon proper exercise of any Warrants, and
shall be required to accept as consideration for the Purchase Price paid to the Corporation in
connection with such exercise, in lieu of the number of Common Shares (the “Pre-Reorganization
Shares”) that such Warrantholder would have received had the Warrantholder exercised such Warrants
prior to the effective date of the Reorganization, the kind and number of such other securities of
the Corporation, or of any affiliate or associate of the Corporation or of any successor Person, as
the case may be, that such Warrantholder would have been entitled to receive as a result of such
Reorganization if, on the effective date thereof, he had been the registered holder of the
Pre-Reorganization Shares. Any adjustment made pursuant to this subsection shall become effective
immediately after the effective date of the Reorganization.



If determined appropriate by the Board of Directors to give effect to or to evidence the provisions
of this section, the Corporation, its affiliates, associates, successors or such purchasing body
corporate, partnership, trust or other entity, as the case








 



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may be, shall prior to or contemporaneously with any such Reorganization enter into an agreement or
new Warrant certificate which shall provide, to the extent possible, for the application of the
provisions set forth in this Warrant with respect to the rights and interests thereafter of the
Warrantholder to the end that the provisions set forth in this Warrant shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, with respect to any shares,
other securities or property to which a Warrantholder is entitled on the exercise of its
acquisition rights thereafter and upon entering into such new Warrant Certificate or agreement, the
Corporation shall cease to have any obligations (including the obligation to issue any Common
Shares) hereunder and the holder shall cease to have any rights hereunder. Any Warrant Certificate
or agreement entered into between the Corporation, any affiliate, associate or successor of the
Corporation or such purchasing body corporate, partnership, trust or other entity shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided
in this Article 4 and which shall apply to successive Reorganizations.




4.5 Other Actions Affecting Common Shares



If at any time after the date hereof the Corporation shall take any action affecting its Common
Shares, and in the opinion of the Board of Directors, acting reasonably, the adjustment provisions
of this Article 4 are not strictly applicable or, if strictly applicable would not fairly protect
the rights of a Warrantholder or the Corporation in accordance with the intent and purposes hereof,
the provisions of this Article 4 shall be adjusted in such manner, if any, and at such time, as the
Board of Directors in its discretion may reasonably determine to be equitable to the Warrantholder
and the Corporation in such circumstances. Failure of the Board of Directors to make an adjustment
in accordance with this Section 4.5 shall be conclusive evidence that the Board of Directors have
determined that it is equitable to make no adjustment in the circumstances. In the event that any
such adjustment is made, the Corporation shall promptly deliver a written notice to the
Warrantholder in accordance with Section 4.10.




4.6 Exception



Notwithstanding anything contained herein, no adjustment in the number of Common Shares purchasable
upon the exercise of a Warrant or the Exercise Price thereof shall be made in respect of any event
or circumstance described in this Article 4 if the Warrantholder is entitled to participate in such
event on the same terms, mutatis mutandis, as if the Warrantholder had exercised his Warrants on or
before the effective date or record date of such event or circumstance.




4.7 Abandonment after Record Date



If the Corporation sets a record date as at which the holders of the Common Shares are to be
determined for the purposes of an Adjustment Event, a Reorganization Event or any other action or
event in respect of which an adjustment in the number of Common Shares purchasable upon the
exercise of a Warrant or the Exercise Price thereof shall be made under this Article 4, but legally
abandons such action or event prior to completion thereof, then no adjustment in the number of
Common Shares purchasable upon the exercise of a Warrant or the Exercise Price thereof shall be
required by reason of the setting of such record date.




4.8 No Adjustments for Other Transactions or Events



Notwithstanding anything contained herein, neither the number of Common Shares purchasable upon the
exercise of a Warrant nor the Exercise Price thereof shall be adjusted or be subject to adjustment
as a result of:





	(a)	 	the granting by the Corporation of options or other rights under any stock option plan, stock
purchase plan, phantom stock plan, stock appreciation rights plan, or other deferred, share or
incentive compensation plan to officers, directors, employees or consultants of the
Corporation or its affiliates;






	(b)	 	the issue by the Corporation of any Common Shares or other securities of the Corporation for
valuable consideration to any Persons other than as specifically provided for in this Article
4 (including without limitation the issue of Common Shares upon the exercise or conversion of
any securities of the Corporation outstanding as at the date hereof that are exercisable or
convertible into Common Shares); or






	(c)	 	the declaration or payment of any dividends on the Common Shares other than as specifically
provided for in this Article 4.





4.9 Proceedings Prior to any Action Requiring Adjustment



As a condition precedent to the taking of any action that would require an adjustment pursuant to
this Article 4, the Corporation shall take all such action as may, in the opinion of the
Corporation and its legal counsel, be necessary or advisable in order that








 



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the Corporation may validly and legally issue as fully paid and non-assessable all Common Shares or
other securities of the Corporation that the Warrantholder is entitled to receive upon the full
exercise of his Warrants in accordance with the provisions hereof.




4.10 Notice of Adjustment





	(a)	 	At least fifteen (15) days prior to the effective date or record date, as the case may be, of
any event that requires or might require an adjustment pursuant to this Article 4, the
Corporation shall give written notice to the Warrantholder of the particulars of such event
and, if determinable, the required adjustment.






	(b)	 	In the event that any adjustment for which the notice of adjustment referred to in paragraph
(a) above has been given is not then determinable, the Corporation will give written notice to
the Warrantholder of the required adjustment promptly after such adjustment is determinable.






	(c)	 	Unless otherwise provided herein, any notice to the Warrantholders under the provisions of
the Warrants shall be valid and effective if delivered or if sent by facsimile or letter or
circular through the ordinary post addressed to such holders at their addresses appearing on
their respective subscriptions for the Warrants and shall be deemed to have been effectively
given on the date of delivery or, if mailed, five business days following actual posting of
the notice, or if telecopied, the next business day after transmission provided that
transmission has been completely and accurately transmitted.






	(d)	 	If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Warrantholders hereunder could reasonably be
considered unlikely to reach its destination, such notice shall be valid and effective only if
it is delivered or sent by facsimile at the appropriate address or number referred to in
subsection 4.10(c).





4.11 Resolution of Disputes



If a dispute arises at any time with respect to any adjustment of the Exercise Price or the number
of Common Shares purchasable pursuant to this Warrant Certificate, such dispute shall be
conclusively determined by a firm of independent chartered accountants as may be selected by the
Board of Directors, acting reasonably. The costs incurred in resolving the dispute shall be borne
equally between the Corporation and the Warrantholder.




4.12 Exchange Approval



Adjustments to the Exercise Price or the number of Common Shares purchasable pursuant to this
Warrant Certificate shall be subject to the prior approval of the TSX Venture Exchange.




ARTICLE 5

AMENDMENTS




5.1 Amendments Generally



Subject to Section 5.2, the terms of the Warrants represented by the Warrant Certificate may be
amended, and the observance of any term thereof may be waived, only by a written instrument signed
by the Corporation and the Warrantholder. Any such amendment shall be subject to receipt by the
Corporation of all required approvals (if any) from the TSX Venture Exchange or any stock exchange
on which the Common Shares are listed and all applicable securities regulatory authorities.




5.2 Reduction in Exercise Price



Subject to applicable securities legislation and receipt by the Corporation of all required
approvals from the TSX Venture Exchange or any stock exchange on which the Common Shares are listed
and all applicable securities regulatory authorities, the Corporation may, at its option, at any
time during the term of the Warrants, reduce the then current Exercise Price to any amount.




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