EXHIBIT 99.2
-------DRAFT -----
WARRANT AGREEMENT
MISTRAL VENTURES, INC.
AND
SIGNATURE STOCK TRANSFER
Warrant Agent
________________________, 2006
1
THIS AGREEMENT (the "Agreement") is dated as of _______________,
2006,
by and between MISTRAL VENTURES, INC., a Nevada corporation (the
"Company") and SIGNATURE STOCK TRANSFER (the "Warrant Agent").
WHEREAS, the Company will issue Warrant Certificates in connection
with a public offering of its securities. Pursuant to the terms of the
offering, there will be two Stock Purchase Warrants (the "Warrants")
issued for each Unit purchased in the offering. Each Warrant will
entitle
the holder to purchase one share of the Company's common stock
at a price
of $.10 for a period of two (2) years from the date of the
offering,
or ________________, 200__.
WHEREAS, the Company desires the
Warrant Agent to act on behalf of
the Company, and the Warrant Agent
is willing so to act, in connection
with the issuance, registration,
transfer and exchange of the Warrant
Certificates and, thereafter,
exercise of the Warrants.
NOW THEREFORE, in consideration of the
promises and the mutual
agreements hereinafter set forth, it is agreed
that:
1. Warrants/Warrant Certificates. Each Warrant shall entitle
the
holder (the "Registered Holder" or, in the aggregate the "Registered
Holders") in whose name the Warrant Certificate shall be registered on
the books maintained by the Warrant Agent to purchase one share of
Common Stock of the Company on exercise thereof, subject to modification
and adjustment as provided in Section 7. Warrant Certificates
representing the right to purchase Warrant Shares shall be executed by
the Company's President, attested to by the Company's Secretary, and
delivered to the Warrant Agent upon execution of this Agreement.
Subject to the provisions of Sections 3, 5 and 6, the Warrant Agent
shall deliver Warrant Certificates in the required whole number
denominations to the Registered Holders in connection with any transfer
or exchange permitted under this Agreement. Except as provided in
Section 6 hereof, no Warrant Certificates shall be issued except
i)
Warrant Certificates initially issued hereunder, (ii) Warrant
Certificates issued on or after the initial issuance date, upon the
exercise of any Warrants, to evidence the unexercised Warrants held
by the exercising Registered Holder, and (iii) Warrant Certificates
issued after the initial issuance date, upon any transfer or exchange
of Warrant Certificates or replacements of lost or mutilated Warrant
Certificates.
2. Form and Execution of Warrant Certificates. The Warrant
Certificates shall be substantially in the form attached hereto as
Exhibit A. The Warrant Certificates shall be dated as of the date of
their issuance, whether on initial issuance, transfer or exchange or
in lieu of mutilated, lost, stolen or destroyed Warrant Certificates.
Each such Warrant Certificate shall be numbered serially in accordance
with the Common Stock initially attached thereto with the letter "W"
appearing on each Warrant Certificate. The Warrant Certificates may
immediately be detached. The Warrant Certificates shall be manually
countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned. In the event any officer of the
Company who executed the Warrant Certificates shall cease to
be an
officer of the Company before the date of issuance of the
Warrant
Certificates or before countersignature and delivery by the
Warrant
Agent, such Warrant Certificates may be countersigned, issued
and
delivered by the Warrant Agent with the same force and effect as
though the person who signed such Warrant Certificates had not
ceased
to be an officer of the Company.
2
3. Exercise. Subject to the provisions of Sections 4 and 7, the
Warrants, when evidenced by a Warrant Certificate, may be exercised
in whole or in part at any time during the period (the "Exercise
Period") commencing on _______________, 2006 (the "Exercise Date")
until ________________, 2008 (the "Warrant Expiration Date", unless
extended by a majority vote of the Company's Board of Directors, but
in
no event after such extended expiration date. The Company shall
promptly
notify the Warrant Agent and the Registered Holders of any
such extension
of the Exercise Period. A Warrant shall be deemed to
have been exercise
immediately prior to the close of business on the
date (the "Exercise
Date") of the surrender for exercise of the Warrant
Certificate.
The exercise form shall be executed by the Registered
Holder thereof or
his attorney duly authorized in writing and shall
be delivered, together
with payment therefore, to the Company at its
corporate offices located
at 000 X. Xxxxxx Xxxxxx, Xxxxx #0, Xxxxxx
Xxxx, XX, 00000 (the
"Corporate Office"), in cash or by official bank
or certified check, in
an amount equal to the aggregate Exercise Price,
in lawful money.
Unless Warrant Shares may not be issued as provided
herein, the person
entitled to receive the number of Warrant Shares
deliverable on such
exercise shall be treated for all purposes as the
holder of such Warrant
Shares as of the close of business on the
Exercise Date. In addition,
the Warrant Agent shall also, at such
time, verify that all of the
conditions precedent to the issuance of
Warrant Shares set forth in
Section 4 have been satisfied as of the
Exercise Date. The Company shall
not be obligated to issue any
fractional share interests in Warrant Shares
issuable or deliverable
on the exercise of any Warrant, or scrip or cash
therefor, and such
fractional shares shall be of no value whatsoever. If
more than one
Warrant shall be exercised at one time by the same
Registered Holder,
the number of full Shares which shall be issuable on
exercise thereof
shall be computed on the basis of the aggregate number
of full Shares
issuable on such exercise.
Within thirty (30) days after the Exercise
Date and in any event prior to
the Expiration Date, the Warrant Agent
shall cause to be issued and
delivered to the person or persons
entitled to receive the same, a
ertificate or certificates for the
number of Warrant Shares deliverable on
such exercise. No adjustment
shall be made in respect of cash dividends,
if any, on Warrant Shares
delivered on exercise of any Warrant.
The Company may deem and treat
the Registered Holders of the Warrants as
he absolute owners thereof
for all purposes, and the Company shall not be
affected by any notice
to the contrary. The Warrants shall not entitle
the holders thereof
to any of the rights of shareholders or to any
dividends declared on
the Common Stock unless the Registered Holder shall
have exercised
the Warrants and purchased Shares of Common Stock prior
to the record
date fixed by the Board of Directors of the Company for the
determination of holders of Common Stock entitled to any such dividend
or other rights.
3
4. Reservation of Shares and Payment of Taxes. The Company covenants
that it will at all times reserve and have available from its
authorized
Common Stock such number of shares as shall then be
issuable upon the
exercise of all outstanding Warrant Certificates.
The Company covenants
that all Warrant Shares which shall be so
issuable shall be duly and
validly issued, fully paid, non-assessable,
and free from all taxes,
liens and charges of whatsoever nature with
respect to the issuance
thereof.
The Company and the Warrant Agent
acknowledge that the Company will be
required, pursuant to the
Securities Act of 1993, as amended (the "Act"),
that no Warrants may
be exercised nor may Warrant Shares be issued by
the Warrant Agent
unless, on the Exercise Date: the Company has an
effective
registration statement covering the issuance of the Warrant
Shares
under the Act or such issuance is exempt from registration under
the
applicable state and federal securities laws, rules and regulations
of the state in which such Registered Holder resides.
If any Shares
of Common Stock to be reserved for the purpose of exercise
of
Warrant Certificates hereunder require any other registration with
or
approval of any government authority under any federal or state
law before
such shares may be validly issued or delivered, then the
Company covenants
that it will, in good faith and as expeditiously
as possible, endeavor to
secure such registration or approval, as
the case may be. No Warrant
Shares shall be issued unless and until
any such registration requirements
have been satisfied if and when
required.
The Registered Holder shall pay all documentary, stamp,
or similar taxes
and other government charges that may be imposed
with respect of the
issuance of the Warrants, or the issuance,
transfer or delivery of any
Warrant Shares on exercise of the
Warrants. In the event the Warrant
Shares are to be delivered in
a name other than the name of the
Registered Holder of the Warrant
Certificate, no such delivery shall be
made unless the person
requesting the same has paid to the Warrant Agent
the amount of
any such taxes or charges incident thereto.
In the event the
Warrant Agent ceases to also serve as the stock transfer
agent
for the Company, the Warrant Agent is irrevocably authorized to
requisition the Company's new transfer agent from time to time for
Certificates of Warrant Shares required upon exercise of the
Warrants,
and the Company will authorize such transfer agent to
comply with all such
requisitions. The Company will file with
the Warrant Agent a statement
setting forth the name and address
of its new transfer agent for Shares of
Common Stock or other
capital stock issuable upon exercise of the Warrants
and of each
successor transfer agent appointed by the Company during the
term of this Agreement.
5. Registration of Transfer. The Warrant Certificates may be
transferred
in whole or in part. Warrant Certificates to be
exchanged shall be
surrendered to the Company at its Corporate
Office. The Company shall
execute and the Warrant Agent shall
countersign, issue and deliver in
exchange therefor the Warrant
Certificate(s)which the Registered Holder
making the transfer
shall be entitled to receive.
The Warrant Agent shall keep
transfer records of all such transactions at its
corporate offices
which shall register Warrant Certificates and any transfers
4
thereof. On due presentment for registration of transfer of
any Warrant
Certificate, the Company shall execute and the
Warrant Agent shall issue and
deliver to the transferee or
transferees' a new Warrant Certificate(s)
representing an equal
aggregate number of Warrants. All Warrant Certificates
presented
for registration of transfer or exercise shall be duly endorsed
or
accompanied by a written instrument or instruments or transfer
in form
satisfactory to the Company and the Warrant Agent. Any
reasonable fee for
any registration of transfer of Warrant
Certificates shall be paid by the
Registered Holder. The
Company may require payment of a sum sufficient to
cover any
tax or other government charge that may be imposed in connection
therewith.
All Warrant Certificates so surrendered, or surrendered
for exercise, or for
exchange in case of mutilated Warrant
Certificates, shall be promptly canceled
by the Warrant Agent
and thereafter retained by the Warrant Agent until
termination
of the agency created by this Agreement. Prior to due
presentment
for registration of transfer thereof, the Company
and the Warrant Agent may
treat the Registered Holder of any
Warrant Certificate as the absolute owner
thereof
(notwithstanding any notations of ownership or writing thereon
made by
anyone other than the Company or the Warrant Agent), and
the parties hereto
shall not be affected by any notice to the
contrary.
6. Loss or Mutilation. On receipt by the Company and the
Warrant Agent of
evidence satisfactory as to the ownership of
and the loss, theft, destruction
or mutilation of any Warrant
Certificate, the Company shall execute, and the
Warrant Agent
shall countersign and deliver in lieu thereof, a new Warrant
Certificate representing an equal aggregate number of Warrants.
In the case
of loss, theft or destruction of any Warrant
Certificate, the individual
requesting issuance of a new Warrant
Certificate shall be required to
indemnify the Company and the
Warrant Agent in an amount satisfactory to each
of them. In the
event a Warrant Certificate is mutilated, such Certificate
shall
be surrendered and canceled by the Warrant Agent prior to delivery
of
a new Warrant Certificate. Applicants for a new Warrant
Certificate shall
also comply with such other regulations and
pay such other reasonable charges
as the Company may prescribe.
7. Adjustment of Exercise Price and Shares. In the event of any
adjustment
of the Exercise Price pursuant to this Section 7, the
number of Shares of
Common Stock purchasable on the exercise of
each Warrant shall be the number
derived by dividing any such
adjusted Exercise Price into the original
Exercise Price. The
Exercise Price shall be subject to adjustment as
follows:
(a) In
the event, prior to the expiration of the Warrants by exercise
or
by their terms, the Company shall issue any Shares of its
Common Stock as a
share dividend or shall subdivide the number
of outstanding Shares of Common
Stock into a greater number of
Shares, then, in either of such events, the
Exercise Price per
Share of Common Stock purchasable pursuant to the Warrants
shall
be increased proportionately. Conversely, in the event the
Company
shall reduce the number of Shares of its outstanding
Common Stock by
combining such Shares into a smaller number of
Shares, then, in such event,
the Exercise Price per Share
5
purchasable pursuant to the Warrants in effect
at the time of
such action shall be increased proportionately and the
number
of Shares of Common Stock at that time purchasable pursuant to
the
Warrants shall be decreased proportionately. Any dividend
paid or
distributed on the Common Stock in Shares of any other
class of the
Company's securities, or in securities convertible
into shares of Common
Stock of the Company, shall be treated
as a dividend paid in Common Stock
to the extent that Shares
of Common Stock are issuable on the
conversion thereof.
(b)
In the event the Company, at any time while the Warrants shall
remain
unexpired and unexercised, shall sell all or
substantially all of its
property, or dissolves, liquidates or
winds up its affairs, prompt,
proportionate, equitable, lawful
and adequate provisions shall be made as
part of the terms of
any such sale, dissolution, liquidation or winding up
such that
the holder of a Warrant may thereafter receive, on exercise
thereof, in lieu of each Share of Common Stock of the Company
which he/she/
it would have been entitled to receive, the same
kind and amount of any
share, securities, or assets as may be
issuable, distributable or payable
on any such sale, dissolution,
liquidation or winding up with respect to
each Share of Common
Stock of the Company; provided, however, that in the
event of
any such sale, dissolution, liquidation or winding up, the
right
to exercise a Warrant shall terminate on a date fixed
by the Company, such
date to be not earlier than 5:00 p.m.,
Pacific Standard Time, on the 30th
day next succeeding the
date on which notice of such termination of the
right to
exercise the Warrants has been given by mail to the Registered
Holders thereof at such addresses as may appear on the records
of the of
the Company and the Warrant Agent.
(c)
Notwithstanding the provisions of this Section 7, no adjustment
on
the Exercise Price shall be made whereby such Price is
adjusted in an
amount less than $0.001, the par value of the
Company's Common Stock, or
until the aggregate of such
adjustments shall equal or exceed $0.001.
(d) In the event,
prior to the expiration of the Warrant Certificates by
exercise
or by their terms, the Company shall determine to take a record
of the Registered Holders of its Common Stock for the purpose
of determining
shareholders entitled to receive any Share
dividend or other right which will
cause any change or
adjustment in the number, amount, price or nature of the
Shares of Common Stock or other securities or assets
deliverable on exercise
of the Warrants pursuant to the
foregoing provisions, the Company shall give
to the Registered
Holders of the Warrants at the addresses as may appear on
the
books of the Company at least 15 days prior written notice to
the effect
that it intends to take such a record. Such notice
hall specify the date as
of which such record is to be taken;
the purpose for which such record is to
be taken; and the number,
amount, price and nature of the Common Stock or
other Shares,
securities or assets which will be deliverable on exercise of
the Warrants after the action for which such record will be
taken has been
completed. Without limiting the obligation of
the Company to provide notice
to the Registered Registered
Holders of the Warrant Certificates of any
corporate action
hereunder, the failure of the Company to give notice shall
not
invalidate such corporate action of the Company.
(e) No
adjustment of the Exercise Price shall be made as a result of
or
in connection with (i) the issuance of Common Stock of the
Company pursuant to
options, warrants and share purchase
agreements outstanding or in effect on
the date hereof, (ii)
the establishment of additional option plans of the
Company,
the modification, renewal or extension of any plan now in
effect or
hereafter created, or the issuance of Common Stock
on exercise of any options
pursuant to such plans, or (iii)
the issuance of Common Stock in connection
ith an acquisition
or merger of any type (therefore, the anti-dilution
provisions
of this Section 7 will not apply in the event a merger or
6
acquisition is undertaken by the Company), in connection with
compensation
arrangements for officers, employees or agents
of the Company or any
subsidiary, or the like.
(f) Before
taking any action which would cause an adjustment reducing
the Exercise Price below the then par value of the Shares of
Common Stock
issuable upon exercise of the Warrants, the
Company shall take any corporate
action which may, in the
opinion of its counsel, be necessary in order that
the
Company may validly and legally issue fully paid and non-
assessable
Shares of such Common Stock at such adjusted
Exercise Price.
Upon any adjustment of the Exercise Price
required to be made pursuant to this
Section 7, the Company,
within 30 days thereafter, shall (a) cause to be filed
with
the Warrant Agent a certificate setting forth the Exercise
Price after
such adjustment and setting forth in reasonable
detail the method of
calculation and the facts upon which
such calculation is based, and (b) cause
to be mailed to each
of the Registered Holders of the Warrant Certificates
written
notice of such adjustment.
8. Duties, Compensation and Termination of Warrant Agent.
The Warrant Agent
shall act hereunder as agent and in a
ministerial capacity for the Company,
and its duties shall
be determined solely by the provisions hereof. The
Warrant
Agent shall not, by issuing and delivering Warrant
Certificates or by
any other act hereunder, be deemed to
make any representations as to the
validity, value or
authorization of the Warrant Certificates or the Warrants
represented thereby or of the Common Stock or other
property delivered on
exercise of any Warrant. The
Warrant Agent shall not at any time be under
any duty or
responsibility to any holder of the Warrant Certificates to
make
or cause to be made any adjustment of the Exercise
Price or to determine
whether any fact exists which may
require any such adjustment.
The Warrant Agent shall not
(i) be liable for any recital or statement of fact
contained
herein or for any action taken or omitted by it in reliance
on any
Warrant Certificate or other document or instrument
believed by it in good
faith to be genuine and to have been
signed or presented by the proper party
or parties, (ii) be
responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained
in this Agreement
except for its own negligence or willful
misconduct.
The Company agrees to indemnify the Warrant Agent
against any and all losses,
expenses and liabilities which
the Warrant Agent may incur in connection with
the exercise
of any Warrants as set forth in Section 4.
The Warrant Agent
may at any time consult with counsel satisfactory to it
(which may be counsel for the Company) and shall incur no
liability or
responsibility for any action taken or omitted
by it in good faith in
accordance with the opinion or advice
of such counsel. Any notice,
statement, instruction,
request, direction, order or demand of the Company
shall be
sufficiently evidenced by aninstrument signed by its
President and
attested to by its Secretary or Assistant
Secretary. The Warrant Agent
shall not be liable for any
action taken or omitted by it in accordance with
such notice,
statement, instruction, request, order or demand.
The Company
agrees to pay the Warrant Agent reasonable compensation for
its
services hereunder and to reimburse the Warrant Agent
for its reasonable
expenses. The Company further agrees to
indemnify the Warrant Agent against
any and all losses,
expenses and liabilities arising as a result of the
Warrant
Agent's negligence or willful misconduct.
The Warrant Agent
may resign its duties or the Company may terminate the
Warrant Agent and the Warrant Agent shall be discharged
from all further
duties and liabilities hereunder (except
liabilities arising as a result of
the Warrant Agent's own
negligence or willful misconduct), on thirty days'
prior
written notice to the other party. At least fifteen days
prior to the
date such resignation is to become effective,
the Warrant Agent shall cause
a copy of such notice of
resignation to be mailed to the Registered Holder
of each
Warrant Certificate. On such resignation or termination,
the
Company shall appoint a new Warrant Agent. If the
Company shall fail to
make such appointment within a
period of thirty days after it has been
notified in
writing of the resignation by the Warrant Agent, then the
Registered Holder of any Warrant Certificate may apply to
any court of
competent jurisdiction for the appointment of
a new Warrant Agent.
After acceptance in writing of an
appointment of a new Warrant Agent is
received by the
Company, such new Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it
had been
originally named herein as the Warrant Agent,
without any further
assurance, conveyance, act or deed;
provided, however, if it shall be
necessary or expedient
to execute and deliver any further assurance,
conveyance,
act or deed, the same shall be done at the expense of the
Company and shall be legally and validly executed. The
Company shall
file a notice of appointment of a new
Warrant Agent with the resigning
Warrant Agent and shall
forthwith cause a copy of such notice to be
mailed to the
Registered Holder of each Warrant Certificate.
Any
corporation into which the Warrant Agent or any new
Warrant Agent
may be converted or merged, or any
corporation resulting from any
consolidation to which the
Warrant Agent or any new Warrant Agent shall
be a party,
or any corporation succeeding to the corporate trust
business
of the Warrant Agent shall be a successor to
the Warrant Agent under the
provisions of the preceding
paragraph. Any such successor Warrant Agent
shall
promptly cause notice of its succession as Warrant Agent
to be
mailed to the Company and to the Registered Holder
of each Warrant
Certificate. No further action shall
be required for establishment and
authorization of such
successor Warrant Agent.
The Warrant Agent, its officers
or directors and its subsidiaries or
affiliates may buy,
hold or sell Warrants or other securities of the Company
and otherwise deal with the Company in the same manner
and to the same extent
and with like effect as though it
were not Warrant Agent. Nothing herein
shall preclude
the Warrant Agent from acting in any other capacity for
the
Company or for any other legal entity.
9. Modification of Agreement. The Warrant Agent and the
Company may, by
supplemental agreement, make any changes
or corrections in this Agreement (i)
that they shall deem
appropriate to cure any ambiguity or to correct any
defective or inconsistent provision or mistake or error
herein contained; or
(ii) that they may deem necessary
or desirable and which shall not adversely
affect the
interests of the holders of Warrant Certificates; provided,
however, this Agreement shall not otherwise be modified,
supplemented or
altered in any respect except with the
consent in writing of the Registered
Holders of Warrant
Certificates representing not less than 51% of the
Warrants outstanding. Additionally, except as provided
in Section 7, no
change in the number or nature of the
Warrant Shares purchasable on exercise
of a Warrant, the
Exercise Price therefor, or the Expiration Date of a
Warrant
shall be made without the consent in writing of
the Registered Holder of the
Warrant Certificate
representing such Warrant, other than such changes as
are
specifically prescribed or allowed by this Agreement.
10. Notices. All notices, demands, elections, opinions
or requests (however
characterized or described) required
or authorized hereunder shall be deemed
given sufficiently
if in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, or by tested
telex, telegram or
cable to, in the case of the Company:
000 X. Xxxxxx Xxxxxx, Xxxxx #0
Xxxxxx Xxxx, XX, 00000
and in the case of the Warrant Agent:
Signature Stock Transfer
0000 Xxxx Xxxxx - Xxxxx 000
Xxxxx, Xxxxx 00000, XXX
and if to the Registered Holder of a Warrant Certificate,
at the address of
such holder as set forth on the records
maintained by the Warrant Agent and
the Company.
11. Binding Agreement. This Agreement shall be binding
upon and inure to the
benefit of the Company, the Warrant
Agent and their respective successors and
assigns, and the
Holders of the Warrant Certificates. Nothing in this
Agreement is intended or shall be construed to confer upon
any other person
any fright, remedy or claim or to impose
on any other person any duty,
liability or obligation.
12.Further Instruments. The parties shall execute and
deliver any and all
such other instruments and shall take
any and all other actions as may be
reasonably necessary
to carry out the intention of this Agreement.
13. Severability. If any provision of this Agreement
shall be held,
declared or pronounced void, voidable,
invalid, unenforceable or
inoperative for any reason by
any court of competent jurisdiction,
government authority
or otherwise, such holding, declaration or
pronouncement
shall not affect adversely any other provision of this
Agreement, which shall otherwise remain in full force and
effect and be
enforced in accordance with its terms and
the effect of such holding,
declaration or pronouncement
shall be limited to the territory or
jurisdiction in which
made.
14. Waiver. All the rights and remedies of either party
under this
Agreement are cumulative and not exclusive of
any other rights and
remedies as provided by law. No delay
or failure on the part of either
party in the exercise of
any right or remedy arising from a breach of this
Agreement
shall operate as a waiver of any subsequent right or remedy
arising from a subsequent breach of this Agreement. The
consent of any
party where required hereunder to act or
occurrence shall not be deemed
to be a consent to any other
action or occurrence.
15. General Provisions. This Agreement shall be construed
and enforced in
accordance with, and governed by, the laws
of the State of Nevada. Except
as otherwise expressly
stated herein, time is of the essence in performing
hereunder.
This Agreement embodies the entire agreement and
understanding
between the parties and supersedes all prior
agreements and understandings
relating to the subject matter
hereof, and this Agreement may not be
modified or amended
or any term or provisions hereof waived or discharged
except
in writing signed by the party against who such amendment,
modification, waiver or discharge is sought to be enforced.
The headings
of this Agreement may be executed in any number
of counterparts, each of
which shall be deemed an original,
but all of which taken together shall
constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be
duly executed as of the date first above
written.
MISTRAL VENTURES, INC.
(Corporate Seal)
By: /s/ Xxxx Xxxxx, President
THE WARRANT AGENT:
SIGNATURE STOCK TRANSFER
By:-------------------------------
Authorized Officer
Title:----------------------------
