EXHIBIT 99.2
STOCK SUBSCRIPTION OFFER
XXXXXXX MOUNTAIN RESOURCES CORP.
-------DRAFT -----
WARRANT AGREEMENT
XXXXXXX MOUNTAIN RESOURCES CORP.
AND
XXXXXXXX STOCK TRANSFER
Warrant Agent
________________________, 2005
THIS AGREEMENT (the "Agreement") is dated as of _______________, 2005, by and
between XXXXXXX MOUNTAIN RESOURCES CORP, a Nevada corporation (the "Company")
and XXXXXXXX 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
one Stock Purchase Warrant (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
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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.
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 _______________,
2000__ (the "Exercise Date") until ________________, 200___ (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 #29B Ebony Tower, President
Park, 00 Xxxxxxxxx 00 Xxxx, Xxxxxxx 00000 Xxxxxxxx (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 therefore, 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 certificate 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 the
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.
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,
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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 therefore 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
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.
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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
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
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intends to take such a record. Such notice shall 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
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 with 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 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 an
instrument signed by its President and attested to by its Secretary or Assistant
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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
therefore, 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.
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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:
#00X Xxxxx Xxxxx, Xxxxxxxxx Xxxx
00 Xxxxxxxxx 00 Xxxx
Xxxxxxx 00000 Xxxxxxxx
and in the case of the Warrant Agent:
Xxxxxxxx Stock Transfer
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
XXXXXXX MOUNTAIN RESOURCES CORP.
(Corporate Seal)
By: /s/ Xxxxxx Xxxxxxx, President
---------------------------------
ATTEST:
/s/ Xxxxxx Xxxxxxx, Secretary
THE WARRANT AGENT:
XXXXXXXX STOCK TRANSFER
By:
-------------------------------
Authorized Officer
Title:
----------------------------
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