EXHIBIT 4.1
THIS WARRANT AND THE SHARES OF COMMON STOCK THAT MAY BE PURCHASED PURSUANT TO
THE EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER,
PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS UNLESS SOLD
PURSUANT TO RULE 144 OF THE ACT.
No. __________________ DATED: November ___, 2001
IMAGINON CORPORATION
WARRANT
THIS CERTIFIES THAT, for value received, Xxxxx Xxxx (together with its
permitted assignees, the "Holder") is entitled to subscribe for and purchase
certain shares of the fully paid and nonassessable Common Stock (the "Shares")
of IMAGINON CORPORATION, a Nevada corporation (the "Company"), as specified
herein. This Warrant is being issued pursuant to that certain Consulting
Agreement, by and among the Company, IMAGINON, INC., a Delaware corporation, and
XXXXX XXXX
This Warrant is subject to the following terms, provisions, and
conditions:
1. ISSUANCE OF WARRANTS. Company, subject to the terms and conditions
hereinafter set forth, hereby issues to Holder warrants to purchase Two Million
Five Hundred Thousand (2,500,000) shares of Common Stock of the Company (the
"Shares"). The exercise price of the Shares shall be $0.02 per share ("Exercise
Price") subject to adjustment in accordance with Paragraph 5 of this Agreement.
2. TERM. The Warrants may be exercised at any time after the Effective Date set
forth on the signature page hereof and before the expiration of thirty six (36)
months therefrom.
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3. EXERCISE.
(a) Holder shall exercise the Warrants granted hereunder, in whole or
in part, by delivering to Company at the office of Company, or at such other
address as Company may designate by notice in writing to the holder hereof, the
notice of Exercise attached hereto as EXHIBIT A and incorporated herein by
reference and a certified check or wire transfer in lawful money of the United
States for the exercise price.
(b) Upon delivery of the items set forth in (a) above, Holder shall be
entitled to receive a certificate or certificates representing the Shares. Such
Shares shall be validly issued, fully paid and non-assessable.
(c) Warrants shall be deemed to have been exercised immediately prior
to the close of business on the day of such delivery, and Holder shall be deemed
the holder of record of the shares issuable upon such exercise at such time. The
Warrants may be exercised in whole or in part and from time to time as the
holder may determine.
(d) Upon any partial exercise, at the request of Company, this
Agreement shall be surrendered and a new Warrant Agreement evidencing the right
to purchase the number of Shares not purchased upon such exercise shall be
issued to Holder.
4. REPRESENTATIONS AND WARRANTIES OF HOLDER. Holder hereby represents and
warrants to Company as follows:
(a) Sophistication. Holder has (i) a preexisting personal or business
relationship with Company or one or more of its officers, directors, or control
persons; or (ii) by reason of Holder's business or financial experience, or by
reason of the business or financial experience or of Holder's financial advisor
who is unaffiliated with and who is not compensated, directly or indirectly, by
Company or any affiliate or selling agent of Company, Holder is capable of
evaluating the risks and merits of this investment and of protecting Holder's
own interests in connection with this investment.
(b) Accredited Investor. Holder is an "accredited investor" as such
term is defined under Regulation D of the Securities Act of 1933 as amended (the
"Securities Act").
(c) Investment Intent. Holder is purchasing the Shares solely for his
own account for investment. The entire legal and beneficial interest of the
Warrants is being purchased, and will be held, for Holder's account only, and
neither in whole or in part for any other person.
(d) Information Concerning Company. Holder is aware of the business
affairs and financial condition of Company and has acquired sufficient
information about Company to make an informed and knowledgeable decision to
purchase the Warrants and the Shares.
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(e) Economic Risk. Holder realizes that the purchase of the Warrants
and the Shares will be a highly speculative investment and involves a high
degree of risk. Holder is able, without impairing Purchaser's financial
condition, to hold the Warrants and/or the Shares for an indefinite period of
time and to suffer a complete loss of Holder's investment.
5. ANTI-DILUTION ADJUSTMENTS. The Warrants granted hereunder and the Purchase
Price thereof shall be subject to adjustment from time to time upon the
happening of certain events as set forth below.
(a) Stock Splits and Dividends. If outstanding shares of Company Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased. When any adjustment is required to be made in the
Purchase Price, the number of Shares purchasable upon the exercise of this
Warrant shall be changed to the number determined by dividing (i) an amount
equal to the number of shares issuable upon the exercise of this Warrant
immediately prior to such adjustment, multiplied by the Purchase Price in effect
immediately prior to such adjustment, by (ii) the Purchase Price in effect
immediately after such adjustment.
(b) Reclassification, Etc. In case there occurs any reclassification or
change of the outstanding securities of Company or of any reorganization of
Company (or any other corporation the stock or securities of which are at the
time receivable upon the exercise of this Warrant) or any similar corporate
reorganization on or after the date hereof, then and in each such case Holder,
upon the exercise hereof at any time after the consummation of such
reclassification, change, or reorganization shall be entitled to receive, in
lieu of the stock or other securities and property receivable upon the exercise
hereof prior to such consummation, the stock or other securities or property to
which Holder would have been entitled upon such consummation if Holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment pursuant to the provisions of this Section.
(c) Adjustment Certificate. When any adjustment is required to be made
in the Shares or the Purchase Price pursuant to this Section, Company shall
promptly mail to the Holder a certificate setting forth (i) a brief statement of
the facts requiring such adjustment, (ii) the Purchase Price after such
adjustment and (iii) the kind and amount of stock or other securities or
property into which this Warrant shall be exercisable after such adjustment.
6. RESERVATION OF SHARES. Company shall at all times keep reserved a sufficient
number of authorized shares of Common Stock, and shall make appropriate
provision of their issuance, to provide for the exercise of the Warrants in
full.
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7. Transferability. The Warrants issued hereunder and any and all Shares issued
upon exercise of the Warrants shall be transferable on the books of Company by
the holder hereof in person or by duly authorized attorney subject to any
restrictions imposed by applicable federal or state securities laws. It shall be
a further condition to any transfer of the Warrants that the transferor (if any
portion of the Warrants are retained) and the transferee shall receive and
accept new Warrants, of like tenor and date, executed by Company, for the
portion so transferred and for any portion retained, and shall surrender this
Agreement executed.
8. VOTING. Nothing contained in this Agreement shall be construed as conferring
upon Holder the right to vote or to receive dividends or to consent or receive
notice as a shareholder in respect to any meeting of shareholders for the
election of directors of Company or for any other purpose not specified herein.
9. MISCELLANEOUS.
(a) AMENDMENT. This Agreement may be amended by written agreement
between Company and Holder.
(b) NOTICE. Any notice, demand or request required or permitted to be
given under this Agreement will be in writing and will be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, or with a
commercial courier service, with postage prepaid, and addressed, if to Company,
at its principal place of business, attention the President, and if to Holder,
at Holder's address as shown on the stock records of Company.
(c) FURTHER ASSURANCES. Both parties agree to execute any additional
documents necessary to carry out the purposes of this Agreement.
(d) SEVERABILITY. If any provision of this Agreement is held by any
court of competent jurisdiction to be illegal, unenforceable or void, such
provision will be enforced to the greatest extent possible and all other
provisions of this Agreement will continue in full force and effect.
(e) GOVERNING LAW. This Agreement will be interpreted and enforced in
accordance with California Law as applied to agreements made and performed in
California.
(f) SURVIVAL. The representations and warranties, of the parties hereto
set forth in this Agreement shall survive the closing and consummation of the
transactions contemplated hereby for a period of three (3) years from the date
hereof.
(g) ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement and the
documents and instruments attached hereto constitute the entire agreement
between Holder and Company relative to the subject matter hereof. Any previous
agreements between the parties are superseded by this Agreement. Subject to any
exceptions specifically set forth in this Agreement, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
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(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(i) HEADINGS. The headings of the Paragraphs of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
(j) ATTORNEY FEES. If any action is brought to interpret or enforce the
terms of this Agreement, the prevailing party in such action shall be entitled
to recover its attorneys fees and costs incurred in connection with such action.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed and delivered by their duly authorized officers as of November , 2001
(the "Effective Date").
COMPANY: IMAGINON, INCORPRATED
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By:
Its:_____________________________________
HOLDER: XXXXX XXXX
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By:
Its:_____________________________________
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WARRANT
NOTICE OF EXERCISE
To: IMAGINON, INC.
(1) XXXXX XXXX ("Holder") hereby elects to purchase ______________
shares of Common Stock of Company, Inc. pursuant to the terms of the Warrant
Agreement executed by Holder and Company, Inc., and tenders herewith payment of
the purchase price in full, together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares
in the name of Holder or in such other name as is specified below.
Holder: XXXXX XXXX
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By:
Its:_____________________________________
