Exhibit 10.14
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE
SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
IMEDIA INTERNATIONAL, INC.
WARRANT
Warrant No. [ ] Date of Original Issuance: September 1, 2004
Date of Subsequent Issuance: June 9, 2005
The Following Warrant replaces and supercedes the original warrant dated
September 1, 2004 in the amount of 444,400 shares exercisable at $0.90 per
share, and incorporates additional warrants issued as consideration for certain
loan extensions made to Company by Holder.
iMedia International, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, MicroCapital Fund LTD or its registered
assigns (the "Holder"), is entitled to purchase from the Company up to a total
of 666,623 shares of Class A Common Stock, $0.001 par value per share (the
"Common Stock"), of the Company (each such share, a "Warrant Share" and all such
shares, the "Warrant Shares") at an exercise price equal to ninety cents ($0.40)
per share (as adjusted from time to time as provided in Section 9, the "Exercise
Price"), at any time and from time to time from and after the date hereof and
through and including August 31, 2009 (the "Expiration Date"), and subject to
the following terms and conditions:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. In addition to the terms defined elsewhere in
this Warrant, the following capitalized terms shall have the following meanings:
(a) "Affiliate" shall mean any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person, as such terms are used in and construed under Rule
144.
(b) "Business Day" shall mean any day except (i) Saturday, (ii)
Sunday and (iii) any day which shall be a federal legal holiday or a day on
which banking institutions in the State of New York are authorized or required
by law or other governmental action to close.
(c) "Closing Price " shall mean the closing bid price for the common
stock of the Company quoted on the Trading Market on the Closing Date.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Person" shall mean an individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
(f) "Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of the date hereof, among the Company, Holder and certain
other investors.
(g) "Rule 144" and "Rule 144(k)" shall mean Rule 144 and Rule
144(k), respectively, promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.
(h) "Trading Day" shall mean (i) a day on which the Common Stock is
traded on a Trading Market, or (ii) if the Common Stock is not listed on a
Trading Market, a day on which the Common Stock is traded in the
over-the-counter market is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i) or (ii)
hereof, then Trading Day shall mean a Business Day.
(i) "Trading Market" means whichever of the New York Stock Exchange,
the American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap
Market or OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.
2. Registration of Warrant. The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Holder hereof from time to time. The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
3. Registration of Transfers. Subject to Section 6, the Company shall
register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed, and a legal opinion as contemplated by the legend on page
1 of this Warrant, to the Company at its address specified herein. Upon any such
registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a "New Warrant"),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant.
4. Exercise and Duration of Warrants.
(a) This Warrant shall be exercisable by the registered Holder in
whole or in part at any time and from time to time on or after the date hereof
to and including the Expiration Date. At 6:30 p.m., San Francisco time on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value. The Company may not call or redeem all or
any portion of this Warrant without the prior written consent of the Holder.
5. Delivery of Warrant Shares.
(a) To effect exercises hereunder, the Holder shall not be required
to physically surrender this Warrant unless all of the Warrant Shares then
represented by this Warrant are being exercised. Upon delivery of an "Exercise
Notice" in the form attached hereto (an "Exercise Notice") to the Company
(together with the attached "Warrant Shares Exercise Log") at its address for
notice set forth herein and upon payment of the Exercise Price
multiplied by the number of Warrant Shares that the Holder intends to purchase
hereunder, the Company shall promptly (but in no event later than three (3)
Trading Days after the Date of Exercise (as defined herein)) issue and deliver
to the Holder a certificate for the Warrant Shares issuable upon such exercise.
The certificate evidencing such Warrant Shares shall bear restrictive legends
substantially similar to those imposed on this Warrant, provided, that no such
legend shall be imposed on any such Warrant Shares (i) following a sale of such
Warrant Shares pursuant to an effective registration statement, (ii) following a
sale of such Warrant Shares pursuant to Rule 144, (iii) while such Warrant
Shares are eligible for sale under Rule 144(k), or (iv) if such a legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Commission). Following such
time as restrictive legends are not required to be placed on certificates
representing Warrant Shares, the Company will, no later than three (3) Trading
Days following the delivery by the holder thereof to the Company or the
Company's transfer agent of a certificate representing such Warrant Shares
containing a restrictive legend, deliver or cause to be delivered to such holder
thereof a certificate representing such Warrant Shares that is free from all
restrictive and other legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of
the Warrant Shares has been declared effective by the Commission, use its best
efforts to deliver Warrant Shares hereunder electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that the Company may, but
will not be required to, change its transfer agent if its current transfer agent
cannot deliver Warrant Shares electronically through the Depository Trust
Corporation. A "Date of Exercise" means the date on which the Holder shall have
delivered to Company: (i) the Exercise Notice (with the attached Warrant Shares
Exercise Log), appropriately completed and duly signed and (ii) payment in full
of the Exercise Price for the number of Warrant Shares so indicated by the
Holder to be purchased.
(b) If by the third (3rd) Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.
(c) If by the third (3rd) Trading Day after a Date of Exercise the
Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third (3rd) Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases in a bona fide
arm's length transaction for fair market value (in an open market transaction or
otherwise) shares of Common Stock necessary to deliver in satisfaction of a bona
fide arm's length sale for fair market value by the Holder of the Warrant Shares
which the Holder was entitled to receive upon such exercise (a "Buy-In"), then
the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the Holder's total proceeds from
such sale (after brokerage commissions, if any) of the shares, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. The Holder shall provide the Company written notice and reasonably
detailed documentation indicating the amounts payable to the Holder in respect
of the Buy-In.
(d) The Company's obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company's failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.
6. Charges, Taxes and Expenses. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.
7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity (which shall not include a surety bond), if requested.
Applicants for a New Warrant under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as
a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company's
obligation to issue the New Warrant.
8. Reservation of Warrant Shares. The Company covenants that it will at
all times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Warrant Shares upon exercise of this Warrant as herein
provided, the number of Warrant Shares which are then issuable and deliverable
upon the exercise of this Warrant, free from preemptive rights or any other
contingent purchase rights of Persons other than the Holder (taking into account
the adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares so issuable and deliverable shall, upon issuance and the payment
of the applicable Exercise Price in accordance with the terms hereof, be duly
and validly authorized and issued and fully paid and nonassessable.
9. Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 9.
(a) Stock Dividends and Splits. If the Company, at any time while
this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common
Stock into a smaller number of shares, then in each such case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which
the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this paragraph occurs
during the period that an Exercise Price is calculated hereunder, then the
calculation of such Exercise Price shall be adjusted appropriately to reflect
such event. Simultaneously with any adjustment to the Exercise Price pursuant to
this paragraph (a), the number of Warrant Shares that may be purchased upon
exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for
the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment.
(b) Fundamental Transactions. If, at any time while this Warrant is
outstanding, (1) the Company effects any merger or consolidation of the Company
with or into another Person, (2) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions, (3)
any tender offer or exchange offer (whether by the Company or another Person) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (4) the Company
effects any reclassification of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash or property (in any such case, a
"Fundamental Transaction"), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise of this Warrant (the "Alternate Consideration"). For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such Fundamental
Transaction. At the Holder's option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a new
warrant substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price (adjusted as provided above, if
necessary) upon exercise thereof. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(b) and insuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
(c) Adjustments to Exercise Price for Certain Dilutive Issuances.
(i) Adjustments for Issuance of Additional Shares of
Common Stock. If the Company, at any time after the Date of Original Issuance,
shall issue any Additional Shares of Common Stock (as such term is defined
below) at a price per share less than the Per Unit Purchase Price, or without
consideration, then the applicable Exercise Price in effect immediately prior to
such issuance shall automatically be adjusted to that price (rounded to the
nearest cent) determined by multiplying the applicable Exercise Price then in
effect by a fraction, (i) the numerator of which shall be equal to the sum of
(A) the number of shares of Common Stock outstanding or deemed outstanding
pursuant to paragraph (c)(ii) below (the "Fully Diluted Outstanding Common
Stock") immediately prior to the issuance of such Additional Shares of Common
Stock plus (B) the number of shares of Common Stock (rounded to the nearest
whole share) which the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at a price per share
equal to the applicable Exercise Price then in effect, and (ii) the denominator
of which shall be equal to the number of shares of Fully Diluted Common Stock
plus the number of such Additional Shares of Common Stock. Simultaneously with
any adjustment in the Exercise Price pursuant to this paragraph (c), the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment. The provisions of this paragraph (c) shall not apply
under any of the circumstances for which an adjustment is provided in paragraphs
(a) or (b) above. No adjustment of the applicable Exercise Price shall be made
under this paragraph (c) upon the issuance of any Additional Shares of Common
Stock which are issued pursuant to any rights, options or warrants (other than
as excluded by paragraph (c)(iii) below) to subscribe for, purchase or otherwise
acquire either Common Stock or Convertible Securities (as such term is defined
below) (collectively, "Options") or securities (other than as excluded by
paragraph (c)(iii) below) convertible, either directly or indirectly, into or
exchangeable for Common Stock ("Convertible Securities"), if upon the issuance
of such Options or Convertible Securities (x) any adjustment shall have been
made pursuant to paragraph (c)(iii)(B) below or (y) no adjustment was required
pursuant to this paragraph (c)(i). No adjustment of the applicable Exercise
Price shall be made under this paragraph (c)(i) in an amount less than $.01 per
share, but any such lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment, if any, which
together with any adjustments so carried forward shall amount to $.01 per share
or more; provided, that upon any adjustment of the applicable Exercise Price as
a result of any dividend or distribution payable in Common Stock or Convertible
Securities or the reclassification, subdivision or combination of Common Stock
into a greater or smaller number of shares, the foregoing figure of $.01 per
share (or such figure as last adjusted) shall be adjusted (to the nearest
one-half cent) in proportion to the adjustment in the applicable Exercise Price.
(ii) Deemed Issuances of Common Stock. In the case of the
issuance (whether before, on or after the Date of Original Issuance) of Options
or Convertible Securities, the following provisions shall apply for all purposes
of this paragraph (c):
(A) The aggregate maximum number of shares of Common
Stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such Options shall be
deemed to have been issued at the time such Options were issued and for a
consideration equal to the consideration (determined in the manner provided in
paragraph (c)(iv) below), if any, received by the Company upon the issuance of
such Options (without taking into account potential
antidilution adjustments) plus the minimum exercise price provided in such
Options for the Common Stock covered thereby.
(B) The aggregate maximum number of shares of Common
Stock deliverable upon conversion of or in exchange for (assuming the
satisfaction of any conditions to exercisability, including without limitation,
the passage of time, but without taking into account potential antidilution
adjustments) any such Convertible Securities or upon the exercise of Options
therefor and subsequent conversion or exchange thereof shall be deemed to have
been issued at the time such Convertible Securities were issued or such Options
were issued and for a consideration equal to the consideration, if any, received
by the Company for any such Convertible Securities or related Options (excluding
any cash received on account of accrued interest or accrued dividends), plus the
minimum additional consideration, if any, to be received by the Company (without
taking into account potential antidilution adjustments) upon the conversion or
exchange of such Convertible Securities or the exercise of any related Options
(the consideration in each case to be determined in the manner provided in
paragraph (c)(iv) below).
(C) In the event of any change in the number of
shares of Common Stock deliverable or in the consideration payable to the
Company upon exercise of such Options or upon conversion of or in exchange for
such Convertible Securities, including, but not limited to, a change resulting
from the antidilution provisions thereof, the Exercise Price, to the extent in
any way affected by or computed using such Options or Convertible Securities,
shall be recomputed to reflect such change, but no further adjustment shall be
made for the actual issuance of Common Stock or any payment of such
consideration upon the exercise of any such Options or the conversion or
exchange of such Convertible Securities.
(D) Upon the expiration of such Options, the
termination of any such rights to convert or exchange or the expiration of any
Options related to such Convertible Securities, the Exercise Price shall, to the
extent in any way affected by or computed using such Options or Convertible
Securities or Options related to such Convertible Securities, be recomputed to
reflect the issuance of only the number of shares of Common Stock (and
Convertible Securities which remain in effect) actually issued upon the exercise
of such Options, upon the conversion or exchange of such Convertible Securities
or upon the exercise of the Options related to such Convertible Securities.
(E) The number of shares of Common Stock deemed
issued and the consideration deemed paid therefor pursuant to paragraphs
(c)(ii)(A) and (c)(ii)(B) above shall be appropriately adjusted to reflect any
change, termination or expiration of the type described in paragraphs (c)(ii)(C)
and (c)(ii)(D) above.
(iii) Definition of Additional Shares of Common Stock. As used
herein, the term "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or deemed to be issued) by the Company after the Date of
Original Issuance, other than shares of Common Stock issued (or deemed to be
issued):
(A) to employees, consultants or directors pursuant
to stock option, stock grant, stock purchase or similar plans or arrangements
approved by the Company's Board of Directors;
(B) as a dividend or other distribution in
connection with which an adjustment to the Warrant Exercise Price is made;
(C) in a merger, consolidation, acquisition or
similar business combination that is approved by the Company's Board of
Directors;
(D) in exchange for technology or other non-cash
assets as approved by the Company's Board of Directors;
(E) pursuant to any rights or agreements outstanding
on the Date of Original Issuance;
(F) to Persons with which the Company has business or
banking relationships, provided that such issuance is approved by the Company's
Board of Directors and is not primarily for capital raising purposes; or
(G) if the Holder agrees in writing that such shares
shall not constitute Additional Shares of Common Stock.
(iv) Determination of Consideration. For purposes of this
paragraph (c) the consideration received by the Company for any Additional
Shares of Common Stock issued (or deemed to be issued) shall be computed as
follows:
(A) Cash and Property. Such consideration shall:
(1) insofar as it consists of cash, be computed
at the aggregate amount of cash received by the Company;
(2) insofar as it consists of securities and
the value of such securities is not determinable by reference to a separate
agreement, (A) if the securities are then traded on a Trading Market, then the
value shall be computed based on the average of the closing prices of the
securities on such Trading Market over the thirty (30)-day period ending on the
date of receipt by the Company, (B) if the securities are actively traded
over-the-counter, then the value shall be computed based on the average of the
closing bid prices over the thirty (30) day ending on the date of receipt by the
Company, and (C) if there is no active public market, then the value shall be
computed based on the fair market value thereof on the date of receipt by the
Company, as determined in good faith by the Board of Directors;
(3) insofar as it consists of property other
than cash and securities, be computed at the fair market value thereof at the
time of such issuance, as determined in good faith by the Board of Directors;
and
(4) if Additional Shares of Common Stock are
issued (or deemed to be issued) together with other shares or securities or
other assets of the Company for consideration which cover both, by the
proportion of such consideration so received, computed as provided in the
immediately preceding paragraphs (1), (2) and (3), as determined in good faith
by the Board of Directors; and
(B) Options and Convertible Securities. The
consideration received by the Company for Additional Shares of Common Stock
deemed to have been issued pursuant to this paragraph (c) relating to Option and
Convertible Securities, shall be the sum of (x) the total amount, if any,
received or receivable by the Company as consideration for the issue of such
Options or Convertible Securities, plus (y) the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in
the case of Options for Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of such Convertible
Securities.
(v) No Increase in Exercise Price. Notwithstanding any other
provisions of this paragraph (c), except to the limited extent provided for in
paragraphs (c)(ii)(D) and (c)(ii)(E) above, no adjustment of the Exercise Price
pursuant to this paragraph (c) shall have the effect of increasing the Exercise
Price above the Exercise Price in effect immediately prior to such adjustment.
(d) Calculations. All calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition
of any such shares shall be considered an issue or sale of Common Stock.
(e) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 9, the Company at its expense will promptly compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number or type of Warrant Shares or other securities
issuable upon exercise of this Warrant (as applicable), describing the
transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's transfer agent.
(f) Notice of Corporate Events. If the Company (i) declares a
dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of rights
or warrants to subscribe for or purchase any capital stock of the Company or any
subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Holder a notice describing
the material terms and conditions of such transaction, at least twenty (20)
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in
order to insure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice. Notwithstanding the foregoing, the
delivery of the notice described in this Section 9(f) is not intended to and
shall not bestow upon the Holder any voting rights whatsoever.
10. Payment of Exercise Price. The Holder shall pay the Exercise Price by
delivering to the Company immediately available funds.
11. Limitations on Exercise. Notwithstanding anything to the contrary
contained herein, the number of shares of Common Stock that may be acquired by
the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following such exercise
(or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder's for
purposes of Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), does not exceed 9.999% of the total number of
issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. This
provision shall not restrict the number of shares of Common Stock which a Holder
may receive or beneficially own in order to determine the amount of securities
or other consideration that such Holder may receive in the event of a
Fundamental Transaction as contemplated in Section 9 of this Warrant. This
restriction may not be waived.
12. No Fractional Shares. No fractional shares of Warrant Shares will be
issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by the applicable Trading Market on the date of
exercise.
13. No Shareholder Rights. The Holder of this Warrant shall not have,
solely on account of such status, any rights of a stockholder of the Company,
either at law or in equity, or to any notice of meetings of shareholders or of
any other proceedings of the Company, except as provided in this Warrant.
Without limiting the generality of the foregoing, and except as otherwise
provided herein, no dividends shall accrue to the Warrant Shares underlying this
Warrant until the exercise hereof and the purchase of the underlying Warrant
Shares, at which point dividends shall begin to accrue with respect to such
purchased Warrant Shares from and after the date such Warrant Shares are so
purchased.
14. Notices. Any and all notices or other communications or deliveries
hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be:
(x) if to the Company: iMedia International, Inc. 0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxx, XX 00000, Facsimile (000) 000-0000, Attention Xxxxx
XxxXxxxxxx, Chairman and Chief Executive Officer
(y) if to the Holder: to the address or facsimile number appearing on
the Warrant Register or such other address or facsimile number as the Holder
may provide to the Company in accordance with this Section.
15. Warrant Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the
Holder's last address as shown on the Warrant Register.
16. Miscellaneous.
(a) This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder and their successors and
assigns.
(b) All questions concerning the construction, validity, enforcement
and interpretation of this Warrant shall be governed by and construed in
accordance with the internal laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. Company irrevocably
consents to the jurisdiction of the United States federal courts and the state
courts located in the City and County of San Francisco, California, in any suit
or proceeding based on or arising under this Warrant and irrevocably agrees that
all claims in respect of such suit or proceeding may be determined in such
courts. Borrower irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in such forum. Company further agrees
that service of process upon Company mailed by first class mail shall be deemed
in every respect effective service of process upon Company in any such suit or
proceeding. Nothing herein shall affect the right of Holder to serve process in
any other manner permitted by law. Company agrees that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
(c) The headings herein are for convenience only, do not constitute
a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
(d) In case any one or more of the provisions of this Warrant shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above. iMEDIA
INTERNATIONAL, INC.
By: /s/ Xxxxx XxxXxxxxxx
----------------------------------
Name: Xxxxx XxxXxxxxxx
Title: Chairman & Chief Executive Officer
[SIGNATURE PAGE TO WARRANT AGREEMENT - LP]
IMEDIA INTERNATIONAL, INC.
WARRANT ORIGINALLY ISSUED SEPTEMBER 1, 2004
WARRANT NO. [ ]
EXERCISE NOTICE
To iMedia International, Inc.:
The undersigned hereby irrevocably elects to purchase _____________ shares
of Class A Common Stock pursuant to the above captioned Warrant, and encloses
herewith $________ in cash, certified or official bank check or checks or other
immediately available funds, which sum represents the aggregate Exercise Price
(as defined in the Warrant) for the number of shares of Common Stock to which
this Exercise Notice relates, together with any applicable taxes payable by the
undersigned pursuant to the Warrant.
By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock (determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of MicroCapital Fund LP, as
follows:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
(Please print name and address)
Warrant Shares Exercise Log
Date Number of Warrant Number of Warrant Number of Warrant
Shares Available Shares Exercised Shares Remaining
to be Exercised to be Exercised
IMEDIA INTERNATIONAL, INC.
WARRANT ORIGINALLY ISSUED SEPTEMBER 1, 2004
WARRANT NO. [ ]
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the
above-captioned Warrant to purchase ____________ shares of Class A Common Stock
to which such Warrant relates and appoints ________________ attorney to transfer
said right on the books of the Company with full power of substitution in the
premises.
Dated: _______________, ____
________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
---------------------------------------
Address of Transferee
________________________________________
________________________________________
