Warrant
Exhibit
4.1
Warrant
THIS
WARRANT AND THE SHARES OF COMMON
STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER
EITHER
THE SECURITIES ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS
(THE
"STATE ACTS") AND SHALL NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED, OR
OTHERWISE TRANSFERRED (WHETHER OR NOT FOR CONSIDERATION) BY THE HOLDER
EXCEPT
UPON THE ISSUANCE TO THE COMPANY OF A FAVORABLE OPINION OF COUNSEL OR SUBMISSION
TO THE COMPANY OF SUCH EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL TO THE
COMPANY, IN EACH SUCH CASE, TO THE EFFECT THAT ANY SUCH TRANSFER SHALL
NOT BE IN
VIOLATION OF THE ACT AND THE STATE ACTS.
WARRANT
TO PURCHASE 200,000 SHARES OF
COMMON STOCK
(a
Colorado Corporation)
Not
Transferable or Exercisable Except
Upon
Conditions Herein Specified
Void
after 5:00 O'Clock p.m.,
Mountain
Standard Time, on November 29, 2012
FOREVER
VALUABLE COLLECTIBLES,
INC., a Colorado corporation (the "Company") hereby certifies that A-SQUARED HOLDINGS,
INC., a
corporation organized under the laws of the State of Colorado, its registered
successors and permitted assigns registered on the books of the Company
maintained for such purposes as the registered holder hereof (the "Holder"),
for
value received, is entitled to purchase from the Company the number of
fully
paid and non-assessable shares of Common Stock of the Company (the "Shares"),
stated above at the purchase price of $.001 per Share (the "Exercise Price")
(the number of Shares and Exercise Price being subject to adjustment as
hereinafter provided) upon the terms and conditions herein provided.
1.
Exercise
of Warrants.
(a)
Subject to subsection (b) of this
Section 1, upon presentation and surrender of this Warrant Certificate,
with the
attached Purchase Form duly executed, at the principal office of the Company
at
000 00xx
Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxx 00000, or at such other place as the Company
may
designate by notice to the Holder hereof, together with a certified or
bank
cashier's check payable to the order of the Company in the amount of the
Exercise Price times the number of Shares being purchased, the Company
shall
deliver to the Holder hereof, as promptly as practicable, certificates
representing the Shares being purchased. This Warrant may be exercised
in whole
or in part; and, in case of exercise hereof in part only, the Company,
upon
surrender hereof, will deliver to the Holder a new Warrant Certificate
or
Warrant Certificates of like tenor entitling the Holder to purchase the
number
of Shares as to which this Warrant has not been exercised.
(b)
This Warrant may
be exercised in whole or in part at any time prior to 5:00 o'clock P.M.,
Mountain Standard Time, on November 29, 2012.
Exhibit
4.1 Page 1 of 7
2.
Exchange
and Transfer of
Warrant. This Warrant (a) at any time prior to the exercise hereof, upon
presentation and surrender to the Company, may be exchanged, alone or with
other
Warrants of like tenor registered in the name of the Holder, for another
Warrant
or other Warrants of like tenor in the name of such Holder exercisable
for the
same aggregate number of Shares as the Warrant or Warrants surrendered,
and (b)
may be sold, transferred, hypothecated or assigned, in whole or in part.
3.
Rights
and Obligations of Warrant
Holder.
(a)
The Holder of
this Warrant Certificate shall not, by virtue hereof, be entitled to any
rights
of a stockholder in the Company, either at law or in equity; provided,
however,
in the event that any certificate representing the Shares is issued to
the
Holder hereof upon exercise of this Warrant, such Holder shall, for all
purposes, be deemed to have become the holder of record of such Shares
on the
date on which this Warrant Certificate, together with a duly executed Purchase
Form, was surrendered and payment of the Exercise Price was made, irrespective
of the date of delivery of such Share certificate. The rights of the Holder
of
this Warrant are limited to those expressed herein and the Holder of this
Warrant, by its acceptance hereof, consents to and agrees to be bound by
and to
comply with all the provisions of this Warrant Certificate, including,
without
limitation, all the obligations imposed upon the Holder hereof by Sections
2 and
5 hereof. In addition, the Holder of this Warrant Certificate, by accepting
the
same, agrees that the Company may deem and treat the person in whose name
this
Warrant Certificate is registered on the books of the Company maintained
for
such purpose as the absolute, true and lawful owner for all purposes whatsoever,
notwithstanding any notation of ownership or other writing thereon, and
the
Company shall not be affected by any notice to the contrary.
(b)
No Holder of this
Warrant Certificate, as such, shall be entitled to vote or receive distributions
or to be deemed the holder of Shares for any purpose, nor shall anything
contained in this Warrant Certificate be construed to confer upon any Holder
of
this Warrant Certificate, as such, any of the rights of a stockholder of
the
Company or any right to vote, give or withhold consent to any action by
the
Company, whether upon any recapitalization, issue of stock, reclassification
of
stock, merger, conveyance or otherwise, receive notice of meetings or other
action affecting stockholders (except for notices provided for herein),
receive
distributions, subscription rights, or otherwise, until this Warrant shall
have
been exercised and the Shares purchasable upon the exercise thereof shall
have
become deliverable as provided herein; provided, however, that any such
exercise
on any date when the stock transfer books of the Company shall be closed
shall
constitute the person or persons in whose name or names the certificate
or
certificates for those Shares are to be issued as the record holder or
holders
thereof for all purposes at the opening of business on the next succeeding
day
on which such stock transfer books are open, and the Warrant surrendered
shall
not be deemed to have been exercised, in whole or in part as the case may
be,
until the next succeeding day on which stock transfer books are open for
the
purpose of determining entitlement to distributions on the Company's common
stock.
4.
Shares
Underlying Warrants.
The Company covenants and agrees that all Shares delivered upon exercise
of this
Warrant shall, upon delivery and payment therefore, be duly and validly
authorized and issued, fully-paid and non-assessable, and free from all
stamp
taxes, liens, and charges with respect to the purchase thereof. In addition,
the
Company agrees at all times to reserve and keep available an authorized
number
of Shares sufficient to permit the exercise in full of this Warrant.
Exhibit
4.1 Page 2 of 7
5.
Disposition
of Warrants or
Shares.
(a)
The holder of
this Warrant Certificate and any transferee hereof or of the Shares issuable
upon the exercise of the Warrant Certificate, by their acceptance hereof,
hereby
understand and agree that the Warrant, and the Shares issuable upon the
exercise
hereof, have not been registered under either the Securities Act of 1933
(the
"Act") or applicable state securities laws (the "State Acts") and shall
not be
sold, pledged, hypothecated, donated, or otherwise transferred (whether
or not
for consideration) except upon the issuance to the Company of a favorable
opinion of counsel or submission to the Company of such evidence as may
be
satisfactory to counsel to the Company, in each such case, to the effect
that
any such transfer shall not be in violation of the Act and the State Acts.
It
shall be a condition to the transfer of this Warrant that any transferee
thereof
deliver to the Company its written agreement to accept and be bound by
all of
the terms and conditions of this Warrant Certificate.
(b)
The stock
certificates of the Company that will evidence the shares of Common Stock
with
respect to which this Warrant may be exercisable will be imprinted with
conspicuous legend in substantially the following form:
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"The
securities represented by this certificate have not been registered
under
either the Securities Act of 1933 (the "Act") or applicable state
securities laws (the "State Acts") and shall not be sold, pledged,
hypothecated, donated or otherwise transferred (whether or not
for
consideration) by the holder except upon the issuance to the
Company of a
favorable opinion of its counsel or submission to the company
of such
other evidence as may be satisfactory to counsel of the Company,
in each
such case, to the effect that any such transfer shall not be
in violation
of the Act and the State Acts."
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The
Company does not
file, and does not in the foreseeable future contemplate filing, periodic
reports with the Securities and Exchange Commission ("SEC") pursuant to
the
provisions of the Securities Exchange Act of 1934, as amended. Except as
provided in Section 8 of this Warrant, the Company has not agreed to register
any of the holder's shares of Common Stock of the Company with respect
to which
this Warrant may be exercisable for distribution in accordance with the
provisions of the Act or the State Acts and, the Company has not agreed
to
comply with any exemption from registration under the Act or the State
Acts for
the resale of the holder's shares of Common Stock of the Company with respect
to
which this Warrant may be exercised. Hence, it is the understanding of
the
holders of this Warrant that by virtue of the provisions of certain rules
respecting "restricted securities" promulgated by the SEC, the shares of
Common
Stock of the Company with respect to which this Warrant may be exercisable
may
be required to be held indefinitely, unless and until registered under
the Act
and the State Acts, unless an exemption from such registration is available,
in
which case the holder may still be limited as to the number of shares of
Common
Stock of the Company with respect to which this Warrant may be exercised
that
may be sold.
6.
Adjustments.
The number of
Shares purchasable upon the exercise of each Warrant is subject to adjustment
from time to time upon the occurrence of any of the events enumerated
below.
(a)
In case the
Company shall: (i) pay a dividend in Shares, (ii) subdivide its outstanding
Shares into a greater number of Shares, (iii) combine its outstanding Shares
into a smaller number of Shares, or (iv) issue, by reclassification of
its
Shares, any shares of its capital stock, the amount of Shares purchasable
upon
the exercise of each Warrant immediately prior thereto shall be adjusted
so that
the Holder shall be entitled to receive upon exercise of the Warrant that
number
of Shares which such Holder would have owned or would have been entitled
to
receive after the happening of such event had such Holder exercised the
Warrant
immediately prior to the record date, in the case of such dividend, or
the
effective date, in the case of any such subdivision, combination or
reclassification. An adjustment made pursuant to this subsection (a) shall
be
made whenever any of such events shall occur, but shall become effective
retroactively after such record date or such effective date, as the case
may be,
as to Warrants exercised between such record date or effective date and
the date
of happening of any such event.
Exhibit
4.1 Page 3 of 7
(b)
In case the
Company shall issue rights or warrants to all holders of its Shares entitling
them to subscribe for or to purchase Shares at a price per Share which,
when
added to the amount of consideration received or receivable by the Company
for
such rights or warrants, is less than the Current Market Price (as hereinafter
defined) per Share at the record date, the number of Shares purchasable
upon the
exercise of this Warrant shall be adjusted so that thereafter, until further
adjusted, each Warrant shall entitle the Holder to purchase that number
of
Shares determined by multiplying the number of Shares purchasable hereunder
by a
fraction, the numerator of which shall be the number of additional Shares
issuable upon the exercise of such rights or warrants, and the denominator
of
which shall be the number of Shares which an amount equal to the sum of
(i) the
aggregate exercise price of the total number of Shares issuable upon the
exercise of such rights or warrants, and (ii) the aggregate amount of
consideration, if any, received, or receivable by the Company for such
rights or
warrants, would purchase at such Current Market Price. Such adjustment
shall be
made whenever such rights or warrants are issued, but shall also be effective
retroactively as to Warrants exercised between the record date for the
determination of stockholders entitled to receive such rights or warrants
and
the date such rights or warrants are issued.
(c)
For the purpose
of any computation under subsection (b) above, the Current Market Price
per
Share at any date shall be: (i) if the Shares are listed on any national
securities exchange, the average of the daily closing prices for the 15
consecutive business days commencing 20 business days before the day in
question
(the "Trading Period"); (ii) if the Shares are not listed on any national
securities exchange but are quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ"), the average of the
high and
low bids as reported by NASDAQ for the Trading Period; and (iii) if the
Shares
are neither listed on any national securities exchange nor quoted on NASDAQ,
the
higher of (x) the exercise price then in effect, or (y) the tangible book
value
per Share as of the end of the Company's immediately preceding fiscal
year.
(d)
No adjustment
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the number of Shares purchasable hereunder; provided,
however,
that any adjustments which by reason of this subsection (d) are not required
to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 6 shall be made to the
nearest
one-hundredth of a Share.
(e)
No adjustment
shall be made in any of the following cases:
(i)
Upon the grant or exercise of stock options now or hereafter granted, or
under
any employee stock option or stock purchase plan now or hereafter authorized,
to
the extent that the aggregate of the number of Shares which may be purchased
under such options and the number of Shares issued under such employee
stock
purchase plan is less than or equal to 10% of the number of Shares outstanding
on January 1 of the year of the grant or exercise;
(ii)
Shares issued
upon the conversion of any of the Company's convertible or exchangeable
securities;
(iii)
Shares issued
in connection with the acquisition by the Company or by any subsidiary
of the
Company of 80% or more of the assets of another corporation or entity,
and
Shares issued in connection with the acquisition by the Company or by any
subsidiary of the Company of 80% or more of the voting shares of another
corporation (including Shares issued in connection with such acquisition
of
voting shares of such other corporation subsequent to the acquisition of
an
aggregate of 80% of such voting shares), Shares issued in a merger of the
Company or a subsidiary of the Company with another corporation in which
the
Company or the Company's subsidiary is the surviving corporation, and Shares
issued upon the conversion of other securities issued in connection with
any
such acquisition or in any such merger; and
Exhibit
4.1 Page 4 of 7
(iv)
Shares issued
pursuant to this Warrant and pursuant to all stock options and warrants
outstanding on the date hereof.
(f)
Notice
to Warrant Holders of
Adjustment. Whenever the number of Shares purchasable hereunder is
adjusted as herein provided, the Company shall cause to be mailed to the
Holder
in accordance with the provisions of this Section 6 a notice (i) stating
that
the number of Shares purchasable upon exercise of this Warrant have been
adjusted, (ii) setting forth the adjusted number of Shares purchasable
upon the
exercise of a Warrant, and (iii) showing in reasonable detail the computations
and the facts, including the amount of consideration received or deemed
to have
been received by the Company, upon which such adjustments are based.
7.
Fractional
Shares. The
Company shall not be required to issue any fraction of a Share upon the
exercise
of Warrants. If more than one Warrant shall be surrendered for exercise
at one
time by the same Holder, the number of full Shares which shall be issuable
upon
exercise thereof shall be computed on the basis of the aggregate number
of
Shares with respect to which this Warrant is exercised. If any fractional
interest in a Share shall be deliverable upon the exercise of this Warrant,
the
Company shall make an adjustment therefor in cash equal to such fraction
multiplied by the Current Market Price of the Shares on the business day
next
preceding the day of exercise.
8.
Registration
Rights.
(a)
(i) If the
Company at any time elects or proposes to register any of its Shares (the
"Registration Shares") under the Securities Act of 1933 (the "Act") on
Forms
X-0, X-0, X-0 or S-18, or any successor registration statement forms in
effect
at such time (a "Registration Statement") with the Securities and Exchange
Commission (the "SEC") pursuant to which Shares owned by any shareholder
of the
Company may be registered, the Company shall give prompt written notice
(the
"Registration Notice") to the Holder of its intention to register the
Registration Shares.
(ii)
Within 15 days
after the Registration Notice shall have been given to the Holder, the
Holder
shall give written notice to the Company (the "Holder Notice"), stating
the
number of Shares to be registered (the "Holder Shares") and the states
in which
the Holder wishes to register the Shares. In the event the Registration
Notice
is given by the Company prior to the time that this Warrant is otherwise
exercisable pursuant to Section l(b) hereof, the Holder Notice shall be
accompanied by this Warrant Certificate together with a duly executed Purchase
Form and payment of the Exercise Price for the Holder Shares in accordance
with
Section 1 hereof.
(iii)
The Company
shall use reasonable efforts to register the Holder Shares under the Act
and the
applicable state securities laws (the "State Acts") designated by the Holder
in
the Holder Notice. Anything contained herein to the contrary notwithstanding,
the Company shall have the right to withdraw and discontinue registration
of the
Holder Shares at any time prior to the effective date of such Registration
Statement if the registration of the Registration Shares is withdrawn or
discontinued.
(iv)
The Company
shall not be required to include any of the Holder Shares in any Registration
Statement unless the Holder agrees, if so requested by the Company, to:
(A)
offer and sell the Holder Shares to or through an underwriter selected
by the
Company and, to the extent possible, on substantially the same terms and
conditions under which the Registration Shares are to be offered and sold;
(B)
comply with any arrangements, terms and conditions with respect to the
offer and
sale of the Shares to which the Company may be required to agree; and (C)
enter
into any underwriting agreement containing customary terms and conditions,
including provisions for the indemnification of the underwriters.
Exhibit
4.1 Page 5 of 7
(b)
If the offering
of the Registration Shares by the Company is, in whole or in part, an
underwritten public offering, and if the managing underwriter determines
and
advises the Company in writing that the inclusion in such Registration
Statement
of all of the Holder Shares, together with the Shares of other persons
who have
exercised their right to include their Shares in the Registration Statement
(collectively referred to as the "Aggregate Shares") would adversely affect
the
marketability of the offering of the Registration Shares, then the Holder
shall
be entitled to register a proportion, as determined in Subsection (b)(i)
below,
of such number of Aggregate Shares as the managing underwriter determines
may be
included without such adverse effects ("Aggregate Underwriter Shares"),
subject
to the terms, exceptions and conditions of this Section 8.
(i)
The proportion of
the Aggregate Underwriter Shares which the Holder shall be entitled to
register
shall be equal to the ratio which the Holder Shares bears to the Aggregate
Shares.
(c)
The Company shall
bear all costs and expenses of registration of the Registration Shares;
provided, however, that the Holder shall bear all costs and expenses directly
related to registration of the Holder Shares.
(d)
It shall be a
condition precedent to the Company's obligation to register any Holder
Shares
pursuant to this Section 9 that the Holder provide the Company with all
information and documents, and shall execute, acknowledge, seal and deliver
all
documents reasonably necessary, to enable the Company to comply with the
Act,
the State Acts, and all applicable laws, rules and regulations of the SEC
or of
any State Securities Commission.
9.
Loss
or Destruction. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction,
or mutilation of this Warrant Certificate and, in the case of any such
loss,
theft or destruction, upon delivery of an indemnity agreement or bond
satisfactory in form, substance and amount to the Company or, in the case
of any
such mutilation, upon surrender and cancellation of this Warrant Certificate,
the Company at its expense will execute and deliver, in lieu thereof, a
new
Warrant Certificate of like tenor.
10.
Survival.
The various rights
and obligations of the Holder hereof as set forth herein shall survive
the
exercise of the Warrants represented hereby and the surrender of this Warrant
Certificate.
11.
Notices.
Whenever any notice,
payment of any purchase price, or other communication is required to be
given or
delivered under the terms of this Warrant, it shall be in writing and delivered
by hand delivery or United States registered or certified mail, return
receipt
requested, postage prepaid, and will be deemed to have been given or delivered
on the date such notice, purchase price or other communication is so delivered
or posted, as the case may be; and, if to the Company, it will be addressed
to
the address specified in Section 1 hereof, and if to the Holder, it will
be
addressed to the registered Holder at its, his or her address as it appears
on
the books of the Company.
By:___/s/
_ ______________________
Its:_____President ________________
Date:____November
29,
2007________
Exhibit
4.1 Page 6 of 7
PURCHASE
FORM
______________,
20__
The
undersigned hereby irrevocably
elects to exercise the attached Warrant Certificate to the extent of __________
shares of the Common Stock, of FOREVER VALUABLE COLLECTIBLES, INC. and
hereby
makes payment of $__________ in accordance with the provisions of Section
1 of
the Warrant Certificate in payment of the purchase price thereof.
INSTRUCTIONS
FOR REGISTRATION OF
STOCK
Name:
__________________________________________
(Please
typewrite or print in block
letters)
Address: ___________________________________________
A-SQUARED
HOLDINGS, INC.
By:____________________________
Its:____________________________
Date:__________________________
Exhibit
4.1 Page 7 of 7
