EXHIBIT
10.24
NEITHER THIS
WARRANT NOR THE WARRANT SHARES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY OTHER APPLICABLE SECURITIES
LAWS IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES
LAWS. NEITHER THIS WARRANT NOR THE SHARES OF WARRANT
STOCK ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD, PLEDGED,
TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN
A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE
PROVISIONS OF THE SECURITIES ACT.
CHANCELLOR GROUP, INC.
Common Stock Purchase
Warrant
(Expiring on December 31,
2014)
This is to
certify that, for value received and subject to the conditions
herein set forth, Koala Pictures Proprietary Ltd. (the
"Warrantholder") is entitled to purchase, at a price per share of
Two Cents ($0.025) per share, One Million (1,000,000) shares of
common stock, par value $0.001 per share (the "Common Stock"), of
Chancellor Group Inc., a Nevada corporation (the "Company"),
subject to adjustment as provided below (such shares purchasable
upon exercise of this Warrant are herein called the "Warrant
Stock"). The amount per share specified above, as
adjusted from time to time pursuant to the provisions hereinafter
set forth, is herein called the "Purchase Price." This
Warrant will be immediately exercisable and may be exercised
anytime after its issuance. In the event of a
exercise of this Warrant, the Warrantholder shall surrender this
Warrant to the Company with payment of the Purchase Price, together
with a notice of exercise (the date of such surrender being herein
referred to as the “Date of Exercise”), in which event
the Company shall issue to the Warrantholder the number of shares
of Warrant Stock.
1. By
acceptance of this Warrant, the Warrantholder agrees, for itself
and all subsequent holders, that prior to making any disposition of
this Warrant or any shares of Warrant Stock, the Warrantholder
shall give written notice to the Company describing briefly the
manner in which any such proposed disposition is to be made; and no
such disposition shall be made unless and until (i) the Company has
received an opinion of counsel satisfactory to it to the effect
that no registration under the Securities Act of 1933, as amended
(the "Act"), is required with respect to such disposition; or (ii)
a registration statement with respect to the Warrant or the Warrant
Stock has been filed by the Company and declared effective by the
Securities and Exchange Commission (the "Commission").
2. (a) If
outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares thereof 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 and conversely, if
outstanding shares of Common Stock shall be combined into a smaller
number of shares thereof, 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 of Common Stock
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 pursuant to 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) If there shall occur any capital
reorganization or reclassification of the Company's Common Stock
(other than a change in par value or a subdivision or combination
as provided for in subparagraph (a) above), or any consolidation or
merger of the Company with or into another corporation, or in the
case of any sale, transfer or other disposition to another person,
corporation or other entity of all or substantially all the
property, assets, business and good will of the Company as an
entirety, then, as part of any such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition, as the case may be, lawful provision shall be made so
that the registered owner of this Warrant shall have the right
thereafter to receive upon the exercise hereof the kind and amount
of shares of stock or other securities or property which said
registered owner would have been entitled to receive if,
immediately prior to any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition, as the
case may be, said registered owner had held the number of shares of
Common Stock which were then purchasable upon the exercise of this
Warrant. In any such case, appropriate adjustment (as
determined by the Board of Directors of the Company) shall be made
in the application of the provisions set forth herein with respect
to the rights and interests thereafter of the registered owner of
this Warrant such that the provisions set forth herein (including
provisions with respect to adjustment of the Purchase Price) shall
thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property
thereafter deliverable upon the exercise of this
Warrant.
(c) In case the Company shall declare
a dividend upon shares of Common Stock payable otherwise than out
of earnings or earned surplus and otherwise than in shares of
Common Stock or in stock or obligations directly or indirectly
convertible into or exchangeable for Common Stock, the
Warrantholder shall, upon exercise of this Warrant in whole or in
part, be entitled to purchase, in addition to the number of shares
of Common Stock deliverable upon such exercise against payment of
the Purchase Price therefor, but without further consideration, the
cash, stock or other securities or property which the holder of
Warrant would have received as dividends (otherwise than out of
such earnings or earned surplus and otherwise than in shares of
Common Stock or in such convertible or exchangeable stock or
obligations), if continuously since the date set forth above such
holder (i) had been the holder of record of the number of shares of
Common Stock deliverable upon such exercise and (ii) had retained
all dividends in stock or other securities (other than shares of
Common Stock or such convertible or exchangeable stock or
obligations) paid or payable in respect of said number of shares of
Common Stock or in respect of any such stock or other securities so
paid or payable as such dividends. For purposes of this
subparagraph (c), a dividend payable otherwise than in cash shall
be considered to be payable out of earnings or earned surplus and
shall be charged in an amount equal to the fair value of such
dividend as determined by the Board of Directors of the
Company.
(i) the Company shall pay any cash or
stock dividend upon its Common Stock or make any distribution to
the holders of its Common Stock; or
(ii) the Company shall offer for
subscription pro rata to the holders of its Common Stock any
additional shares of stock of any class or any other rights;
or
(iii) the Company shall effect any
capital reorganization or any reclassification of or change in the
outstanding capital stock of the Company (other than a stock split,
a change in par value, or a change resulting solely from a
subdivision or combination of outstanding shares of Common Stock),
or any consolidation or merger, or any sale, transfer or other
disposition of all or substantially all its property, assets,
business and good will as an entirety, or the liquidation,
dissolution or winding up of the Company; or
(iv) the Company shall declare a
dividend upon shares of its Common Stock payable otherwise than out
of earnings or earned surplus or otherwise than in shares of Common
Stock or any stock or obligations directly or indirectly
convertible into or exchangeable for Common Stock;
then, in any
such case, the Company shall cause at least fifteen (15) days'
prior notice thereof to be furnished to the Warrantholder at the
address of such holder shown on the books of the
Company. Such notice shall also
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