Neither this security
nor the securities for which this security is exercisable have been
registered with the Securities and Exchange Commission or the
securities commission of any state. These securities are issued in
reliance upon an exemption from registration under the Securities
Act of 1933 (the “Securities Act”), and, accordingly,
may not be offered or sold except pursuant to an effective
registration statement under the Securities Act or pursuant to an
available exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in accordance
with applicable state securities laws as evidenced by a legal
opinion of counsel to the transferor to such effect, the substance
of which shall be reasonably acceptable to the company.
COMMON STOCK PURCHASE
WARRANT
To
purchase up to 400,000 shares of common stock of
iMEDIA INTERNATIONAL,
INC.
This common stock purchase
warrant (the “ Warrant ”) certifies that,
for value received, Sawtooth Properties, LLLP. (the “
Holder ”), is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set
forth, at any time on or after the date given above (the “
Initial Exercise Date ”) and by the close of business
on the third anniversary of the Initial Exercise Date (the “
Termination Date ”) but not thereafter, to subscribe
for and purchase from iMedia International, Inc., a Delaware
corporation (the “ Company ”), up to
400,000 shares (the “ Warrant Shares
”) of common stock, par value $0.001 per share, of the
Company (the “ Common Stock ”), as calculated
based the total investment amount per the related Securities
Purchase Agreement of the same date. The purchase price of one
share of Common Stock under this Warrant is equal to the Exercise
Price, as defined in Section 2(a).
1.
Definitions . Capitalized terms used and not otherwise
defined in this Warrant have the same meanings ascribed to them in
the Securities Purchase Agreement (the “ Purchase
Agreement ”), dated April 10, 2008, by and between
the Company and the Holder as Purchaser.
(a) Exercise
Price . The exercise price of the Common Stock under this
Warrant is $0.225 .
(b) Exercise
of Warrant . The Holder may exercise the purchase rights
represented by this Warrant at any time from the Initial Exercise
Date until 5:00 p.m., Pacific Standard Time, on the Termination
Date by delivering to the Company (i) a duly executed
facsimile copy of the annexed Exercise Notice (attached hereto as
Exhibit A ) no less than 61 days prior to the
exercise date designated therein, and (ii) no later than 5
Trading Days after the exercise date designated in the Exercise
Notice delivered to the Company, (A) this Warrant, and
(B) payment to the Company of the aggregate Exercise Price for
the number of Warrant Shares being purchased by the Holder in
connection with such Exercise Notice (the “ Exercise
Amount ”). For the purposes hereof, “Trading
Day” shall mean any day on which the New York Stock Exchange
is open for trading.
(c) Exercise
limitations .
(i) The
Holder may not exercise any portion of this Warrant if, immediately
after the Warrant Shares are issued, the Holder (together with the
Holder’s affiliates) would beneficially own a number of
shares of Common Stock in excess of the Beneficial Ownership
Limitation (as defined below) . For the purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its affiliates includes the number of shares of
Common Stock issuable upon the exercise of this Warrant, but
excludes the number of shares of
Common Stock
that would be issuable upon (i) the Holder’s exercise of
the remaining, unexercised portion of this Warrant and
(ii) the Holder’s or its affiliates’ exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company that the Holder or any of its affiliates
own beneficially. Except as set forth in the foregoing sentence,
for the purposes of this Section 2(c), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Securities
and Exchange Act of 1934, as amended (the “ Exchange
Act ”). The “ Beneficial Ownership
Limitation ” shall be 4.99% of the number of shares of
the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of this
Warrant. The Holder, upon not less than 61 days’ prior
notice to the Company, may increase or decrease the Beneficial
Ownership Limitation provisions of this Section 2(c)(i) or may
waive the application of the Beneficial Ownership Limitation of
this Section 2(c)(i) altogether until any subsequent election
under this Section 2(c)(i). Any such increase, decrease or
waiver will not be effective until the 61 st day after such notice is delivered to the
Company and shall only apply to such Holder and no other Holder.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.
(ii) The
Holder acknowledges that the Company is not representing to the
Holder that the calculation described in Section 2(c) complies with
Section 13(d) of the Exchange Act, and the Holder is solely
responsible for any schedules required to be filed in accordance
with the Exchange Act. The determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
and its affiliates) is in the sole discretion of the Holder, and
the submission of an Exercise Notice is deemed to be the
Holder’s declaration that the Holder has determined that this
Warrant is exercisable as set out in the Exercise Notice and
subject to the limitations in this Section 2(c). The Company
is not obliged to verify or confirm the accuracy of the
Holder’s determination.
(iii) For
the purposes of this Section 2(c), in determining the number
of outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in the
most recent of (A) the latest filed of the Company’s
Form 10-QSB and Form 10-KSB, (B) a public announcement by the
Company stating the number of shares of Common Stock outstanding,
or (C) any other notice by the Company or the Company’s
transfer agent stating the number of shares of Common Stock
outstanding. Within two Trading Days of the Holder’s written
request to the Company, the Company shall confirm orally and in
writing to the Holder the number of shares of Common Stock then
outstanding.
(d)
Payment. Payment may be made either in cash or by certified
or official bank check payable to the order of the Company equal to
the applicable aggregate Exercise Price for the number of shares of
Common Stock specified in the Exercise Notice (as such exercise
number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the Holder per the
terms of this Warrant), and the Holder shall thereupon be entitled
to receive the number of duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock determined as
provided herein.
(e)
Authorization of Warrant Shares. The Company will issue all
Warrant Shares as duly authorized, validly issued, fully paid and
non-assessable, and free from all taxes, liens and charges (other
than taxes in respect of any transfer occurring contemporaneously
with the issue).
(f) Delivery
of certificates upon exercise . The Company will instruct its
transfer agent to deliver certificates for Warrant Shares to the
Holder to the address specified by the Holder in the Exercise
Notice within 5 Trading Days from the later of (A) 61 days
following the Company’s receipt of the Exercise Notice,
(B) the Holder’s surrender of this Warrant, and
(C) the Company’s receipt of the Exercise Amount as set
out in Section 2(b) (the “ Warrant Share Delivery Date
”). This Warrant shall be deemed to have been exercised on
the later of (1) the date the Exercise Amount is received by
the Company and (2) 61 days following the Company’s
receipt of the Exercise Notice (the “ Exercise Date
”); and the Warrant Shares shall be deemed to have been
issued, and the Holder shall be deemed to have become a holder of
record of the shares for all purposes, on the Exercise
Date.
(g) Delivery
of new Warrants upon exercise . If this Warrant is exercised in
part, the Company, when it instructs its transfer agent to deliver
the certificate or certificates representing Warrant Shares, will
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