Unassociated Document


    
      Exhibit
        4.1

    

     

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES
      ACT”),
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    


    SERIES
      A-1 WARRANT TO PURCHASE

    


    SHARES
      OF
      COMMON STOCK

    


    OF

    


    INTERNATIONAL
      IMAGING SYSTEMS, INC.

    


    Expires
      October [__], 2012

     

    
      	
              No.:
                W-A-1-07- __

            	
              Number
                of Shares: ___________

            
	
              Date
                of Issuance: October [__], 2007

            	 


    

     

    FOR
      VALUE
      RECEIVED, the undersigned, INTERNATIONAL
      IMAGING SYSTEMS, INC.,
      a
      Delaware corporation (together with its successors and assigns, the
“Issuer”),
      hereby
      certifies that__________________________
      or its
      registered assigns is entitled to subscribe for and purchase, during the Term
      (as hereinafter defined), up to ____________________________________
      (_____________) shares (subject to adjustment as hereinafter provided) of the
      duly authorized, validly issued, fully paid and non-assessable Common Stock
      of
      the Issuer, at an exercise price per share equal to the Warrant Price then
      in
      effect, subject, however, to the provisions and upon the terms and conditions
      hereinafter set forth. Capitalized terms used in this Warrant and not otherwise
      defined herein shall have the respective meanings specified in Section
      9
      hereof.

    


    1. Term.
      The
      term of this Warrant shall commence on October [__], 2007 and shall expire
      at
      6:00 p.m., Eastern Time, on October [__], 2012 (such period being the
“Term”).

    


    
      
        2.
          Method
          of Exercise; Payment; Issuance of New Warrant; Transfer and
          Exchange.

      

    

    


    (a) Time
      of Exercise.
      The
      purchase rights represented by this Warrant may be exercised in whole or in
      part
      during the Term. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    (b) Method
      of Exercise.
      The
      Holder hereof may exercise this Warrant, in whole or in part, by the surrender
      of this Warrant (with the exercise form attached hereto duly executed) at the
      principal office of the Issuer, and by the payment to the Issuer of an amount
      of
      consideration therefor equal to the Warrant Price in effect on the date of
      such
      exercise multiplied by the number of shares of Warrant Stock with respect to
      which this Warrant is then being exercised, payable at such Holder's election
      (i) by certified or official bank check or by
      wire
      transfer to an account designated by the Issuer,
      (ii) by
“cashless exercise” in accordance with the provisions of subsection (c) of this
Section
      2,
      but
      only when a registration statement under the Securities Act providing for the
      resale of the Warrant Stock and the Common Stock underlying the preferred stock
      issued pursuant to the Purchase Agreement is not then in effect, or (iii) by
      a
      combination of the foregoing methods of payment selected by the Holder of this
      Warrant.

    


    (c) Cashless
      Exercise.
      Notwithstanding any provision herein to the contrary, but subject to
Section
      2(b)(ii)
      hereof,
      and commencing twenty-four (24) months following the Original Issue Date if
      the
      Per Share Market Value of one share of Common Stock is greater than the Warrant
      Price (at the date of calculation as set forth below), in lieu of exercising
      this Warrant by payment of cash, the Holder may exercise this Warrant by a
      cashless exercise by surrender of this Warrant at the principal office of the
      Issuer together with the properly endorsed Notice of Exercise, in which event
      the Issuer shall issue to the Holder a number of shares of Common Stock computed
      using the following formula:

    


    X
      = Y -
(A)(Y)

                  
      B

    


    
      	
              Where

            	
              X
                =

            	
              the
                number of shares of Common Stock to be issued to the
                Holder.

            


      	 	 	 


      	 	
              Y
                =

            	
              the
                number of shares of Common Stock purchasable upon exercise of all
                of the
                Warrant or, if only a portion of the Warrant is being exercised,
                the
                portion of the Warrant being exercised.


            


    

    


    
      	 	
              A
                =

            	
              the
                Warrant Price. 

            


      	 	 	 


      	 	B =	the Per Share Market Value of one share of Common
              Stock.


    

    


    (d) Issuance
      of Stock Certificates.
      In the
      event of any exercise of this Warrant in accordance with and subject to the
      terms and conditions hereof, certificates for the shares of Warrant Stock so
      purchased shall be dated the date of such exercise and delivered to the Holder’s
      Prime Broker as specified in the Holder’s exercise form within a reasonable
      time, not exceeding five (5) Trading Days after such exercise (the “Delivery
      Date”)
      or, at
      the request of the Holder (provided that a registration statement under the
      Securities Act providing for the resale of the Warrant Stock is then in effect
      or that the shares of Warrant Stock are otherwise exempt from registration),
      issued and delivered to the Depository Trust Company (“DTC”)
      account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
      System (“DWAC”)
      within
      a reasonable time, not exceeding five (5) Trading Days after such exercise,
      and
      the Holder hereof shall be deemed for all purposes to be the holder of the
      shares of Warrant Stock so purchased as of the date of such exercise.
      Notwithstanding the foregoing to the contrary, the Issuer or its transfer agent
      shall only be obligated to issue and deliver the shares to the DTC on a holder’s
      behalf via DWAC if such exercise is in connection with a sale or other exemption
      from registration by which the shares may be issued without a restrictive legend
      and the
      Issuer and its transfer agent are participating in DTC through the DWAC
      system.
      The
      Holder shall deliver this original Warrant, or an indemnification reasonably
      acceptable to the Issuer undertaking with respect to such Warrant in the case
      of
      its loss, theft or destruction, at such time that this Warrant is fully
      exercised. With respect to partial exercises of this Warrant, the Issuer shall
      keep written records for the Holder of the number of shares of Warrant Stock
      exercised as of each date of exercise.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

       

    

    (e) Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Issuer fails to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Stock pursuant to an exercise on or before the second
      business day following the Delivery Date, and if after such date the Holder
      is
      required by its broker to purchase (in an open market transaction or otherwise)
      shares of Common Stock to deliver in satisfaction of a sale by the Holder of
      the
      Warrant Stock which the Holder anticipated receiving upon such exercise (a
      “Buy-In”),
      then
      the Issuer 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 amount obtained by
      multiplying (A) the number of shares of Warrant Stock that the Issuer was
      required to deliver to the Holder in connection with the exercise at issue
      times
      (B) the price at which the sell order giving rise to such purchase obligation
      was executed, and (2) at the option of the Holder, either reinstate the portion
      of the Warrant and equivalent number of shares of Warrant Stock 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 Issuer timely complied with its
      exercise and delivery obligations hereunder. For example, if the Holder
      purchases Common Stock having a total purchase price of $11,000 to cover a
      Buy-In with respect to an attempted exercise of shares of Common Stock with
      an
      aggregate sale price giving rise to such purchase obligation of $10,000, under
      clause (1) of the immediately preceding sentence the Issuer shall be required
      to
      pay the Holder $1,000. The Holder shall provide the Issuer written notice
      indicating the amounts payable to the Holder in respect of the Buy-In, together
      with applicable confirmations and other evidence reasonably requested by the
      Issuer. 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
      Issuer’s failure to timely deliver certificates representing shares of Common
      Stock upon exercise of this Warrant as required pursuant to the terms
      hereof.

     

    (f) Transferability
      of Warrant.
      Subject
      to Section
      2(h)
      hereof,
      this Warrant may be transferred by a Holder, in whole or in part, without the
      consent of the Issuer. If transferred pursuant to this paragraph, this Warrant
      may be transferred on the books of the Issuer by the Holder hereof in person
      or
      by duly authorized attorney, upon surrender of this Warrant at the principal
      office of the Issuer, properly endorsed (by the Holder executing an assignment
      in the form attached hereto) and upon payment of any necessary transfer tax
      or
      other governmental charge imposed upon such transfer. This Warrant is
      exchangeable at the principal office of the Issuer for Warrants to purchase
      the
      same aggregate number of shares of Warrant Stock, each new Warrant to represent
      the right to purchase such number of shares of Warrant Stock as the Holder
      hereof shall designate at the time of such exchange. All Warrants issued on
      transfers or exchanges shall be dated the Original Issue Date and shall be
      identical with this Warrant except as to the number of shares of Warrant Stock
      issuable pursuant thereto.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    (g) Continuing
      Rights of Holder.
      The
      Issuer will, at the time of or at any time after each exercise of this Warrant,
      upon the request of the Holder hereof, acknowledge in writing the extent, if
      any, of its continuing obligation to afford to such Holder all rights to which
      such Holder shall continue to be entitled after such exercise in accordance
      with
      the terms of this Warrant, provided
      that if
      any such Holder shall fail to make any such request, the failure shall not
      affect the continuing obligation of the Issuer to afford such rights to such
      Holder.

    


    (h) Compliance
      with Securities Laws.

    


    (i) The
      Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
      and
      the shares of Warrant Stock to be issued upon exercise hereof are being acquired
      solely for the Holder's own account and not as a nominee for any other party,
      and for investment, and that the Holder will not offer, sell or otherwise
      dispose of this Warrant or any shares of Warrant Stock to be issued upon
      exercise hereof except pursuant to an effective registration statement, or
      an
      exemption from registration, under the Securities Act and any applicable state
      securities laws.

    


    (ii) Except
      as
      provided in paragraph (iii) below, this Warrant and all certificates
      representing shares of Warrant Stock issued upon exercise hereof shall be
      stamped or imprinted with a legend in substantially the following
      form:

    


    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”),
      OR
      ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
      OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
      SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES
      UNDER
      THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES
      LAWS
      IS NOT REQUIRED.

    


    (iii) The
      Issuer agrees to reissue this Warrant or certificates representing any of the
      Warrant Stock, without the legend set forth above, if at such time, prior to
      making any transfer of any such securities, the Holder shall give written notice
      to the Issuer describing the manner and terms of such transfer and demonstrating
      that the following conditions are satisfied. Such proposed transfer will not
      be
      effected until: (a) either (i) the Issuer has received an opinion of counsel
      reasonably satisfactory to the Issuer, to the effect that the registration
      of
      such securities under the Securities Act is not required in connection with
      such
      proposed transfer, or (ii) a registration statement under the Securities Act
      covering such proposed disposition has been filed by the Issuer with the
      Securities and Exchange Commission and has become and remains effective under
      the Securities Act, or (b) either (i) the Issuer has received an opinion of
      counsel reasonably satisfactory to the Issuer, to the effect that registration
      or qualification under the securities or “blue sky” laws of any state is not
      required in connection with such proposed disposition, or (ii) compliance with
      applicable state securities or “blue sky” laws has been effected or a valid
      exemption exists with respect thereto. The Issuer will respond to any such
      notice from a holder within three (3) Trading Days. In the case of any proposed
      transfer under this Section
      2(h),
      the
      Issuer will use reasonable efforts to comply with any such applicable state
      securities or “blue sky” laws, but shall in no event be required, (x) to qualify
      to do business in any state where it is not then qualified, (y) to take any
      action that would subject it to tax or to the general service of process in
      any
      state where it is not then subject, or (z) to comply with state securities
      or
“blue sky” laws of any state for which registration by coordination is
      unavailable to the Issuer. The restrictions on transfer contained in this
Section
      2(h)
      shall be
      in addition to, and not by way of limitation of, any other restrictions on
      transfer contained in any other section of this Warrant. Whenever
      a
      certificate representing the Warrant Stock is required to be issued to the
      Holder without a legend, in lieu of delivering physical certificates
      representing the Warrant Stock, the Issuer shall cause its transfer agent to
      electronically transmit the Warrant Stock to the Holder by crediting the account
      of the Holder or Holder's Prime Broker with DTC through its DWAC system (to
      the
      extent not inconsistent with any provisions of this Warrant or the Purchase
      Agreement). 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

    

     

    (i) Accredited
      Investor Status.
      In no
      event may the Holder exercise this Warrant in whole or in part unless the Holder
      is an “accredited investor” as defined in Regulation D under the Securities Act.


    


    3. Stock
      Fully Paid; Reservation and Listing of Shares; Covenants; Loss, Theft,
      Destruction.

    


    (a) Stock
      Fully Paid.
      The
      Issuer represents, warrants, covenants and agrees that all shares of Warrant
      Stock which may be issued upon the exercise of this Warrant or otherwise
      hereunder will, when issued in accordance with the terms of this Warrant, be
      duly authorized, validly issued, fully paid and non-assessable and free from
      all
      taxes, liens and charges created by or through the Issuer. The Issuer further
      covenants and agrees that during the period within which this Warrant may be
      exercised, the Issuer will at all times have authorized and reserved for the
      purpose of the issuance upon exercise of this Warrant a number of authorized
      but
      unissued shares of Common Stock equal to at least one hundred ten percent (110%)
      of the number of shares of Common Stock issuable upon exercise of this Warrant
      without regard to any limitations on exercise.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

       

    

    (b) Reservation.
      If any
      shares of Common Stock required to be reserved for issuance upon exercise of
      this Warrant or as otherwise provided hereunder require registration or
      qualification with any Governmental Authority under any federal or state law
      before such shares may be so issued, the Issuer will in good faith use its
      best
      efforts as expeditiously as possible at its expense to cause such shares to
      be
      duly registered or qualified. If the Issuer shall list any shares of Common
      Stock on any securities exchange or market it will, at its expense, list
      thereon, and maintain and increase when necessary such listing, of, all shares
      of Warrant Stock from time to time issued upon exercise of this Warrant or
      as
      otherwise provided hereunder (provided that such Warrant Stock has been
      registered pursuant to a registration statement under the Securities Act then
      in
      effect), and, to the extent permissible under the applicable securities exchange
      rules, all unissued shares of Warrant Stock which are at any time issuable
      hereunder, so long as any shares of Common Stock shall be so listed. The Issuer
      will also so list on each securities exchange or market, and will maintain
      such
      listing of, any other securities which the Holder of this Warrant shall be
      entitled to receive upon the exercise of this Warrant if at the time any
      securities of the same class shall be listed on such securities exchange or
      market by the Issuer.

    


    (c) Covenants.
      The
      Issuer shall not by any action including, without limitation, amending the
      Certificate of Incorporation or the by-laws of the Issuer, or through any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other action, avoid or seek to avoid the observance
      or
      performance of any of the terms of this Warrant, but will at all times in good
      faith assist in the carrying out of all such terms and in the taking of all
      such
      actions as may be necessary or appropriate to protect the rights of the Holder
      hereof against dilution (to the extent specifically provided herein) or
      impairment. Without limiting the generality of the foregoing, the Issuer will
      (i) not permit the par value, if any, of its Common Stock to exceed the then
      effective Warrant Price, (ii) not amend or modify any provision of the
      Certificate of Incorporation or by-laws of the Issuer in any manner that would
      adversely affect the rights of the Holders of the Warrants, (iii) take all
      such
      action as may be reasonably necessary in order that the Issuer may validly
      and
      legally issue fully paid and nonassessable shares of Common Stock, free and
      clear of any liens, claims, encumbrances and restrictions (other than as
      provided herein) upon the exercise of this Warrant, and (iv) use its best
      efforts to obtain all such authorizations, exemptions or consents from any
      public regulatory body having jurisdiction thereof as may be reasonably
      necessary to enable the Issuer to perform its obligations under this
      Warrant.

    


    (d) Loss,
      Theft, Destruction of Warrants.
      Upon
      receipt of evidence satisfactory to the Issuer of the ownership of and the
      loss,
      theft, destruction or mutilation of any Warrant and, in the case of any such
      loss, theft or destruction, upon receipt of indemnity or security satisfactory
      to the Issuer or, in the case of any such mutilation, upon surrender and
      cancellation of such Warrant, the Issuer will make and deliver, in lieu of
      such
      lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
      representing the right to purchase the same number of shares of Common
      Stock.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    4. Adjustment
      of Warrant Price.
      The
      Warrant Price shall be subject to adjustment from time to time as set forth
      in
      this Section
      4.
      The
      Issuer shall give the Holder notice of any event described below which requires
      an adjustment pursuant to this Section
      4
      in
      accordance with the notice provisions set forth in Section
      5.

    


    (a) Recapitalization,
      Reorganization, Reclassification, Consolidation, Merger or Sale.

     

    (i)
      In
      case the Issuer after the Original Issue Date shall do any of the following
      (each, a “Triggering
      Event”):
      (a)
      consolidate or merge with or into any other Person and the Issuer shall not
      be
      the continuing or surviving corporation of such consolidation or merger, or
      (b)
      permit any other Person to consolidate with or merge into the Issuer and the
      Issuer shall be the continuing or surviving Person but, in connection with
      such
      consolidation or merger, any Capital Stock of the Issuer shall be changed into
      or exchanged for Securities of any other Person or cash or any other property,
      or (c) transfer all or substantially all of its properties or assets to any
      other Person, or (d) effect a capital reorganization or reclassification of
      its
      Capital Stock, then, and in the case of each such Triggering Event, proper
      provision shall be made to the Warrant Price and the number of shares of Warrant
      Stock that may be purchased upon exercise of this Warrant so that, upon the
      basis and the terms and in the manner provided in this Warrant, the Holder
      of
      this Warrant shall be entitled upon the exercise hereof at any time after the
      consummation of such Triggering Event, to the extent this Warrant is not
      exercised prior to such Triggering Event, to receive at the Warrant Price in
      effect at the time immediately prior to the consummation of such Triggering
      Event, in lieu of the Common Stock issuable upon such exercise of this Warrant
      prior to such Triggering Event, the Securities and property to which such Holder
      would have been entitled upon the consummation of such Triggering Event if
      such
      Holder had exercised the rights represented by this Warrant immediately prior
      to
      such Triggering Event (including the right of a shareholder to elect the type
      of
      consideration it will receive upon a Triggering Event), subject to adjustments
      (subsequent to such corporate action) as nearly equivalent as possible to the
      adjustments provided for elsewhere in this Section
      4; provided,
      however, the Holder at its option may elect to receive an amount in unregistered
      shares of the common stock of the surviving entity equal to the value of this
      Warrant calculated in accordance with the Black-Scholes formula; provided,
      further, such shares of Common Stock shall be valued at a twenty percent (20%)
      discount to the VWAP of the Common Stock for the twenty (20) Trading Days
      immediately prior to the Triggering Event. Immediately upon the occurrence
      of a
      Triggering Event, the Issuer shall notify the Holder in writing of such
      Triggering Event and provide the calculations used in determining the number
      of
      shares of Warrant Stock issuable upon exercise of the new warrant and the
      adjusted Warrant Price. Upon the Holder’s request, the continuing or surviving
      corporation as a result of such Triggering Event shall issue to the Holder
      a new
      warrant of like tenor evidencing the right to purchase the adjusted number
      of
      shares of Warrant Stock and the adjusted Warrant Price pursuant to the terms
      and
      provisions of this Section
      4(a)(i).
      Notwithstanding the foregoing to the contrary, this Section
      4(a)(i)
      shall
      only apply if the surviving entity pursuant to any such Triggering Event is
      a
      company that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board. In the event that the
      surviving entity pursuant to any such Triggering Event is not a public company
      that is
      registered pursuant to the Securities Exchange Act of 1934, as amended, or
      its
      common stock is not listed or quoted on a national securities exchange, national
      automated quotation system or the OTC Bulletin Board, then the Holder shall
      have
      the right to demand that the Issuer issue to the Holder that number of
      restricted shares of Common Stock the Holder would be entitled to upon
      the
      occurrence of such Triggering Event if such Holder had exercised the rights
      represented by this Warrant immediately prior to such Triggering
      Event
      at a
Warrant
      Price equal to the average of the VWAP for the twenty (20) trading days
      immediately prior to the occurrence of such Triggering Event. 

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

    

     

    (ii) In
      the
      event that the Holder has elected not to exercise this Warrant prior to the
      consummation of a Triggering Event and has also elected not to receive an amount
      of restricted shares of Common Stock at a Warrant Price equal to the average
      of
      the VWAP for the twenty trading days pursuant to the provisions of Section
      4(a)(i)
      above,
      so long as the surviving entity pursuant to any Triggering Event is a company
      that has a class of equity securities registered
      pursuant to the Securities Exchange Act of 1934, as amended, and its common
      stock is listed or quoted on a national securities exchange, national automated
      quotation system or the OTC Bulletin Board,
      the
      surviving entity and/or each Person (other than the Issuer) which may be
      required to deliver any Securities or property upon the exercise of this Warrant
      as provided herein shall assume, by written instrument delivered to, and
      reasonably satisfactory to, the Holder of this Warrant, (A) the obligations
      of
      the Issuer under this Warrant (and if the Issuer shall survive the consummation
      of such Triggering Event, such assumption shall be in addition to, and shall
      not
      release the Issuer from, any continuing obligations of the Issuer under this
      Warrant) and (B) the obligation to deliver to such Holder such Securities or
      property as, in accordance with the foregoing provisions of this subsection
      (a),
      such Holder shall be entitled to receive, and the surviving entity and/or each
      such Person shall have similarly delivered to such Holder an opinion of counsel
      for the surviving entity and/or each such Person, which counsel shall be
      reasonably satisfactory to such Holder, or in the alternative, a written
      acknowledgement executed by the President or Chief Financial Officer of the
      Issuer, stating that this Warrant shall thereafter continue in full force and
      effect and the terms hereof (including, without limitation, all of the
      provisions of this subsection (a)) shall be applicable to the Securities, cash
      or property which the surviving entity and/or each such Person may be required
      to deliver upon any exercise of this Warrant or the exercise of any rights
      pursuant hereto. 

    


    (b) Stock
      Dividends, Subdivisions and Combinations.
      If at
      any time the Issuer shall:

    


    (i) make
      or
      issue or set a record date for the holders of the Common Stock for the purpose
      of entitling them to receive, a dividend payable in, or other distribution
      of,
      shares of Common Stock, 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

    

     

    (ii)
       subdivide
      its outstanding shares of Common Stock into a larger number of shares of Common
      Stock, or

     

    (iii)
       combine
      its outstanding shares of Common Stock into a smaller number of shares of Common
      Stock,

    


    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      immediately after the occurrence of any such event shall be adjusted to equal
      the number of shares of Common Stock which a record holder of the same number
      of
      shares of Common Stock for which this Warrant is exercisable immediately prior
      to the occurrence of such event would own or be entitled to receive after the
      happening of such event, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares of Common Stock
      for
      which this Warrant is exercisable immediately after such
      adjustment.

    


    (c) Certain
      Other Distributions.
      If at
      any time the Issuer shall make or issue or set a record date for the holders
      of
      the Common Stock for the purpose of entitling them to receive any dividend
      or
      other distribution of:

    


    (i) cash,

    


    (ii) any
      evidences of its indebtedness, any shares of stock of any class or any other
      securities or property of any nature whatsoever, or

    


    (iii) any
      warrants or other rights to subscribe for or purchase any evidences of its
      indebtedness, any shares of stock of any class or any other securities or
      property of any nature whatsoever, 

    


    then
      (1)
      the number of shares of Common Stock for which this Warrant is exercisable
      shall
      be adjusted to equal the product of the number of shares of Common Stock for
      which this Warrant is exercisable immediately prior to such adjustment
      multiplied by a fraction (A) the numerator of which shall be the Per Share
      Market Value of Common Stock at the date of taking such record and (B) the
      denominator of which shall be such Per Share Market Value minus the amount
      allocable to one share of Common Stock of any such cash so distributable and
      of
      the fair value (as determined in good faith by the Board and supported by an
      opinion from an investment banking firm mutually agreed upon by the Issuer
      and
      the Holder) of any and all such evidences of indebtedness, shares of stock,
      other securities or property or warrants or other subscription or purchase
      rights so distributable, and (2) the Warrant Price then in effect shall be
      adjusted to equal (A) the Warrant Price then in effect multiplied by the number
      of shares of Common Stock for which this Warrant is exercisable immediately
      prior to the adjustment divided by (B) the number of shares of Common Stock
      for
      which this Warrant is exercisable immediately after such adjustment. A
      reclassification of the Common Stock (other than a change in par value, or
      from
      par value to no par value or from no par value to par value) into shares of
      Common Stock and shares of any other class of stock shall be deemed a
      distribution by the Issuer to the holders of its Common Stock of such shares
      of
      such other class of stock within the meaning of this Section
      4(c)
      and, if
      the outstanding shares of Common Stock shall be changed into a larger or smaller
      number of shares of Common Stock as a part of such reclassification, such change
      shall be deemed a subdivision or combination, as the case may be, of the
      outstanding shares of Common Stock within the meaning of Section
      4(b). 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    (d) Issuance
      of Additional Shares of Common Stock.
      For a
      period of one (1) year following the Original Issue Date (the “Full
      Ratchet Period”),
      in
      the event the Issuer shall issue any Additional Shares of Common Stock
      (otherwise than as provided in the foregoing subsections (a) through (c) of
      this
Section
      4),
      at a
      price per share less than the Warrant Price then in effect or without
      consideration, then the Warrant Price upon each such issuance shall be adjusted
      to a price equal to the consideration per share paid for such Additional Shares
      of Common Stock.

    


    (e) Issuance
      of Common Stock Equivalents.
      During
      the Full Ratchet Period, in the event the Issuer shall take a record of the
      holders of its Common Stock for the purpose of entitling them to receive a
      distribution of, or shall in any manner (whether directly or by assumption
      in a
      merger in which the Issuer is the surviving corporation) issue or sell, any
      Common Stock Equivalents, whether or not the rights to exchange or convert
      thereunder are immediately exercisable, and the price per share for which Common
      Stock is issuable upon such conversion or exchange shall be less than the
      Warrant Price in effect immediately prior to the time of such issue or sale,
      or
      if, after any such issuance of Common Stock Equivalents, the price per share
      for
      which Additional Shares of Common Stock may be issuable thereafter is amended
      or
      adjusted, and such price as so amended shall be less than the Warrant Price
      in
      effect at the time of such amendment or adjustment, then the Warrant Price
      then
      in effect shall be adjusted as provided in Section
      4(d).
      No
      further adjustments of the number of shares of Common Stock for which this
      Warrant is exercisable and the Warrant Price then in effect shall be made upon
      the actual issue of such Common Stock upon conversion or exchange of such Common
      Stock Equivalents.

    


    (f) Subsequent
      Common Stock and Common Stock Equivalents Issues.
      In the
      event the Issuer, shall, at any time during the thirty-six
      (36) months immediately after
      the
      Full Ratchet Period, issue or sell any Additional Shares of Common Stock or
      Common Stock Equivalents (otherwise than as provided in the foregoing
subsections
      (a) through (c) of this Section 4),
      at a
      price per share less than the Warrant Price, or without consideration, the
      Warrant Price then in effect upon each such issuance shall be adjusted to that
      price (rounded to the nearest cent) determined by multiplying the Warrant Price
      by a fraction: (1) the numerator of which shall be equal to the sum
      of (A)
      the number of shares of 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 Warrant Price
      in effect immediately prior to such issuance; and (2) the denominator of which
      shall be equal to the number of shares of Outstanding Common Stock immediately
      after the issuance of such Additional Shares of Common Stock. No adjustment
      of
      the Warrant Price shall be made upon the issuance of any Additional Shares
      of
      Common Stock which are issued pursuant to the exercise of any warrants or other
      subscription or purchase rights or pursuant to the exercise of any conversion
      or
      exchange rights in any Common Stock Equivalents if any such adjustment shall
      previously have been made upon the issuance of such warrants or other rights
      or
      upon the issuance of such Common Stock Equivalents (or upon the issuance of
      any
      warrant or other rights therefore).
      

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    (g) Superseding
      Adjustment.
      If, at
      any time after any adjustment of the Warrant Price then in effect shall have
      been made pursuant to Section
      4(e) or 4(f)
      as the
      result of any issuance of Common Stock Equivalents, and such Common Stock
      Equivalents, or the right of conversion or exchange in such Common Stock
      Equivalents, shall expire, and all of such or the right of conversion or
      exchange with respect to all of such Common Stock Equivalents shall not have
      been converted or exercised, then such previous adjustment shall be rescinded
      and annulled and the Warrant Price then in effect shall be adjusted to the
      Warrant Price in effect immediately prior to the issuance of such Common Stock
      Equivalents, subject to any further adjustments pursuant to this Section
      4.

    


    (h) Other
      Provisions applicable to Adjustments under this Section.
      The
      following provisions shall be applicable to the making of adjustments of the
      number of shares of Common Stock for which this Warrant is exercisable and
      the
      Warrant Price then in effect provided for in this Section
      4:

    


    (i) Computation
      of Consideration.
      To the
      extent that any Additional Shares of Common Stock or any Common Stock
      Equivalents (or any warrants or other rights therefor) shall be issued for
      cash
      consideration, the consideration received by the Issuer therefor shall be the
      amount of the cash received by the Issuer therefor, or, if such Additional
      Shares of Common Stock or Common Stock Equivalents are offered by the Issuer
      for
      subscription, the subscription price, or, if such Additional Shares of Common
      Stock or Common Stock Equivalents are sold to underwriters or dealers for public
      offering without a subscription offering, the initial public offering price
      (in
      any such case subtracting any amounts paid or receivable for accrued interest
      or
      accrued dividends and without taking into account any compensation, discounts
      or
      expenses paid or incurred by the Issuer for and in the underwriting of, or
      otherwise in connection with, the issuance thereof). In connection with any
      merger or consolidation in which the Issuer is the surviving corporation (other
      than any consolidation or merger in which the previously outstanding shares
      of
      Common Stock of the Issuer shall be changed to or exchanged for the stock or
      other securities of another corporation), the amount of consideration therefor
      shall be deemed to be the fair value, as determined reasonably and in good
      faith
      by the Board, of such portion of the assets and business of the nonsurviving
      corporation as the Board may determine to be attributable to such shares of
      Common Stock or Common Stock Equivalents, as the case may be. The consideration
      for any Additional Shares of Common Stock issuable pursuant to any warrants
      or
      other rights to subscribe for or purchase the same shall be the sum of (A)
      the
      consideration received by the Issuer for issuing such warrants or other rights,
      plus (B) the additional consideration payable to the Issuer upon exercise of
      such warrants or other rights. The consideration for any Additional Shares
      of
      Common Stock issuable pursuant to the terms of any Common Stock Equivalents
      shall be the sum of (A) the consideration received by the Issuer for issuing
      warrants or other rights to subscribe for or purchase such Common Stock
      Equivalents, plus (B) the consideration paid or payable to the Issuer in respect
      of the subscription for or purchase of such Common Stock Equivalents, plus
      (C)
      the additional consideration, if any, payable to the Issuer upon the exercise
      of
      the right of conversion or exchange in such Common Stock Equivalents. In the
      event of any consolidation or merger of the Issuer in which the Issuer is not
      the surviving corporation or in which the previously outstanding shares of
      Common Stock of the Issuer shall be changed into or exchanged for the stock
      or
      other securities of another corporation, or in the event of any sale of all
      or
      substantially all of the assets of the Issuer for stock or other securities
      of
      any corporation, the Issuer shall be deemed to have issued a number of shares
      of
      its Common Stock for stock or securities or other property of the other
      corporation computed on the basis of the actual exchange ratio on which the
      transaction was predicated, and for a consideration equal to the fair market
      value on the date of such transaction of all such stock or securities or other
      property of the other corporation. In the event any consideration received
      by
      the Issuer for any securities consists of property other than cash, the fair
      market value thereof at the time of issuance or as otherwise applicable shall
      be
      as determined in good faith by the Board. In the event Common Stock is issued
      with other shares or securities or other assets of the Issuer for consideration
      which covers both, the consideration computed as provided in this Section
      4(g)(i)
      shall be
      allocated among such securities and assets as determined in good faith by the
      Board.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    (ii) When
      Adjustments to Be Made.
      The
      adjustments required by this Section
      4
      shall be
      made whenever and as often as any specified event requiring an adjustment shall
      occur, except that any adjustment of the number of shares of Common Stock for
      which this Warrant is exercisable that would otherwise be required may be
      postponed (except in the case of a subdivision or combination of shares of
      the
      Common Stock, as provided for in Section
      4(b))
      up to,
      but not beyond the date of exercise if such adjustment either by itself or
      with
      other adjustments not previously made adds or subtracts less than one percent
      (1%) of the shares of Common Stock for which this Warrant is exercisable
      immediately prior to the making of such adjustment. Any adjustment representing
      a change of less than such minimum amount (except as aforesaid) which is
      postponed shall be carried forward and made as soon as such adjustment, together
      with other adjustments required by this Section
      4
      and not
      previously made, would result in a minimum adjustment or on the date of
      exercise. For the purpose of any adjustment, any specified event shall be deemed
      to have occurred at the close of business on the date of its
      occurrence.

    


    (iii) Fractional
      Interests.
      In
      computing adjustments under this Section
      4,
      fractional interests in Common Stock shall be taken into account to the nearest
      one one-hundredth (1/100th)
      of a
      share.

    


    (iv) When
      Adjustment Not Required.
      If the
      Issuer shall take a record of the holders of its Common Stock for the purpose
      of
      entitling them to receive a dividend or distribution or subscription or purchase
      rights and shall, thereafter and before the distribution to stockholders
      thereof, legally abandon its plan to pay or deliver such dividend, distribution,
      subscription or purchase rights, then thereafter no adjustment shall be required
      by reason of the taking of such record and any such adjustment previously made
      in respect thereof shall be rescinded and annulled.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    (h) Form
      of Warrant after Adjustments.
      The
      form of this Warrant need not be changed because of any adjustments in the
      Warrant Price or the number and kind of Securities purchasable upon the exercise
      of this Warrant.

    


    (i) Escrow
      of Warrant Stock.
      If
      after any property becomes distributable pursuant to this Section
      4
      by
      reason of the taking of any record of the holders of Common Stock, but prior
      to
      the occurrence of the event for which such record is taken, and the Holder
      exer
      cises this Warrant, any shares of Common Stock issuable upon exercise by reason
      of such adjustment shall be deemed the last shares of Common Stock for which
      this Warrant is exercised (notwithstanding any other provision to the contrary
      herein) and such shares or other property shall be held in escrow for the Holder
      by the Issuer to be issued to the Holder upon and to the extent that the event
      actually takes place, upon payment of the current Warrant Price. Notwithstanding
      any other provision to the contrary herein, if the event for which such record
      was taken fails to occur or is rescinded, then such escrowed shares shall be
      cancelled by the Issuer and escrowed property returned.

    


    5. Notice
      of Adjustments.
      Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant
      to
Section
      4
      hereof
      (for purposes of this Section
      5,
      each an
“adjustment”),
      the
      Issuer shall cause its Chief Financial Officer to prepare and execute a
      certificate setting forth, in reasonable detail, the event requiring the
      adjustment, the amount of the adjustment, the method by which such adjustment
      was calculated (including a description of the basis on which the Board made
      any
      determination hereunder), and the Warrant Price and Warrant Share Number after
      giving effect to such adjustment, and shall cause copies of such certificate
      to
      be delivered to the Holder of this Warrant promptly after each adjustment.
      Any
      dispute between the Issuer and the Holder of this Warrant with respect to the
      matters set forth in such certificate may at the option of the Holder of this
      Warrant be submitted to a national or regional accounting firm reasonably
      acceptable to the Issuer and the Holder, provided
      that the
      Issuer shall have ten (10) days after receipt of notice from such Holder of
      its
      selection of such firm to object thereto, in which case such Holder shall select
      another such firm and the Issuer shall have no such right of objection. The
      firm
      selected by the Holder of this Warrant as provided in the preceding sentence
      shall be instructed to deliver a written opinion as to such matters to the
      Issuer and such Holder within thirty (30) days after submission to it of such
      dispute. Such opinion shall be final and binding on the parties hereto. The
      costs and expenses of the initial accounting firm shall be paid equally by
      the
      Issuer and the Holder and, in the case of an objection by the Issuer, the costs
      and expenses of the subsequent accounting firm shall be paid in full by the
      Issuer.

    


    6. Fractional
      Shares.
      No
      fractional shares of Warrant Stock will be issued in connection with any
      exercise hereof, but in lieu of such fractional shares, the Issuer shall make
      a
      cash payment therefor equal in amount to the product of the applicable fraction
      multiplied by the Per Share Market Value then in effect.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    7. Ownership
      Cap and Exercise Restriction.
      The
      Issuer shall not effect any exercise of this Warrant, and a Holder shall not
      have the right to exercise any portion of this Warrant, to the extent that,
      after giving effect to the exercise set forth on the applicable Notice of
      Exercise, such Holder would beneficially own in excess of the Beneficial
      Ownership Limitation (as defined below). For purposes of this Section
      7,
      beneficial ownership shall be calculated in accordance with Section 13(d) of
      the
      Exchange Act and the rules and regulations promulgated thereunder. To the extent
      that the limitation contained in this Section
      7
      applies,
      the determination of whether the Warrant is exercisable and of how many shares
      of Warrant are exercised shall be in the sole discretion of such Holder, and
      the
      submission of a Notice of Exercise shall be deemed to be such Holder’s
      determination of whether the shares of this Warrant may be exercised and how
      many shares of the Warrant are exercisable, in each case subject to such
      aggregate percentage limitations. To ensure compliance with this restriction,
      each Holder will be deemed to represent to the Issuer each time it delivers
      a
      Notice of Exercise that such Notice of Exercise has not violated the
      restrictions set forth in this paragraph. In
      addition, a determination as to any group status as contemplated above shall
      be
      determined in accordance with Section 13(d) of the Exchange Act and
      the
      rules and regulations promulgated thereunder.
      For
      purposes of this Section
      7,
      in
      determining the number of outstanding shares of Common Stock, a Holder may
      rely
      on the number of outstanding shares of Common Stock as stated in the most recent
      of the following: (A) the Issuer’s most recent Form 10-QSB or Form 10-KSB, as
      the case may be, (B) a more recent public announcement by the Issuer or (C)
      a
      more recent notice by the Issuer or the Issuer’s transfer agent setting forth
      the number of shares of Common Stock outstanding. Upon the written or oral
      request of a Holder, the Issuer shall within two (2) Trading Days confirm orally
      and in writing to such Holder the number of shares of Common Stock then
      outstanding. In any case, the number of outstanding shares of Common Stock
      shall
      be determined after giving effect to the conversion or exercise of securities
      of
      the Issuer by such Holder since the date as of which such number of outstanding
      shares of Common Stock was reported. 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
      conversion of Warrant held by the applicable Holder. The Beneficial Ownership
      Limitation provisions of this Section
      7
      may be
      waived by a Holder, at the election of such Holder, upon not less than 61 days’
prior notice to the Issuer (“Limitation Notice”); provided however, that if less
      than 61 days remains on the Warrant’s Term, the Beneficial Ownership Limitation
      provisions of this Section 7 shall remain in full force and effect until such
      time as the Holder submits a Limitation Notice to the Company, which such
      Limitation Notice may be provided at any time during such period and which
      shall
      be effective as of the date of such Limitation Notice for such number of shares
      as specified therein. The provisions of this paragraph shall be construed and
      implemented in a manner otherwise than in strict conformity with the terms
      of
      this Section
      7
      to
      correct this paragraph (or any portion hereof) which may be defective or
      inconsistent with the intended Beneficial Ownership Limitation herein contained
      or to make changes or supplements necessary or desirable to properly give effect
      to such limitation.
      The
      limitations contained in this paragraph shall apply to a successor holder of
      Warrant.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

    

     

    8. Registration
      Rights.
      

    


    The
      Holder of this Warrant is entitled to the benefit of certain registration rights
      with respect to the shares of Warrant Stock issuable upon the exercise of this
      Warrant, pursuant to that certain Registration Rights Agreement, of even date
      herewith, by and among the Issuer and Persons listed on Schedule I thereto
      (the
“Registration
      Rights Agreement”)
      and
      the registration rights with respect to the shares of Warrant Stock issuable
      upon the exercise of this Warrant by any subsequent Holder may only be assigned
      in accordance with the terms and provisions of the Registrations Rights
      Agreement.

     

    9. Definitions.
      For the
      purposes of this Warrant, the following terms have the following
      meanings:

    


    “Additional
      Shares of Common Stock”
means
      all shares of Common Stock issued by the Issuer after the Original Issue Date,
      and all shares of Other Common, if any, issued by the Issuer after the Original
      Issue Date, except: (i) the Warrant Stock,(ii) securities issued (other than
      for
      cash) in connection with a merger, acquisition, or consolidation, (iii)
      securities issued pursuant to the conversion or exercise of convertible or
      exercisable securities issued or outstanding on or prior to the date of the
      Purchase Agreement or issued pursuant to the Purchase Agreement (so long as
      the
      terms governing the conversion or exercise price in such securities are not
      amended to lower such price and/or adversely affect the Holders); (iii)
      securities issued in connection with bona fide strategic license agreements
      or
      other partnering arrangements so long as such issuances are not for the purpose
      of raising capital and so long as such agreements and arrangements are
      pre-approved in writing by the Holder, (iv) Common Stock issued or the issuance
      or grants of options to purchase Common Stock pursuant to the Company’s stock
      option plans and employee stock purchase plans outstanding as they exist on
      the
      date of the Purchase Agreement, and (v) securities issued to any placement
      agent
      and its respective designees for the transactions contemplated by the Purchase
      Agreement.

     

    “Board”
shall
      mean the Board of Directors of the Issuer.

    


    “Capital
      Stock”
means
      and includes (i) any and all shares, interests, participations or other
      equivalents of or interests in (however designated) corporate stock, including,
      without limitation, shares of preferred or preference stock, (ii) all
      partnership interests (whether general or limited) in any Person which is a
      partnership, (iii) all membership interests or limited liability company
      interests in any limited liability company, and (iv) all equity or ownership
      interests in any Person of any other type.

    


    “Certificate
      of Incorporation”
means
      the Amended and Restated Certificate of Incorporation of the Issuer as in effect
      on the Original Issue Date, and as hereafter from time to time amended,
      modified, supplemented or restated in accordance with the terms hereof and
      thereof and pursuant to applicable law. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    

      Exhibit
        4.1

       

    

    “Common
      Stock”
means
      the Common Stock, $0.001 par value per share, of the Issuer and any other
      Capital Stock into which such stock may hereafter be changed.

    


    “Common
      Stock Equivalent”
means
      any Convertible Security or warrant, option or other right to subscribe for
      or
      purchase any Additional Shares of Common Stock or any Convertible
      Security.

    


    “Convertible
      Securities”
means
      evidences of indebtedness, shares of Capital Stock or other Securities which
      are
      or may be at any time convertible into or exchangeable for Additional Shares
      of
      Common Stock. The term “Convertible
      Security”
means
      one of the Convertible Securities.

    


    “Governmental
      Authority”
means
      any governmental, regulatory or self-regulatory entity, department, body,
      official, authority, commission, board, agency or instrumentality, whether
      federal, state or local, and whether domestic or foreign.

    


    “Holders”
mean
      the Persons who shall from time to time own any Warrant. The term “Holder”
means
      one of the Holders.

    


    “Independent
      Appraiser”
means
      a
      nationally recognized or major regional investment banking firm or firm of
      independent certified public accountants of recognized standing (which may
      be
      the firm that regularly examines the financial statements of the Issuer) that
      is
      regularly engaged in the business of appraising the Capital Stock or assets
      of
      corporations or other entities as going concerns, and which is not affiliated
      with either the Issuer or the Holder of any Warrant.

    


    “Initial
      Holder”
      means
      ________________.

    


    “Issuer”
means
      International Imaging Systems, Inc., a Delaware corporation, and its successors.
      

    


    “Majority
      Holders”
means
      at any time the Holders of Warrants exercisable for a majority of the shares
      of
      Warrant Stock issuable under the Warrants at the time outstanding.

    


    “Original
      Issue Date”
means
      October [__], 2007.

    


    “OTC
      Bulletin Board”
means
      the over-the-counter electronic bulletin board.

    


    “Other
      Common”
means
      any other Capital Stock of the Issuer of any class which shall be authorized
      at
      any time after the date of this Warrant (other than Common Stock) and which
      shall have the right to participate in the distribution of earnings and assets
      of the Issuer without limitation as to amount.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

    

     

    “Outstanding
      Common Stock”
means,
      at any given time, the aggregate amount of outstanding shares of Common Stock,
      assuming full exercise, conversion or exchange (as applicable) of all Common
      Stock Equivalents that are outstanding at such time.

    


    “Person”
means
      an individual, corporation, limited liability company, partnership, joint stock
      company, trust, unincorporated organization, joint venture, Governmental
      Authority or other entity of whatever nature.

    


    “Per
      Share Market Value”
means
      on any particular date (a) the last closing bid price per share of the Common
      Stock on such date on the OTC
      Bulletin Board or
      another registered national stock exchange on which the Common Stock is then
      listed, or if there is no such price on such date, then the closing bid price
      on
      such exchange or quotation system on the date nearest preceding such date,
      or
      (b) if the Common Stock is not listed then on the OTC Bulletin Board or any
      registered national stock exchange, the last closing bid price for a share
      of
      Common Stock in the over-the-counter market, as reported by the OTC Bulletin
      Board or in the National Quotation Bureau Incorporated or similar organization
      or agency succeeding to its functions of reporting prices) at the close of
      business on such date, or (c) if the Common Stock is not then reported by the
      OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
      organization or agency succeeding to its functions of reporting prices), then
      the average of the "Pink Sheet" quotes for the five (5) Trading Days preceding
      such date of determination, or (d) if the Common Stock is not then publicly
      traded the fair market value of a share of Common Stock as determined by an
      Independent Appraiser selected in good faith by the Initial Holder, or if the
      Initial Holder no longer owns any Warrants the Majority Holders; provided,
      however,
      that
      the Issuer, after receipt of the determination by such Independent Appraiser,
      shall have the right to select an additional Independent Appraiser, in which
      case, the fair market value shall be equal to the average of the determinations
      by each such Independent Appraiser; and provided,
      further
      that all
      determinations of the Per Share Market Value shall be appropriately adjusted
      for
      any stock dividends, stock splits or other similar transactions during such
      period. The determination of fair market value by an Independent Appraiser
      shall
      be based upon the fair market value of the Issuer determined on a going concern
      basis as between a willing buyer and a willing seller and taking into account
      all relevant factors determinative of value, and shall be final and binding
      on
      all parties. In determining the fair mket value of any shares of Common Stock,
      no consideration shall be given to any restrictions on transfer of the Common
      Stock imposed by agreement or by federal or state securities laws, or to the
      existence or absence of, or any limitations on, voting rights.

    


    "Preferred
      Stock"
      means
      shares of the Company’s Series A Convertible Preferred Stock issued to the
      Purchasers pursuant to the Purchase Agreement.

    


    “Purchase
      Agreement”
means
      the Series A Convertible Preferred Stock Purchase Agreement dated as of October
      [__], 2007, among the Issuer and the Purchasers.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

    

     

    “Purchasers”
means
      the purchasers of the Series A Convertible Preferred Stock and the Warrants
      issued by the Issuer pursuant to the Purchase Agreement.

    


    “Securities”
means
      any debt or equity securities of the Issuer, whether now or hereafter
      authorized, any instrument convertible into or exchangeable for Securities
      or a
      Security, and any option, warrant or other right to purchase or acquire any
      Security. "Security" means one of the Securities.

    


    “Securities
      Act”
means
      the Securities Act of 1933, as amended.

    


    “Subsidiary”
means
      any corporation at least 50% of whose outstanding Voting Stock shall at the
      time
      be owned directly or indirectly by the Issuer or by one or more of its
      Subsidiaries, or by the Issuer and one or more of its Subsidiaries.

    


    “Term”
has
      the
      meaning specified in Section
      1
      hereof.

    


    “Trading
      Day”
means
      (a) a day on which the Common Stock is traded on the OTC Bulletin Board, or
      (b)
      if the Common Stock is not traded on the OTC Bulletin Board, a day on which
      the
      Common Stock is quoted in the over-the-counter market as reported by National
      Quotation Bureau Incorporated (or any similar organization or agency succeeding
      its functions of reporting prices); provided,
      however,
      that in
      the event that the Common Stock is not listed or quoted as set forth in (a)
      or
      (b) hereof, then Trading Day shall mean any day except Saturday, Sunday and
      any
      day which shall be a legal holiday or a day on which banking institutions in
      the
      State of New York are authorized or required by law or other government action
      to close.

    


    “Voting
      Stock”
means,
      as applied to the Capital Stock of any corporation, Capital Stock of any class
      or classes (however designated) having ordinary voting power for the election
      of
      a majority of the members of the Board of Directors (or other governing body)
      of
      such corporation, other than Capital Stock having such power only by reason
      of
      the happening of a contingency.

    


    “VWAP
      means” for
      any
      date, (i) the daily volume weighted average price of the Common Stock for such
      date on the OTC Bulletin Board as reported by Bloomberg Financial L.P. (based
      on
      a trading day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time);
      (ii) if the Common Stock is not then listed or quoted on the OTC Bulletin
      Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by the Pink Sheets, LLC (or a similar organization or agency
      succeeding to its functions of reporting prices), the most recent bid price
      per
      share of the Common Stock so reported; or (iii) in all other cases, the
      fair market value of a share of Common Stock as determined in accordance with
      the definition of Per Share Market Value.

    


    “Warrants”
means
      the Warrants issued and sold pursuant to the Purchase Agreement, including,
      without limitation, this Warrant and the Series A-2 Warrants (as defined in
      the
      Purchase Agreement), and any other warrants of like tenor issued in substitution
      or exchange for any thereof pursuant to the provisions of Section
      2(d),
      2(e)
      or
2(f)
      hereof
      or of any of such other Warrants. 

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        4.1

       

    

    “Warrant
      Price”
      initially means $3.00, as such price may be adjusted from time to time as shall
      result from the adjustments specified in this Warrant, including Section
      4
      hereto.

    


    “Warrant
      Share Number”
means
      at any time the aggregate number of shares of Warrant Stock which may at such
      time be purchased upon exercise of a Warrant, after giving effect to all prior
      adjustments and increases to such number made or required to be made under
      the
      terms hereof.

    


    “Warrant
      Stock”
means
      Common Stock issuable upon exercise of any Warrant or Warrants or otherwise
      issuable pursuant to any Warrant or Warrants.

    


    10. Other
      Notices.
      In case
      at any time:

    


    (i) the
      Issuer shall make any distributions to the holders of Common Stock;
      or

    


    (ii) the
      Issuer shall authorize the granting to all holders of its Common Stock of rights
      to subscribe for or purchase any shares of Capital Stock of any class or other
      rights; or

    


    (iii) there
      shall be any reclassification of the Capital Stock of the Issuer; or


    


    (iv) there
      shall be any capital reorganization by the Issuer; or

    


    (v) there
      shall be any (i) consolidation or merger involving the Issuer or (ii) sale,
      transfer or other disposition of all or substantially all of the Issuer's
      property, assets or business (except a merger or other reorganization in which
      the Issuer shall be the surviving corporation and its shares of Capital Stock
      shall continue to be outstanding and unchanged and except a consolidation,
      merger, sale, transfer or other disposition involving a wholly-owned
      Subsidiary); or

    


    (vi) there
      shall be a voluntary or involuntary dissolution, liquidation or winding-up
      of
      the Issuer or any partial liquidation of the Issuer or distribution to holders
      of Common Stock;

    


    then,
      in
      each of such cases, the Issuer shall give written notice to the Holder of the
      date on which (i) the books of the Issuer shall close or a record shall be
      taken
      for such dividend, distribution or subscription rights or (ii) such
      reorganization, reclassification, consolidation, merger, disposition,
      dissolution, liquidation or winding-up, as the case may be, shall take place.
      Such notice also shall specify the date as of which the holders of Common Stock
      of record shall participate in such dividend, distribution or subscription
      rights, or shall be entitled to exchange their certificates for Common Stock
      for
      securities or other property deliverable upon such reorganization,
      reclassification, consolidation, merger, disposition, dissolution, liquidation
      or winding-up, as the case may be. Such notice shall be given at least twenty
      (20) days prior to the action in question and not less than ten (10) days prior
      to the record date or the date on which the Issuer's transfer books are closed
      in respect thereto. This Warrant entitles the Holder to receive copies of all
      financial and other information distributed or required to be distributed to
      the
      holders of the Common Stock.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        4.1

       

    

    11. Amendment
      and Waiver.
      Any
      term, covenant, agreement or condition in this Warrant may be amended, or
      compliance therewith may be waived (either generally or in a particular instance
      and either retroactively or prospectively), by a written instrument or written
      instruments executed by (a) the Issuer, (b) the Initial Holder (assuming the
      Initial Holder still owns all or part of this Warrant), and (c) the Holders
      of
      twenty-five percent (25%) of the Warrants, the calculation of which shall
      include the Initial Holder’s percentage of ownership of the Warrants;
provided,
      however,
      that no
      such amendment or waiver shall reduce the Warrant Share Number, increase the
      Warrant Price, shorten the period during which this Warrant may be exercised
      or
      modify any provision of this Section
      11
      without
      the consent of the Holder of this Warrant. No consideration shall be offered
      or
      paid to any person to amend or consent to a waiver or modification of any
      provision of this Warrant unless the same consideration is also offered to
      all
      holders of the Warrants.

    


    12. Governing
      Law; Jurisdiction.
      This
      Warrant shall be governed by and construed in accordance with the internal
      laws
      of the State of New York, without giving effect to any of the conflicts of
      law
      principles which would result in the application of the substantive law of
      another jurisdiction. This Warrant shall not be interpreted or construed with
      any presumption against the party causing this Warrant to be drafted. The Issuer
      and the Holder agree that venue for any dispute arising under this Warrant
      will
      lie exclusively in the state or federal courts located in New York County,
      New
      York, and the parties irrevocably waive any right to raise forum
      non conveniens
      or any
      other argument that New York is not the proper venue. The Issuer and the Holder
      irrevocably consent to personal jurisdiction in the state and federal courts
      of
      the state of New York. The Issuer and the Holder consent to process being served
      in any such suit, action or proceeding by mailing a copy thereof to such party
      at the address in effect for notices to it under this Warrant and agrees that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing in this Section
      12
      shall
      affect or limit any right to serve process in any other manner permitted by
      law.
      The Issuer and the Holder hereby agree that the prevailing party in any suit,
      action or proceeding arising out of or relating to this Warrant or the Purchase
      Agreement, shall be entitled to reimbursement for reasonable legal fees from
      the
      non-prevailing party. The parties hereby waive all rights to a trial by
      jury.

    


    13. Notices.
      Any
      notice, demand, request, waiver or other communication required or permitted
      to
      be given hereunder shall be in writing and shall be effective (a) immediately
      upon hand delivery, telecopy or facsimile at the address or number designated
      below (if delivered on a business day during normal business hours where such
      notice is to be received), or the first business day following such delivery
      (if
      delivered other than on a business day during normal business hours where such
      notice is to be received) or (b) on the second business day following the date
      of mailing by express courier service, fully prepaid, addressed to such address,
      or upon actual receipt of such mailing, whichever shall first occur. The
      addresses for such communications shall be:

     

    
      	
              If
                to the Issuer: 

            	International Imaging Systems,
              Inc. 
	 	
              c/oXi'an
                Baorun Industrial Development Co. Ltd.

              Dongxin
                Century Square,  7th Floor

              Xi'an
                East City High-tech Industrial Development Park

              Shannxi
                Province,  P.R. China

              Attn:
                Mr. Gao Xincheng

              Tel: 
                86 29 82682019

              Fax:
                86 29 82683629

            


    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
       

      Exhibit
        4.1

    

     

    with
      copies (which copies 

    shall
      not
      constitute notice)

     to:   

    Loeb
      & Loeb

    345
      Park
      Avenue

    New
      York,
      NY10154

    Attn:
      Mitchell S. Nussbaum

    Tel:
      212.407.4159

    Fax:
      212.407-4990

     

    
      	If to any Holder:	
              At
                the address of such Holder set forth on Exhibit
                A
                to
                this Agreement, with copies to Holder’s counsel as set forth on
                Exhibit
                A
                or
                as specified in writing by such
                Holder

            


    

     

    Any
      party
      hereto may from time to time change its address for notices by giving written
      notice of such changed address to the other party hereto.

     

    14. Warrant
      Agent.
      The
      Issuer may, by written notice to each Holder of this Warrant, appoint an agent
      having an office in New York, New York for the purpose of issuing shares of
      Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of
      Section
      2
      hereof,
      exchanging this Warrant pursuant to subsection (d) of Section
      2
      hereof
      or replacing this Warrant pursuant to subsection (d) of Section
      3
      hereof,
      or any of the foregoing, and thereafter any such issuance, exchange or
      replacement, as the case may be, shall be made at such office by such
      agent.

    


    15. Remedies.
      The
      Issuer stipulates that the remedies at law of the Holder of this Warrant in
      the
      event of any default or threatened default by the Issuer in the performance
      of
      or compliance with any of the terms of this Warrant are not and will not be
      adequate and that, to the fullest extent permitted by law, such terms may be
      specifically enforced by a decree for the specific performance of any agreement
      contained herein or by an injunction against a violation of any of the terms
      hereof or otherwise.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        4.1

       

    

    16. Successors
      and Assigns.
      This
      Warrant and the rights evidenced hereby shall inure to the benefit of and be
      binding upon the successors and assigns of the Issuer, the Holder hereof and
      (to
      the extent provided herein) the Holders of Warrant Stock issued pursuant hereto,
      and shall be enforceable by any such Holder or Holder of Warrant
      Stock.

    


    17. Modification
      and Severability.
      If, in
      any action before any court or agency legally empowered to enforce any provision
      contained herein, any provision hereof is found to be unenforceable, then such
      provision shall be deemed modified to the extent necessary to make it
      enforceable by such court or agency. If any such provision is not enforceable
      as
      set forth in the preceding sentence, the unenforceability of such provision
      shall not affect the other provisions of this Warrant, but this Warrant shall
      be
      construed as if such unenforceable provision had never been contained
      herein.

    


    18. Headings.
      The
      headings of the Sections of this Warrant are for convenience of reference only
      and shall not, for any purpose, be deemed a part of this Warrant.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Exhibit
      4.1

     

    IN
      WITNESS WHEREOF, the Issuer has executed this Series A-1 Warrant as of the
      day
      and year first above written.

    
      	 	 	 
	 	
              INTERNATIONAL
                IMAGING SYSTEMS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                

              Title:

            


    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

      
        Exhibit
          4.1

         

      

    

    EXERCISE
      FORM

    SERIES
      A-1 WARRANT

    


    INTERNATIONAL
      IMAGING SYSTEMS, INC.

    


    The
      undersigned _______________, pursuant to the provisions of the accompanying
      Series A-1 Warrant, hereby elects to purchase _____ shares of Common Stock
      of
      INTERNATIONAL IMAGING SYSTEMS, INC. covered by the accompanying Series A-1
      Warrant.

    


    Dated:
      _________________   Signature ___________________________

    


    Address _____________________

     

    _____________________

    


    Number
      of
      shares of Common Stock beneficially owned or deemed beneficially owned by the
      Holder on the date of Exercise: _________________________

    


    The
      undersigned is an “accredited investor” as defined in Regulation D under the
      Securities Act of 1933, as amended.   □
      Yes   □
      No

     

    The
      undersigned intends that payment of the Warrant Price shall be made as (check
      one): 

     

    Cash
      Exercise_______ 

     

    Cashless
      Exercise_______

     

    If
      the
      Holder has elected a Cash Exercise, the Holder shall pay the sum of $________
      by
      certified or official bank check (or via wire transfer) to the Issuer in
      accordance with the terms of the Warrant. 

     

    If
      the
      Holder has elected a Cashless Exercise, a certificate shall be issued to the
      Holder for the number of shares equal to the whole number portion of the product
      of the calculation set forth below, which is ___________. The Issuer shall
      pay a
      cash adjustment in respect of the fractional portion of the product of the
      calculation set forth below in an amount equal to the product of the fractional
      portion of such product and the Per Share Market Value on the date of exercise,
      which product is ____________.

     

    X
      = Y -
(A)(Y)

    B

    


    Where: 

    


    The
      number of shares of Common Stock to be issued to the Holder is
      (“X”).

    


    The
      number of shares of Common Stock purchasable upon exercise of all of the Warrant
      or, if only a portion of the Warrant is being exercised, the portion of the
      Warrant being exercised is (“Y”). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
        4.1

       

    

    The
      Warrant Price is (“A”). 

    


    The
      Per
      Share Market Value of one share of Common Stock is (“B”).


    


    ASSIGNMENT

    


    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the accompanying Series A-1 Warrant and all rights evidenced
      thereby and does irrevocably constitute and appoint _____________, attorney,
      to
      transfer said Series A-1 Warrant on the books of the corporation named
      therein.

    


    Dated:
      _________________  
Signature ___________________________

    


    Address _____________________

     

    _____________________

    


    PARTIAL
      ASSIGNMENT

    


    FOR
      VALUE
      RECEIVED, _________________ hereby sells, assigns and transfers unto
      __________________ the right to purchase _________ shares of Warrant Stock
      evidenced by the accompanying Series A-1 Warrant together with all rights
      therein, and does irrevocably constitute and appoint ___________________,
      attorney, to transfer that part of said Series A-1 Warrant on the books of
      the
      corporation named therein.

    


    Dated:
      _________________   Signature ___________________________

    


    Address _____________________

     

    _____________________

    


    FOR
      USE
      BY THE ISSUER ONLY:

    


    This
      Warrant No. W-A-1-07-___ canceled (or transferred or exchanged) this _____
      day
      of ___________, _____, shares of Common Stock issued therefor in the name of
      _______________, Warrant No. W-A-1-07-_____ issued for ____ shares of Common
      Stock in the name of _______________.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    
      	
              Name
                and Address of Holder 

            	 	
              Name
                and Address of Holder’s Counsel

            
	
               

              ________________________________

               

              ________________________________

               

              ________________________________

            	 	
               

              ________________________________

               

              ________________________________

               

              ________________________________