Document:

f8k071807ex4x_redmile.htm

    Exhibit
      4.10

     

    This
      Warrant and the securities issuable upon conversion of this warrant have not
      been registered under the Securities Act of 1933, as amended (the "Act"), or
      under the securities laws of applicable states.  These securities are
      subject to restrictions on transferability and resale and may not be transferred
      or resold except as permitted under the Act and the applicable state securities
      laws pursuant to registration or exemption therefrom.

    

    Unless
      permitted under securities legislation, the holder of this security must not
      trade the security before the date that is four (4) months and a day after
      the
      later of June 26, 2007 and the date the Corporation became a reporting issuer
      in
      any province or territory of Canada.

    

    RED
      MILE ENTERTAINMENT, INC.

    (Incorporated
      under the laws of the State of Delaware)

    

    FORM
      OF SHARE PURCHASE WARRANT

    

    THIS
      IS TO CERTIFY THAT

    

    l

    

    of

    

    l

    

    (hereinafter
      referred to as the "holder") is the owner of l share purchase
      warrants
      ("Warrants") in respect of each of which the holder is entitled to acquire
      in
      the manner and subject to the restrictions and adjustments set forth herein,
      one
      fully paid and non-assessable common share ("Share") of Red Mile Entertainment,
      Inc. (the "Corporation") for US$2.75 (the "Exercise Price") per
      Share.

    

    The
      Warrants will be exercisable at any time and from time to time until 4:30 p.m.
      (Calgary time) (the "Time of Expiry") on July 17, 2009 (the "Expiry
      Date").

    

    The
      right
      to acquire Shares may only be exercised by the holder to the extent and within
      the times set forth above by:

    

    
      	
              (a)  

            	
              duly
                completing and executing the Exercise Form attached hereto;
                and

            

    

    

    
      	
              (b)  

            	
              surrendering
                this Certificate and the Exercise Price in respect of each Share
                subscribed for, by cash or certified cheque, bank draft or money
                order in
                lawful money of the United States of America, payable to the Corporation,
                to the Corporation at the principal office of the Corporation located
                at
                4000 Bridgeway, Suite 101 Sausalito, California,
                95965.

            

    

    

    This
      Certificate, the Exercise Form attached hereto, and such payment shall be deemed
      to be surrendered only upon personal delivery thereof or, if sent by mail or
      other means of transmission, upon actual receipt thereof by the Corporation
      at
      the office referred to above.

    

    Upon
      surrender as aforesaid, the holder shall be deemed for all purposes to be the
      holder or holders of record of such Shares and the Corporation will cause a
      certificate or certificates representing such Shares to be delivered or mailed
      to the person or persons at the address or addresses specified in the Exercise
      Form within five business days.  The certificate may bear a legend
      restricting the transfer of the Shares for the balance on any hold period
      imposed under applicable securities laws.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    The
      holder may acquire any lesser number of Shares than the number of Shares which
      may be acquired for the Warrants represented by this Certificate. In such event,
      the holder shall be entitled to receive a new Certificate for the balance of
      the
      Shares which may be acquired. No fractional Shares will be
      issued.

    

    The
      rights of the holder, including the number of Shares issuable upon exercise
      of a
      Warrant and the Exercise Price, shall be subject to adjustment as set forth
      in
      Appendix A hereto.

    

    At
      the
      Time of Expiry, the right of a holder to acquire Shares represented hereby
      will
      expire and the Warrants will be void and of no further effect.

    

    The
      holding of the Warrants evidenced by this Certificate shall not constitute
      the
      holder a shareholder of the Corporation or entitle the holder to any right
      or
      interest in respect thereof except as expressly provided and in this
      Certificate.

    

    The
      Warrants represented by this Certificate and this Certificate are transferable
      by the holder without the prior consent of the Corporation.  In the
      event of such transfer, each transferee shall be entitled to receive from the
      Corporation a certificate representing the Warrants so transferred upon
      presentation to the Corporation of this certificate together with a duly
      executed assignment in the form attached hereto.

    

    Time
      shall be of the essence hereof.

    

    IN
      WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed
      by its duly authorized officers as of July _________, 2007.

    

    

    RED
      MILE ENTERTAINMENT,
      INC.

    

    

    

    Per:____________________________

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    EXERCISE
      NOTICE

     

    TO:RED
      MILE ENTERTAINMENT, INC.

     

    Terms
      used herein and not otherwise defined shall have the meanings ascribed thereto
      in the Warrant certificate delivered herewith.

     

    The
      undersigned hereby irrevocably exercises the right to acquire
      ______________________________ Shares in accordance with and subject to the
      provisions of the accompanying Warrant certificate and encloses or delivers
      herewith payment in the amount of $_____________________, representing the
      aggregate subscription price.

     

    The
      Shares are to be issued as follows:

     

     

                    

      Name:
        

      

    

    (print
      clearly)

     

    Address
      in full:
      

    

     

    
      

    

     

    
      Number
        of
        Shares:
        

      

     

    

     

    DATED
      as
      of    _________________________________,
      200_____.

     

    
      	 	 	
              (signature
                of Holder)

            
	 	 	 
	 	 	 
	 	 	
              print
                full name

               

               

            
	 	 	 
	 	 	 
	 	 	
              print
                full address

            

    

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    INSTRUCTIONS
      FOR EXERCISE

    

    The
      above
      form of exercise notice is to be signed by the holder, whether the registered
      holder or any valid assignee.  Signature to the exercise notice as
      signed by the registered holder must correspond in every particular with the
      name written upon the face of the warrant or, if the exercise notice is signed
      by an assignee, must correspond in every particular with the name of the
      assignee shown on the assignment.  If more than one person holds the
      warrant jointly all must sign.

    

    Any
      signature may be by an agent or attorney if the authority of the agent or
      attorney to sign is proven to the satisfaction of the Corporation. No fraction
      of warrants may be bought or sold.

    

    This
      form
      of exercise notice must be signed and surrendered at the office of the
      Corporation at the address set out on the face page of the Warrant
      certificate.

    

    Upon
      surrender, the Corporation will issue to the person or persons named in the
      exercise notice the number of Shares set forth in the exercise notice and such
      persons will be shareholders of the Corporation in respect of the Shares as
      at
      the date of surrender and payment.  As soon as practicable after
      surrender and payment the Corporation will mail to such persons at the address
      or addresses specified in the exercise notice a certificate or certificates
      evidencing the Shares to which the holder is entitled.  If the holder
      exercises a lesser number of Warrants than the number of Warrants represented
      by
      the Warrant certificate, the Holder shall be entitled to receive a further
      Warrant certificate in respect of Shares represented by the original Warrant
      certificate but not exercised by the holder.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ASSIGNMENT

    

    FOR
      VALUE
      RECEIVED the undersigned hereby sells, assigns and transfers unto
      ________________________ the within warrant and all rights represented thereby
      and does hereby irrevocably constitute and appoint ________________________
      to
      enter the same on the books of Red Mile Entertainment, Inc. with full power
      of
      substitution in the premises.

    

    DATED
      the
      ____ day of ________________, 200__.

    

    

    _______________________________                _______________________________

    (Signature
      of
      Guarantor)                                                                                     (Signature
      of assignor)

    

    

    INSTRUCTIONS
      FOR ASSIGNMENT

    

    The
      signature on the foregoing assignment must correspond with the name written
      on
      the face of the warrant in every particular without alteration or enlargement
      or
      any change whatever and must be guaranteed by a Canadian chartered bank or
      by
      some other person satisfactory to the Corporation.  Assignments may be
      made to one assignee only unless the assignment be to a joint
      account.  To assign to more persons than one for separate accounts the
      warrant should be first split into warrants of smaller
      denominations.

    

    In
      the
      case of a person signing by agent or attorney, the authority of the agent or
      attorney to sign must be proven to the satisfaction of the
      Corporation.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

    APPENDIX
      A

    

    [NTD:
      Adjustment provisions from agency agreement to be inserted upon
      finalization]f8k071807ex4xi_redmile.htm

    Exhibit
      4.11

     

    UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
      TRADE THE SECURITY BEFORE THE DATE THAT IS FOUR (4) MONTHS AND A DAY AFTER
      THE
      LATER OF JULY 18, 2007 AND THE DATE THE CORPORATION BECAME A REPORTING ISSUER
      IN
      ANY PROVINCE OR TERRITORY OF CANADA.

     

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
      SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR STATE SECURITIES
      LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT
      OF RED MILE ENTERTAINMENT, INC. THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
      OTHERWISE TRANSFERRED ONLY (A) TO RED MILE ENTERTAINMENT, INC., (B) OUTSIDE
      THE
      UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES
      ACT, (C) INSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 144A UNDER THE
      SECURITIES ACT, OR (D) INSIDE THE UNITED STATES, PURSUANT TO AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS
      AFTER
      PROVIDING A LEGAL OPINION REASONABLY SATISFACTORY TO RED MILE ENTERTAINMENT,
      INC.

     

    THIS
      WARRANT AND THE SECURITIES TO BE ISSUED UPON THE EXERCISE THEREOF HAVE NOT
      BEEN
      REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE “1933
      SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND THE WARRANTS MAY NOT BE
      EXERCISED IN THE UNITED STATES OR BY OR FOR THE ACCOUNT OR BENEFIT OF A PERSON
      IN THE UNITED STATES OR A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE
      1933
      SECURITIES ACT) WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
      UNITED STATES FEDERAL AND STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
      EXEMPTION THEREFROM AND THE CORPORATION SHALL HAVE RECEIVED AN OPINION OF
      COUNSEL TO SUCH EFFECT SATISFACTORY TO IT.

     

    THIS
      AGREEMENT made as of the 18th day of
      July,
      2007

     

    BETWEEN:

     

    RED
      MILE ENTERTAINMENT, INC., a corporation incorporated under the laws of
      the State of Delaware and having an office in the City of Sausalito, California
      (the “Corporation”)

     

    -
      and -

     

    l,
      (the “Warrantholder”)

     

    WHEREAS
      the Corporation has agreed pursuant to an Agency Agreement made
      effective the 22nd day of
      June, 2007
      between the Corporation and the Agent (the “Agency Agreement”)
      to grant the Agent and its nominees, warrants to purchase that number of Common
      Shares equal to the aggregate of 8% of the Common Shares sold by the Agent
      pursuant to the Offering and 8% of the Common Shares issuable pursuant to
      Convertible Promissory Notes issued by the Corporation to persons with accounts
      established with the Agent.

     

    NOW
      THEREFORE in consideration of the premises, mutual covenants and
      agreements herein contained, this agreement witnesses and it is understood
      and
      agreed by and between the parties hereto as follows:

     

    1.           Interpretation

     

    All
      capitalized terms herein and not defined herein shall have the meaning given
      to
      such terms in the Agency Agreement.

     

    2.           Grant
      of Agent's Warrants

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Subject
      to the provisions hereinafter contained, the Corporation hereby grants to the
      Warrantholder an aggregate of l share purchase
      warrants
      (the “Agent’s Warrants”), each Agent's Warrant entitling the Warrantholder to
      purchase ● Common Shares (the “Optioned Securities”).

     

    3.           Exercise
      of Agent's Warrants

     

    The
      Agent
      may exercise the Agent’s Warrants at any time on or before 4:30 p.m. Calgary
      time (the “Expiry Time”) on or before July 18, 2009 at an exercise price of US
      $3.00, subject to adjustment as set forth herein.

     

    4.           Manner
      of Exercise

     

    The
      Warrantholder may exercise the Agent's Warrants represented by this certificate
      in whole or in part, at any time and from time to time, on or prior to the
      Expiry Time, by notice in writing given by the Warrantholder to the Corporation
      at its address for notice set out in the Agency Agreement, specifying the number
      of Agent's Warrants to be exercised and accompanied by payment in cash or
      certified cheque for the purchase price of all of the Common Shares issuable
      by
      the Corporation, calculated in accordance with Articles 3 and 9
      hereof.

     

    5.           Certificates

     

    Upon
      exercise of the Agent's Warrants, the Corporation shall cause the transfer
      agent
      and registrar of the Corporation to deliver to the Warrantholder, or as the
      Warrantholder may otherwise in writing direct in the notice of exercise of
      the
      Agent's Warrants, within seven (7) days following the receipt by the Corporation
      of payment in accordance with Article 4 hereof, certificates representing in
      the
      aggregate the number of Common Shares for which payment has been received by
      the
      Corporation.

     

    6.           No
      Rights of Shareholder Until Exercise

     

    The
      Warrantholder shall have no rights whatsoever as a shareholder (including any
      rights to receive dividends or other distributions to shareholders or to vote
      at
      a general meeting of shareholders of the Corporation, except as provided in
      Article 10 hereof) other than in respect to Common Shares in respect of which
      the Warrantholder shall have exercised its right to purchase hereunder and
      which
      the Warrantholder shall have actually taken up and paid for.

     

    7.           Non-Transferable

     

    The
      rights conferred upon the Warrantholder hereunder shall be non-transferable
      and
      non-tradable.

     

    8.           No
      Fractional Common Shares

     

    No
      fractional Optioned Securities will be issued on exercise of the Agent's
      Warrants.

     

    9.           Adjustments
      in Event of Change in Common Shares

     

    Definitions. For
      the purposes of this section 9, unless there is something in the subject matter
      or context inconsistent therewith, the words and terms defined below will have
      the respective meanings specified therefor in this subsection:

     

    (a)           "Adjustment
      Period" means the period commencing on July 18, 2007 and ending at the
      Time of Expiry;

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)           "Current
      Market Price" of the Common Shares at any date means the price per
      share equal to the weighted average price at which the Shares have traded on
      the
      Over-the-Counter Bulletin Board, on such other stock exchange as may be selected
      by the directors of the Corporation for such purpose, during the period of
      any
      twenty consecutive trading days ending not more than three trading days before
      such date; provided that the weighted average price will be determined by
      dividing the aggregate sale price of all Common Shares sold on the said exchange
      or market, as the case may be, during the said twenty consecutive trading days
      by the total number of Common Shares so sold; and provided further that if
      the
      Common Shares are not then listed on any stock exchange or traded in the
      over-the-counter market, then the Current Market Price will be determined by
      such firm of independent chartered accountants as may be selected by the
      directors of the Corporation;

     

    (c)           "director"
      means a director of the Corporation for the time being and, unless otherwise
      specified herein, a reference to action "by the directors" means action by
      the
      directors of the Corporation as a board or, whenever empowered, action by the
      executive committee of such board; and

     

    (d)           "trading
      day" with respect to a stock exchange or over-the-counter market means
      a day on which such stock exchange or market is open for business.

     

    Adjustments.  The
      number of Common Shares which the holder shall be entitled to receive pursuant
      to the Warrants represented by this certificate (the "Share Rate") and the
      exercise price for such Common Shares (the "Exercise Price") shall be subject
      to
      adjustment from time to time in the events and in the manner provided as
      follows.

     

    (1)           If
      at any time during the Adjustment Period the Corporation:

     

    
      	
              (a)  

            	
              fixes
                a record date for the issue of, or issues, Common Shares to the holders
                of
                all or substantially all of the outstanding Shares by way of a stock
                dividend;

            

    

     

    
      	
              (b)  

            	
              fixes
                a record date for the distribution to, or makes a distribution to,
                the
                holders of all or substantially all of the Common Shares payable
                in Common
                Shares or securities exchangeable for or convertible into
                Shares;

            

    

     

    
      	
              (c)  

            	
              subdivides
                the outstanding Common Shares into a greater number of Common Shares;
                or

            

    

     

    
      	
              (d)  

            	
              consolidates
                the outstanding Common Shares into a lesser number of Common
                Shares;

            

    

     

    (any
      of
      such events in subclauses 9(1)(a), (b), (c) and (d) above being herein called
      a
      "Common Share Reorganization"),

     

    
      	
              (i)  

            	
              the
                Share Rate shall be adjusted on the earlier of the record date on
                which
                holders of Common Shares are determined for the purposes of the Common
                Share Reorganization and the effective date of the Common Share
                Reorganization to the amount determined by multiplying the Share
                Rate in
                effect immediately prior to such record date or effective date, as
                the
                case may be, by a fraction:

            

    

     

    
      	
              A.  

            	
              the
                denominator of which will be the number of Common Shares outstanding
                on
                such record date or effective date before giving effect to such Common
                Share Reorganization; and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              B.  

            	
              the
                numerator of which will be the number of Common Shares which will
                be
                outstanding immediately after giving effect to such Common Share
                Reorganization (including in the case of a distribution of securities
                exchangeable for or convertible into Common Shares the number of
                Common
                Shares that would be outstanding had such securities all been exchanged
                for or converted into Common Shares on such date);
                and

            

    

     

    
      	
              (ii)  

            	
              the
                Exercise Price shall be concurrently adjusted by multiplying the
                Exercise
                Price in effect immediately prior to such record date or effective
                date,
                as the case may be, by a fraction which shall be the reciprocal of
                the
                fraction used in the adjustment of the Share Rate in the paragraph
                above;

            

    

     

    To
      the
      extent that any adjustment in the Share Rate or Exercise Price occurs pursuant
      to this clause as a result of the fixing by the Corporation of a record date
      for
      the distribution of securities exchangeable for or convertible into Common
      Shares, such Share Rate and Exercise Price will be readjusted immediately after
      the expiry of any relevant exchange or conversion right to the Share Rate and
      Exercise Price which would then be in effect based upon the number of Common
      Shares actually issued and remaining issuable after such expiry and will be
      further readjusted in such manner upon the expiry of any further such
      right.

     

    
      	
              (2)

            	
              If
                at any time during the Adjustment Period the Corporation fixes a
                record
                date for the issue or distribution to the holders of all or substantially
                all of the outstanding Common Shares of rights, options or warrants
                pursuant to which such holders are entitled, during a period expiring
                not
                more than 45 days after the record date for such issue (such period
                being
                the "Rights Period"), to subscribe for or purchase Common Shares
                or
                securities exchangeable for or convertible into Common Shares at
                a price
                per share (or in the case of securities exchangeable for or convertible
                into Shares at an exchange or conversion price per share at the date
                of
                issue of such securities) of less than 85% of the Current Market
                Price of
                the Common Shares on such record date (any of such events being herein
                called a "Rights Offering"),

            

    

     

    
      	
              (a)  

            	
              the
                Share Rate will be adjusted effective immediately after the record
                date
                for the Rights Offering to the amount determined by multiplying the
                Share
                Rate in effect on such record date by a
                fraction:

            

    

     

    
      	
              (i)  

            	
              the
                denominator of which will be the aggregate
                of

            

    

     

    
      	
              A.  

            	
              the
                number of Common Shares outstanding on the record date for the Rights
                Offering; and

            

    

     

    
      	
              B.  

            	
              the
                quotient determined by dividing

            

    

     

    
      	
              a)  

            	
              either
                (a) the product of the number of Common Shares offered during the
                Rights
                Period pursuant to the Rights Offering and the price at which such
                Common
                Shares are offered, or, (b) the product of the exchange or conversion
                price of the securities so offered and the number of Common Shares
                for or
                into which the securities offered pursuant to the Rights Offering
                may be
                exchanged or converted, as the case may be,
                by

            

    

     

    
      	
              b)  

            	
              the
                Current Market Price of the Common Shares as of the record date for
                the
                Rights Offering; and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (ii)  

            	
              the
                numerator of which will be the aggregate of the number of Common
                Shares
                outstanding on such record date and the number of Common Shares offered
                pursuant to the Rights Offering (including in the case of the issue
                or
                distribution of securities exchangeable for or convertible into Common
                Shares the number of Common Shares for or into which such securities
                may
                be exchanged or converted); and

            

    

     

    
      	
              (b)  

            	
              the
                Exercise Price shall be concurrently adjusted by multiplying the
                Exercise
                Price in effect immediately prior to such record date or effective
                date,
                as the case may be, by a fraction which shall be the reciprocal of
                the
                fraction used in the adjustment of the Share Rate in the paragraph
                above;

            

    

     

    If
      by the
      terms of the rights, options, or warrants referred to in this clause, there
      is
      more than one purchase, conversion or exchange price per Common Share, the
      aggregate price of the total number of additional Common Shares offered for
      subscription or purchase, or the aggregate conversion or exchange price of
      the
      convertible or exchangeable securities so offered, will be calculated for
      purposes of the adjustment on the basis of the weighted average purchase,
      conversion or exchange price per Common Share, as the case may
      be.  Any Common Shares owned by or held for the account of the
      Corporation will be deemed not to be outstanding for the purpose of any such
      calculation.  To the extent that any adjustment in the Share Rate and
      Exercise Price occurs pursuant to this clause as a result of the fixing by
      the
      Corporation of a record date for the issue or distribution of rights, options
      or
      warrants referred to in this clause, the Share Rate and Exercise Price will
      be
      readjusted immediately after the expiry of any relevant exchange, conversion
      or
      exercise right to the Share Rate which would then be in effect based upon the
      number of Common Shares actually issued and remaining issuable after such expiry
      and will be further readjusted in such manner upon the expiry of any further
      such right.

     

    
      	
              (3)

            	
              If
                at any time during the Adjustment Period the Corporation fixes a
                record
                date for the issue or distribution to the holders of all or substantially
                all of the Common Shares of:

            

    

     

    
      	
              (a)  

            	
              shares
                of the Corporation of any class other than Common
                Shares;

            

    

     

    
      	
              (b)  

            	
              rights,
                options or warrants to acquire Common Shares or securities exchangeable
                for or convertible into Common Shares (other than rights, options
                or
                warrants pursuant to which holders of Common Shares are entitled,
                during a
                period expiring not more than 45 days after the record date for such
                issue, to subscribe for or purchase Common Shares at a price per
                share (or
                in the case of securities exchangeable for or convertible into Common
                Shares at an exchange or conversion price per share at the date of
                issue
                of such securities) of at least 85% of the Current Market Price of
                the
                Common Shares on such record date);

            

    

     

    
      	
              (c)  

            	
              evidences
                of indebtedness of the Corporation;
                or

            

    

     

    
      	
              (d)  

            	
              any
                property or assets of the
                Corporation;

            

    

     

    and
      if
      such issue or distribution does not constitute a Common Share Reorganization
      or
      a Rights Offering (any of such non-excluded events being herein called a
      "Special Distribution"):

     

    
      	
              (i)  

            	
              the
                Share Rate will be adjusted effective immediately after the record
                date
                for the Special Distribution to the amount determined by multiplying
                the
                Share Rate in effect on the record date for the Special Distribution
                by a
                fraction:

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              A.  

            	
              the
                numerator of which will be the aggregate
                of

            

    

     

    
      	
              a)  

            	
              the
                product of the number of Common Shares outstanding on such record
                date and
                the Current Market Price of the Common Shares on such record date,
                and

            

    

     

    
      	
              b)  

            	
              the
                aggregate fair value, as determined by the directors of the Corporation,
                to the holders of the Common Shares of the shares, rights, options,
                warrants, evidences of indebtedness or property or assets to be issued
                or
                distributed in the Special Distribution,
                and

            

    

     

    
      	
              B.  

            	
              the
                denominator of which will be the product obtained by multiplying
                the
                number of Common Shares outstanding on such record date by the Current
                Market Price of the Common Shares on such record date;
                and

            

    

     

    
      	
              (ii)  

            	
              the
                Exercise Price shall be concurrently adjusted by multiplying the
                Exercise
                Price in effect immediately prior to such record date or effective
                date,
                as the case may be, by a fraction which shall be the reciprocal of
                the
                fraction used in the adjustment of the Share Rate in the paragraph
                above;

            

    

     

    Any
      Common Shares owned by or held for the account of the Corporation will be deemed
      not to be outstanding for the purpose of such calculation.  To the
      extent that any adjustment in the Share Rate occurs pursuant to this clause
      as a
      result of the fixing by the Corporation of a record date for the issue or
      distribution of rights, options or warrants to acquire Shares or securities
      exchangeable for or convertible into Shares referred to in this clause, the
      Share Rate will be readjusted immediately after the expiry of any relevant
      exercise, exchange or conversion right to the amount which would then be in
      effect if the fair market value had been determined on the basis of the number
      of Shares issued and remaining issuable immediately after such expiry, and
      will
      be further readjusted in such manner upon the expiry of any further such
      right.

     

    (4)           If
      at any time during the Adjustment Period there occurs:

     

    
      	
              (a)  

            	
              a
                reclassification or redesignation of the Common Shares, any change
                of the
                Common Shares into other shares or securities or any other capital
                reorganization involving the Common Shares other than a Common Share
                Reorganization;

            

    

     

    
      	
              (i)  

            	
              a
                consolidation, amalgamation, arrangement or merger of the Corporation
                with
                or into any other body corporate which results in a reclassification
                or
                redesignation of the Common Shares or a change or exchange of the
                Common
                Shares into other shares or securities;
                or

            

    

     

    
      	
              (ii)  

            	
              the
                transfer of the undertaking or assets of the Corporation as an entirety or
                substantially as an entirety to another corporation or
                entity;

            

    

     

    (any
      of
      such events being herein called a "Capital Reorganization"), after the effective
      date of the Capital Reorganization the Warrantholder will be entitled to
      receive, and shall accept, upon exercise of the Agent's Warrants, in lieu of
      the
      number of Common Shares which the Warrantholder shall be entitled to receive
      pursuant to the Agent's Warrants, the kind and aggregate number of shares and
      other securities or property resulting from the Capital Reorganization which
      the
      Warrantholder would have been entitled to receive as a result of the Capital
      Reorganization if, on the effective date thereof, the Warrantholder had been
      the
      registered holder of the number of Common Shares which the Warrantholder would
      have been entitled to receive pursuant to the Agent's Warrants represented
      by
      this certificate if exercised immediately prior to such Capital Reorganization.
      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    If
      necessary, as a result of any Capital Reorganization, appropriate adjustments
      will be made in the application of the provisions of this certificate with
      respect to the rights and interest thereafter of the Holder to the end that
      the
      provisions of this certificate will thereafter correspondingly be made
      applicable as nearly as may reasonably be possible in relation to any shares
      or
      other securities or property thereafter deliverable upon the exercise of the
      Agent's Warrants.

     

    Rules.  The
      following rules and procedures will be applicable to adjustments made pursuant
      to this Article 9.

     

    
      	
              (a)  

            	
              Subject
                to the following provisions hereof, any adjustment made pursuant
                to
                Article 9 above will be made successively whenever an event referred
                to
                therein occurs.

            

    

     

    
      	
              (b)  

            	
              No
                adjustment will be made in the Share Rate unless it would result
                in a
                change of at least three percent in the prevailing Share Rate; provided,
                however, that any adjustments which except for the provisions of
                this
                Article 9 would otherwise have been required to be made will be carried
                forward and taken into account in any subsequent
                adjustment.

            

    

     

    
      	
              (c)  

            	
              If
                at any time during the Adjustment Period the Corporation will take
                any
                action affecting the Common Shares, other than an action or an event
                described above, which in the opinion of the directors would have
                a
                material adverse effect upon the rights of the Warrantholder under
                this
                certificate, the Exercise Price and/or the number of Common Shares
                purchasable hereunder will be adjusted in such manner and at such
                time as
                the directors may determine to be equitable in the
                circumstances.  Failure of the taking of action by the directors
                so as to provide for an adjustment prior to the effective date of
                any
                action by the Corporation affecting the Common Shares will be deemed
                to be
                conclusive evidence that the directors have determined that it is
                equitable to make no adjustment in the
                circumstances.

            

    

     

    
      	
              (d)  

            	
              No
                adjustment in the number or kind of securities purchasable on the
                exercise
                of the Agent's Warrant's will be made in respect of any event described
                herein if the Warrantholder is entitled to participate in such event
                on
                the same terms mutatis mutandis as if the Warrantholder had exercised
                the
                Agent's Warrants prior to or on the record date or effective date,
                as the
                case may be, of such event.

            

    

     

    
      	
              (e)  

            	
              If
                the Corporation sets a record date to determine holders of Common
                Shares
                for the purpose of entitling such holders to receive any dividend
                or
                distribution or any subscription or purchase rights and will thereafter
                and before the distribution to such holders of any such dividend,
                distribution or subscription or purchase rights legally abandon its
                plan
                to pay or deliver such dividend, distribution or subscription or
                purchase
                rights, no adjustment in the Share Rate will be required by reason
                of the
                setting of such record date.

            

    

     

    
      	
              (f)  

            	
              If
                a dispute arises at any time with respect to any adjustment of the
                Exercise Price, Share Rate or the number of Common Shares purchasable
                hereunder, such dispute will be conclusively determined by the auditors
                of
                the Corporation or if they are unable or unwilling to act by such
                other
                firm of independent chartered accountants as may be selected by the
                directors of the Corporation.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Taking
      of Actions.  As a condition precedent to the taking of
      any action which would require an adjustment hereunder, the Corporation will
      take any action which may, in the opinion of the Corporation's legal counsel,
      be
      necessary in order that the Corporation may validly and legally issue as fully
      paid and non-assessable shares all of the Common Shares which the Warrantholder
      is entitled to receive.

     

    Notice.  At
      least ten days prior to any record date or effective date, as the case may
      be,
      for any event which requires or might require an adjustment in any of the rights
      of the Warrantholder hereunder, including the Exercise Price and the number
      of
      Common Shares which are purchasable hereunder, the Corporation will deliver
      to
      the Warrantholder, at the Warrantholder's registered address, a certificate
      of
      the Corporation specifying the particulars of such event and, if determinable,
      the required adjustment and the calculation of such adjustment.  In
      case any adjustment for which a notice has been given is not then determinable,
      the Corporation will promptly after such adjustment is determinable deliver
      to
      the Warrantholder, at the Warrantholders registered address, a certificate
      providing the calculation of such adjustment.  The Corporation hereby
      covenants and agrees that the register of transfers and share transfer books
      for
      the Common Shares will be open, and that the Corporation will not take any
      action which might deprive the Warrantholder of the opportunity of exercising
      the rights of subscription contained herein, during such period.

     

    10.           Intentionally
      Deleted

     

    [THE
      REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    11.           Reservation
      of Securities

     

    The
      Corporation shall at all times, during the term of this Agreement, reserve
      and
      keep available a sufficient number of unissued Common Shares to satisfy the
      requirements hereof.

     

    12.           Entire
      Agreement

     

    This
      Agreement supersedes all other agreements, documents, writings and verbal
      understandings among the parties relating to the subject matter hereof and
      represents the entire agreement between the parties relating to the subject
      matter hereof.  This Agreement may be executed by facsimile in any
      number of counterparts all of which when taken together shall be deemed to
      be
      one and the same document and notwithstanding the actual date of execution
      of
      each counterpart, this Agreement shall be deemed to be dated as of the date
      first above written.

     

    13           Enurement

     

    Except
      as
      otherwise set forth herein, this Agreement shall be binding upon and enure
      to
      the benefit of the successors and assigns of the Agent and of the Corporation,
      respectively.

     

    14.           Time

     

    Time
      shall be of the essence of this Agreement.

     

    

     

    IN
      WITNESS WHEREOF the Corporation has caused this warrant certificate to
      be executed by its duly authorized officer.

     

    RED
      MILE ENTERTAINMENT, INC.

     

    

     

    Per:  _______________________________

     

    Ben 
      Zadik

    Chief
      Financial Officer

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