Document:

Unassociated Document

    
      EXHIBIT
        10.28

       

       

       

      WARRANT
        AGREEMENT

       

      WARRANT
        AGREEMENT (this “Agreement”) dated as of June __, 2005, between National
        Lampoon, Inc., a Delaware corporation (the “Company”), and Merriman Curhan Ford
& Co. (the “Underwriter”).

       

      W
        I T
        N E S S E T H:

       

      WHEREAS,
        the Company proposes to issue to the Underwriter warrants (“Warrants”) to
        purchase up to an aggregate of _________ shares (the “Shares”) of common stock
        of the Company, par value $.0001 per share (the “Common Stock”);
        and

       

      WHEREAS,
        the Underwriter has agreed pursuant to the underwriting agreement (the
“Underwriting Agreement”) dated June __, 2005 between the Underwriter and the
        Company, to act as the underwriter in connection with the Company’s proposed
        public offering (the “Public Offering”) of _______ shares of Common Stock at an
        initial public offering price of $____
        per
        share, with an option to purchase up to an additional _______ shares of Common
        Stock for the purpose of covering over-allotments; and

       

      WHEREAS,
        the Warrants issued pursuant to this Agreement are being issued by the Company
        to the Underwriter or its officers, directors or partners and members of
        the
        selling group (the “Selling Group”) and/or their officers, directors or
        partners, in consideration for, and as part of the Underwriter’s compensation in
        connection with, the Underwriter acting as the underwriter pursuant to the
        Underwriting Agreement;

       

      NOW,
        THEREFORE, in consideration of the foregoing premises, the payment by the
        Underwriter to the Company of an aggregate of One Hundred Dollars and No
        Cents
        ($100.00), the agreements herein set forth and other good and valuable
        consideration the receipt and sufficiency of which are hereby acknowledged,
        the
        parties hereto agree as follows:

       

      1.    Grant.
        The
        Underwriter, and/or its designees who are officers or partners of the
        Underwriter or members of the Selling Group in connection with the Public
        Offering, are hereby granted the right to purchase, at any time from December
        __, 2005 until 5:00 P.M., New York City time, on June __, 2009 (the “Warrant
        Exercise Term”), up to an aggregate of _______ Shares at an initial exercise
        price (subject to adjustment as provided in Article
        8
        hereof)
        of $____
        per
        Share (120% of the public offering price of the Shares). Notwithstanding
        the
        foregoing, the Warrants shall become immediately exercisable upon a change
        in
        control (as determined in good faith by the Company’s Board of Directors) of the
        Company. Except as set forth herein, the Shares issuable upon exercise of
        the
        Warrants are in all respects identical to the shares of Common Stock being
        purchased by the Underwriter for resale to the public pursuant to the terms
        and
        provisions of the Underwriting Agreement.

       

      2.    Warrant
        Certificates.
        The
        warrant certificates (the “Warrant Certificates”) delivered and to be delivered
        pursuant to this Agreement shall be in the form set forth as Exhibit
        A
        attached
        hereto and made a part hereof, with such appropriate insertions, omissions,
        substitutions and other variations as required or permitted by this
        Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      3.    Exercise
        of Warrants.

       

      3.1    Cash
        Exercise.
        The
        Warrants initially are exercisable at a price of $____ per Share, payable
        in
        cash or by check to the order of the Company, or any combination of cash
        or
        check, subject to adjustment as provided in Article
        8
        hereof.
        Upon surrender of the Warrant Certificate with the duly executed Form of
        Election to Purchase in the form set forth on Exhibit
        B
        attached
        hereto and made a part hereof, together with payment of the Exercise Price
        (as
        hereinafter defined) for the Shares purchased at the Company’s principal
        offices, currently located at 10850 Wilshire Boulevard, Suite 1000, Los Angeles,
        California 90024, the registered holder of a Warrant Certificate (“Holder” or
“Holders”) shall be entitled to receive a certificate or certificates for the
        Shares so purchased. The purchase rights represented by each Warrant Certificate
        are exercisable at the option of the Holder thereof, in whole or in part
        (but
        not as to fractional shares of the Common Stock underlying the Warrants).
        In the
        case of the purchase of less than all the Shares purchasable under any Warrant
        Certificate, the Company shall cancel said Warrant Certificate upon the
        surrender thereof and shall execute and deliver a new Warrant Certificate
        of
        like tenor for the balance of the Shares purchasable thereunder.

       

      3.2    [Intentionally
        Omitted]

       

      4.    Issuance
        of Certificates.

       

      4.1    Issuance.
        Upon
        the exercise of the Warrants, the issuance of certificates for the Shares
        shall
        be made forthwith (and in any event within five (5) business days thereafter)
        without any charge to the Holder thereof including, without limitation, any
        tax
        (other than income taxes) which may be payable in respect of the issuance
        thereof, and such certificates shall (subject to the provisions of Article
        5
        hereof)
        be issued in the name of, or in such names as may be directed by, the Holder
        thereof; provided however, that the Company shall not be required to pay
        any tax
        which may be payable in respect of any transfer involved in the issuance
        and
        delivery of any such certificates in a name other than that of the Holder
        and
        the Company shall not be required to issue or deliver such certificates unless
        or until the person or persons requesting the issuance thereof shall have
        paid
        to the Company the amount of such tax or shall have established to the
        satisfaction of the Company that such tax has been paid.

       

      4.2    Form
        of Certificates.
        The
        Warrant Certificates and certificates representing the Shares shall be executed
        on behalf of the Company by such officer or officers as are permitted or
        required to execute such certificates on behalf of the Company by the Company’s
        by-laws and applicable law. Warrant Certificates shall be dated the date
        of
        execution by the Company upon initial issuance, division, exchange, substitution
        or transfer. 

       

      (a)  The
        Warrant Certificates shall bear a legend substantially similar to the
        following:

       

      NEITHER
        THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE COMMON STOCK ISSUABLE
        UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
        OR
        ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
        PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
        REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
        ACT
        OR AN EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE
        STATE SECURITIES LAWS.

       

      
        
          
          

        

        
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      THIS
        CERTIFICATE IS ISSUED SUBJECT TO THE PROVISIONS OF A WARRANT AGREEMENT DATED
        AS
        OF _____ __, 2005, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND ANY
        TRANSFEREE OF THIS CERTIFICATE OR OF THE SHARES ISSUABLE UPON EXERCISE OF
        IT
        SHALL BE BOUND BY THE PROVISIONS OF SAID AGREEMENT, A COPY OF WHICH IS ON
        FILE
        WITH, AND AVAILABLE FROM, THE SECRETARY OF THE COMPANY. AMONG OTHER THINGS,
        SUCH
        WARRANT AGREEMENT ABSOLUTELY PROHIBITS THE SALE, TRANSFER, ASSIGNMENT, PLEDGE
        OR
        HYPOTHECATION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR ISSUABLE
        UPON
        EXERCISE THEREOF PRIOR TO ______ __, 2005, EXCEPT TO A “PERMITTED TRANSFEREE”
        (AS DEFINED IN SUCH WARRANT AGREEMENT).

       

      (b)    Upon
        exercise of the Warrants, in part or in whole, certificates representing
        the
        Shares issued upon such exercise shall bear a legend substantially similar
        to
        the following:

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY
        NOT BE
        SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED
        IN THE
        ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
        UNDER SUCH ACT OR AN EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT
        TO APPLICABLE STATE SECURITIES LAWS.

       

      THIS
        CERTIFICATE IS ISSUED SUBJECT TO THE PROVISIONS OF A WARRANT AGREEMENT DATED
        AS
        OF _____ __, 2005, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND ANY
        TRANSFEREE OF THIS CERTIFICATE SHALL BE BOUND BY THE PROVISIONS OF SAID
        AGREEMENT, A COPY OF WHICH IS ON FILE WITH, AND AVAILABLE FROM, THE SECRETARY
        OF
        THE COMPANY. AMONG OTHER THINGS, SUCH WARRANT AGREEMENT ABSOLUTELY PROHIBITS
        THE
        SALE, TRANSFER, ASSIGNMENT, PLEDGE OR HYPOTHECATION OF THE SECURITIES
        REPRESENTED BY THIS CERTIFICATE OR ISSUABLE UPON EXERCISE THEREOF PRIOR TO
        ______ __, 2005, EXCEPT TO A “PERMITTED TRANSFEREE” (AS DEFINED IN SUCH WARRANT
        AGREEMENT).

       

      
        
          
          

        

        
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      5.    Restriction
        on Transfer of Warrants.
        The
        Holder of a Warrant Certificate, by its acceptance thereof, covenants and
        agrees
        that the Warrants are being acquired, and any Shares will be acquired, as
        an
        investment and not with a view to the distribution thereof, and that the
        Warrants and Shares may not be sold, transferred, assigned, hypothecated
        or
        otherwise disposed of, in whole or in part, except pursuant to an effective
        registration statement under the Securities Act of 1933, as amended (the
“Act”)
        or an applicable exemption from the registration requirements thereof. In
        addition to, and without limiting the foregoing, pursuant to Corporate Financing
        Rule 2710, the Warrants and Shares may not be sold, transferred, assigned,
        hypothecated or otherwise disposed of, in whole or in part for a period of
        180
        days from the effective date of the Registration Statement filed for the
        Public
        Offering, except to officers or partners (but not directors) of the Underwriter,
        to any member of the Selling Group participating in the distribution to the
        public of the Common Stock and/or to their respective officers or partners
        which, in each case, agree in writing not to further transfer any Warrants
        or
        Shares during such 180-day period, (each of which is hereinafter referred
        to as
        a “Permitted Transferee”), in which case such Permitted Transferee shall be
        entitled to receive a replacement Warrant Certificate in accordance with
        Section
        9
        hereof
        upon presentment of a properly executed Form of Assignment in the form set
        forth
        on Exhibit
        C
        attached
        hereto and made a part hereof. 

       

      In
        connection with the transfer or exercise of Warrants, the transferee and
        Holder
        must agree to execute any documents which may be reasonably required by counsel
        to the Company to comply with the provisions of the Act (as defined below)
        and
        applicable state securities laws.

       

      6.    Price.

       

      6.1    Initial
        and Adjusted Exercise Price.
        The
        initial exercise price of each Warrant shall be $____ per Share. The adjusted
        exercise price shall be the price which shall result from time to time from
        any
        and all adjustments of the initial exercise price in accordance with the
        provisions of Article
        8
        hereof.

       

      6.2    Exercise
        Price.
        The
        term “Exercise Price” herein shall mean the initial exercise price or the
        adjusted exercise price, depending upon the context.

       

      7.    Registration
        Rights.

       

      7.1    Registrable
        Securities.
        As used
        herein the term “Registrable Security” means each of the Shares issuable upon
        exercise of the Warrants and any shares of Common Stock issued upon any stock
        split or stock dividend in respect of such Shares; provided, however, that
        with
        respect to any particular Registrable Security, such security shall cease
        to be
        a Registrable Security when, as of the date of determination, (i) it has
        been
        effectively registered under the Act and disposed of pursuant thereto, (ii)
        it
        may be resold to the public pursuant to Rule 144 under the Act or other
        applicable exemption from the registration requirements of the Act, (iii)
        registration under the Act is no longer required for the immediate public
        distribution of all or any portion of such security or (iv) it has ceased
        to be
        outstanding. The term “Registrable Securities” means any and/or all of the
        securities falling within the foregoing definition of a “Registrable Security.”
        In the event of any merger, reorganization, consolidation, recapitalization
        or
        other change in corporate structure affecting the Common Stock, such adjustment
        shall be made in the definition of “Registrable Security” as is appropriate in
        order to prevent any dilution or enlargement of the rights granted pursuant
        to
        this Article
        7.

       

      
        
          
          

        

        
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      7.2    Demand
        Registration.
        At any
        time commencing after December __, 2005 through
        and including December __, 2009, the Majority Holders (as defined below)
        shall
        have the right (which right is in addition to the registration rights under
        Section
        7.3
        hereof),
        exercisable by written notice to the Company, to have the Company prepare
        and
        file with the Commission, on one occasion, a Registration Statement (“Demand
        Registration”) and such other documents, including a prospectus, as may be
        necessary in order to comply with the provisions of the Act, so as to permit
        a
        public offering and sale of the Registrable Securities during a period equal
        to
        the longer of (i) nine (9) months and (ii) the unexpired term of the Warrants
        by
        the Majority Holders demanding such registration and any other Holders of
        Warrants who shall notify the Company within ten (10) days after receiving
        notice from the Company of such Demand Registration. 

       

      7.3    Piggyback
        Registration.
        

       

      (a)    If,
        at
        any time during the seven years following the effective date of the Public
        Offering, the Company proposes to prepare and file any new registration
        statement under the Securities Act or post-effective amendments thereto covering
        equity or debt securities of the Company, or any such securities of the Company
        held by its shareholders (other than on Form S-4 or Form S-8 promulgated
        under
        the Securities Act or any successor forms thereto), it shall, with respect
        to
        each such registration statement and amendment, give written notice by
        registered mail to the Holders of its intention to so register such securities
        (“Notice”) at least thirty (30) days before the initial filing of such
        registration statement. Upon the written request, delivered to the Company
        within 20 days after delivery of any such Notice by the Company, of any Holder
        (a “Requesting Holder”) to include in such registration the Requesting Holder’s
        Registrable Securities (which request shall specify the number of such Holder’s
        Registrable Securities proposed to be included in such registration and shall
        state that such Requesting Holder desires to sell such Registrable Securities
        in
        the public securities markets), the Company shall use its best efforts to
        cause
        all such Registrable Securities to be included in such registration (“Piggyback
        Registration”), at the company’s sole cost and expense and at no cost or expense
        to the Requesting Holders (other than underwriting discounts and commissions
        applicable to the sale of such Registrable Securities and the fees and
        disbursements, if any, of counsel or any advisor to the Requesting Holders);
        provided,
        however,
        that if
        the Piggyback Registration relates to an underwritten public offering and
        the
        managing underwriter advises the Company and the Requesting Holders that
        the
        inclusion of all Registrable Securities requested to be included in such
        registration would
        materially adversely affect the marketability of the offering (including
        pricing) of the securities proposed to be registered by the Company, then
        such
        Requesting Holders shall be entitled to participate pro rata (based on the
        number of shares owned by the respective Requesting Holders) with the other
        Requesting Holders having similar piggyback registration rights with respect
        to
        such registration to the extent the managing underwriter determines that
        such
        securities may be included without such material adverse effect. 

       

      (b)    Notwithstanding
        the provisions of this Section
        7.3,
        the
        Company shall have the right at any time after it shall have given written
        notice pursuant to this Section
        7.3
        (irrespective of whether any written request for inclusion of Registrable
        Securities shall have already been made) to elect not to file any such proposed
        Registration Statement, or to withdraw the same after the filing but prior
        to
        the effective date thereof.

       

      
        
          
          

        

        
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      7.4    Covenants
        of the Company With Respect to Registration.
        The
        Company covenants and agrees as follows:

       

      (a)    The
        Company shall pay all costs, fees and expenses in connection with all
        Registration Statements filed pursuant to Sections
        7.2
        and
7.3
        hereof
        (excluding any underwriting discounts and commissions which may be incurred
        in
        connection with the sale of any Registrable Securities and fees of counsel
        or
        any advisor to the Holders of Registrable Securities) including, without
        limitation, the Company’s legal and accounting fees, printing expenses and blue
        sky fees and expenses and the reasonable fees and expenses (not to exceed
        $10,000) of one counsel to the Holders of Registrable Securities.

       

      (b)    The
        Company shall take all reasonably necessary action which may be required
        in
        qualifying or registering the Registrable Securities included in a Registration
        Statement for offering and sale under the securities or blue sky laws of
        such
        states as are reasonably requested by the holders of such securities, provided
        that the Company shall not be obligated to execute or file any general consent
        to service of process or to qualify as a foreign corporation to do business
        under the laws of any such jurisdiction or to provide any material undertaking
        or make any changes in its by-laws or amended and restated certificate of
        incorporation which the Board of Directors determines to be contrary to the
        best
        interests of the Corporation or to modify any of its contractual relationships
        then existing.

       

      (c)    Nothing
        contained in this Agreement shall be construed as requiring any Holder to
        exercise his Warrants prior to the initial filing of any Registration Statement
        or the effectiveness thereof.

       

      (d)    The
        Company shall deliver promptly to each holder of Registrable Securities
        participating in the offering copies of all correspondence between the
        Commission or its staff, on the one hand, and the Company, its counsel or
        auditors, on the other hand, with respect to the Registration Statement and
        permit each holder of Registrable Securities and underwriter to do such
        investigation, upon reasonable advance notice, with respect to information
        contained in or omitted from the Registration Statement as it deems reasonably
        necessary to comply with applicable securities laws or rules of the National
        Association of Securities Dealers, Inc. (“NASD”); provided
        that
        each such holder of Registrable Securities agrees not to disclose or use
        such
        information without the prior written consent of the Company. Such investigation
        shall include access to books, records and properties and opportunities to
        discuss the business of the Company with its officers and independent auditors,
        all to such reasonable extent and at such reasonable times and as often as
        any
        such holder of Registrable Securities or underwriter shall reasonably
        request.

       

      (e)    In
        connection with any Registration Statement filed pursuant to Sections
        7.2
        and
7.3
        hereof,
        the Company shall furnish, or cause to be furnished, to each Holder
        participating in any underwritten offering and to each underwriter, a signed
        counterpart, addressed to such Holder or underwriter, of (i) an opinion of
        counsel to the Company, dated the effective date of such 

       

      
        
          
          

        

        
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      Registration
        Statement (and, if such registration includes an underwritten public offering,
        an opinion dated the date of the closing under the underwriting agreement),
        and
        (ii) a “cold comfort” letter, dated the effective date of such Registration
        Statement (and, if such registration includes an underwritten public offering,
        a
        letter dated the date of the closing under the underwriting agreement), signed
        by the independent public accountants who have issued a report on the Company’s
        financial statements included in such Registration Statement, in each case
        covering substantially the same matters with respect to such Registration
        Statement (and the prospectus included therein) and, in the case of such
        accountants’ letter, with respect to events subsequent to the date of such
        financial statements, as are customarily covered in opinions of issuer’s counsel
        and in accountants’ letters delivered to underwriters in underwritten public
        offerings of securities.

       

      (f)    The
        Company shall promptly notify each Holder of Registrable Securities covered
        by
        such Registration Statement, at any time when a prospectus relating thereto
        is
        required to be delivered under the Act, upon the Company’s discovery that, or
        upon the happening of any event as a result of which, the prospectus included
        in
        such Registration Statement, as then in effect, includes an untrue statement
        of
        a material fact or omits to state any material fact required to be stated
        therein or necessary to make the statements therein not misleading in the
        light
        of the circumstances under which they were made, and upon receipt of such
        notice
        each Holder shall not effect any sale of Shares and shall immediately cease
        utilizing or distributing such prospectus. At the request of any such Holder,
        the Company shall promptly prepare and furnish to such Holder and each
        underwriter, if any, a reasonable number of copies of a supplement to or
        an
        amendment of such prospectus as may be necessary so that, as thereafter
        delivered to the purchasers of such securities, such prospectus shall not
        include an untrue statement of a material fact or omit to state a material
        fact
        required to be stated therein or necessary to make the statements therein
        not
        misleading in the light of the circumstances under which they were
        made.

       

      (g)    For
        purposes of this Agreement, the term “Majority Holders” means the Holders of
        Registrable Securities and/or Warrants exerciseable for Registrable Securities
        which constitute in excess of fifty percent (50%) of the then outstanding
        Registrable Securities and/or Warrants exerciseable for Registrable
        Securities.

       

      7.5    Indemnification. 

       

      (a)    In
        connection with any registration of any Registrable Securities under the
        Act
        pursuant to this Agreement, the Company shall indemnify and hold harmless
        the
        holders of Registrable Securities, each underwriter, broker or any other
        person
        acting on behalf of the holders of Registrable Securities and each other
        person,
        if any, who controls any of the foregoing persons within the meaning of the
        Act
        against any losses, claims, damages or liabilities, joint or several (or
        actions
        in respect thereof), to which any of the foregoing persons may become subject
        under the Act or otherwise, insofar as such losses, claims, damages or
        liabilities (or actions in respect thereof) arise out of or are based upon
        an
        untrue statement or allegedly untrue statement of a material fact contained
        in
        the registration statement under which such Registrable Securities were
        registered under the Act, any preliminary prospectus or final prospectus
        contained therein or otherwise filed with the Commission, any amendment or
        supplement thereto or any document incident to registration or qualification
        of
        any Registrable Securities, or arise out of or are based upon the omission
        or
        alleged omission to state therein a material fact 

       

      
        
          
          

        

        
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      required
        to be stated therein or necessary to make the statements therein not misleading
        or, with respect to any prospectus, necessary to make the statements therein
        in
        light of the circumstances under which they were made not misleading, or
        any
        violation by the Company of the Act or state securities or blue sky laws
        applicable to the Company and relating to action or inaction required of
        the
        Company in connection with such registration or qualification under such
        state
        securities or blue sky laws; and shall reimburse the holders of Registrable
        Securities, such underwriter, such broker or such other person acting on
        behalf
        of the holders of Registrable Securities and each such controlling person
        for
        any legal or other expenses reasonably incurred by any of them in connection
        with investigating or defending any such loss, claim, damage, liability or
        action; provided,
        however,
        that
        the Company shall not be liable in any such case to the extent that any such
        loss, claim, damage, liability or action (including any legal or other expenses
        incurred) arises out of or is based upon an untrue statement or allegedly
        untrue
        statement or omission or alleged omission made in said registration statement,
        preliminary prospectus, final prospectus, amendment, supplement or document
        incident to registration or qualification of any Registrable Securities in
        reliance upon and in conformity with written information furnished to the
        Company through an instrument duly executed by the holders of Registrable
        Securities specifically for use in the preparation thereof. 

       

      (b)    In
        connection with any registration of Registrable Securities under the Act
        pursuant to this Agreement, each holder of Registrable Securities shall
        severally and not jointly indemnify and hold harmless (in the same manner
        and to
        the same extent as set forth in the preceding paragraph of this Section
        7.5)
        the
        Company, each director of the Company, each officer of the Company who shall
        sign such registration statement, each other holder of Registrable Securities
        or
        Other Shares, each underwriter, broker or other person acting on behalf of
        the
        holders of Registrable Securities and each person who controls any of the
        foregoing persons within the meaning of the Act with respect to any statement
        or
        omission from such registration statement, any preliminary prospectus or
        final
        prospectus contained therein or otherwise filed with the Commission, any
        amendment or supplement thereto or any document incident to registration
        or
        qualification of any Registrable Securities if such statement or omission
        was
        made in reliance upon and in conformity with written information furnished
        by
        such holder to the Company or such underwriter specifically for use in
        connection with the preparation of such registration statement, preliminary
        prospectus, final prospectus, amendment, supplement or document.

       

      (c)    Promptly
        after receipt by an indemnified party of notice of the commencement of any
        action involving a claim referred to in the preceding paragraphs of this
        Section
        7.5,
        such
        indemnified party will, if a claim in respect thereof is made against an
        indemnifying party, give written notice to the latter of the commencement
        of
        such action. The failure of any indemnified party to notify an indemnifying
        party of any such action shall not relieve the indemnifying party from any
        liability in respect of such action that it may have to such indemnified
        party
        on account of this Section
        7.5
        (except
        to the extent that such indemnifying party is actually prejudiced thereby).
        In
        case any such action is brought against an indemnified party, the indemnifying
        party will be entitled to participate in and to assume the defense thereof,
        jointly with any other indemnifying party to the extent that it may wish,
        with
        counsel reasonably satisfactory to such indemnified party, and after notice
        from
        the indemnifying party to such indemnified party of its election so to assume
        the defense thereof, the indemnifying party shall not be responsible for
        any
        legal or other expenses subsequently incurred by the indemnified party in
        

       

      
        
          
          

        

        
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      connection
        with the defense thereof; provided,
        however,
        that if
        any indemnified party shall have reasonably concluded that there may be one
        or
        more legal or equitable defenses available to such indemnified party which
        are
        additional to or conflict with those available to the indemnifying party,
        or
        that such claim or litigation involves or could have an effect upon matters
        beyond the scope of the indemnity agreement provided in this Section
        7.5,
        the
        indemnifying party shall not have the right to assume the defense of such
        action
        on behalf of such indemnified party (but shall have the right to participate
        therein with counsel of its choice) and such indemnifying party shall reimburse
        such indemnified party for that portion of the fees and expenses of any counsel
        retained by the indemnified party which is reasonably related to the matters
        covered by the indemnity agreement provided in this Section
        7.5.
        If the
        indemnifying party is not entitled to, or elects not to, assume the defense
        of a
        claim, it will not be obligated to pay the fees and expenses of more than
        one
        counsel with respect to such claim. No indemnifying party shall, without
        the
        prior written consent of the indemnified parties, which consent shall not
        be
        unreasonably withheld, effect any settlement or compromise of, or consent
        to the
        entry of judgment with respect to, any litigation, or any investigation or
        proceeding by any governmental agency or body, commenced or threatened, or
        any
        claim whatsoever in respect of which indemnification or contribution could
        have
        been sought under this Section
        7.5
        (whether
        or not the indemnified parties are actual or potential parties thereto),
        unless
        (x) such settlement, compromise or consent (I) includes an unconditional
        release
        of the indemnified party from all liability arising out of such litigation,
        investigation, proceeding or claim and (II) does not include a statement
        as to,
        or an admission of, fault, culpability or a failure to act, by or on behalf
        of
        the indemnified party and (y) the indemnifying party reaffirms its
        indemnification obligations pursuant to this Agreement. For purposes of this
        Section
        7.5(c),
        it
        shall be deemed unreasonable for an indemnified party to withhold consent
        to
        settlement if the conditions in clauses (x) and (y) above are
        satisfied.

       

      (d)    If
        the
        indemnification provided for in this Section
        7.5
        is
        unavailable to an indemnified party under subsections (a) and (b) of this
        Section
        7.5
        in
        respect of any losses, expenses, liabilities, damages or claims referred
        to
        therein, then each applicable indemnifying party, in lieu of indemnifying
        such
        indemnified party, shall contribute to the amount paid or payable by such
        indemnified party as a result of such losses, expenses, liabilities, damages
        or
        claims (i) in such proportion as is appropriate to reflect the relative benefits
        received by such person from the registration and offering of Registrable
        Securities pursuant to Section
        7.2
        or
7.3
        or (ii)
        if (but only if) the allocation provided by clause (i) above is not permitted
        by
        applicable law, in such proportion as is appropriate to reflect not only
        the
        relative benefits referred to in clause (i) above but also the relative fault
        of
        such person with respect to the statements or omissions which resulted in
        such
        losses, expenses, liabilities, damages or claims, as well as any other relevant
        equitable considerations. The relative fault of any person shall be determined
        by reference to, among other things, whether the untrue statement or alleged
        untrue statement of a material fact or omission or alleged omission relates
        to
        information supplied by such person, the intent of the parties and their
        relative knowledge, access to information and opportunity to correct or prevent
        such statement or omission. The amount paid or payable by a party as a result
        of
        the losses, claims, damages and liabilities referred to above shall be deemed
        to
        include any legal or other fees or expenses reasonably incurred by such party
        in
        connection with investigating or defending any claim or action. Notwithstanding
        anything to the contrary, no person guilty of fraudulent misrepresentation
        (within the meaning of Section 11(f) of the Act) shall be entitled to
        contribution from any person who was not guilty of such fraudulent
        misrepresentation.

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      8.    Adjustments
        of Exercise Price and Number of Shares.

       

      8.1    Computation
        of Adjusted Price.
        In case
        the Company shall at any time after the date hereof pay a dividend to holders
        of
        Common Stock in shares of Common Stock or make a distribution to holders
        of
        Common Stock in shares of Common Stock, then upon such dividend or distribution
        the Exercise Price in effect immediately prior to such dividend or distribution
        shall forthwith be reduced to a price determined by dividing:

       

      (a)    an
        amount
        equal to the total number of shares of Common Stock outstanding immediately
        prior to such dividend or distribution multiplied by the Exercise Price in
        effect immediately prior to such dividend or distribution, by

       

      (b)    the
        total
        number of shares of Common Stock outstanding immediately after such issuance
        or
        sale. 

       

      For
        the
        purposes of any computation to be made in accordance with the provisions
        of this
Section
        8.1,
        the
        following provisions shall be applicable: Common Stock issuable by way of
        dividend or other distribution on any stock of the Company shall be deemed
        to
        have been issued immediately after the opening of business on the date following
        the date fixed for the determination of stockholders entitled to receive
        such
        dividend or other distribution.

       

      8.2    Subdivision
        and Combination.
        In case
        the Company shall at any time subdivide or combine the outstanding shares
        of
        Common Stock, the Exercise Price shall forthwith be proportionately decreased
        in
        the case of subdivision or increased in the case of combination.

       

      8.3    Adjustment
        in Number of Shares.
        Upon
        each adjustment of the Exercise Price pursuant to the provisions of this
        Article
        8,
        the
        number of Shares issuable upon the exercise of each Warrant shall be adjusted
        to
        the nearest full Share, by multiplying a number equal to the Exercise Price
        in
        effect immediately prior to such adjustment by the number of Shares issuable
        upon exercise of the Warrants immediately prior to such adjustment and dividing
        the product so obtained by the adjusted Exercise Price.

       

      8.4    Reclassification,
        Consolidation, Merger, etc.
        In case
        of any reclassification or change of the outstanding shares of Common Stock
        (other than a change in par value to no par value, or from no par value to
        par
        value, or as a result of a subdivision or combination), or in the case of
        any
        consolidation of the Company with, or merger of the Company into, another
        corporation (other than a consolidation or merger in which the Company is
        the
        surviving corporation and which does not result in any reclassification or
        change of the outstanding shares of Common Stock, except a change as a result
        of
        a subdivision or combination of such shares or a change in par value, as
        aforesaid), or in the case of a sale or conveyance to another corporation
        of the
        property of the Company as an entirety, the Holders shall thereafter have
        the
        right to purchase the kind and number of shares of stock and other securities
        and property receivable upon such reclassification, change, consolidation,
        merger, sale or conveyance as if the Holders were the owners of the shares
        of
        Common Stock issuable upon exercise of the Warrants immediately prior to
        any
        such events at a price equal to the product of (x) the number of shares issuable
        upon exercise of the Warrants and (y) the Exercise Price in effect immediately
        prior to the record date for such reclassification, change, consolidation,
        merger, sale or conveyance as if such Holders had exercised the
        Warrants.

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

      8.5    Determination
        of Outstanding Shares of Common Stock.
        The
        number of shares of Common Stock at any one time outstanding shall include
        the
        aggregate number of shares issued or issuable upon the exercise of options,
        rights, warrants and upon the conversion or exchange of convertible or
        exchangeable securities.

       

      8.6    [Intentionally
        Omitted] 

       

      8.7    Subscription
        Rights for Shares of Common Stock or Other Securities.
        In the
        case the Company or an affiliate of the Company shall at any time after the
        date
        hereof and prior to the exercise of all the Warrants issue any rights to
        subscribe for shares of Common Stock or any other securities of the Company
        or
        of such affiliate to all the shareholders of the Company, each Holder of
        unexercised Warrants shall be entitled to receive such rights at the later
        of
        (i) the time such Holder exercises its Warrants and (ii) the time such rights
        are distributed to the other shareholders of the Company.

       

      9.    Exchange
        and Replacement of Warrant Certificates.

       

      9.1    Exchange.
        Each
        Warrant Certificate is exchangeable without expense, upon the surrender hereof
        by the registered Holder at the principal executive office of the Company,
        for a
        new Warrant Certificate of like tenor and date representing in the aggregate
        the
        right to purchase the same number of Shares in such denominations as shall
        be
        designated by the Holder thereof at the time of such surrender.

       

      9.2    Replacement.
        Upon
        receipt by the Company of evidence reason-ably satisfactory to it of the
        loss,
        theft, destruction or mutilation of any Warrant Certificate, and, in case
        of
        loss, theft or destruction, of indemnity or security reasonably satisfactory
        to
        it, and reimbursement to the Company of all reasonable expenses incidental
        thereto, and upon surrender and cancellation of the Warrants, if mutilated,
        the
        Company will make and deliver a new Warrant Certificate of like tenor, in
        lieu
        thereof.

       

      10.    Elimination
        of Fractional Interests.
        The
        Company shall not be required to issue certificates representing fractions
        of
        shares of Common Stock and shall not be required to issue scrip or pay cash
        in
        lieu of fractional interests, it being the intent of the parties that all
        fractional interests shall be eliminated by rounding any fraction up to the
        nearest whole number of shares of Common Stock.

       

      11.    Reservation
        and Listing of Securities.
        The
        Company shall at all times reserve and keep available out of its authorized
        shares of Common Stock, solely for the purpose of issuance upon the exercise
        of
        the Warrants, such number of shares of Common Stock as shall be issuable
        upon
        the exercise thereof. The Company covenants and agrees that, upon exercise
        of
        the Warrants and payment of the Exercise Price thereof, all shares of Common
        Stock issuable upon such exercise shall be duly and validly issued, fully
        paid,
        non-assessable and not subject to the preemptive rights of any shareholder.
        As
        long as the Warrants shall be outstanding, the Company shall use its best
        efforts to cause all shares of Common Stock issuable upon the exercise of
        the
        Warrants to be listed on or quoted by the exchange upon which the Company’s
        Common Stock is then listed or quoted.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

      

      12.    Notices
        to Warrant Holders.
        Nothing
        contained in this Agreement shall be construed as conferring upon the Holder
        or
        Holders the right to vote or to consent or to receive notice as a shareholder
        in
        respect of any meetings of shareholders for the election of directors or
        any
        other matter, or as having any rights whatsoever as a shareholder of the
        Company. If, however, at any time prior to the expiration of the Warrants
        and
        their exercise, any of the following events shall occur:

       

      (a)    the
        Company shall take a record of the holders of its shares of Common Stock
        for the
        purpose of entitling them to receive a dividend or distribution payable
        otherwise than in cash, or a cash dividend or distribution payable otherwise
        than out of current or retained earnings, as indicated by the accounting
        treatment of such dividend or distribution on the books of the Company;
        or

       

      (b)    the
        Company shall offer to all the holders of its Common Stock any additional
        shares
        of capital stock of the Company or securities convertible into or exchangeable
        for shares of capital stock of the Company, or any option, right or warrant
        to
        subscribe therefor; or

       

      (c)    a
        dissolution, liquidation or winding up of the Company (other than in connection
        with a consolidation or merger) or a sale of all or substantially all of
        its
        property, assets and business as an entirety shall be proposed; or 

       

      (d)    a
        change
        in control of the Company occurs; 

       

      then,
        in
        any one or more of said events, the Company shall give written notice of
        such
        event at least twenty (20) days prior to the date fixed as a record date
        or the
        date of closing the transfer books for the determination of the shareholders
        entitled to such dividend, distribution, convertible or exchangeable securities
        or subscription rights, options or warrants, or entitled to vote on such
        proposed dissolution, liquidation, winding up, sale or change of control.
        Such
        notice shall specify such record date or the date of closing of the transfer
        books, as the case may be. Failure to give such notice or any defect therein
        shall not affect the validity of any action taken in connection with the
        declaration or payment of any such dividend or distribution, or the issuance
        of
        any convertible or exchangeable securities or subscription rights, options
        or
        warrants, or any proposed dissolution, liquidation, winding up, sale or change
        of control.

       

      13.    Notices.
        All
        notices, requests, consents and other communications hereunder shall be in
        writing and shall be deemed to have been duly made when delivered, telecopied
        or
        mailed by registered or certified mail, return receipt requested:

       

      (a)    If
        to a
        registered Holder of the Warrants, to the address of such Holder as shown
        on the
        books of the Company; or

       

      (b)    If
        to the
        Company, to the address set forth in Section
        3
        of this
        Agreement or to such other address as the Company may designate by notice
        to the
        Holders.

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

      

      14.    Supplements
        and Amendments.
        The
        Company and the Underwriter may from time to time supplement or amend this
        Agreement without the approval of any Holders of Warrant Certificates in
        order
        to cure any ambiguity, to correct or supplement any provision contained herein
        which may be defective or inconsistent with any provisions herein, or to
        make
        any other provisions in regard to matters or questions arising hereunder
        which
        the Company and the Underwriter may deem necessary or desirable and which
        the
        Company and the Underwriter deem not to adversely affect the interests of
        the
        Holders of Warrant Certificates. Furthermore, this Agreement may be amended
        by a
        writing signed by the Company and the Majority Holders.

       

      15.    Successors.
        All the
        covenants and provisions of this Agreement by or for the benefit of the Company
        and the Holders inure to the benefit of their respective successors and assigns
        hereunder.

       

      16.    Termination.
        This
        Agreement shall terminate at the close of business on June __, 2009.
        Notwithstanding the foregoing, the indemnification provisions of Article
        7
        shall
        survive such termination until the close of business on June __,
        2012.

       

      17.    Governing
        Law.
        This
        Agreement and each Warrant Certificate issued hereunder shall be deemed to
        be a
        contract made under the laws of the State of New York with respect to contracts
        made and to be wholly performed in said State and for all purposes shall
        be
        construed in accordance with the laws of said State. The Company, the
        Underwriter and any other registered holder or holders of the Warrant
        Certificates (i) agree that any legal Suit, action or proceeding arising
        out of
        or relating to this Agreement shall be instituted exclusively in New York
        State
        Supreme Court, County of New York, or in the United States District Court
        for
        the Southern District of New York, (ii) waive any objection which the they
        may
        have now or hereafter to the venue of any such suit, action or proceeding,
        and
        (iii) irrevocably consent to the jurisdiction of the New York State Supreme
        Court, County of New York and the United States District Court for the Southern
        District of New York in any such suit, action or procedure. The Company,
        the
        Underwriter and any other registered holder or holders of the Warrant
        Certificates, Warrants or the Shares further agree to accept and acknowledge
        service of any and all process which may be served in any suit, action or
        proceeding in the New York State Supreme Court, County of New York and the
        United States District Court for the Southern District of New York, and agree
        that service of process upon them mailed by certified mail to their respective
        addresses shall be deemed in every respect effective service of process upon
        them in any such suit, action or proceeding. In the event of litigation between
        the parties arising hereunder, the prevailing party shall be entitled to
        costs
        and reasonable attorney’s fees.

       

      18.    Benefits
        of This Agreement.
        Nothing
        in this Agreement shall be construed to give to any person or corporation,
        other
        than the Company and the Underwriter and any other registered holder or holders
        of the Warrant Certificates, Warrants or the Shares, any legal or equitable
        right, remedy or claim under this Agreement; and this Agreement shall be
        for the
        sole and exclusive benefit of the Company and the Underwriter and any other
        holder or holders of the Warrant Certificates, Warrants or the
        Shares.

       

      19.    Preservation
        of Rights.
        The
        Company will not, by amendment of its articles of incorporation or through
        any
        consolidation, merger, reorganization, transfer of assets, dissolution, issue
        or
        sale of securities or any other voluntary action, avoid or seek to avoid
        the
        observance or performance of any of the terms of this Agreement or the Warrants
        or the rights represented hereby or thereby, 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 in order to protect the rights
        of the
        Holders of the Warrants against dilution or other impairment.

       

      20.    Counterparts.
        This
        Agreement may be executed in any number of counterparts and each of such
        counterparts shall for all purposes be deemed to be an original, and such
        counterparts shall together constitute but one and the same
        instrument.

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to
        be
        duly executed, as of the day and year first above written.

       

      

       

      
        	 	
                NATIONAL
                  LAMPOON, INC.

                 

              
	 	
                By: 
                  ___________________________________

                Name:

                Title:

              
	 	 
	 	 
	 	
                MERRIMAN
                  CURHAN FORD & CO. 

                 

                By: 
                  ___________________________________

                Name:

                Title:

              

      

      

      

      

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        A

       

      NEITHER
        THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE COMMON STOCK ISSUABLE
        UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
        OR
        ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
        PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
        REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH
        ACT
        OR AN EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE
        STATE SECURITIES LAWS.

       

      THIS
        CERTIFICATE IS ISSUED SUBJECT TO THE PROVISIONS OF A WARRANT AGREEMENT DATED
        AS
        OF _____ __, 2005, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, AND ANY
        TRANSFEREE OF THIS CERTIFICATE OR OF THE SHARES ISSUABLE UPON EXERCISE OF
        IT
        SHALL BE BOUND BY THE PROVISIONS OF SAID AGREEMENT, A COPY OF WHICH IS ON
        FILE
        WITH, AND AVAILABLE FROM, THE SECRETARY OF THE COMPANY. AMONG OTHER THINGS,
        SUCH
        WARRANT AGREEMENT ABSOLUTELY PROHIBITS THE SALE, TRANSFER, ASSIGNMENT, PLEDGE
        OR
        HYPOTHECATION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR ISSUABLE
        UPON
        EXERCISE THEREOF PRIOR TO ______ __, 2005, EXCEPT TO A “PERMITTED TRANSFEREE”
        (AS DEFINED IN SUCH WARRANT AGREEMENT).

       

      EXERCISABLE
        ON OR BEFORE

      5:00
        P.M., NEW YORK TIME, _________, 2009

       

      
        	No. W- 	
                _____
                  Warrants

              
	 	 

      

      WARRANT
        CERTIFICATE

       

      This
        Warrant Certificate certifies that Merriman Curhan Ford & Co. or registered
        assigns is the registered holder of _________________ (______) Warrants to
        purchase, at any time from ________, 2005 until 5:00 P.M. New York City time
        on
        _________, 2009 (“Expiration Date”) up to ________________
         (______)
        shares
        (“Shares”) of fully-paid and nonassessable common stock, par value $.0001 per
        share (“Common Stock”), of National Lampoon, Inc., a Delaware corporation (the
“Company”), at the initial exercise price, subject to adjustment in certain
        events (the “Exercise Price”), of $____ per Share upon surrender of this Warrant
        Certificate and payment of the Exercise Price or notice of cashless exchange
        at
        an office or agency of the Company, but subject to the conditions set forth
        herein and in the warrant agreement dated as of ________, 2005 (“Warrant
        Agreement”) between the Company and Merriman Curhan Ford & Co. Payment of
        the Exercise Price may be made in cash, by certified or official bank check
        in
        New York Clearing House funds payable to the order of the Company, or any
        combination of cash or check, or in shares of Common Stock pursuant to a
        Notice
        of Exchange in accordance with Section 3 of the Warrant Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      No
        Warrant may be exercised after 5:00 P.M., New York City time, on the Expiration
        Date, at which time all Warrants evidenced hereby, unless exercised prior
        thereto, shall thereafter be void.

       

      The
        Warrants evidenced by this Warrant Certificate are part of a duly authorized
        issue of Warrants issued pursuant to the Warrant Agreement, which Warrant
        Agreement is hereby incorporated by reference in and made a part of this
        instrument and is hereby referred to as a description of the rights, limitation
        of rights, obligations, duties and immunities thereunder of the Company and
        the
        holders (the words “holders” or “holder” meaning the registered holders or
        registered holder) of the Warrants.

       

      The
        Warrant Agreement provides that upon the occurrence of certain events, the
        Exercise Price and/or number of the Company’s securities issuable thereupon may,
        subject to certain conditions, be adjusted. In such event, the Company will,
        at
        the request of the holder, issue a new Warrant Certificate evidencing the
        adjustment in the Exercise Price and the number and/or type of securities
        issuable upon the exercise of the Warrants; provided, however, that the failure
        of the Company to issue such new Warrant Certificates shall not in any way
        change, alter, or otherwise impair, the rights of the holder as set forth
        in the
        Warrant Agreement.

       

      Upon
        due
        presentment for registration of transfer of this Warrant Certificate at an
        office or agency of the Company, a new Warrant Certificate or Warrant
        Certificates of like tenor and evidencing in the aggregate a like number
        of
        Warrants shall be issued to the transferee(s) in exchange for this Warrant
        Certificate, subject to the limitations provided herein and in the Warrant
        Agreement, without any charge except for any tax, or other governmental charge
        imposed in connection therewith.

       

      Upon
        the
        exercise of less than all of the Warrants evidenced by this Certificate,
        the
        Company shall forthwith issue to the holder hereof a new Warrant Certificate
        representing such number of unexercised Warrants.

       

      The
        Company may deem and treat the registered holder(s) hereof as the absolute
        owner(s) of this Warrant Certificate (notwithstanding any notation of ownership
        or other writing hereon made by anyone), for the purpose of any exercise
        hereof,
        and of any distribution to the holder(s) hereof, and for all other purposes,
        and
        the Company shall not be affected by any notice to the contrary.

       

      All
        terms
        used in this Warrant Certificate which are defined in the Warrant Agreement
        shall have the meanings assigned to them in the Warrant Agreement.

       

      [Remainder
        of page intentionally left blank]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant Certificate to be duly
        executed under its corporate seal.

       

      

      
        	
                Dated: 
                  ____________,
                  2005

              	
                NATIONAL
                  LAMPOON, INC.

                 

                By: 
                  ___________________________________

                Name:

                Title:

              
	 	 
	 	 

      

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        B

       

      FORM
        OF
        ELECTION TO PURCHASE

       

      The
        undersigned registered owner of the attached Warrant Certificate hereby
        irrevocably elects to exercise the right, represented by such Warrant
        Certificate, to purchase _______
        Shares
        and herewith tenders in payment for such Shares cash or a certified or official
        bank check payable in New York Clearing House Funds to the order of National
        Lampoon, Inc. in the amount of $_______ all in accordance with Section 3.1
        of
        the Warrant Agreement. 

       

       

      
        	
                Dated:

              	
                ______________________________________

                Name
                  of Registered Owner

                 

                ______________________________________

                Signature
                  of Registered Owner

                (Signature
                  must conform in all respects to name
                  

                of
                  holder as specified on the face of the Warrant
                  

                Certificate.)

                 

                ______________________________________

                Street
                  Address

                 

                ______________________________________

                City,
                  State, Zip

                 

                ______________________________________

                IRS
                  Identification Number/Social Security
                  Number

              

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        C

       

      FORM
        OF
        ASSIGNMENT

       

      (To
        be
        executed by the registered holder if such holder desires to transfer the
        Warrant
        Certificate.)

       

      FOR
        VALUE
        RECEIVED, the undersigned registered owner of the attached Warrant Certificate
        hereby sells, assigns and transfers unto the Assignee named below all of
        the
        rights, title and interest therein of the undersigned under the within Warrant,
        with respect to the number of shares of Common stock set forth
        below:

       

      
        	
                NAME
                  OF ASSIGNEE

              	
                ADDRESS

              	
                NUMBER
                  OF SHARES

              
	 	 	 

      

      

      and
        does
        hereby irrevocably constitute and appoint __________________________, Attorney,
        to transfer the within Warrant on the books of National Lampoon, Inc.,
        maintained for the purpose, with full power of substitution in the premises.
        The
        undersigned understand that compliance with the provisions of the Warrant
        is
        necessary to effect any assignment or transfer. 

       

      

      
        	
                Dated:

              	
                ______________________________________

                Signature
                  of Registered Owner

                (Signature
                  must conform in all respects to name 

                of
                  holder as specified on the face of the Warrant 

                Certificate.)

                 

                ______________________________________

                Name
                  of Registered Owner

                 

                ______________________________________

                IRS
                  Identification Number/Social Security NumberUnassociated Document

    

       

      NATIONAL
        LAMPOON, INC.

      DEMAND
        PROMISSORY NOTE

      

      US
        $142,596.25       

      Los
        Angeles, California

      June
        15, 2005

      

       

      FOR
        VALUE RECEIVED, National Lampoon, Inc.,
        a
        Delaware corporation (“NLPN”),
        unconditionally promises to pay to Richardson
        & Patel LLP
        (“Payee”),
        the
        principal amount of $142,596.25, upon the terms and subject to the conditions
        herein set forth. No interest shall accrue for 30 days, thereafter interest
        shall accrue at the legal rate of 10% per annum, compounded
        annually.

       

      All
        payments of principal and interest shall be made in lawful money of the United
        States of America in same day funds.

       

      NLPN
        promises to pay the entire outstanding principal amount owing under this
        Note
        upon the closing of its next offering, currently scheduled to close on July
        15,
        2005. If the offering does not close by that date, then this Note and any
        accrued and unpaid interest, shall be paid immediately upon demand.

       

      NLPN
        shall have the right at any time and from time to time to prepay the principal
        of this Note in whole or in part without premium or penalty. NLPN will pay
        all
        reasonable costs and expenses of the preparation and collection of this Note,
        including reasonable attorneys’ fees. This Note shall be governed by and
        construed in accordance with the laws of the State of California. NLPN and
        Payee
        waive the right to trial by jury and consent that the exclusive forum for
        the
        resolution of any disputes or litigation arising hereunder or in connection
        herewith shall be Los Angeles County, California, and NLPN and Payee consent
        to
        jurisdiction therein.

       

      Upon
        the
        occurrence or existence of any default in payment, immediately and without
        notice, all outstanding principal and accrued but unpaid interest shall
        automatically become immediately due and payable, without presentment, demand,
        protest or any other notice of any kind, all of which are hereby expressly
        waived. This Note is issued in consideration of legal fees owed by NLPN to
        Payee. 

       

      IN
        WITNESS WHEREOF,
        NLPN
        has caused this Note to be executed and delivered by its duly authorized
        officer
        as of the date and at the place first above written. 

      

      

      NATIONAL
        LAMPOON, INC.

      

      By:
        /s/
        Douglas S.
        Bennett

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